EXHIBIT 10.3.1
EXECUTION COPY
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MOBILE MINI, INC.
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SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
Dated: February 17, 2006
US$350,000,000
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DEUTSCHE BANK AG, NEW YORK BRANCH
Individually and as Agent for any Lender which is
or becomes a Party hereto
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DEUTSCHE BANK SECURITIES INC.
and
BANC OF AMERICA SECURITIES, LLC.
as Joint Lead Arrangers and Book Managers
JPMORGAN CHASE BANK, N.A.
and
NATIONAL CITY BANK
as Co-Documentation Agents
BANK OF AMERICA, N.A.
as Syndication Agent
TABLE OF CONTENTS
Page
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SECTION 1. CREDIT FACILITY............................................... 1
1.1 Revolving Credit Facility..................................... 2
1.2 Letters of Credit; LC Guaranties.............................. 4
1.3 Financial Assistance.......................................... 5
SECTION 2. INTEREST, FEES AND CHARGES.................................... 5
2.1 Interest...................................................... 5
2.2 Computation of Interest and Fees.............................. 6
2.3 Fee Letter.................................................... 6
2.4 Letter of Credit and LC Guaranty Fees......................... 6
2.5 Unused Line Fee............................................... 7
2.6 Audit Fees.................................................... 7
2.7 Reimbursement of Expenses..................................... 7
2.8 Bank Charges.................................................. 8
2.9 Collateral Protection Expenses................................ 8
2.10 Payment of Charges............................................ 8
SECTION 3. LOAN ADMINISTRATION........................................... 8
3.1 Manner of Borrowing Revolving Credit Loans; Swing Line Loan... 8
3.2 Payments...................................................... 13
3.3 Mandatory and Optional Prepayments............................ 14
3.4 Application of Payments and Collections....................... 16
3.5 All Loans to Constitute One Obligation........................ 17
3.6 Loan Account.................................................. 17
3.7 Statements of Account......................................... 17
3.8 Sharing of Payments, Etc...................................... 17
3.9 Increased Costs............................................... 17
3.10 Taxes......................................................... 18
3.11 Affected Lenders.............................................. 21
3.12 Basis for Determining Interest Rate Inadequate or Unfair...... 22
3.13 UK Revolving Credit Loans; Intra-Lender Issues................ 22
3.14 Judgment Currency............................................. 26
3.15 UK VAT........................................................ 26
3.16 Term And Termination.......................................... 26
SECTION 4. SECURITY INTERESTS............................................ 28
4.1 Security Interest in Collateral............................... 28
4.2 Other Collateral.............................................. 29
4.3 Lien Perfection; Further Assurances........................... 30
4.4 Lien on Realty................................................ 31
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4.5 UK Security Documents......................................... 31
SECTION 5. COLLATERAL ADMINISTRATION..................................... 31
5.1 General....................................................... 31
5.2 Administration of Accounts.................................... 32
5.3 Records and Reports of Inventory, Machinery and Equipment..... 33
5.4 Administration of Equipment................................... 34
5.5 Appraisals.................................................... 34
5.6 Field Examinations............................................ 34
SECTION 6. REPRESENTATIONS AND WARRANTIES................................ 35
6.1 General Representations and Warranties........................ 35
6.2 Continuous Nature of Representations and Warranties........... 41
6.3 Survival of Representations and Warranties.................... 41
SECTION 7. COVENANTS AND CONTINUING AGREEMENTS........................... 42
7.1 Affirmative Covenants......................................... 42
7.2 Negative Covenants............................................ 46
7.3 Specific Financial Covenants.................................. 56
SECTION 8. CONDITIONS PRECEDENT.......................................... 56
8.1 Conditions Precedent to Effectiveness of this Agreement....... 56
8.2 Conditions Precedent to Revolving Credit Loans................ 58
SECTION 9. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT............. 58
9.1 Events of Default............................................. 58
9.2 Acceleration of the Obligations............................... 61
9.3 Other Remedies................................................ 61
9.4 Set Off and Sharing of Payments............................... 63
9.5 Remedies Cumulative; No Waiver................................ 63
SECTION 10. THE AGENT.................................................... 64
10.1 Authorization and Action...................................... 64
10.2 Agent's Reliance, Etc......................................... 64
10.3 DB AG and Affiliates.......................................... 65
10.4 Lender Credit Decision........................................ 65
10.5 Indemnification............................................... 65
10.6 Rights and Remedies to be Exercised by Agent Only............. 66
10.7 Agency Provisions Relating to Collateral...................... 66
10.8 Agent's Right to Purchase Commitments......................... 67
10.9 Right of Sale, Assignment, Participations..................... 67
10.10 Amendments.................................................... 68
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10.11 Resignation of Agent; Appointment of Successor................ 69
10.12 Co-Agents..................................................... 70
SECTION 11. MISCELLANEOUS................................................ 70
11.1 Power of Attorney............................................. 70
11.2 Indemnity..................................................... 71
11.3 Sale of Interest.............................................. 71
11.4 Severability.................................................. 71
11.5 Successors and Assigns........................................ 71
11.6 Cumulative Effect; Conflict of Terms.......................... 71
11.7 Execution in Counterparts; Effectiveness...................... 72
11.8 Notices....................................................... 72
11.9 Consent....................................................... 73
11.10 Credit Inquiries.............................................. 73
11.11 Time of Essence............................................... 73
11.12 Entire Agreement.............................................. 73
11.13 Interpretation................................................ 73
11.14 Confidentiality............................................... 73
11.15 GOVERNING LAW; CONSENT TO FORUM............................... 73
11.16 WAIVERS BY BORROWER........................................... 74
11.17 Increases In Total Revolving Loan Commitments................. 75
11.18 Existing Loan Agreement And Loan Documents.................... 76
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SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT dated as
of February 17, 2006, by and among DEUTSCHE BANK AG, NEW YORK BRANCH ("DB AG"),
individually as a Lender and as Agent ("Agent") for itself and any other
financial institution which is or becomes a party hereto (each such financial
institution, including DB AG, is referred to hereinafter individually as a
"Lender" and collectively as the "Lenders"), the LENDERS and MOBILE MINI, INC.,
a Delaware corporation with its chief executive office and principal place of
business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
("Borrower"), JPMORGAN CHASE BANK, N.A. and NATIONAL CITY BANK, as
Co-Documentation Agents, and BANK OF AMERICA, N.A., as Syndication Agent.
Capitalized terms used in this Agreement have the meanings assigned to them in
Appendix A, General Definitions. Accounting terms not otherwise specifically
defined herein shall be construed in accordance with GAAP consistently applied.
WHEREAS, Borrower, FLEET CAPITAL CORPORATION ("Fleet"), as agent and
as a lender, certain other lenders including Agent (together with Fleet, the
"Prior Lenders"), Bank of America, N.A. and Washington Mutual Bank, as
Co-Documentation Agents, and Bank One, N.A. and JPMorgan Chase Bank, N.A., as
Co-Syndication Agents, are parties to that certain Amended and Restated Loan and
Security Agreement, dated as of February 11, 2002, and Amended and Restated as
of June 26, 2003, and as further amended by that certain First Amendment to
Amended and Restated Loan and Security Agreement, dated as of January 14, 2004,
that certain Second Amendment to Amended and Restated Loan and Security
Agreement, dated as of March 16, 2004 and that certain Third Amendment to
Amended and Restated Loan and Security Agreement dated as of August__, 2004
(collectively, the "Existing Loan Agreement");
WHEREAS, Borrower, the Prior Lenders, the Lenders and Agent wish to
amend the Existing Loan Agreement and restate it in its entirety;
WHEREAS, effective as of the Restatement Date, all Obligations of
Borrower under and as defined in the Existing Loan Agreement shall be deemed to
be Obligations under this Agreement and all provisions of this Agreement not
theretofore in effect shall become effective;
NOW, THEREFORE, in consideration of the above recitals and the mutual
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. CREDIT FACILITY
Subject to the terms and conditions of, and in reliance upon the
representations and warranties made in, this Agreement and the other Loan
Documents, Lenders agree to make a Total Credit Facility of up to US$350,000,000
available upon Borrower's request therefor, as follows:
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1.1 Revolving Credit Facility.
1.1.1 Revolving Credit Loans. Each Lender agrees, on and after the
Restatement Date, severally and not jointly, for so long as no Default or Event
of Default exists and if the conditions set forth in Section 8.1 and Section 8.2
are satisfied, to make US Revolving Credit Loans to Borrower from time to time
during the period from the date hereof to but not including the last day of the
Term, as requested by Borrower in the manner set forth in Subsection 3.1.1
hereof, up to a maximum principal amount at any time outstanding equal to the
lesser of (i) such Lender's Revolving Loan Commitment minus such Lender's
Revolving Loan Percentage of the Revolving Loan Exposure and (ii) the product of
such Lender's Revolving Loan Percentage and an amount equal to the US Borrowing
Base at such time minus the Revolving Loan Exposure; provided, however, that no
Lender shall be required to make any Pounds Sterling Denominated Revolving
Credit Loan to the extent that the aggregate outstanding amount of Pounds
Sterling Denominated Revolving Credit Loans of all Lenders at such time exceeds
US$50,000,000 (on an as-converted to US Dollars basis at currently prevailing
exchange rates as determined by the Agent). Agent shall have the right, after
consultation with Borrower, to establish reserves in such amounts, and with
respect to such matters, as Agent shall reasonably deem necessary or appropriate
in its reasonable credit judgment exercised in good faith, against the amount of
Revolving Credit Loans which Borrower may otherwise request under this
Subsection 1.1.1 or UK Borrower may otherwise request under Subsection 1.1.3
with respect to (i) price adjustments, damages, unearned discounts, returned
products or other matters for which credit memoranda are issued in the ordinary
course of business of Borrower and its Subsidiaries; (ii) shrinkage, spoilage
and obsolescence of Inventory; (iii) other sums chargeable against Borrower's
Loan Account as Revolving Credit Loans under any section of this Agreement; (iv)
liabilities and clean up costs under Environmental Laws; (v) claims which have
priority over the Liens granted to Agent, and (vi) such other specific events,
conditions or contingencies as to which Agent, in its reasonable credit judgment
exercised in good faith, determines reserves should be established from time to
time hereunder. Notwithstanding the foregoing, Agent shall not establish any
reserves in respect of any matters relating to any items of Collateral that have
been specifically taken into account in determining eligibility of any category
of assets or the amount or value thereof for determining the US Borrowing Base
or the UK Borrowing Base. The Revolving Credit Loans shall be further evidenced
by, and repayable in accordance with the terms of, the Revolving Notes and shall
be secured by all of the Collateral.
1.1.2 Protective Advances.
(a) Subject to the limitations set forth below (and
notwithstanding anything to the contrary in Section 8.2 and notwithstanding
that such Loan may cause the aggregate Revolving Loan Exposure to exceed
the Aggregate Borrowing Base), Agent is authorized by Borrower and the
Lenders, from time to time in Agent's sole discretion (but shall have
absolutely no obligation to), to make Loans to Borrower or UK Borrower, on
behalf of all Lenders at any time that any condition precedent set forth in
Section 8.2 has not been satisfied or waived, which Agent, in its good
faith judgment, deems necessary or desirable (x) to preserve or protect the
Collateral, or any portion thereof, (y) to enhance the likelihood of, or
maximize the amount of, repayment of the Loans and other Obligations, or
(z) to pay any other amount chargeable to or required to be paid by
Borrower or UK Borrower pursuant to the terms of this Agreement, including
payments
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of reimbursable expenses (including costs, fees, and expenses as described
in Subsection 2.7) and other sums payable under the Loan Documents (each
such Loan, a "Protective Advance"). Any Protective Advance may be made in a
principal amount that would cause the aggregate Revolving Loan Exposure to
exceed the Aggregate Borrowing Base, provided that (i) no Protective
Advance may be made to the extent that, after giving effect to such
Protective Advance (together with the outstanding principal amount of any
outstanding Protective Advances), the aggregate principal amount of
Protective Advances outstanding hereunder would exceed the lesser of (A)
five percent (5%) of the Aggregate Borrowing Base as determined on the date
of such proposed Protective Advance and (B) US$17,500,000; (ii) the
aggregate amount of outstanding Protective Advances plus the aggregate
Revolving Loan Exposure shall not exceed the aggregate total Revolving Loan
Commitments; and (iii) the aggregate amount of outstanding Protective
Advances to UK Borrower plus the aggregate UK Revolving Loan Exposure shall
not exceed the UK Sublimit. No Protective Advance may remain outstanding
for more than forty-five (45) days without the consent of the Majority
Lenders. Protective Advances may be made even if the conditions precedent
set forth in Section 8 have not been satisfied or waived. Each Protective
Advance shall be secured by the Liens in favor of Agent in and to the
Collateral and shall constitute Obligations hereunder. Agent's
authorization to make Protective Advances may be revoked at any time by the
Majority Lenders. Any such revocation must be in writing and shall become
effective prospectively upon Agent's receipt thereof. The making of a
Protective Advance on any one occasion shall not obligate Agent to make any
Protective Advance on any other occasion. At any time that the conditions
precedent set forth in Section 8 have been satisfied or waived, Agent may
request the Revolving Lenders to make a US Revolving Credit Loan to repay a
Protective Advance to Borrower or a UK Revolving Credit Loan to repay a
Protective Advance to UK Borrower. At any other time, Agent may require the
Lenders to fund their risk participations described in Section 1.1.2(b).
(b) Upon the making of a Protective Advance by Agent (whether
before or after the occurrence of a Default), each Lender shall be deemed,
without further action by any party hereto, unconditionally and irrevocably
to have purchased from Agent without recourse or warranty, an undivided
interest and participation in such Protective Advance in proportion to its
Revolving Loan Percentage. From and after the date, if any, on which any
Lender is required to fund its participation in any Protective Advance
purchased hereunder, Agent shall promptly distribute to such Lender, such
Lender's Revolving Loan Percentage of all payments of principal and
interest and all proceeds of Collateral received by Agent in respect of
such Protective Advance.
1.1.3 UK Subfacility. Each Lender agrees, on and after the Restatement
Date, severally and not jointly, for so long as no Default or Event of Default
exists and if the conditions set forth in Section 8 are satisfied, to make UK
Revolving Credit Loans to UK Borrower from time to time during the period from
the date hereof to but not including the last day of the Term, as requested by
UK Borrower in the manner set forth in Subsection 3.1.1 hereof, up to a maximum
principal amount at any time outstanding equal to the least of (i) such Lender's
Revolving Loan Commitment minus such Lender's Revolving Loan Percentage of the
Revolving Loan Exposure, (ii) the product of such Lender's Revolving Loan
Percentage and an amount equal to the UK Borrowing Base at such time minus the
UK Revolving Loan Exposure
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and (iii) the product of such Lender's Revolving Loan Percentage and an amount
equal to the UK Sublimit at such time minus the outstanding principal amount of
UK Revolving Credit Loans; provided, however, that no Lender shall be required
to make any Pounds Sterling Denominated Revolving Credit Loan to the extent that
the aggregate outstanding amount of Pounds Sterling Denominated Revolving Credit
Loans of all Lenders at such time exceeds US$50,000,000 (on an as-converted to
US Dollars basis at currently prevailing exchange rates as determined by the
Agent). Prior to the initial advance under the UK subfacility, Borrower and
Agent may negotiate modifications to the UK subfacility; provided that such
modifications shall be customary for transactions of this nature. The Lenders,
Agent and the Borrower shall enter into such amendments to this Agreement to
reflect any such modifications.
1.1.4 Canadian Subfacility. At the request of Borrower, with the
approval of Agent, Borrower may establish a subfacility for loans to be made in
Canadian Dollars, either to Borrower or a Subsidiary of Borrower, such
subfacility or subfacilities to be in such amounts as agreed by Agent and
Borrower. Promptly following such request, Borrower and Agent shall negotiate
the terms of such subfacility, it being understood that the interest rates to be
payable shall be the equivalent to those payable under this Agreement, the
definition of "borrowing base" under such subfacility shall be substantially
similar to the definition of US Borrowing Base hereunder and the obligations
under such subfacility shall be Obligations hereunder. Loans to a Canadian
Borrower may be Base Rate Advances or made by the issuance of bankers
acceptances on customary terms. The procedures for making and repayment of such
Loans shall be substantially similar to those set forth in this Section 1
(including the absence of withholding or other taxes) with respect to US
Revolving Credit Loans, with such changes as Agent and Borrower shall agree.
Borrower shall be irrevocably authorized to make all requests and issue all
instructions with respect to Revolving Credit Loans for any Canadian Borrower.
No Lender shall be required to make any Revolving Credit Loans in Canadian
dollars without the consent of such Lender; provided that, all Lenders shall be
required to participate pro rata in such subfacility, which participation may be
arranged as purchase of risk participations for Loans made by Agent, on
customary terms. The Lenders, Agent and the Borrower shall enter into such
amendments to this Agreement to reflect the terms of this subfacility as agreed
by Agent and Borrower. Each Credit Party shall grant to Agent for the benefit of
Lenders Liens on substantially all of its property to secure its own Obligations
and the Obligations of the Canadian Borrower, but no foreign Subsidiary shall be
required to guaranty the Obligations of Borrower if such guaranty would have
adverse tax consequences.
1.1.5 Use of Proceeds. The Revolving Credit Loans shall be used solely
for (i) refinancing of amounts outstanding under the Existing Loan Agreement,
(ii) general operating capital needs (including Capital Expenditures) of
Borrower and its Subsidiaries in a manner consistent with the provisions of this
Agreement and all applicable laws, and (iii) for other purposes permitted under
this Agreement.
1.2 Letters of Credit; LC Guaranties. Agent agrees, for so long as no
Default or Event of Default exists and if requested by Borrower, to (i) issue
its, or cause to be issued by another Affiliate of Agent or by another LC
Issuer, Letters of Credit for the account of Borrower or any Guarantor or (ii)
execute LC Guaranties by which Agent, or another Affiliate of Agent shall
guaranty the payment or performance by Borrower of its reimbursement obligations
with respect to Letters of Credit and letters of credit issued with the prior
approval of Agent for Borrower's
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account by other Persons in support of Borrower's or any of its Subsidiaries'
obligations (other than obligations for the repayment of money borrowed), in
each case, on the date that is not sooner than three Business Days after an LC
Request Notice has been submitted by Borrower to Agent or an LC Issuer with a
copy to Agent, provided that the sum of the LC Amount plus all unpaid LC
Obligations shall not exceed US$50,000,000 at any time. Upon issuance of any
Letter of Credit by any LC Issuer, Borrower and the LC Issuer with respect to
such Letter of Credit shall promptly notify Agent of the date of issuance and
stated amount of such Letter of Credit. No documentary Letter of Credit or LC
Guaranty of a documentary letter of credit may have an expiration date that is
more than 180 days after the date of issuance thereof and all such documentary
Letters of Credit shall be payable at sight; and no standby Letter of Credit or
LC Guaranty of a standby letter of credit may have an expiration date that is
more than one year from the date of issuance thereof, which expiration date may
be extended for additional periods of up to one year for each additional period,
subject to the immediately following sentence. No Letter of Credit or LC
Guaranty may have an expiration date that is after the date which is five (5)
days prior to the last day of the Term. All Letters of Credit shall be
denominated in US Dollars. Notwithstanding anything to the contrary contained
herein, Borrower, Agent and Lenders hereby agree that all LC Obligations and all
Obligations of Borrower relating thereto shall be satisfied by the prompt
issuance of one or more Revolving Credit Loans that are Base Rate Portions,
which Borrower hereby acknowledges are requested and Lenders hereby agree to
fund. In the event that Revolving Credit Loans are not, for any reason, promptly
made to satisfy all then existing LC Obligations, each Lender hereby agrees to
pay to Agent, on demand, an amount equal to such LC Obligations multiplied by
such Lender's Revolving Loan Percentage, and until so paid, such amount shall be
secured by the Collateral and shall bear interest and be payable at the same
rate and in the same manner as Base Rate Portions. Immediately upon the issuance
of a Letter of Credit or an LC Guaranty under this Agreement, each Lender shall
be deemed to have irrevocably and unconditionally purchased and received from
Agent, without recourse or warranty, an undivided interest and participation
therein equal to such LC Obligations multiplied by such Lender's Revolving Loan
Percentage. All Letters of Credit and LC Guaranties outstanding under the
Existing Loan Agreement and all LC Obligations relating thereto shall, from and
after the Restatement Date, be deemed to be outstanding under this Agreement.
1.3 Financial Assistance. None of the proceeds of any Loan under this
Agreement may be used in any way that infringes Section 151 of the United
Kingdom Companies ▇▇▇ ▇▇▇▇ unless Borrower and its Subsidiaries are in
compliance with the provisions of Sections 155 to 158 of the Companies ▇▇▇ ▇▇▇▇.
SECTION 2. INTEREST, FEES AND CHARGES
2.1 Interest.
2.1.1 Rates of Interest. Interest shall accrue on the principal amount
of the Base Rate Portions outstanding at the end of each day at a fluctuating
rate per annum equal to the Applicable Margin then in effect plus the Base Rate.
No Pounds Sterling Denominated Revolving Credit Loan may maintained as a Base
Rate Advance. Said rate of interest shall increase or decrease by an amount
equal to any increase or decrease in the Base Rate, effective as of the opening
of business on the day that any such change in the Base Rate occurs. Interest
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shall accrue on the principal amount of each LIBOR Advance outstanding at the
end of each day at a fixed rate per annum equal to the Applicable Margin then in
effect plus the LIBOR for the applicable Interest Period.
2.1.2 Default Rate of Interest. At the option of Agent or the Majority
Lenders, upon and after the occurrence of an Event of Default, and during the
continuation thereof, the principal amount of all Loans and all other
Obligations under the Loan Documents shall bear interest from the time at which
such Obligations become due at a rate per annum equal to 2.0% plus the interest
rate otherwise applicable thereto (the "Default Rate"). Such Default Rate shall
apply automatically in the case of a Default under Subsection 9.1.9. All
Protective Advances shall bear interest at the Default Rate applicable to Base
Rate Loans.
2.1.3 Maximum Interest. In no event whatsoever shall the aggregate of
all amounts deemed interest hereunder or under the Revolving Notes and charged
or collected pursuant to the terms of this Agreement or pursuant to the
Revolving Notes exceed the highest rate permissible under any law which a court
of competent jurisdiction shall, in a final determination, deem applicable
hereto. If any provisions of this Agreement or the Revolving Notes are in
contravention of any such law, such provisions shall be deemed amended to
conform thereto.
2.2 Computation of Interest and Fees. Interest, Letter of Credit and LC
Guaranty fees and Unused Line Fees hereunder shall be calculated daily and shall
be computed on the actual number of days elapsed over a year of 360 days, except
for interest on Pounds Sterling Denominated Revolving Credit Loans, which shall
be computed on the actual number of days elapsed over a year of 365 days.
2.3 Fee Letter. Borrower shall pay to Agent certain fees and other amounts
in accordance with the terms of the fee letter among Borrower, Agent, the Joint
Arrangers and the Syndication Agent (the "Fee Letter").
2.4 Letter of Credit and LC Guaranty Fees. Borrower shall pay to Agent, for
the ratable benefit of the Lenders, a fee equal to the Applicable Margin then in
effect for LIBOR Advances per annum multiplied by the aggregate face amount of
all Letters of Credit and LC Guaranties outstanding from time to time during the
term of this Agreement, which fees shall be payable monthly in arrears on the
first day of each month hereafter, and, shall pay the LC Issuer all usual and
customary charges of Bank associated with the issuance of such Letters of Credit
and LC Guaranties for the account of borrowers with creditworthiness similar to
Borrower's, which fees and charges shall be deemed fully earned and shall be due
and payable upon issuance of each such Letter of Credit or LC Guaranty and shall
not be subject to rebate or proration upon the termination of this Agreement for
any reason. In addition, Borrower shall pay to Agent for the account of each LC
Issuer a fronting fee for each Letter of Credit or LC Guaranty of such LC Issuer
in an amount agreed to by such LC Issuer and shall pay directly to each LC
Issuer all issuance, amendment and payment fees customarily charged by such LC
Issuer with respect to Letters of Credit or LC Guaranties issued by such LC
Issuer. At the option of Agent or the Majority Lenders, upon and after the
occurrence of an Event of Default, and during the continuation thereof, the fee
shall increase to the Applicable Margin then in effect for LIBOR
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Advances per annum plus two percent (2%) multiplied by the aggregate face amount
of all Letters of Credit and LC Guaranties outstanding at such time.
2.5 Unused Line Fee. Borrower shall pay to Agent, for the ratable benefit
of the Lenders, a fee (the "Unused Line Fee") equal to the amount by which the
Total Credit Facility exceeds the average daily amount of the Facility
Utilization for the preceding month multiplied by the percentage set forth below
opposite the applicable Facility Utilization percentage:
Facility Utilization Unused Line Fee
-------------------- ---------------
< or = 50% 0.375%
> 50% 0.25%
The Unused Line Fee shall be payable monthly in arrears on the first day of each
month hereafter and upon the termination of this Agreement or maturity of the
Obligations.
2.6 Audit Fees. Borrower shall pay to Agent all reasonable out-of-pocket
expenses incurred by Agent in connection with (i) audits of the books and
records and Properties of Borrower and its Subsidiaries and Affiliates, (ii)
appraisals conducted pursuant to Section 5.5 hereof, (iii) field examinations
conducted pursuant to Section 5.6 hereof, and (iv) such other matters as Agent
shall deem appropriate in its reasonable credit judgment, whether such audits,
appraisals or field examinations are conducted by employees of Agent or by third
parties hired by Agent. The out-of-pocket expenses incurred in connection with
the audits shall be payable as incurred and following the issuance by Agent of a
request for payment thereof to Borrower.
2.7 Reimbursement of Expenses. If, at any time or times regardless of
whether or not an Event of Default then exists, (i) Agent or an Affiliate of
Agent incurs legal or accounting expenses or any other costs or out-of-pocket
expenses in connection with (1) the negotiation and preparation of this
Agreement or any of the other Loan Documents, any amendment of or modification
of this Agreement or any of the other Loan Documents, the initial syndication of
the Loans (including, without limitation, printing and distribution of materials
to prospective Lenders and all costs associated with bank meetings) or (2) the
administration of this Agreement or any of the other Loan Documents and the
transactions contemplated hereby and thereby; or (ii) Agent or any Lender incurs
legal or accounting expenses or any other costs or out-of-pocket expenses in
connection with (1) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Agent, any Lender, Borrower or any other Person) relating
to the Collateral, this Agreement or any of the other Loan Documents or
Borrower's, any of its Subsidiaries' or any Guarantor's affairs (but excluding
any proceeding among only the Agent and the Lenders); (2) any attempt to enforce
any rights of Agent or any Lender against Borrower, any Guarantor or any other
Person which may be obligated to Agent or any Lender by virtue of this Agreement
or any of the other Loan Documents, including, without limitation, the Account
Debtors; or (3) after the occurrence of an Event of Default and during the
continuance thereof, any attempt to inspect, verify, protect, preserve, restore,
collect, sell, liquidate or otherwise dispose of or realize upon the Collateral;
then all such legal and accounting expenses (including allocated costs of
in-house counsel in lieu of outside counsel), other costs and out of pocket
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expenses of Agent or (in the case of clause (ii) only) any Lender, as
applicable, shall be charged to Borrower; provided, that (x) Borrower shall not
be responsible for such costs and out-of-pocket expenses of any Person to the
extent incurred because of the gross negligence or willful misconduct of such
Person and (y) prior to a Default or an Event of Default, the Lenders shall be
entitled to reimbursement for one counsel representing all Lenders. Borrower
shall also reimburse Agent for expenses incurred by Agent in its administration
of the Collateral to the extent and in the manner provided in Section 2.9
hereof.
2.8 Bank Charges. Borrower shall pay to Agent any and all fees, costs or
expenses which Agent pays to a bank or other similar institution arising out of
or in connection with (i) the forwarding to Borrower or any other Person on
behalf of Borrower by Agent of proceeds of Loans made to Borrower pursuant to
this Agreement and (ii) the depositing for collection by Agent of any check or
item of payment received or delivered to Agent on account of the Obligations.
2.9 Collateral Protection Expenses. All out-of-pocket expenses incurred in
protecting, storing, warehousing, insuring, handling, maintaining and shipping
the Collateral, any and all excise, property, sales, and use taxes imposed by
any state, federal, or local authority on any of the Collateral or in respect of
the sale thereof shall be borne and paid by Borrower. If Borrower fails to
promptly pay any portion thereof when due, Agent may, at its option, but shall
not be required to, pay the same and charge Borrower therefore.
2.10 Payment of Charges. All amounts chargeable to Borrower under this
Agreement shall be Obligations secured by all of the Collateral, shall be,
unless specifically otherwise provided, payable on demand and shall bear
interest from the date demand was made or such amount is due, as applicable,
until paid in full at the rate applicable to Base Rate Portions from time to
time.
SECTION 3. LOAN ADMINISTRATION
3.1 Manner of Borrowing Revolving Credit Loans; Swing Line Loan. Borrowings
under the credit facility established pursuant to Section 1 hereof shall be as
follows:
3.1.1 Loan Requests. A request for a Revolving Credit Loan shall be
made, or shall be deemed to be made, in the following manner: (i) Borrower may
give Agent notice of its intention to borrow (or of the intention of any UK
Borrower to borrow), in which notice Borrower shall specify: (a) the amount of
the proposed borrowing, (b) for borrowings made by the Borrower, whether such
borrowing shall be in US Dollars or Pounds Sterling, and (c) the proposed
borrowing date, (x) no later than 2:00 p.m. New York time on the proposed
borrowing date for Swing Line Loans or (y) no later than 2:00 p.m. New York time
on the Business Day prior to the proposed borrowing date for US Revolving Credit
Loans (or in accordance with Section 3.1.5 in the case of a request for a LIBOR
Advance) or (z) no later than 10:00 a.m. New York time three Business Days prior
to the proposed borrowing date for UK Revolving Credit Loans, provided, however,
that no such request may be made at a time when there exists a Default or an
Event of Default or other conditions set forth in Section 8 are not satisfied;
and (ii) the becoming due of any amount required to be paid under this
Agreement, or the Revolving Notes, whether as interest or for any other
Obligation, shall be deemed irrevocably to be a
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request for a Revolving Credit Loan on the due date in the amount required to
pay such interest or other Obligation.
3.1.2 Disbursement. Borrower hereby irrevocably authorizes Agent to
disburse the proceeds of each Revolving Credit Loan requested, or deemed to be
requested, pursuant to Subsection 3.1.1 as follows: (i) the proceeds of each
Revolving Credit Loan requested under Subsection 3.1.1 and each Swing Line Loan
shall be disbursed by Agent in lawful money of the United States of America or,
except with respect to a Swing Line Loan, the United Kingdom, as applicable, in
immediately available funds, in the case of the initial borrowing, in accordance
with the terms of the written disbursement letter from Borrower, and in the case
of each subsequent borrowing, by wire transfer to such bank account as may be
agreed upon by Borrower and Agent from time to time or elsewhere if pursuant to
a written direction from Borrower; and (ii) the proceeds of each Revolving
Credit Loan deemed requested under Subsection 3.1.1(ii) shall be disbursed by
Agent by way of direct payment of the relevant interest or other Obligation.
3.1.3 Payment by Lenders. Unless Agent elects to make a Swing Line
Loan in accordance with Subsection 3.1.11, Agent shall give to each Lender
prompt written notice electronically or by facsimile, or telecopy of the receipt
by Agent from Borrower of any request for a Revolving Credit Loan. Each such
notice shall specify the requested date and amount of such Revolving Credit
Loan, whether such Revolving Credit Loan shall be a LIBOR Advance, whether such
Revolving Credit Loan shall be a US Revolving Credit Loan or a UK Revolving
Credit Loan and if a US Revolving Credit Loan, whether such shall be denominated
in US Dollars or Pounds Sterling, and the amount of each Lender's advance
thereunder (in accordance with its applicable Revolving Loan Percentage). If
Agent gives notice, electronically or facsimile, with respect to a Base Rate
Advance, to a Lender by 12:00 noon (New York time), each Lender shall, not later
than 4:00 p.m. (New York time) on such requested date (or on the next Business
Day if Agent gives later notice), wire to a bank designated by Agent the amount
of that Lender's Revolving Loan Percentage of the requested Revolving Credit
Loan. If Agent gives notice, electronically or facsimile, with respect to a
LIBOR Advance, to a Lender by 12:00 noon (New York time), two Business Days
prior to the proposed borrowing date, each Lender shall, not later than 4:00
p.m. (New York time) on such proposed borrowing date (or on the next Business
Day if Agent gives later notice), wire to a bank designated by Agent the amount
of that Lender's Revolving Loan Percentage of the requested Revolving Credit
Loan. The failure of any Lender to make the Revolving Credit Loans to be made by
it shall not release any other Lender of its obligations hereunder to make its
Revolving Credit Loan. Neither Agent nor any other Lender shall be responsible
for the failure of any other Lender to make the Revolving Credit Loan to be made
by such other Lender. The foregoing notwithstanding, Agent, in its sole
discretion, may from its own funds make a Revolving Credit Loan on behalf of any
Lender. In such event, the Lender on behalf of whom Agent made the Revolving
Credit Loan shall reimburse Agent for the amount of such Revolving Credit Loan
made on its behalf on the next Business Day. The entire amount of interest
attributable to such Revolving Credit Loan for the period from the date on which
such Revolving Credit Loan was made by Agent on such Lender's behalf until Agent
is reimbursed by such Lender, shall be paid to Agent for its own account.
3.1.4 Authorization. Borrower hereby irrevocably authorizes Agent to
advance to Borrower, and to charge to Borrower's Loan Account hereunder as a
Revolving Credit Loan, a
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sum sufficient to pay all interest accrued on the Obligations during the
immediately preceding month and to pay all fees, costs and expenses and other
Obligations at any time owed by Borrower to Agent or any Lender hereunder.
3.1.5 LIBOR Advances. Notwithstanding the provisions of Subsection
3.1.1, in the event Borrower desires to obtain a LIBOR Advance, Borrower shall
give Agent prior, written, irrevocable notice no later than 2:00 p.m. New York
time on the 3rd Business Day prior to the requested borrowing date specifying
(i) Borrower's election to obtain a LIBOR Advance, (ii) the date of the proposed
borrowing (which shall be a Business Day) and (iii) the amount to be borrowed,
which amount shall be in a minimum principal amount of US$2,000,000 and may
increase in integral multiples of US$100,000. In no event shall Borrower be
permitted to have outstanding at any one time LIBOR Advances with more than
fifteen (15) different Interest Periods with respect to Revolving Credit Loans
(including no more than five (5) different Interest Periods at any one time with
respect to Pounds Sterling Denominated Revolving Credit Loans).
3.1.6 Conversion of Base Rate Advances. Provided that no Default or
Event of Default has occurred which is then continuing, Borrower may, on any
Business Day, convert any Revolving Credit Loan which is a Base Rate Advance
into a LIBOR Advance. If Borrower desires to convert such a Base Rate Advance,
Borrower shall give Agent not less than three (3) Business Days' prior written
notice (prior to 2:00 p.m. New York time on such Business Day), specifying the
date of such conversion and the amount to be converted. Each conversion into or
conversion of a LIBOR Advance shall be in a minimum principal amount of
US$2,000,000 and may increase in integral multiples of US$100,000 in excess
thereof. After giving effect to any conversion of Base Rate Advances to LIBOR
Advances, Borrower shall not be permitted to have outstanding at any one time
LIBOR Advances with more than fifteen (15) different Interest Periods with
respect to Revolving Credit Loans (including no more than five (5) different
Interest Periods at any one time with respect to Pounds Sterling Denominated
Revolving Credit Loans).
3.1.7 Continuation of LIBOR Advances. Borrower shall have the right on
three (3) Business Days' prior irrevocable written notice given to Agent by
Borrower (prior to 2:00 p.m. New York time on such Business Day), subject to the
provisions hereof, to continue any LIBOR Advance into a subsequent Interest
Period of the same or a different permitted duration, in each case subject to
the satisfaction of the following conditions:
(i) in the case of a continuation of less than all LIBOR
Advances, the LIBOR Advances continued shall each be in a minimum
principal amount of US$2,000,000 and may increase in integral
multiples of US$100,000; and
(ii) no LIBOR Advance (or portion thereof) may be continued
as a LIBOR Advance if a Default or Event of Default has occurred which
is then continuing or if, after giving effect to such continuation,
Borrower has outstanding LIBOR Advances with more than fifteen (15)
different Interest Periods with respect to Revolving Credit Loans
(including no more than five (5)
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different Interest Periods at any one time with respect to Pounds
Sterling Denominated Revolving Credit Loans).
If Borrower shall fail to give timely notice of its election to
continue any LIBOR Advance or portion thereof as provided above, or if such
continuation shall not be permitted, such LIBOR Advance or portion thereof,
unless such LIBOR Advance shall be repaid, shall automatically be converted into
a Base Rate Advance at the end of the Interest Period then in effect with
respect to such LIBOR Advance.
3.1.8 Inability to Make LIBOR Advances. Notwithstanding any other
provision hereof, if any (i) change in applicable law, treaty, regulation or
directive, or any change in the interpretation or application thereof, shall
make it unlawful for any Lender (for purposes of this Subsection 3.1.8, the term
"Lender" shall include the office or branch where a Lender or any corporation or
bank then controlling such Lender makes or maintains any LIBOR Advances) to make
or maintain its LIBOR Advances, or (ii) if with respect to any Interest Period,
Agent is unable to determine the LIBOR relating thereto, or (iii) adverse or
unusual conditions in, or changes in applicable law relating to, the London
interbank market make it, in the reasonable judgment of a Lender, impracticable
to fund therein any of the LIBOR Advances, or (iv) if Majority Lenders shall, at
least one Business Day before the requested date of any Borrowing hereunder,
notify Agent that the projected LIBOR is unreflective of the actual costs of
funds therefore to such Lenders, the obligation of the affected Lender (or in
the case of clauses (ii) and (iv), all Lenders) to make LIBOR Advances hereunder
shall forthwith be suspended during the pendency of such circumstances and
Borrower shall, if any affected LIBOR Advances are then outstanding, promptly
upon request from such Lender, convert such affected LIBOR Advances into Base
Rate Advances; provided, that if Borrower receives a notice pursuant to clauses
(iii) or (iv), so long as no Default or Event of Default shall have occurred and
be continuing and Borrower has obtained a commitment from another Lender or
other financial institution, acceptable to Agent in its reasonable discretion,
to become a Lender for all purposes under this Agreement and to assume all
obligations of the Lender to be replaced, at any time after receipt of such
notice and while the circumstances causing LIBOR not to be available, Borrower
may require the Lender giving such notice to assign all of its Loans, Revolving
Loan Commitments and other Obligations to such other Lender or financial
institution pursuant to the provisions of Subsection 10.9.1; provided further
that, prior to or concurrently with such replacement (x) Borrower has paid to
the Lender giving such notice all principal, interest, fees and other amounts
due and owing to such Lender through such date of replacement, (y) Agent has
received the processing and recordation fee required to be paid by Subsection
10.9.1, and (z) all of the requirements for such assignment contained in
Subsection 10.9.1, including, without limitation, the receipt by Agent of an
executed assignment and assumption agreement and other supporting documents,
have been fulfilled.
3.1.9 Letter of Credit and LC Guaranty Requests. A request for a
Letter of Credit or LC Guaranty shall be made in the following manner: Borrower
may give Agent and Bank a written notice of its request for the issuance of a
Letter of Credit or LC Guaranty, not later than 2:00 p.m. New York time, one
Business Day before the proposed issuance date thereof, in which notice Borrower
shall specify the proposed issuer, issuance date and format and wording for the
Letter of Credit or LC Guaranty being requested (which shall be satisfactory to
Agent and the Person being asked to issue such Letter of Credit or LC Guaranty);
provided, that
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no such request may be made at a time when there exists a Default or Event of
Default or other conditions set forth in Section 8.2 are not satisfied. Such
request shall be accompanied by an executed application and reimbursement
agreement in form and substance satisfactory to Agent and the Person being asked
to issue the Letter of Credit or LC Guaranty, as well as any required
resolutions.
3.1.10 Method of Making Requests. As an accommodation to Borrower,
unless a Default or an Event of Default is then in existence, (i) Agent shall
permit telephonic requests for Revolving Credit Loans to Agent, (ii) Agent and
Bank may, in their discretion, permit electronic transmittal of requests for
Letters of Credit and LC Guaranties to them, and (iii) Agent may, in Agent's
discretion, permit electronic transmittal of instructions, authorizations,
agreements or reports to Agent. Unless Borrower specifically directs Agent or
Bank in writing not to accept or act upon telephonic or electronic
communications from Borrower, neither Agent nor Bank nor any Lender shall have
any liability to Borrower for any loss or damage suffered by Borrower as a
result of Agent's or Bank's honoring of any requests, execution of any
instructions, authorizations or agreements or reliance on any reports
communicated to it telephonically or electronically and purporting to have been
sent to Agent or Bank by an authorized officer of Borrower, and neither Agent
nor Bank shall have any duty to verify the origin of any such communication or
the authority of the person sending it. Each telephonic request for a Revolving
Credit Loan accepted by Agent hereunder shall be promptly followed by a written
confirmation of such request from Borrower to Agent.
3.1.11 Swing Line Loans; Settlement Procedures. In order to facilitate
the administration of the Revolving Credit Loans, notwithstanding the provisions
of Subsection 3.1.3, Agent may make US Revolving Credit Loans on behalf of the
Lenders (each, a "Swing Line Loan"); provided that Agent shall not make any
Swing Line Loan if the aggregate outstanding principal amount of all Swing Line
Loans (taking into account the Loan to be made and any repayments received on
such date) would exceed US$10,000,000, and settlement will be made among the
Lenders and Agent in accordance with this Subsection 3.1.11. Each Lender's
obligation to fund its Revolving Loan Percentage of each Swing Line Loan shall
commence on the date on which such Swing Line Loan is made by Agent, and each
Lender shall be deemed to have irrevocably and unconditionally purchased a
participation in such Swing Line Loan in an amount equal to its Revolving Credit
Percentage of the Swing Line Loan. All Swing Line Loans shall be Base Rate
Advances, and interest accrued on the Swing Line Loans shall be for the account
of Agent until settlement is made in accordance with this Section. Settlement of
all Swing Line Loans in excess of US$1,000,000 (or such lesser amount as
required by Agent) shall be made weekly on the date (each, a "Settlement Date")
selected by Agent and in any event on the date on which the outstanding balance
of the Swing Line Loans shall have increased or decreased since the last
Settlement Date by US$10,000,000 or more, or more frequently if Agent elects.
Agent will advise each Lender electronically or by telephone, facsimile or
telecopy of its Revolving Loan Percentage of the Swing Line Loans, and in the
event that payments are necessary to be made so that each Lender has funded
Revolving Credit Loans equal to its Revolving Loan Percentage of all outstanding
Revolving Credit Loans, each Lender shall transfer such amount to Agent, or
Agent shall transfer such amount to each Lender, in immediately available funds
no later than 4 p.m. (New York time) on the Settlement Date if Agent has
delivered notice prior to 12:00 noon (New York time) on the Settlement Date or
by 1:00 p.m. (New York time) on the next Business Day if notice is given later.
Settlements shall
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be made whether or not any Default or Event of Default exists and whether or not
the conditions to Revolving Credit Loans have been met; provided however, that
notwithstanding the foregoing, a Lender shall not have any obligation to acquire
a participation in a Swing Line Loan pursuant to this Subsection 3.1.11 if a
Default or Event of Default existed or any conditions precedent to making Loans
were not satisfied at the time such Swing Line Loan was made and such Lender
shall have notified Agent in writing, at least one Business Day prior to the
time such Swing Line Loan was made, that the foregoing circumstances existed and
that such Lender would not acquire participations in Swing Line Loans made while
such circumstances continued. If any Lender fails to fund any amount due to
Agent under this Section on the Settlement Date, Agent shall be entitled to
recover such amount on demand from such Lender, together with interest thereon
at the interest rate then applicable to the Revolving Credit Loans. All payments
made by the Lenders under this Subsection 3.1.11 shall be deemed to be Revolving
Credit Loans made to Borrower in accordance with this Agreement.
3.2 Payments. Except where evidenced by notes or other instruments issued
or made by Borrower to any Lender and accepted by such Lender specifically
containing payment instructions that are in conflict with this Section 3.2 (in
which case the conflicting provisions of said notes or other instruments shall
govern and control), the Obligations shall be payable, without setoff or
counter-claim, as follows:
3.2.1 Principal. Principal payable on account of Revolving Credit
Loans shall be payable by Borrower (or UK Borrower, as the case may be) to Agent
for the ratable benefit of Lenders immediately upon the earliest of (i) the
receipt by Agent or Borrower of any proceeds of any of the Collateral (except as
otherwise provided herein), including without limitation pursuant to Subsections
3.3.1 and 5.2.5, to the extent of said proceeds, subject to Borrower's rights to
reborrow such amounts in compliance with Subsection 1.1.1 hereof; (ii) the
occurrence of an Event of Default in consequence of which Agent or Majority
Lenders elect to accelerate the maturity and payment of the Obligations, or
(iii) termination of this Agreement pursuant to Section 3.16 hereof; provided,
however, that, if an Overadvance shall exist at any time, Borrower shall
immediately repay the Overadvance. Each payment (including principal
prepayments) by Borrower on account of principal of the Revolving Credit Loans
shall be applied first to Base Rate Advances, then to LIBOR Advances, subject to
Subsection 3.2.5 hereof. If any amounts collected by Agent exceed the Revolving
Credit Loans outstanding (including any amounts charged to Borrower under this
Agreement), such amounts shall be disbursed to Borrower or at its written
direction.
3.2.2 Interest.
(a) Base Rate Advances. Interest accrued on Base Rate Advances
shall be due and payable on the earliest of (1) the first calendar day of
each month (for the immediately preceding month), computed through the last
calendar day of the preceding month, (2) the occurrence of an Event of
Default in consequence of which Agent or Majority Lenders elect to
accelerate the maturity and payment of the Obligations or (3) termination
of this Agreement pursuant to Section 3.16 hereof.
(b) LIBOR Advances. Interest accrued on each LIBOR Advance shall
be due and payable on each LIBOR Interest Payment Date and on the earliest
of (1) the
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occurrence of an Event of Default in consequence of which Agent or Majority
Lenders elect to accelerate the maturity and payment of the Obligations or
(2) termination of this Agreement pursuant to Section 3.16 hereof.
3.2.3 Costs, Fees and Charges. Costs, fees and charges payable
pursuant to this Agreement shall be payable by Borrower to Agent, as and when
provided in Section 2 hereof or to any other Person designated by Agent in
writing.
3.2.4 Other Obligations. The balance of the Obligations requiring the
payment of money, if any, shall be payable by Borrower to Agent for distribution
to Lenders, as appropriate, as and when provided in this Agreement, the Other
Agreements or the Security Documents, or if not so provided, on demand.
3.2.5 Prepayment of LIBOR Advances. Borrower may prepay a LIBOR
Advance only on the last day of the Interest Period for such LIBOR Advance. If
Borrower shall nonetheless pay or repay a LIBOR Advance on any other date,
Borrower shall pay to Agent, upon request of Agent, such amount or amounts as
shall be sufficient (in the reasonable opinion of Agent) to compensate Lenders
for any loss, cost, or expense incurred as a result of: (i) any payment of a
LIBOR Advance on a date other than the last day of the Interest Period for such
Loan; (ii) any failure by Borrower to borrow a LIBOR Advance on the date
specified by Borrower's written notice; or (iii) any failure by Borrower to pay
a LIBOR Advance on the date for payment specified in Borrower's written notice;
provided that each Lender waives any amounts payable pursuant to this Section
3.2.5 as a result of payment of LIBOR Advances under the Existing Loan Agreement
on the Restatement Date. If by reason of an Event of Default, Agent or Majority
Lenders elect to declare the Obligations to be immediately due and payable, then
any breakage costs with respect to a LIBOR Advance shall become due and payable
in the same manner as though Borrower had exercised such right of prepayment.
3.3 Mandatory and Optional Prepayments.
3.3.1 Proceeds of Sale, Loss, Destruction or Condemnation of
Collateral. Except as provided in Subsection 7.2.5(i), if Borrower or any of its
Subsidiaries sells or otherwise disposes of any of the Equipment or real
Property or other Collateral or assets, or if a Casualty Loss occurs with
respect to any of the Collateral, Borrower shall, unless otherwise agreed by
Majority Lenders, pay to Agent for the ratable benefit of Lenders as and when
received by Borrower or such Subsidiary and as a mandatory prepayment of the
Loans, as herein provided, a sum equal to the proceeds (including insurance
payments and condemnation awards but net of costs and taxes incurred in
connection with such sale or event) ("Sale Proceeds") received by Borrower or
such Subsidiary from such sale or Casualty Loss. The applicable prepayment shall
be applied to reduce the outstanding principal balance of the Revolving Credit
Loans, but, except as provided below, shall not permanently reduce the Revolving
Loan Commitments; provided that any sale or Casualty Loss of Inventory,
Equipment or Specified Real Property shall reduce the US Borrowing Base to the
extent of the value of the applicable Property. Such reduction shall be
effective on the date of consummation of the sale or receipt of proceeds of a
Casualty Loss if the Sale Proceeds are equal to or greater than five percent
(5%) of Availability on such date (without giving effect to the application of
the Sale Proceeds) and otherwise as of the date on which Borrower delivers its
new Borrowing Base Certificate pursuant to Subsection 7.1.4. If
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Borrower and its Subsidiaries do not reinvest the proceeds of any sales or other
dispositions of assets within 364 days after receipt of such proceeds in assets
used in their business and would be required to make a "Net Proceeds Offer" (as
defined in the Senior Note Indenture), then the Revolving Loan Commitments shall
be automatically permanently reduced by an amount equal to the uninvested
portion of such proceeds on the 364th day after receipt of such proceeds.
Notwithstanding the foregoing, Sale Proceeds received by a UK Borrower shall be
applied to its Revolving Credit Loans to the extent outstanding, and not to the
Revolving Credit Loans of the Borrower.
3.3.2 Proceeds from Issuance of Additional Indebtedness or Equity. If
Borrower or any Subsidiary issues any additional Indebtedness (other than
intercompany Indebtedness) or obtains any additional equity in a manner
permitted under this Agreement, Borrower shall pay to Agent for the ratable
benefit of Lenders, when and as received by any Borrower and as a mandatory
prepayment of the Obligations, a sum equal to 100% of the net cash proceeds to
Borrower or such Subsidiary of the issuance of such Indebtedness or equity. Any
such prepayment shall be applied to reduce the outstanding principal balance of
the Revolving Credit Loans, but shall not permanently reduce the Revolving Loan
Commitments. Proceeds received by a UK Borrower shall be applied to its
Revolving Credit Loans to the extent outstanding, and not to the Revolving
Credit Loans of Borrower. If the proceeds of the issuance of Securities are to
be used to redeem or repurchase Senior Notes in accordance with Subsection
7.2.6(b) hereof, such proceeds shall be paid to Agent for application to the
Revolving Credit Loans but, subject to the terms of this Agreement, may be
reborrowed for such redemption or repurchase.
3.3.3 LIBOR Advances. If the application of any payment made in
accordance with the provisions of this Section 3.3 at a time when no Event of
Default has occurred and is continuing would result in termination of a LIBOR
Advance prior to the last day of the Interest Period for such LIBOR Advance, the
amount of such prepayment shall not be applied to such LIBOR Advance, but will,
at Borrower's option, be deposited by Borrower in an interest bearing account at
Bank or another bank satisfactory to Agent in its discretion, which account is
in the name of Borrower and under the control of Agent and from which account
only Agent can make any withdrawal, in each case to be applied as such amount
would otherwise have been applied under this Section 3.3 at the earlier to occur
of (i) the last day of the relevant Interest Period or (ii) the occurrence of a
Default or an Event of Default.
3.3.4 Optional Reductions of Revolving Loan Commitments. Borrower may,
at its option from time to time upon not less than 3 Business Days' prior
written notice to Agent, terminate in whole or permanently reduce ratably in
part, the unused portion of the Revolving Loan Commitments, provided, however,
that each such partial reduction shall be in an amount of US$5,000,000 or
integral multiples of US$1,000,000 in excess thereof. Except for charges under
Subsection 3.2.5 applicable to prepayments of LIBOR Advances, such prepayments
shall be without premium or penalty, but Borrower shall repay the Loans (or
provide cash collateral for the LC Amount) to the extent that the sum of the
outstanding principal amount of the Revolving Credit Loans, the LC Amount and
all unpaid LC Obligations exceeds the Revolving Loan Commitments as so reduced.
3.3.5 Exchange Rate Prepayments. If on the date on which Borrower
delivers its Borrowing Base Certificate pursuant to Subsection 7.1.4,
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(a) the aggregate amount of the UK Revolving Loan Exposure of all
the Lenders (determined on an as-converted to US Dollars basis at currently
prevailing exchange rates as determined by the Agent) exceeds the UK
Sublimit (the amount of such excess, the "UK Prepayment Amount"), within
three (3) Business Days thereof, Borrower shall pay to Agent for the
ratable benefit of Lenders, as a mandatory prepayment of the Obligations, a
sum equal to the UK Prepayment Amount, to be applied to reduce the
outstanding principal balance of the UK Revolving Credit Loans; or
(b) the aggregate principal amount of the Pounds Sterling
Denominated Revolving Credit Loans made to Borrower (determined on an
as-converted to US Dollars basis at currently prevailing exchange rates as
determined by the Agent) exceeds $50,000,000, (the amount of such excess,
the "Borrower UK Prepayment Amount"), within three (3) Business Days
thereof, Borrower shall pay to Agent for the ratable benefit of Lenders, as
a mandatory prepayment of the Obligations, a sum equal to the Borrower UK
Prepayment Amount, to be applied to reduce the outstanding principal
balance of the Pounds Sterling Denominated Revolving Credit Loans; or
(c) the aggregate amount of the Revolving Loan Exposure of all
the Lenders (with the amount of Pounds Sterling Denominated Revolving
Credit Loans being determined on an as-converted to US Dollars basis at
currently prevailing exchange rates as determined by the Agent) exceeds the
lesser of (i) the Aggregate Borrowing Base and (ii) the Revolving Credit
Maximum Amount (the amount of such excess, the "Aggregate Prepayment
Amount"), within three (3) Business Days thereof, Borrower shall pay to
Agent for the ratable benefit of Lenders, as a mandatory prepayment of the
Obligations, a sum equal to the Aggregate Prepayment Amount, to be applied
to reduce the outstanding principal balance of the Revolving Credit Loans.
Prepayments under this subsection 3.3.5 shall not permanently reduce the
Revolving Loan Commitments.
3.4 Application of Payments and Collections. All items of payment received
by Agent by 3 p.m., New York time, on any Business Day shall be deemed received
on that Business Day. All items of payment received after 3 p.m., New York time,
on any Business Day shall be deemed received on the following Business Day.
Borrower irrevocably waives the right to direct the application of any and all
payments and collections at any time or times hereafter received by Agent from
or on behalf of Borrower, any UK Borrower or any Guarantor, and Borrower does
hereby irrevocably agree that Agent shall have the continuing exclusive right to
apply and reapply any and all such payments and collections received at any time
or times hereafter by Agent or its agent against the Obligations, in such manner
as Agent may deem advisable, notwithstanding any entry by Agent or any Lender
upon any of its books and records. If as the result of collections of Accounts
as authorized by Subsection 5.2.5 hereof or otherwise, a credit balance exists
in the Loan Account, such credit balance shall not accrue interest in favor of
Borrower, but shall be disbursed to Borrower or otherwise at Borrower's
direction in the manner set forth in Subsection 3.1.2, upon Borrower's request
at any time, so long as no Default or Event of Default then exists. Agent may at
its option, offset such credit balance against any of the Obligations upon and
during the continuance of an Event of Default.
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3.5 All Loans to Constitute One Obligation. The Loans shall constitute one
general Obligation of Borrower, and shall be secured by Agent's Lien for the
benefit of Agent and the ratable benefit of the Lenders upon all of the
Collateral.
3.6 Loan Account. Agent shall enter all Loans as debits to a loan account
(the "Loan Account") and shall also record in the Loan Account all payments made
on any Obligations and all proceeds of Collateral which are finally paid to
Agent, and may record therein, in accordance with customary accounting practice,
other debits and credits, including interest and all charges and expenses
properly chargeable to Borrower pursuant to this Agreement or any other Loan
Document.
3.7 Statements of Account. Agent will account to Borrower monthly with a
statement of Loans, charges and payments made pursuant to this Agreement during
the immediately preceding month, and such account rendered by Agent shall be
deemed final, binding and conclusive upon Borrower absent demonstrable error
unless Agent is notified by Borrower in writing to the contrary within 30 days
of the date each accounting is received by Borrower. Such notice shall only be
deemed an objection to those items specifically objected to therein.
3.8 Sharing of Payments, Etc. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) on account of any Loan made by it in excess of its ratable share
of payments on account of Loans made by all Lenders, such Lender shall forthwith
purchase from each other Lender such participation in such Loan as shall be
necessary to cause such purchasing Lender to share the excess payment ratably
with each other Lender; provided, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
each Lender shall be rescinded and such Lender shall repay to the purchasing
Lenders the purchase price to the extent of such recovery, together with an
amount equal to such Lender's ratable share (according to the proportion of (i)
the amount of such Lender's required repayment to (ii) the total amount so
recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 3.8 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of
Borrower in the amount of such participation. Notwithstanding anything to the
contrary contained herein, all purchases and repayments to be made under this
Section 3.8 shall be made through Agent.
3.9 Increased Costs. If any law or any governmental or quasi-governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law) adopted after the date of this Agreement and having general
applicability to all banks within the jurisdiction in which any Lender operates
(excluding, for the avoidance of doubt, the effect of and phasing in of capital
requirements or other regulations or guidelines passed prior to the date of this
Agreement), or any interpretation or application thereof by any governmental
authority charged with the interpretation or application thereof, or the
compliance of such Lender therewith, shall:
(1) subject such Lender to any tax with respect to this Agreement
(other than (a) any tax based on or measured by net income or otherwise in
the nature of a net income tax, including, without limitation, any
franchise tax or any similar tax based
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on capital, net worth or comparable basis for measurement and (b) any tax
collected by a withholding on payments and which neither is computed by
reference to the net income of the payee nor is in the nature of an advance
collection of a tax based on or measured by the net income of the payee) or
(2) change the basis of taxation of payments to such Lender of principal,
fees, interest or any other amount payable hereunder or under any Loan
Documents (other than in respect of (a) any tax based on or measured by net
income or otherwise in the nature of a net income tax, including, without
limitation, any franchise tax or any similar tax based on capital, net
worth or comparable basis for measurement and (b) any tax collected by a
withholding on payments and which neither is computed by reference to the
net income of the payee nor is in the nature of an advance collection of a
tax based on or measured by the net income of the payee);
(2) impose, modify or hold applicable any reserve (except any
reserve taken into account in the determination of the applicable LIBOR),
special deposit, assessment or similar requirement against assets held by,
or deposits in or for the account of, advances or loans by, or other credit
extended by, any office of such Lender, including (without limitation)
pursuant to Regulation D of the Board of Governors of the Federal Reserve
System; or
(3) impose on such Lender or the London interbank market any
other condition with respect to any Loan Document; or
(4) impose on such Lender any capital requirements.
and the result of any of the foregoing is to increase the cost to such Lender of
making, renewing or maintaining its Loans hereunder by an amount that such
Lender deems to be material or to reduce the amount of any payment (whether of
principal, interest or otherwise) in respect of any of such Loans by an amount
that such Lender deems to be material, or reduces the rate of return on such
Lender's capital as a result of its obligations hereunder by an amount such
Lender deems to be material, then, in any such case, Borrower shall pay such
Lender, upon demand and certification not later than six months following its
receipt of notice of the imposition of such increased costs or such reduced
return, such additional amount as will compensate such Lender for such
additional cost or such reduction, as the case may be, to the extent such Lender
has not otherwise been compensated, with respect to a particular Loan, for such
increased cost or such reduced return as a result of an increase in the Base
Rate or the LIBOR. An officer of such Lender shall determine the amount of such
additional cost or reduced amount using reasonable averaging and attribution
methods and shall certify the amount of such additional cost or reduced amount
to Borrower, which certification shall include a written explanation of such
additional cost or reduction to Borrower. Such certification shall be conclusive
absent manifest error. If such Lender claims any additional cost or reduced
amount pursuant to this Subsection 3.9.1, then such Lender shall use reasonable
efforts (consistent with legal and regulatory restrictions) to designate a
different lending office or to file any certificate or document reasonably
requested by Borrower if the making of such designation or filing would avoid
the need for, or reduce the amount of, any such additional cost or reduced
amount and would not, in the sole discretion of such Lender, be otherwise
disadvantageous to such Lender.
3.10 Taxes.
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3.10.1 Gross Up for Indemnified Taxes. If Borrower or UK Borrower
shall be required by Applicable Law to withhold or deduct any Indemnified Taxes
from or in respect of any sum payable under this Agreement or any of the other
Loan Documents (a "Tax Deduction"), (i) the sum payable to Agent or such Lender
shall be increased as may be necessary so that, after making all required Tax
Deductions, Agent or such Lender (as the case may be) receives an amount equal
to the sum it would have received had no such Tax Deductions been made, (ii)
Borrower or UK Borrower, as the case may be, shall make such Tax Deductions, and
(iii) Borrower or UK Borrower, as the case may be, shall pay the full amount of
any such Tax Deductions to the relevant taxation authority or other authority in
accordance with Applicable Law.
3.10.2 United States. No increased payments by Borrower or UK Borrower
to Agent or any Lender with respect to a Tax Deduction shall be required
pursuant to Subsection 3.10.1 of this Agreement unless the applicable Lender has
complied with the requirements of this Subsection 3.10.2.
(a) Each Lender that is a United States Person (as such term is
defined in Section 7701(a)(30) of the Internal Revenue Code) shall deliver
to Borrower and Agent on or prior to the Restatement Date (in the case of
each Lender listed on the signature pages hereof on the Restatement Date)
or on or prior to the date such Lender became a party hereto (in the case
of each other Lender), and at such other times as may be necessary in the
determination of Borrower or Agent (each in the reasonable exercise of its
discretion), two properly completed and duly executed originals of United
States Internal Revenue Service Form W-9 (or any successor form) certifying
that such Lender is not subject to United States federal backup withholding
tax.
(b) Each Lender that is not a United States Person (as such term
is defined in Section 7701(a)(30) of the Internal Revenue Code) shall
deliver to Borrower and Agent on or prior to the Restatement Date (in the
case of each Lender listed on the signature pages hereof on the Restatement
Date) or on or prior to the date such Lender became a party hereto (in the
case of each other Lender), and at such other times as may be necessary in
the determination of Borrower or Agent (each in the reasonable exercise of
its discretion), either of the following:
(i) if such Lender is not (1) a "bank" as described in
Section 881(c)(3)(A) of the Internal Revenue Code, (2) a 10%
shareholder of Borrower (within the meaning of Section 871(h)(3)(B) of
the Internal Revenue Code), or (3) a controlled foreign corporation
related to Borrower within the meaning of Section 864(d)(4) of the
Internal Revenue Code, a statement, signed under penalty of perjury,
to the effect that such Lender is eligible for a complete exemption
from withholding of United States federal income tax under the
"portfolio interest" exemption and two properly completed and duly
executed originals of United States Internal Revenue Service Form
W-8BEN (or any successor form); or
(ii) two properly completed and duly executed originals of
United States Internal Revenue Service Form W-8BEN or Form W-8ECI,
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certifying in either case that such Lender is entitled to receive any
payment under this Agreement or any of the other Loan Documents
without deduction or withholding of any United States federal income
tax, and such other documentation required under the Internal Revenue
Code and reasonably requested by Borrower to establish that such
Lender is not subject to any such deduction or withholding of United
States federal income tax.
(c) Each Lender that so delivers the documents required under
either paragraphs (a) or (b) above (each such form, statement, certificate
or document shall be referred to herein as an "Exemption Certificate")
shall further undertake to deliver to Borrower and Agent such an Exemption
Certificate on or before the date that such Exemption Certificate expires,
becomes obsolete or after the occurrence of any event requiring a change in
the Exemption Certificate so delivered by it, and such amendments thereto
or extensions or renewals thereof as may be reasonably requested by
Borrower or Agent, in each case, certifying that such Lender is entitled to
receive any payment under this Agreement or any other Loan Documents
without deduction or withholding of any United States federal income tax,
unless an event (including any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required under this Subsection 3.10.2(c) that renders all such Exemption
Certificates inapplicable or that would prevent such Lender from duly
completing and delivering any such Exemption Certificate with respect to it
and such Lender advises Borrower and Agent that it is not capable of
receiving payments without any deduction or withholding of United States
federal income tax.
3.10.3 United Kingdom.
(a) No increased payment by UK Borrower to any Lender with
respect to a Tax Deduction shall be required pursuant to Subsection 3.10.1
of this Agreement if, on the date on which the payment falls due:
(i) the payment could have been made to the relevant Lender
without a Tax Deduction if it was a Qualifying Lender, but on that
date such Lender is not or has ceased to be a Qualifying Lender other
than as a result of any change after the date it became a Lender under
this Agreement in (or in the interpretation, administration or
application of) any law or Treaty, or any published practice or
concession of any relevant taxing authority;
(ii) the relevant Lender is a Qualifying Lender solely under
one of the clauses (i) through (iii) of the definition of Qualifying
Lender and has not, following a written request from the Credit
Parties, other than by reason of any change after the date of this
Agreement in (or in the interpretation, administration or application
of) any Applicable Law, or any published practice or concession of any
relevant taxing authority, given a Tax Confirmation to the Credit
Parties; or
(iii) the relevant Lender is a Treaty Lender and the UK
Borrower is able to demonstrate that the payment could have been made
to the
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Lender without the Tax Deduction had that Lender complied with its
obligations under Subsection 3.10.3(b) below.
(b) UK Borrower shall cooperate in completing, as soon as
reasonably practicable, any procedural formalities necessary for the UK
Borrower to obtain authorization to make that payment without a Tax
Deduction (including, for the avoidance of doubt, the completion and
submission to UK Borrower or to the United Kingdom Inland Revenue (as
applicable) of such properly completed and executed forms and documentation
prescribed by Applicable Law as may reasonably be requested by UK
Borrower).
(c) A UK Non-Bank Lender that becomes a party hereto as of the
Restatement Date shall by entering into this Agreement be deemed to have
given a Confirmation as of such date.
(d) Each UK Non-Bank Lender shall promptly notify Borrower and
Agent if there is any change in the position from that set out in the
applicable Tax Confirmation.
(e) Each relevant Lender shall, within 20 Business Days of
becoming a party to which any Credit Party is required to make payment
under this Agreement, notify the Credit Party in writing whether or not it
is a Qualifying Lender with respect to payments of interest and, if it is a
Qualifying Lender with respect to payments of interest, within which
clause(s) of the definition of "Qualifying Lender" it falls and notify the
Credit Party as soon as possible in writing should it subsequently become
aware that such notification has ceased to be correct.
3.11 Affected Lenders. If Borrower receives a demand for payments under
Section 3.9 or 3.10, so long as no Default or Event of Default shall have
occurred and be continuing and Borrower has obtained a commitment from another
Lender or other financial institution, acceptable to Agent in its reasonable
discretion, to become a Lender for all purposes under this Agreement and to
assume all obligations of the Lender to be replaced, at any time after receipt
of such demand for payments and while the circumstances causing LIBOR not to be
available continue, Borrower may require the Lender giving such notice to assign
all of its Loans, Revolving Loan Commitments and other Obligations to such other
Lender or financial institution pursuant to the provisions of Subsection 10.9.1;
provided that, prior to or concurrently with such replacement (i) Borrower has
paid to the Lender giving such demand for payments all principal, interest, fees
and other amounts due and owing to such Lender through such date of replacement,
(ii) Agent has received the processing and recordation fee required to be paid
by Subsection 10.9.1, and (iii) all of the requirements for such assignment
contained in Subsection 10.9.1, including, without limitation, the receipt by
Agent of an executed assignment and assumption agreement and other supporting
documents, have been fulfilled.
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3.12 Basis for Determining Interest Rate Inadequate or Unfair. In the event
that Agent shall have determined that:
(i) reasonable means do not exist for ascertaining the LIBOR
for any Interest Period; or
(ii) Dollar deposits in the relevant amount and for the
relevant maturity are not available in the London interbank market
with respect to a proposed LIBOR Advance, or a proposed conversion of
a Base Rate Advance into a LIBOR Advance; then
Agent shall give Borrower prompt written, telephonic or electronic notice of the
determination of such effect. If such notice is given, (i) any such requested
LIBOR Advance shall be made as a Base Rate Advance, unless Borrower shall notify
Agent no later than 2:00 p.m. (New York time) two (2) Business Days prior to the
date of such proposed borrowing that the request for such borrowing shall be
canceled or made as an unaffected type of LIBOR Advance, and (ii) any Base Rate
Advance which was to have been converted to an affected type of LIBOR Advance
shall be continued as or converted into a Base Rate Advance, or, if Borrower
shall notify Agent, no later than 2:00 p.m. (New York time) two (2) Business
Days prior to the proposed conversion, shall be maintained as an unaffected type
of LIBOR Advance.
3.13 UK Revolving Credit Loans; Intra-Lender Issues.
3.13.1 Pounds Sterling Participations. Notwithstanding anything to the
contrary contained herein, all UK Revolving Credit Loans shall be made solely by
the Lenders with Pounds Sterling Funding Capacity. Each Lender that does not
have Pounds Sterling Funding Capacity (a "Participating Pounds Lender") shall
irrevocably and unconditionally purchase and acquire and shall be deemed to
irrevocably and unconditionally purchase and acquire from DB AG, and DB AG shall
sell and be deemed to sell to each such Participating Pounds Lender, without
recourse or any representation or warranty whatsoever, an undivided interest and
participation (a "Pounds Sterling Participation") in each UK Revolving Credit
Loan funded by DB AG in an amount equal to such Participating Pounds Lender's
Revolving Loan Percentage of the borrowing that includes such UK Revolving
Credit Loan. Such purchase and sale of a Pounds Sterling Participation shall be
deemed to occur automatically upon the making of a UK Revolving Credit Loan by
DB AG, without any further notice to any Participating Pounds Lender. The
purchase price payable by each Participating Pounds Lender to DB AG for each
Pounds Sterling Participation purchased by it from DB AG shall be equal to 100%
of the principal amount of such Pounds Sterling Participation (i.e., the product
of (i) the amount of the borrowing that includes the relevant UK Revolving
Credit Loan and (ii) such Participating Pounds Lender's Revolving Loan
Percentage), and such purchase price shall be payable by each Participating
Pounds Lender to DB AG in accordance with the settlement procedure set forth in
Subsection 3.13.2 below. DB AG and Agent shall record on their books the amount
of the UK Revolving Credit Loans made by DB AG and each Participating Pounds
Lender's Pounds Sterling Participation and Funded Pounds Sterling Participation
therein, all payments in respect thereof and interest accrued thereon and all
payments made by and to each Participating Pounds Lender pursuant to this
Subsection 3.13.
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3.13.2 Settlement Procedures for UK Revolving Credit Loan
Participations. Each Participating Pounds Lender's Pounds Sterling Participation
in the UK Revolving Credit Loans (other than Protective Advances) shall be in an
amount equal to its Revolving Loan Percentage of all such UK Revolving Credit
Loans. However, in order to facilitate the administration of the UK Revolving
Credit Loans made by DB AG and the Pounds Sterling Participations, settlement
among DB AG and the Participating Pounds Lenders with regard to the
Participating Pounds Lenders' Pounds Sterling Participations shall take place in
accordance with the following provisions:
(a) DB AG and the Participating Pounds Lenders shall settle (a
"Pounds Sterling Participation Settlement") by payments in respect of the
Pounds Sterling Participations as follows: So long as any UK Revolving
Credit Loans are outstanding, Pounds Sterling Participation Settlements
shall be effected through Agent on such Business Days as Agent shall
specify by a notice by telecopy, telephone or similar form of notice to
each Participating Pounds Lender requesting such Pounds Sterling
Participation Settlement (each such date on which a Pounds Sterling
Participation Settlement occurs herein called a "Pounds Sterling
Participation Settlement Date"), such notice to be delivered no later than
2:00 p.m. (New York time) at least one Business Day prior to the requested
Pounds Sterling Participation Settlement Date; provided, that Agent shall
have the option but not the obligation to specify a Pounds Sterling
Participation Settlement Date and, in any event, shall not specify a Pounds
Sterling Participation Settlement Date prior to the occurrence of an Event
of Default; provided, further, that if (x) such Event of Default is waived
in writing in accordance with the terms hereof, (y) no Obligations have yet
been declared due and payable under Subsection 9.2 and (z) Agent has actual
knowledge of such cure or waiver, all prior to Agent's giving notice to the
Participating Pounds Lenders of the first Pounds Sterling Participation
Settlement Date under this Agreement, then Agent shall not give notice to
the Participating Pounds Lenders of a Pounds Sterling Participation
Settlement Date based upon such cured or waived Event of Default. If on any
Pounds Sterling Participation Settlement Date the total principal amount of
the UK Revolving Credit Loans made or deemed made by DB AG during the
period ending on (but excluding) such Pounds Sterling Settlement Date and
commencing on (and including) the immediately preceding Pounds Sterling
Participation Settlement Date (or the Closing Date in the case of the
period ending on the first Pounds Sterling Participation Settlement Date)
(each such period herein called a "Pounds Sterling Participation Settlement
Period") is greater than the principal amount of UK Revolving Credit Loans
repaid during such Pounds Sterling Participation Settlement Period to DB
AG, each Participating Pounds Lender shall pay to DB AG (through Agent), no
later than 11:00 a.m. (New York time) on such Pounds Sterling Participation
Settlement Date, an amount equal to such Participating Pounds Lender's
ratable share of the amount of such excess. If in any Pounds Sterling
Participation Settlement Period the outstanding principal amount of the UK
Revolving Credit Loans repaid to DB AG in such period exceeds the total
principal amount of the UK Revolving Credit Loans made or deemed made by DB
AG during such period, DB AG shall pay to each Participating Pounds Lender
(through Agent) on such Pounds Sterling Participation Settlement Date an
amount equal to such Participating Pounds Lender's ratable share of such
excess. Pounds Sterling Participation Settlements in respect of UK
Revolving Credit Loans shall be made
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in Pounds Sterling (or the Equivalent Amount in Dollars) on the Pounds
Sterling Participation Settlement Date for such UK Revolving Credit Loans.
(b) If any Participating Pounds Lender fails to pay to DB AG on
any Pounds Sterling Participation Settlement Date the full amount required
to be paid by such Participating Pounds Lender to DB AG on such Pounds
Sterling Participation Settlement Date in respect of such Participating
Pounds Lender's Pounds Sterling Participation (such Participating Pounds
Lender's "Pounds Sterling Participation Settlement Amount") with DB AG, DB
AG shall be entitled to recover such unpaid amount from such Participating
Pounds Lender, together with interest thereon (in the same respective
currency or currencies as the relevant UK Revolving Credit Loans) at the
Base Rate plus 2% with respect to Loans denominated in Pounds Sterling.
Without limiting DB AG's rights to recover from any Participating Pounds
Lender any unpaid Pounds Sterling Participation Settlement Amount payable
by such Participating Pounds Lender to DB AG, Agent shall also be entitled
to withhold from amounts otherwise payable to such Participating Pounds
Lender an amount equal to such Participating Pounds Lender's unpaid Pounds
Sterling Participation Settlement Amount owing to DB AG and apply such
withheld amount to the payment of any unpaid Pounds Sterling Participation
Settlement Amount owing by such Participating Pounds Lender to DB AG.
(c) Following the first Pounds Sterling Participation Settlement
Date, Agent shall effect a Pounds Sterling Participation Settlement on each
subsequent Pounds Sterling Revolving Loan Settlement Date or within 1
Business Day thereafter.
3.13.3 Obligations Irrevocable. The obligations of each Participating
Pounds Lender to purchase from DB AG a participation in each UK Revolving Credit
Loan made by DB AG and to make payments to DB AG with respect to such
participation, in each case as provided herein, shall be irrevocable and not
subject to any qualification or exception whatsoever, including any of the
following circumstances:
(a) any lack of validity or enforceability of this Agreement or
any of the other Loan Documents or of any Revolving Credit Loans, against
Borrower, any UK Borrower or any Guarantor;
(b) the existence of any claim, setoff, defense or other right
which Borrower, any UK Borrower or any Guarantor may have at any time in
respect of any UK Revolving Credit Loans;
(c) any application or misapplication of any proceeds of any UK
Revolving Credit Loans;
(d) the surrender or impairment of any security for any UK
Revolving Credit Loans;
(e) the occurrence of any Default or Event of Default;
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(f) the commencement or pendency of any events specified in
Subsection 9.1.9 hereof, in respect of Borrower Parent or any Subsidiary
thereof, any other Guarantor or any other Person; or
(g) the failure to satisfy the applicable conditions precedent
set forth in Section 8 hereof.
3.13.4 Recovery or Avoidance of Payments. In the event any payment by
or on behalf of Borrower, any UK Borrower or any other Credit Party received by
Agent with respect to any UK Revolving Credit Loan made by DB AG is thereafter
set aside, avoided or recovered from Agent in connection with any Insolvency
Proceeding or due to any mistake of law or fact, each Participating Pounds
Lender shall, upon written demand by Agent, pay to DB AG (through Agent) such
Participating Pounds Lender's Revolving Loan Percentage of such amount set
aside, avoided or recovered, together with interest at the rate and in the
currency required to be paid by DB AG or Agent upon the amount required to be
repaid by it.
3.13.5 Indemnification by Lenders. Each Participating Pounds Lender
agrees to indemnify DB AG (to the extent not reimbursed by Borrower or UK
Borrower and without limiting the obligations of Borrower and UK Borrower
hereunder or under any other Loan Document) ratably for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorneys' fees) or disbursements of any kind and nature
whatsoever that may be imposed on, incurred by or asserted against DB AG in any
way relating to or arising out of any UK Revolving Credit Loans or any
participations by DB AG in any Letters of Credit denominated in Pounds Sterling
or related LC Support or any action taken or omitted by DB AG in connection
therewith; provided that no Participating Pounds Lender shall be liable for any
of the foregoing to the extent it arises from the gross negligence or willful
misconduct of DB AG. Without limiting the foregoing, each Participating Pounds
Lender agrees to reimburse DB AG promptly upon demand for such Participating
Pounds Lender's ratable share of any costs or expenses payable by the Borrowers
to DB AG in respect of the UK Revolving Credit Loans to the extent that DB AG is
not promptly reimbursed for such costs and expenses by the Borrowers. The
agreement contained in this Subsection 3.13.5 shall survive payment in full of
all UK Revolving Credit Loans.
3.13.6 UK Revolving Credit Loan Participation Fee. In consideration
for each Participating Pounds Lender's participation in the UK Revolving Credit
Loans made by DB AG, DB AG agrees to pay to Agent for the account of each
Participating Pounds Lender, as and when DB AG receives payment of interest on
its UK Revolving Credit Loans, a fee (the "Pounds Sterling Participation Fee")
at a rate per annum equal to the Applicable Margin on such UK Revolving Credit
Loans minus 0.25% on the Unfunded Pounds Sterling Participation of such
Participating Pounds Lender in such UK Revolving Credit Loans of DB AG. The
Pounds Sterling Participation Fee in respect of any unfunded Pounds Sterling
Participation in a UK Revolving Credit Loan shall be payable to Agent in Pounds
Sterling when interest on such UK Revolving Credit Loan is received by DB AG. If
DB AG does not receive payment in full of such interest, the Pounds Sterling
Participation Fee in respect of the unfunded Pounds Sterling Participation in
such UK Revolving Credit Loans shall be reduced proportionately. Any amounts
payable under this Subsection 3.13.6 by Agent to the Participating Pounds
Lenders shall
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be paid in Pounds Sterling (or the US Dollar equivalent thereof as determined by
the Agent in its sole discretion).
3.14 Judgment Currency.
3.14.1 Conversion. If, for the purposes of obtaining judgment in any
court, it is necessary to convert a sum due hereunder in any currency (the
"Original Currency") into another currency (the "Other Currency") the parties
hereto agree, to the fullest extent that they may effectively do so under
Applicable Law, that the rate of exchange used shall be that at which in
accordance with normal banking procedures Agent could purchase the Original
Currency with the Other Currency at 11:00 a.m. (New York time) on the second
Business Day preceding that on which final judgment is given.
3.14.2 Original Currency. The obligation of Borrower or any UK
Borrower in respect of any sum due in the Original Currency from it to any
Lender or any Agent hereunder shall, notwithstanding any judgment in any Other
Currency, be discharged only to the extent that on the Business Day following
receipt by such Lender or such Agent (as the case may be) of any sum adjudged to
be so due in such Other Currency such Lender or such Agent (as the case may be)
may in accordance with normal banking procedures purchase the Original Currency
with such Other Currency; if the amount of the Original Currency so purchased is
less than the sum originally due to such Lender or such Agent (as the case may
be) in the Original Currency, such Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify such Lender or such Agent (as
the case may be) against such loss, and if the amount of the Original Currency
so purchased exceeds the sum originally due to any Lender or such Agent (as the
case may be) in the Original Currency, such Lender or such Agent (as the case
may be) agrees to remit to Borrower or such UK Borrower such excess.
3.15 UK VAT.
3.15.1 Exclusive of VAT. All amounts payable under this Agreement or
any of the Loan Documents by any Credit Party to Agent or any Lender shall be
deemed to be exclusive of VAT. If any VAT is chargeable on any supply made by
Agent or any Lender to any Credit Party in connection with this Agreement or any
of the Loan Documents, that Credit Party shall, subject to receipt of a valid
VAT invoice, pay to such Agent or Lender (in addition to and at the same time as
paying the amount for such supply) an amount equal to the amount of the VAT.
3.15.2 VAT Tax. Where this Agreement or any Loan Document requires any
Credit Party to reimburse Agent or a Lender for any costs or expenses, that
Credit Party shall also at the same time pay and indemnify such Agent or Lender
against all VAT incurred by it in respect of such costs and expenses to the
extent that such Agent or Lender reasonably determines that neither it nor any
other member of any group of which it is a member for VAT purposes is entitled
to credit or repayment in respect of the VAT.
3.16 Term And Termination.
3.16.1 Term of Agreement. Subject to the right of Lenders to cease
making Loans to Borrower during the continuance of any Default or Event of
Default, this Agreement
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shall be in effect for the period from the Restatement Date through and
including February 17, 2011 (the "Term"), unless terminated as provided in
Subsection 3.16.2 hereof.
3.16.2 Termination.
(a) Termination by Lenders. Agent may, and at the direction of
Majority Lenders shall, terminate this Agreement without notice upon or after
the occurrence and during the continuance of an Event of Default.
(b) Termination by Borrower. Upon at least five (5) Business Days
prior written notice to Agent and Lenders, Borrower may, at its option,
terminate this Agreement; provided, however, no such termination shall be
effective until Borrower has paid or collateralized to Agent's reasonable
satisfaction all of the Obligations in immediately available funds, all Letters
of Credit and LC Guaranties have expired, terminated or have been cash
collateralized to Agent's satisfaction and Borrower has complied with Subsection
3.2.5. Unless Majority Lenders otherwise agree, any notice of termination given
by Borrower shall be irrevocable and no Lender shall have any obligation to make
any Loans or issue or procure any Letters of Credit or LC Guaranties on or after
the termination date stated in such notice. Borrower may elect to terminate this
Agreement in its entirety only. No section of this Agreement or type of Loan
available hereunder may be terminated singly.
(c) Additional Amounts. In addition to any other fees or charges
payable hereunder, in the event that Borrower provides less than five (5)
Business Days prior written notice of termination of this Agreement as required
by Subsection 3.16.2(b) in addition to any other amounts which are required to
be paid to Agent or any Lender under the Loan Documents, (i) Borrower agrees to
pay to Agent (for the ratable benefit of Lenders) an amount equal to the product
of (A) (I) the product of (X) the aggregate payoff amount of the Obligations
times (Y) the interest rates then applicable to the Obligations, divided by (II)
360 times (B) the difference between five (5) and the number of Business Days
prior written notice of termination of this Agreement given by Borrower to Agent
and the Lenders.
(d) Effect of Termination. All of the Obligations shall be immediately
due and payable upon the termination date stated in any notice of termination of
this Agreement. All undertakings, agreements, covenants, warranties and
representations of Borrower contained in the Loan Documents shall survive any
such termination and Agent shall retain its Liens in the Collateral and Agent
and each Lender shall retain all of its rights and remedies under the Loan
Documents notwithstanding such termination until all Obligations (other than
Derivative Obligations) have been discharged or paid, in full, in immediately
available funds, including, without limitation, all Obligations under Subsection
3.2.5 resulting from such termination. Notwithstanding the foregoing or the
payment in full of the Obligations, Agent shall not be required to terminate its
Liens in the Collateral unless, with respect to any loss or damage Agent may
incur as a result of dishonored checks or other items of payment received by
Agent from Borrower or any Account Debtor and applied to the Obligations, Agent
shall, at its option, (i) have received a written agreement satisfactory to
Agent, executed by Borrower, indemnifying Agent and each Lender from any such
loss or damage or (ii) have retained cash collateral for such period of time as
Agent, in its reasonable discretion, may deem necessary to protect Agent and
each Lender from any such loss or damage.
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SECTION 4. SECURITY INTERESTS
4.1 Security Interest in Collateral. To secure the prompt payment and
performance to Agent and each Lender of the Obligations, Borrower hereby
confirms the grant to the Prior Agent for the benefit of Agent and each Prior
Lender, their successors and assigns, of the Liens contained in the Existing
Loan Agreement and further grants to Agent for the benefit of Agent and each
Lender a continuing Lien upon all of Borrower's assets, including all of the
following Property and interests in Property of Borrower, whether now owned or
existing or hereafter created, acquired or arising and wheresoever located:
(i) Accounts;
(ii) Certificated Securities;
(iii) Chattel Paper, including Electronic Chattel Paper and
Tangible Chattel Paper;
(iv) Commercial Tort Claims;
(v) Computer Hardware and Software and all rights with
respect thereto, including, any and all licenses, options, warranties,
service contracts, program services, test rights, maintenance rights,
support rights, improvement rights, renewal rights and
indemnifications, and any substitutions, replacements, additions or
model conversions of any of the foregoing;
(vi) Contract Rights;
(vii) Deposit Accounts;
(viii) Documents;
(ix) Equipment;
(x) Financial Assets;
(xi) Fixtures;
(xii) General Intangibles, including Payment Intangibles and
Software;
(xiii) Goods (including all of its Equipment, Fixtures and
Inventory), and all accessions, additions, attachments, improvements,
substitutions and replacements thereto and therefore;
(xiv) Instruments;
(xv) Intellectual Property;
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(xvi) Inventory;
(xvii) Investment Property;
(xviii) money (of every jurisdiction whatsoever);
(xix) Letter-of-Credit Rights;
(xx) Payment Intangibles;
(xxi) Security Entitlements;
(xxii) Software;
(xxiii) Supporting Obligations;
(xxiv) Uncertificated Securities; and
(xxv) to the extent not included in the foregoing, all other
personal property of any kind or description;
together with all books, records, writings, data bases, information and other
property relating to, used or useful in connection with, or evidencing,
embodying, incorporating or referring to any of the foregoing, and all Proceeds,
products, offspring, rents, issues, profits and returns of and from any of the
foregoing; provided that to the extent that the provisions of any lease or
license of Computer Hardware and Software or Intellectual Property expressly
prohibit (which prohibition is enforceable under applicable law) any assignment
thereof, and the grant of security interest therein, Agent will not enforce its
security interest in Borrower's rights under such lease or license (other than
in respect of the Proceeds thereof) for so long as such prohibition continues,
it being understood that upon request of Agent, Borrower will in good faith use
reasonable efforts to obtain consent for the creation of a security interest in
favor of Agent (and to Agent's enforcement of such security interest) in Agent's
rights under such lease or license. Notwithstanding anything herein to the
contrary, in no event shall the Collateral include or the security interest
granted under Section 4.1 hereof attach to any of the outstanding capital stock
of a Controlled Foreign Corporation in excess of 65% of the voting power of all
classes of capital stock of such Controlled Foreign Corporation entitled to
vote; provided that immediately upon the amendment of the Internal Revenue Code
to allow the pledge of a greater percentage of the voting power of capital stock
in a Controlled Foreign Corporation without adverse tax consequences, the
Collateral shall include, and the security interest granted by the Borrower
shall attach to, such greater percentage of capital stock of each Controlled
Foreign Corporation.
4.2 Other Collateral.
4.2.1 Commercial Tort Claims. Borrower shall, and shall cause its
Subsidiaries to, promptly notify Agent in writing upon its obtaining knowledge
of the incurrence of or obtaining a Commercial Tort Claim after the Restatement
Date against any third party and, upon request of Agent, promptly enter into an
amendment to this Agreement or the Subsidiary
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Security Agreement, as applicable, and do such other acts or things deemed
appropriate by Agent to give Agent a security interest in any such Commercial
Tort Claim.
4.2.2 Other Collateral. Borrower shall, and shall cause its
Subsidiaries to, promptly notify Agent in writing upon acquiring or otherwise
obtaining any material amount of Collateral after the date hereof consisting of
Deposit Accounts, Investment Property, Letter of Credit Rights or Electronic
Chattel Paper and, upon the request of Agent, promptly execute such other
documents, and do such other acts or things deemed appropriate by Agent to
deliver to Agent control with respect to such Collateral; promptly notify Agent
in writing upon acquiring or otherwise obtaining any Collateral after the date
hereof consisting of Documents or Instruments and, upon the request of Agent,
will promptly execute such other documents, and do such other acts or things
deemed appropriate by Agent to deliver to Agent possession of such Documents
which are negotiable and Instruments (other than Instruments for which the
aggregate principal amount does not collectively exceed US$100,000), and, with
respect to nonnegotiable Documents, to have such nonnegotiable Documents issued
in the name of Agent; and with respect to Collateral in the possession of a
third party, other than Certificated Securities and Goods covered by a Document,
obtain an acknowledgement from the third party that it is holding the Collateral
for the benefit of Agent.
4.3 Lien Perfection; Further Assurances. Borrower shall, and shall cause
its Subsidiaries to, execute such UCC-1 financing statements as are required by
the UCC and such other instruments, assignments or documents as are necessary to
perfect Agent's Lien upon any of the Collateral and shall take such other action
as may be required to perfect or to continue the perfection of Agent's Lien upon
the Collateral. Unless prohibited by applicable law, Borrower hereby irrevocably
authorizes Agent to execute (if required) and file any such financing statements
or amendments, including, without limitation, financing statements that indicate
the Collateral (i) as all assets of Borrower or its Subsidiaries, as applicable,
or words of similar effect, or (ii) as being of an equal or lesser scope, or
with greater or lesser detail, than as set forth in Section 5.1, on Borrower's
or the applicable Subsidiary's behalf. Borrower, on behalf of itself and its
Subsidiaries, also hereby ratifies its authorization for Agent to have filed in
any jurisdiction any like financing statements or amendments thereto if filed
prior to the date hereof. The parties agree that a carbon, photographic or other
reproduction of this Agreement shall be sufficient as a financing statement and
may be filed in any appropriate office in lieu thereof. At Agent's request,
Borrower shall, and shall cause its Subsidiaries to, also promptly execute or
cause to be executed and shall deliver to Agent any and all documents,
instruments and agreements deemed necessary by Agent to give effect to or carry
out the terms or intent of the Loan Documents. Borrower shall, and shall cause
its Subsidiaries to, ▇▇▇▇ all Chattel Paper to note Agent's Liens therein.
Within 180 days of the Restatement Date (or such additional time as the Agent
shall determine in its sole discretion), the Borrower shall, and shall cause
each Subsidiary to, with respect to any asset of any Credit Party subject to a
Certificate of Title (other than Trailer Fleet Inventory aggregating less than
$5,000,000), take all action to have the Agent on behalf of the Lenders noted on
the respective Certificate of Title as the secured party with respect to such
asset. After the Restatement Date, promptly upon acquisition of any asset
subject to a Certificate of Title (other than Trailer Fleet Inventory to the
extent that such is less than $5,000,000 in the aggregate), the Borrower shall,
and shall cause each Subsidiary to, have the Agent noted on the respective
Certificate of Title as the secured party.
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4.4 Lien on Realty. The due and punctual payment and performance of the
Obligations shall also be secured by the Lien created by Mortgages upon all real
property of Borrower and its Subsidiaries now or hereafter owned, together with
all improvements or Fixtures on such real property. Each Mortgage shall be
executed by Borrower or the applicable Subsidiary in favor of Agent. Each
Mortgage shall be duly recorded, at Borrower's expense, in each office where
such recording is required to constitute a fully perfected first Lien on the
real property covered thereby, together with all improvements or Fixtures on
such real property. On the Restatement Date, Borrower shall deliver to Agent, at
Borrower's expense, amendments to the Mortgages on the Specified Real Property
and mortgagee title insurance policies or endorsements thereto issued by a title
insurance company satisfactory to Agent, which policies shall be in form and
substance satisfactory to Agent and shall insure a valid first Lien in favor of
Agent, for the benefit of itself and the Lenders, on the real property covered
by each Mortgage, subject only to those exceptions acceptable to Agent and its
counsel. Borrower shall deliver to Agent such other documents, including,
without limitation, as-built survey prints of the real property, as Agent and
its counsel may request relating to the real property subject to the Mortgages.
4.5 UK Security Documents. The parties hereby acknowledge and agree that,
on or before the initial borrowing under Subsection 1.1.3, the UK Credit Parties
shall execute and deliver the UK Security Documents, each in form and substance
satisfactory to Agent and Lenders.
SECTION 5. COLLATERAL ADMINISTRATION
5.1 General.
5.1.1 Location of Collateral. All Collateral, other than Inventory in
transit, Inventory held pursuant to leases at a lessee's location and motor
vehicles, will at all times be kept by Borrower and Guarantors at one or more of
business locations set forth in Exhibit 5.1.1 hereto, as updated pursuant to
Section 6.2 hereof.
5.1.2 Insurance of Collateral. Borrower shall maintain and pay for
insurance upon all Collateral wherever located and with respect to the business
of Borrower and Guarantors, covering casualty, hazard, public liability,
workers' compensation and such other risks in such amounts and with such
insurance companies as are reasonably satisfactory to Agent. Borrower shall
deliver certified copies of such policies to Agent as promptly as practicable,
with satisfactory lender's loss payable endorsements, naming Agent as loss payee
on any property insurance or business interruption insurance policies and as an
additional insured on any liability insurance policies, and showing only such
other loss payees, assignees and additional insureds as are satisfactory to
Agent. Each policy of insurance or endorsement shall contain a clause requiring
the insurer to give not less than 10 days prior written notice to Agent in the
event of cancellation of the policy for nonpayment of premium and not less than
30 days prior written notice to Agent in the event of cancellation of the policy
for any other reason whatsoever and a clause specifying that the interest of
Agent shall not be impaired or invalidated by any act or neglect of Borrower,
any of its Subsidiaries or the owner of the Property or by the occupation of the
premises for purposes more hazardous than are permitted by said policy. Borrower
agrees to deliver to Agent, promptly as rendered, true copies of all reports
made in any reporting forms to insurance companies. All proceeds of business
interruption insurance (if any)
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of Borrower and Guarantors shall be remitted to Agent for application to the
outstanding balance of the Revolving Credit Loans.
Unless Borrower provides Agent with evidence of the insurance coverage
required by this Agreement, Agent may purchase insurance at Borrower's expense
to protect Agent's interests in the Properties of Borrower and Guarantors. This
insurance may, but need not, protect the interests of Borrower and Guarantors.
The coverage that Agent purchases may not pay any claim that Borrower or any
Guarantor makes or any claim that is made against Borrower or any such Guarantor
in connection with said Property. Borrower may later cancel any insurance
purchased by Agent, but only after providing Agent with evidence that Borrower
and Guarantors have obtained insurance as required by this Agreement. If Agent
purchases insurance, Borrower will be responsible for the costs of that
insurance, including interest and any other charges Agent may impose in
connection with the placement of insurance, until the effective date of the
cancellation or expiration of the insurance. The costs of the insurance may be
added to the Obligations. The costs of the insurance may be more than the cost
of insurance that Borrower and Guarantors may be able to obtain on their own.
5.1.3 Protection of Collateral. Neither Agent nor any Lender shall be
liable or responsible in any way for the safekeeping of any of the Collateral or
for any loss or damage thereto (except for reasonable care in the custody
thereof while any Collateral is in Agent's or such Lender's actual possession)
or for any diminution in the value thereof, or for any act or default of any
warehouseman, carrier, forwarding agency, or other person whomsoever, but the
same shall be at Borrower's sole risk.
5.2 Administration of Accounts.
5.2.1 Records, Schedules and Assignments of Accounts. Borrower shall,
and shall cause each of its Subsidiaries to, keep accurate and complete records
of its Accounts and all payments and collections thereon and shall submit to
Agent on such periodic basis as Agent shall request a sales and collections
report for the preceding period, in form consistent with the reports currently
prepared by Borrower with respect to such information. Concurrently with the
delivery of each Borrowing Base Certificate required by Subsection 7.1.4, or
more frequently as requested by Agent, from and after the date hereof, Borrower
shall deliver to Agent a detailed aging of all of Accounts of Borrower and
Guarantors, and upon Agent's request therefore, copies of proof of delivery and
the original copy of all documents, including, without limitation, repayment
histories and present status reports relating to the Accounts so scheduled and
such other matters and information relating to the status of then existing
Accounts as Agent shall reasonably request.
5.2.2 Taxes. If an Account includes a charge for any tax payable to
any governmental taxing authority, Agent is authorized, in its sole discretion,
to pay the amount thereof to the proper taxing authority for the account of
Borrower or its Subsidiary and to charge Borrower therefore, except for taxes
that (i) are being actively contested in good faith and by appropriate
proceedings and with respect to which Borrower or such Subsidiary maintains
reasonable reserves on its books therefore and (ii) would not reasonably be
expected to result in any Lien other than a Permitted Lien. In no event shall
Agent or any Lender be liable for any
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taxes to any governmental taxing authority that may be due by Borrower or any of
its Subsidiaries or Affiliates.
5.2.3 Account Verification. Any of Agent's officers, employees or
agents shall have the right, at any time or times hereafter, in the name of
Agent, any designee of Agent or Borrower or any Guarantor, to verify the
validity, amount or any other matter relating to any Accounts by mail,
telephone, telegraph or otherwise; provided, that unless a Default or an Event
of Default is then in existence, prior to conducting each set of verifications,
Agent shall generally consult with Borrower about the verification process.
Borrower shall cooperate fully with Agent in an effort to facilitate and
promptly conclude any such verification process.
5.2.4 Maintenance of Blocked Account Agreements. Borrower shall, and
shall cause UK Borrowers and Guarantors to, maintain lockbox and blocked account
arrangements acceptable to Agent with such banks as may be selected by Borrower
and be acceptable to Agent, for direct deposit of payments and other
remittances, including, without limitation, payment on Accounts. All such
agreements shall provide that if an Event of Default or a Liquidity Event has
occurred the depository institution shall follow Agent's written instructions to
transfer funds in such accounts to the Dominion Account for application on
account of the Obligations without further consent of any Credit Party. All
funds deposited in any Dominion Account shall immediately become the property of
Agent, for the ratable benefit of Lenders, and Borrower or the applicable
Guarantor shall obtain the agreement by such banks in favor of Agent to waive
any offset rights against the funds so deposited. In the event that the
applicable bank is unwilling to waive such rights, Borrower shall, and shall
cause Guarantors to, upon Agent's request to do so, immediately transfer any
funds deposited in such bank accounts to a bank that will agree to waive such
rights. Agent assumes no responsibility for such lockbox and blocked account
arrangements, including, without limitation, any claim of accord and
satisfaction or release with respect to deposits accepted by any bank
thereunder. As soon as practicable, the Borrower shall give written instruction
directing the applicable obligors to direct all payments and remittances to such
accounts. Borrower shall have 60 days (or such additional time as the Agent
shall determine in its sole discretion) from the Restatement Date to establish
the arrangements required by this Subsection 5.2.4.
5.2.5 Collection of Accounts, Proceeds of Collateral. To expedite
collection, Borrower shall, and shall cause Guarantors to, endeavor in the first
instance to make collection of its Accounts for Agent. All remittances received
by Borrower or any Guarantor on account of Accounts, together with the proceeds
of any other Collateral, shall be held in depository accounts subject to control
agreements in form and substance acceptable to Agent. Agent retains the right at
all times after the occurrence and during the continuance of an Event of Default
to notify Account Debtors that Accounts of Borrower and Guarantors have been
assigned to Agent and to collect such Accounts directly in its own name and to
charge the collection costs and expenses, including attorneys' fees, to
Borrower.
5.3 Records and Reports of Inventory, Machinery and Equipment. Borrower
shall, and shall cause its Subsidiaries to, keep records of its Inventory and
Equipment, which records shall be complete and accurate in all material
respects. Borrower shall furnish to Agent and Lenders updates of Exhibit 5.1.1
and Inventory, and Equipment reports concurrently with the delivery of each
Borrowing Base Certificate described in Subsection 7.1.4 or more frequently as
requested
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by Agent, which reports will be in such other format and detail as Agent shall
request and shall include a current list of all locations of Inventory,
Machinery and Equipment of Borrower and Guarantors. Borrower shall conduct a
physical inventory of all container Inventory on premises owned or leased by
Borrower or any of its Subsidiaries no less frequently than monthly and shall
provide to Agent a report based on each such physical inventory promptly
thereafter, together with such supporting information as Agent shall reasonably
request.
5.4 Administration of Equipment. Borrower shall, and shall cause its
Subsidiaries to, keep records of its Equipment which shall be complete and
accurate in all material respects itemizing and describing the kind, type,
quality, quantity and book value of its Equipment and all dispositions made in
accordance with this Agreement, and Borrower shall, and shall cause Guarantors
to, furnish Agent with a current schedule containing the foregoing information
on at least an annual basis and more often if reasonably requested by Agent.
Promptly after the reasonable request therefore by Agent, Borrower shall deliver
to Agent any and all evidence of ownership, if any, of any Equipment.
5.5 Appraisals. When reasonably requested by Agent, Borrower shall, and
cause each of its Subsidiaries to, provide the following to Agent, with a copy
to any Lender which requests delivery (which, at Borrower's election, may be
made by email or other electronic means of communication, or by web posting) of
such reports: a report of Eligible Container Fleet Inventory and Eligible
Trailer Fleet Inventory by category and by item (in detail), a report of
Inventory, based upon a physical count, which shall describe Inventory of
Borrower and Guarantors by category and by item (in detail) and report the then
appraised value (at the lower of cost or orderly liquidation value) of such
Inventory, and a report of Equipment which shall describe Borrower's and
Guarantors' Equipment (in detail) and report the then appraised value (at the
lower of cost or orderly liquidation value) of such Equipment. In addition, when
requested by Agent after consultation with Borrower regarding the scope and cost
of any such appraisal, Borrower shall, at Borrower's expense, allow Agent to
engage an Appraiser with respect to the Collateral, shall provide Agent and such
Appraiser reasonable access to the Collateral and shall cooperate with Agent and
such Appraiser with respect to the foregoing. Unless (a) a Default, an Event of
Default or a Liquidity Event has occurred and is continuing or (b) Borrower
otherwise agrees, (i) the appraisals respecting Inventory held for lease or sale
shall be requested at least once, but not more than once, during any twelve
month period, other than appraisals of such Inventory in connection with a
Permitted Acquisition as required by this Agreement and (ii) at the option of
Agent, such appraisals may be done on either a desktop or physical inspection
basis.
5.6 Field Examinations. Agent shall conduct a field examination once per
year and may, at its discretion, conduct a second field examination each year,
and, if an Event of Default or a Liquidity Event exists, more frequently at
Agent's discretion, and in connection therewith, Borrower shall provide Agent
and field examiner reasonable access to the books and records and the Collateral
and shall cooperate with Agent and such Appraiser with respect to the foregoing.
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SECTION 6. REPRESENTATIONS AND WARRANTIES
6.1 General Representations and Warranties. To induce Agent and each Lender
to enter into this Agreement and to make advances hereunder, Borrower warrants,
represents and covenants to Agent and each Lender that:
6.1.1 Organization and Qualification. Borrower is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Each of Borrower's Subsidiaries is a corporation, limited partnership
or limited liability company duly organized, validly existing and (to the extent
relevant) in good standing under the laws of the jurisdiction of its
incorporation or organization. Each of Borrower and each of its Subsidiaries is
duly qualified and is authorized to do business and is in good standing as a
limited liability company, limited partnership or corporation, as applicable, in
each state or jurisdiction listed on Exhibit 6.1.1 hereto and in all other
states and jurisdictions in which the failure of Borrower or any of its
Subsidiaries to be so qualified would reasonably be expected to have a Material
Adverse Effect.
6.1.2 Power and Authority. Borrower and each other Credit Party is
duly authorized, has the capacity and is empowered to enter into, execute,
deliver and perform this Agreement and each of the other Loan Documents to which
it is a party. The execution, delivery and performance of this Agreement and
each of the other Loan Documents have been duly authorized by all necessary
corporate or other relevant action and do not and will not (i) require any
consent or approval of the shareholders of Borrower or any of the shareholders,
partners or members, as the case may be, of any other Credit Party; (ii)
contravene Borrower's or any other Credit Party's charter, articles or
certificate of incorporation, partnership agreement, certificate of formation,
by-laws, limited liability company agreement, operating agreement or other
organizational documents (as the case may be); (iii) violate, or cause Borrower
or any other Credit Party to be in default under, any provision of any law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award in effect having applicability to Borrower or any other Credit Party; (iv)
result in a breach of or constitute a default under any indenture or loan or
credit agreement or any other agreement, lease or instrument to which Borrower
or any other Credit Party is a party or by which it or its Properties may be
bound or affected; or (v) result in, or require, the creation or imposition of
any Lien (other than Permitted Liens) upon or with respect to any of the
Properties now owned or hereafter acquired by Borrower or any other Credit
Party.
6.1.3 Legally Enforceable Agreement. This Agreement is, and each of
the other Loan Documents when delivered under this Agreement will be, a legal,
valid and binding obligation of each of Borrower and each other Credit Party, in
each case to the extent it is a party thereto, enforceable against it in
accordance with its respective terms, except as limited by applicable bankruptcy
or insolvency laws, and by general principles of equity.
6.1.4 Capital Structure. Exhibit 6.1.4 hereto states, as of the date
hereof, (i) the correct name of each of the Subsidiaries of Borrower, its
jurisdiction of incorporation or organization and the percentage of its Voting
Stock owned by Borrower or a Subsidiary of Borrower, (ii) the name of each of
Borrower's and each other Credit Party's corporate or joint venture
relationships and the nature of the relationship, (iii) the number and nature of
all
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outstanding Securities of Borrower and the number, nature and holder of
Securities of each other Credit Party and (iv) the number of issued and treasury
Securities of Borrower. Borrower and each other Credit Party has good title to
all of the Securities it purports to own of each of such Subsidiaries, free and
clear in each case of any Lien other than Permitted Liens. All such Securities
have been duly issued and are fully paid and non-assessable. As of the date
hereof, there are no outstanding options to purchase, or any rights or warrants
to subscribe for, or any commitments or agreements to issue or sell any
Securities or obligations convertible into, or any powers of attorney relating
to any Securities of any of Borrower's direct or indirect Subsidiaries. Except
as set forth on Exhibit 6.1.4, as of the date hereof, there are no outstanding
agreements or instruments binding upon any of Borrower's or any other Credit
Party's partners, members or shareholders, as the case may be, relating to the
ownership of its Securities.
6.1.5 Names. Neither Borrower nor any other Credit Party has been
known as or has used any legal, fictitious or trade names except those listed on
Exhibit 6.1.5 hereto as such Exhibit may be amended in connection with a
Permitted Acquisition. Except as set forth on Exhibit 6.1.5 or in connection
with an Acquisition permitted hereunder consummated after the date hereof,
neither Borrower nor any other Credit Party has been the surviving entity of a
merger or consolidation or has acquired all or substantially all of the assets
of any Person. Borrower's and each other Credit Party's respective states of
incorporation or organization, Type of Organization and Organizational I.D.
Number are set forth on Exhibits 6.1.4 and 6.1.5, as such Exhibits may be
amended in connection with a Permitted Acquisition. The respective exact legal
names of Borrower and each other Credit Party are set forth on Exhibit 6.1.5, as
such Exhibit may be amended in connection with a Permitted Acquisition.
6.1.6 Business Locations; Agent for Process. Each of Borrower's and
each other Credit Party's chief executive office and other places of business
are as listed on Exhibit 5.1.1 hereto, as updated from time to time by Borrower.
During the preceding one-year period, neither Borrower nor any other Credit
Party has had an office or place of business other than as listed on Exhibit
5.1.1. All tangible Collateral is and will at all times be kept by Borrower and
each other Credit Party in accordance with Subsection 5.1.1. Except as shown on
Exhibit 5.1.1, as of the date hereof, no Inventory is stored with a bailee,
distributor, warehouseman or similar party, nor is any Inventory consigned to
any Person.
6.1.7 Title to Properties; Priority of Liens. Borrower and each other
Credit Party has good, indefeasible and marketable title to and fee simple
ownership of, or valid and subsisting leasehold interests in, all of its real
Property, and good title to all of the Collateral and all of its other Property,
in each case, free and clear of all Liens except Permitted Liens. Borrower and
each other Credit Party has paid or discharged all lawful claims which, if
unpaid, might become a Lien against any of Borrower's or such Credit Party's
Properties that is not a Permitted Lien. The Liens granted to Agent under
Section 4 hereof and under the Security Documents are first priority Liens,
subject only to Permitted Liens.
6.1.8 Accounts. Agent may rely, in determining which Accounts are
Eligible Accounts, on all statements and representations made by Borrower with
respect to any Account or Accounts of Borrower or any other Credit Party. With
respect to each of such Accounts, whether or not such Account is an Eligible
Account, unless otherwise disclosed to Agent in writing:
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(i) It is genuine and in all respects what it purports to
be, and it is not evidenced by a judgment;
(ii) It arises out of a completed, bona fide sale and
delivery of goods or rendition of services by Borrower or the
applicable Credit Party, in the ordinary course of its business and in
accordance with the terms and conditions of all purchase orders,
contracts or other documents relating thereto and forming a part of
the contract between Borrower or the applicable Credit Party and the
Account Debtor and the Account Debtor is not an Affiliate of Borrower
or any other Credit Party;
(iii) It is for a liquidated amount maturing as stated in
the duplicate invoice covering such sale or rendition of services;
(iv) There are no facts, events or occurrences which in any
way impair the validity or enforceability of any Accounts or tend to
reduce the amount payable thereunder from the face amount of the
invoice and statements delivered or made available to Agent with
respect thereto;
(v) To Borrower's knowledge, the Account Debtor thereunder
(1) had the capacity to contract at the time any contract or other
document giving rise to the Account was executed and (2) such Account
Debtor is Solvent; and
(vi) To Borrower's knowledge, there are no proceedings or
actions which are threatened or pending against the Account Debtor
thereunder which might result in any material adverse change in such
Account Debtor's financial condition or the collectibility of such
Account (other than non-material disputes involving de minimis amounts
arising in the ordinary course of business).
6.1.9 Equipment. The Equipment of Borrower and each other Credit Party
is in good operating condition and repair.
6.1.10 Financial Statements; Fiscal Year. The Consolidated balance
sheets of Borrower and its Subsidiaries (including the accounts of all
Subsidiaries of Borrower and their respective Subsidiaries for the respective
periods during which a Subsidiary relationship existed) as of December 31, 2004
and as of September 30, 2005 and the related statements of income and cash flows
for the periods ended on such dates, except for the absence of footnote
disclosures and normal year-end adjustments in the September 30, 2005 financial
statements, have been prepared in accordance with GAAP, and present fairly in
all material respects the financial position of Borrower and such Persons, taken
as a whole, at such dates and the results of Borrower's and such Persons'
operations, taken as a whole, for such periods. As of the date hereof, since
December 31, 2004, there has been no material adverse change in the financial
condition, business, prospects, operations, results of operations, assets or
liabilities of Borrower and such other Persons, taken as a whole, as reflected
in the Consolidated balance sheet as of such date. As of the date hereof, the
fiscal year of Borrower and each such Persons ends on December 31 of each year.
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6.1.11 Full Disclosure. The financial statements referred to in
Subsection 6.1.10 hereof do not, nor does this Agreement or any other written
statement of Borrower to Agent or any Lender, contain any untrue statement of a
material fact or omit a material fact necessary to make the statements contained
therein or herein not misleading. There is no fact which Borrower has failed to
disclose to Agent or any Lender in writing which would reasonably be expected to
have a Material Adverse Effect.
6.1.12 Solvent Financial Condition. Each of Borrower and each other
Credit Party, is now and, after giving effect to the Loans to be made and the
Letters of Credit and LC Guaranties to be issued hereunder and all related
transactions, will be, Solvent.
6.1.13 Surety Obligations. Except as set forth on Exhibit 6.1.13, as
of the date hereof, neither Borrower nor any other Credit Party is obligated as
surety or indemnitor under any surety or similar bond or other contract issued
or entered into to assure payment, performance or completion of performance of
any undertaking or obligation of any Person.
6.1.14 Identification Numbers; Taxes. Borrower's federal tax
identification number is ▇▇-▇▇▇▇▇▇▇. The federal tax identification number of
each Subsidiary of Borrower is shown on Exhibit 6.1.14 hereto, as updated from
time to time. Borrower and each of its Subsidiaries has filed all federal, state
and local tax returns and other reports relating to taxes it is required by law
to file, except where the failure to so file would not reasonably be expected to
have a Material Adverse Effect, and has paid, or made provision for the payment
of, all taxes, assessments, fees, levies and other governmental charges upon it,
its income and Properties as and when such taxes, assessments, fees, levies and
charges are due and payable, unless and to the extent any thereof are being
diligently contested in good faith and by appropriate proceedings and Borrower
and each of its Subsidiaries maintains reasonable reserves on its books
therefor. The provision for taxes on the books of Borrower and its Subsidiaries
is adequate for all years not closed by applicable statutes, and for the current
fiscal year.
6.1.15 Brokers. Except as shown on Exhibit 6.1.15 hereto or in the Fee
Letter, there are no claims for brokerage commissions, finder's fees or
investment banking fees in connection with the transactions contemplated by this
Agreement.
6.1.16 Patents, Trademarks, Copyrights and Licenses. Borrower and each
other Credit Party owns, possesses or licenses or has the right to use all the
patents, trademarks, service marks, trade names, copyrights, licenses and other
Intellectual Property necessary for the present and planned future conduct of
its business without any known conflict with the rights of others, except for
such conflicts as would not reasonably be expected to have a Material Adverse
Effect. All such patents, trademarks, service marks, trade names, copyrights,
licenses, and Intellectual Property are listed on Exhibit 6.1.16 hereto. No
claim has been asserted to Borrower or any other Credit Party which is currently
pending that their use of their Intellectual Property or the conduct of their
business does or may infringe upon the Intellectual Property rights of any third
party. To the knowledge of Borrower and except as set forth on Exhibit 6.1.16
hereto, as of the date hereof, no Person is engaging in any activity that
infringes in any material respect upon Borrower's or any of its Subsidiaries'
material Intellectual Property. Except as set forth on Exhibit 6.1.16, each of
Borrower's and each other Credit Party's (i) material trademarks, service marks,
and copyrights are registered with the U.S. Patent and Trademark Office, or in
the U.S.
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Copyright Office, as applicable and (ii) material license agreements and similar
arrangements relating to its Inventory (1) permits, and does not restrict, the
assignment by Borrower or any other Credit Party to Agent, or any other Person
designated by Agent, of all of Borrower's or such Credit Party's, as applicable,
rights, title and interest pertaining to such license agreement or such similar
arrangement and (2) would permit the continued use by Borrower or such Credit
Party, or Agent or its assignee, of such license agreement or such similar
arrangement and the right to sell Inventory subject to such license agreement
for a period of no less than 6 months after a default or breach of such
agreement or arrangement. The consummation and performance of the transactions
and actions contemplated by this Agreement and the other Loan Documents,
including without limitation, the exercise by Agent of any of its rights or
remedies under Section 10, will not result in the termination or impairment of
any of Borrower's or any Guarantors' ownership or rights relating to its
Intellectual Property, except for such Intellectual Property rights the loss or
impairment of which would not reasonably be expected to have a Material Adverse
Effect. Except as listed on Exhibit 6.1.16 and except as would not reasonably be
expected to have a Material Adverse Effect, (i) neither Borrower nor any other
Credit Party is in breach of, or default under, any term of any license or
sublicense with respect to any of its Intellectual Property and (ii) to the
knowledge of Borrower, no other party to such license or sublicense is in breach
thereof or default thereunder, and such license is valid and enforceable.
6.1.17 Governmental Consents. Borrower and each of its Subsidiaries
has, and is in good standing with respect to, all governmental consents,
approvals, licenses, authorizations, permits, certificates, inspections and
franchises necessary to continue to conduct its business as heretofore or
proposed to be conducted by it and to own or lease and operate its Properties as
now owned or leased by it.
6.1.18 Compliance with Laws. Borrower and each of its Subsidiaries has
duly complied in all material respects with, and its Properties, business
operations and leaseholds are in compliance in all material respects with, the
provisions of all federal, state, local and other laws, rules and regulations
applicable to Borrower or such Subsidiary, as applicable, its Properties or the
conduct of its business, and there have been no citations, notices or orders of
noncompliance issued to Borrower or any of its Subsidiaries under any such law,
rule or regulation. Borrower and each of its Subsidiaries has established and
maintains an adequate monitoring system to insure that it remains in compliance
in all material respects with all federal, state, local and other rules, laws
and regulations applicable to it. No Inventory has been produced by Borrower or
any of its Subsidiaries in violation of the Fair Labor Standards Act (29 U.S.C.
Section 201 et seq.), as amended.
6.1.19 Restrictions. Neither Borrower nor any other Credit Party is a
party or subject to any contract or agreement which restricts its right or
ability to incur Indebtedness, other than as set forth on Exhibit 6.1.19 hereto,
none of which prohibit the execution of or compliance with this Agreement or the
other Loan Documents by Borrower or any other Credit Party, as applicable.
Except as permitted in the Loan Agreement, none of the Collateral is subject to
contractual obligations that may restrict or inhibit Agent's rights or abilities
to sell or dispose of the Collateral or any part thereof after the occurrence
and during the continuance of an Event of Default.
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6.1.20 Litigation. Except as set forth on Exhibit 6.1.20 hereto, there
are no actions, suits, proceedings or investigations pending, or to the
knowledge of Borrower, threatened, against or involving Borrower or any of its
Subsidiaries, or the business, operations, Properties, prospects, profits or
condition of Borrower or any of its Subsidiaries which, singly or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.
Neither Borrower nor any of its Subsidiaries is in default with respect to any
order, writ, injunction, judgment, decree or rule of any court, governmental
authority or arbitration board or tribunal, which, singly or in the aggregate,
would reasonably be expected to have a Material Adverse Effect.
6.1.21 No Defaults. No event has occurred and no condition exists
which would, upon or after the execution and delivery of this Agreement or
Borrower's performance hereunder, constitute a Default or an Event of Default.
Neither Borrower nor any other Credit Party is in default in (and no event has
occurred and no condition exists which constitutes, or which the passage of time
or the giving of notice or both would constitute, a default in) the payment of
any Indebtedness to any Person for Funded Debt in excess of the lesser of
US$2,500,000 or that amount which would have a Material Adverse Effect. All
Obligations are permitted under the Senior Note Indenture and the other Senior
Note Documents.
6.1.22 Leases. Exhibit 6.1.22 hereto is a complete listing of all
capitalized and operating personal property leases of Borrower and the other
Credit Parties and all real property leases of Borrower and the other Credit
Parties. Borrower and each other Credit Party is in full compliance with all of
the terms of each of its respective capitalized and operating leases, except
where the failure to so comply would not reasonably be expected to have a
Material Adverse Effect.
6.1.23 Pension Plans. Except as disclosed on Exhibit 6.1.23 hereto,
neither Borrower nor any of its Subsidiaries has any Plan. Borrower and each of
its Subsidiaries is in compliance with the requirements of ERISA and the
regulations promulgated thereunder with respect to each Plan, except where the
failure to so comply would not reasonably be expected to have a Material Adverse
Effect. No fact or situation that would reasonably be expected to result in a
material adverse change in the financial condition of Borrower and its
Subsidiaries exists in connection with any Plan. Neither Borrower nor any of its
Subsidiaries has any material withdrawal liability in connection with a
Multiemployer Plan.
6.1.24 Trade Relations. Except as set forth on Exhibit 6.1.24, there
exists no actual or, to Borrower's knowledge, threatened termination,
cancellation or limitation of, or any modification or change in, the business
relationship between Borrower or any other Credit Party and any customer or any
group of customers whose purchases individually or in the aggregate are material
to the business of Borrower and the other Credit Parties (taken as a whole), or
with any material supplier, except in each case, where the same would not
reasonably be expected to have a Material Adverse Effect, and there exists no
present condition or state of facts or circumstances which would prevent
Borrower or any other Credit Party from conducting such business after the
consummation of the transaction contemplated by this Agreement in substantially
the same manner in which it has heretofore been conducted.
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6.1.25 Labor Relations. Except as described on Exhibit 6.1.25 hereto,
as of the date hereof, neither Borrower nor any of its Subsidiaries is a party
to any collective bargaining agreement covering any material number of
employees. There are no material grievances, disputes or controversies with any
union or any other organization of Borrower's or any of its Subsidiaries'
employees, or threats of strikes, work stoppages or any asserted pending demands
for collective bargaining by any union or organization, except those that would
not reasonably be expected to have a Material Adverse Effect.
6.1.26 Margin Regulations. Neither Borrower nor any Subsidiary is
generally engaged in the business of purchasing or selling "margin stock" (as
defined in Regulation U of the Board of Governors of the Federal Reserve
System), or extending credit for the purpose of purchasing or carrying "margin
stock". Less than 15% of the assets of Borrower constitute "margin stock." To
the extent that Borrower uses Loan proceeds to acquire shares of its own
Securities, Borrower intends to cause such acquired shares to be cancelled or
maintained as treasury stock by Borrower.
6.1.27 Anti-Terrorism Laws. Borrower and its Subsidiaries are in
compliance with the Uniting and Strengthening of America by Providing the
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the
"Patriot Act").
6.1.28 UK Financial Assistance. Neither the execution, delivery and
performance of this Agreement and each of the other Loan Documents and Senior
Note Documents to which it is a party nor the incurrence of any obligations or
liabilities (actual or contingent) thereunder by Borrower or any of the UK
Guarantors constitutes or will constitute unlawful financial assistance for the
purposes of sections 151 to 158 (inclusive) of the United Kingdom Companies Act
1985 (as amended or otherwise re-enacted from time to time).
6.2 Continuous Nature of Representations and Warranties. Each
representation and warranty contained in this Agreement and the other Loan
Documents shall be continuous in nature and shall remain accurate, complete in
all material respects and not misleading at all times during the term of this
Agreement (on each day as if made on and as of such date, except to the extent
that any representation and warranty is made only as of a specified date, in
which case it shall have been true and correct as of such date), except for
changes in the nature of Borrower's or one of Borrower's Subsidiary's business
or operations that would render the information in any exhibit attached hereto
or to any other Loan Document either inaccurate, incomplete or misleading, so
long as Majority Lenders have consented to such changes or such changes are
expressly permitted by this Agreement.
6.3 Survival of Representations and Warranties. All representations and
warranties of Borrower or any other Credit Party contained in this Agreement or
any of the other Loan Documents shall survive the execution, delivery and
acceptance thereof by Agent and each Lender and the parties thereto and the
closing of the transactions described therein or related thereto.
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SECTION 7. COVENANTS AND CONTINUING AGREEMENTS
7.1 Affirmative Covenants. During the Term, and thereafter for so long as
there are any Obligations outstanding, Borrower covenants that, unless otherwise
consented to by Majority Lenders, in writing, it shall:
7.1.1 Visits and Inspections; Lender Meeting. Permit representatives
of Agent, and during the continuation of any Liquidity Event, Default or Event
of Default any Lender, from time to time, as often as may be reasonably
requested, but only during normal business hours, to visit and inspect the
Properties of Borrower and each of its Subsidiaries (including the Collateral),
inspect, audit and make extracts from their books and records, and discuss with
their officers, their employees and their independent accountants, Borrower's
and each of its Subsidiaries' business, assets, liabilities, financial
condition, business prospects and results of operations. Neither Agent nor any
Lender shall have any duty to make any such inspection and shall not incur any
liability by reason of its failure to conduct or delay in conducting any such
inspection. Agent, if no Default or Event of Default then exists, shall give
Borrower reasonable prior notice of any such inspection or audit. Without
limiting the foregoing, Borrower will participate and will cause its key
management personnel to participate in a meeting with Agent and Lenders at least
once during each year or more frequently, as Agent may reasonably request
(except that during the continuation of an Event of Default such meetings may be
held more frequently as requested by Agent or Majority Lenders), which
meeting(s) shall be held at such times and such places as may be reasonably
requested by Agent.
7.1.2 Notices.
(a) Promptly notify Agent in writing of the occurrence of any event or
the existence of any fact that, in either case, is known to Borrower, which
renders any representation or warranty in this Agreement or any of the other
Loan Documents inaccurate, incomplete or misleading in any material respect as
of the date made or remade. In addition, Borrower agrees to provide Agent with
(i) 10 Business Days' prior written notice of (1) any change in the legal name
of Borrower or any other Credit Party, (2) the adoption by Borrower or any other
Credit Party of any new fictitious name or trade name and (3) any change in the
chief executive office of Borrower or any other Credit Party, and (ii) prompt
written notice of any change in the information disclosed in any Exhibit hereto,
in each case after giving effect to the materiality limits and Material Adverse
Effect qualifications contained therein.
(b) Promptly, and in any event within ten (10) Business Days after the
Borrower or any of its Subsidiaries becomes aware that a Reportable Event
involving a claim against, or possible liability of, the Borrower of at least
US$1,000,000 has occurred, a written statement of the chief financial officer of
the Borrower describing such Reportable Event and any action that is being
taking with respect thereto by the Borrower or any such Subsidiary, and any
action taken or threatened by the Internal Revenue Service, Department of Labor
or Pension Benefit Guaranty Corporation.
(c) Promptly, and in any event within ten (10) Business Days after
receipt by the Borrower or any of its Subsidiaries of any notice, complaint or
order alleging actual or prospective violation of any Applicable Law with
respect to environmental, health or safety by
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the Borrower or any of its Subsidiaries or alleging responsibility of the
Borrower or any of its Subsidiaries for costs of a cleanup in an amount in
excess of US$2,500,000, together with a copy of such notice, complaint, or order
and a written statement describing any action being taken with respect thereto
by the Borrower or any such Subsidiary.
7.1.3 Financial Statements. Keep, and cause each of its Subsidiaries
to keep, adequate records and books of account with respect to its business
activities in which proper entries are made in accordance with customary
accounting practices reflecting all its financial transactions; and cause to be
prepared and furnished to Agent and each Lender, the following, all to be
prepared in accordance with GAAP applied on a consistent basis, unless
Borrower's certified public accountants concur in any change therein and such
change is disclosed to Agent and is consistent with GAAP:
(i) as soon as available, but not later than 90 days after the close
of each fiscal year of Borrower, unqualified (except for a qualification for a
change in accounting principles with which the accountant concurs) audited
financial statements (including, but not limited to, balance sheet, income
statement and statement of cash flows) of Borrower and its Subsidiaries as of
the end of such year, on a Consolidated basis, certified by a firm of
independent certified public accountants of recognized standing selected by
Borrower but reasonably acceptable to Agent, together with unaudited
consolidating balance sheets, income statements and statements of cash flows
and, within a reasonable time thereafter a copy of any management letter issued
in connection therewith;
(ii) as soon as available, but not later than 30 days after the end of
each month hereafter, including the last month of Borrower's fiscal year,
unaudited interim financial statements (including, but not limited to, balance
sheet, income statement and statement of cash flows) of Borrower and its
Subsidiaries as of the end of such month and of the portion of the fiscal year
then elapsed, on a Consolidated basis, certified by the principal financial
officer or principal accounting officer of Borrower as prepared in accordance
with GAAP and fairly presenting in all material respects the financial position
and results of operations of Borrower and its Subsidiaries for such month and
period subject only to changes from audit and year-end adjustments and except
that such statements need not contain notes and, at Agent's request, unaudited
interim financial statements on a consolidating basis, in a form consistent with
Borrower's historical practices of preparation of consolidating financial
statements;
(iii) as soon as available, but not later than 45 days after the end
of each fiscal quarter of Borrower, including the last quarter of Borrower's
fiscal year, unaudited quarterly financial statements (including, but not
limited to, balance sheet, income statement and statement of cash flows) of
Borrower and its Subsidiaries as of the end of such fiscal quarter, on a
Consolidated basis, certified by the principal financial officer or principal
accounting officer of Borrower as prepared in accordance with GAAP and fairly
presenting in all material respects the financial position and results of
operations of Borrower and its Subsidiaries for such fiscal quarter and period
subject only to changes from audit and year-end adjustments and except that such
statements need not contain notes and, at Agent's request, unaudited interim
financial statements on a consolidating basis, in a form consistent with
Borrower's historical practices of preparation of consolidating financial
statements;
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(iv) together with each delivery of financial statements pursuant to
clauses (i) and (iii) of this Subsection 7.1.3, a management report (1) setting
forth in comparative form the corresponding figures for the corresponding
periods of the previous fiscal year and the corresponding figures from the most
recent Projections for the current fiscal year delivered pursuant to Subsection
7.1.7 and (2) identifying the reasons for any significant variations. The
information above shall be presented in reasonable detail and shall be certified
by the chief financial officer or principal accounting officer of Borrower to
the effect that such information fairly presents in all material respects the
results of operations and financial condition of Borrower and its Subsidiaries
as at the dates and for the periods indicated;
(v) promptly after the sending or filing thereof, as the case may be,
copies of Borrower's Forms 10-Q and 10-K and any proxy statements or financial
statements which Borrower has made available to its Securities holders and
copies of any regular, periodic and special reports or registration statements
which Borrower or any of its Subsidiaries files with the Securities and Exchange
Commission or any governmental authority which may be substituted therefore, or
any national securities exchange;
(vi) upon request of Agent, copies of any annual report to be filed
with ERISA in connection with each Plan; and
(vii) such other data and information (financial and otherwise) as
Agent or any Lender, from time to time, may reasonably request, bearing upon or
related to the Collateral or Borrower's or any of its Subsidiaries' financial
condition or results of operations.
Concurrently with the delivery of the financial statements described
in paragraph (i) of this Subsection 7.1.3, Borrower shall forward to Agent a
copy of the accountants' letter to Borrower's management that is prepared in
connection with such financial statements. Concurrently with the delivery of the
financial statements described in paragraph (i) and (iii) of this Subsection
7.1.3, or more frequently if reasonably requested by Agent, Borrower shall cause
to be prepared and furnished to Agent a Compliance Certificate in the form of
Exhibit 7.1.3 hereto executed by the Chief Financial Officer or principal
accounting officer of Borrower. To the extent any deliverable described in
Subsection 7.1.3 (i), (iii) or (iv) is contained in a 10-Q or 10-K which is
delivered to the Agent and each Lender pursuant to Subsection 7.1.3(v), the
Borrower's obligation to deliver such item shall be deemed satisfied.
7.1.4 Borrowing Base Certificates. On or before the 15th calendar day
of each month and at any other time requested by Agent or Majority Lenders from
and after the date hereof, deliver to Agent and, at the request of any Lender,
to such Lender a Borrowing Base Certificate as of the last day of the
immediately preceding month (or as of such other date as Agent may reasonably
request), with such supporting materials as Agent shall reasonably request.
7.1.5 Landlord, Processor and Storage Agreements. Provide Agent on
request with copies of all agreements between Borrower or any other Credit Party
and any landlord, processor, distributor, warehouseman or consignee which owns
any premises at which any Collateral may, from time to time, be kept.
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7.1.6 Credit Party Financial Statements. Deliver or cause to be
delivered to Agent financial statements, if any, for each other Credit Party (to
the extent not consolidated or combined with the financial statements delivered
to Agent under Subsection 7.1.3) in form and substance satisfactory to Agent at
such intervals and covering such time periods as Agent may request.
7.1.7 Projections. No later than 30 days after the end of each fiscal
year of Borrower deliver to Agent Projections of Borrower and each of its
Subsidiaries for the forthcoming three (3) fiscal years, month by month
(including, but not limited to, projected balance sheets, income statements,
statements of cash flows and Availability and calculations of projected covenant
compliance other than compliance with Section 7.3.3 (Minimum Utilization) set
forth in Exhibit 7.3).
7.1.8 Subsidiaries.
(a) Cause each Domestic Subsidiary of Borrower, whether now or
hereafter in existence, promptly upon Agent's request therefore, to execute and
deliver to Agent a Guaranty Agreement and a security agreement pursuant to which
such Subsidiary guaranties the payment of all Obligations and grants to Agent
for the benefit of Lenders a first priority Lien (subject only to Permitted
Liens) on all of its Properties of the types described in Section 4.1. In
addition, Borrower shall, and shall cause each Domestic Subsidiary to execute
and deliver to Agent a Guaranty Agreement and (if not heretofore delivered) a
security agreement pursuant to which Borrower and each such Subsidiary
guaranties the payment of all Obligations of UK Borrower and grants to Agent for
the benefit of Lenders a first priority Lien (subject only to Permitted Liens)
on all of its Properties of the types described in Section 4.1 to secure such
Guaranty Agreement. Additionally, Borrower and each Domestic Subsidiary shall
execute and deliver to Agent a Pledge Agreement (or an amendment thereto)
pursuant to which Borrower or such Domestic Subsidiary grants to Agent for the
benefit of the Lenders a first priority Lien (subject only to Permitted Liens)
with respect to all of the issued and outstanding Securities of each such
Subsidiary.
(b) Cause each UK Subsidiary, whether now or hereafter in existence,
promptly upon Agent's request therefore, to execute and deliver to Agent the UK
Security Documents pursuant to which such Subsidiary guaranties the payment of
all UK Obligations and grants to Agent for the benefit of Lenders a first
priority Lien (subject only to Permitted Liens) on all or substantially all of
its Properties, including, without limitation all of the issued and outstanding
Securities of any other Person held by such UK Subsidiary.
7.1.9 Deposit and Brokerage Accounts. For each deposit account or
brokerage account that Borrower or any other Credit Party at any time opens or
maintains, Borrower shall, at Agent's request and option, pursuant to an
agreement in form and substance satisfactory to Agent, cause the depository bank
or securities intermediary, as applicable, to agree to comply at any time with
instructions from Agent to such depository bank or securities intermediary, as
applicable, directing the disposition of funds from time to time credited to
such deposit or brokerage account, without further consent of Borrower or such
other Credit Party, at any time after the occurrence of a Liquidity Event, a
Default or an Event of Default.
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7.1.10 Maintenance of Equipment. Make or cause to be made all
necessary replacements of and repairs to Equipment so that the operating
efficiency thereof shall be maintained and preserved, reasonable wear and tear
excepted, except where the failure to so maintain the same would not reasonably
be expected to have a Material Adverse Effect. Borrower will not, and will not
allow any other Credit Party to, permit any Equipment to become affixed to any
real Property leased to Borrower or any other Credit Party so that an interest
arises therein under the real estate laws of the applicable jurisdiction unless
the landlord of such real Property has executed a landlord waiver or leasehold
mortgage in favor of and in form reasonably acceptable to Agent, and Borrower
will not permit, nor will it allow any other Credit Party to permit, any of the
Equipment of Borrower or any other Credit Party to become an accession to any
personal Property other than Equipment that is subject to first priority (except
for Permitted Liens) Liens in favor of Agent.
7.1.11 Environmental Reports. Prior to inclusion of any Specified Real
Property in the US Borrowing Base, provide Agent with environmental reports, in
form and substance satisfactory to Agent and Majority Lenders and from a firm
satisfactory to Agent, relating to the properties owned by Borrower or any of
its Subsidiaries.
7.1.12 Qualifying Derivative Obligations. Prior to or concurrently
with Borrower or any other Credit Party entering into any Derivative Obligation
or any modification of such Derivative Obligation with any Lender or any
Affiliate of a Lender (other than Agent or any Affiliate of Agent), Borrower
shall provide, or shall cause such Lender or such Affiliate to provide, written
notice to Agent specifying, in a manner reasonably acceptable to Agent, the
terms and conditions of such Derivative Obligations. In addition, any Lender
that enters into any Derivative Obligation or any modification of a Derivative
Obligation with a Credit Party may provide notice thereof to the Agent.
7.2 Negative Covenants. During the Term, and thereafter for so long as
there are any Obligations outstanding, Borrower covenants that, unless otherwise
consented to by Majority Lenders, in writing:
7.2.1 Capital Expenditures. Borrower and its Subsidiaries shall not
make payments for Capital Expenditures (net of sales of Eligible Container Fleet
Inventory) in excess of US$150,000,000 in any fiscal year; provided, that as
long as no Event of Default shall have occurred and be continuing, Borrower and
its Subsidiaries may carry forward and add to the next year's limitation amount
(but not beyond such next year) the unused portion of the limitation on Capital
Expenditures for the prior year, up to a maximum of one hundred percent (100%)
of the prior year's limitation amount; and provided, further, that the amount
set forth in this Subsection 7.2.1 shall be increased by an amount equal to
three hundred percent (300%) of the net cash proceeds received by Borrower from
any sale of equity Securities of Borrower less such amount of such net cash
proceeds used to redeem or repurchase Senior Notes in compliance with this
Agreement (the "CapEx Equity Increase"), and the unused portion of any CapEx
Equity Increase may be carried forward to any subsequent fiscal year. Borrower
and its Subsidiaries shall not make any Capital Expenditures that are not
directly related to the business conducted on the Restatement Date by Borrower
and its Subsidiaries.
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7.2.2 Additional Indebtedness. Neither Borrower nor any of its
Subsidiaries shall directly or indirectly incur, create, assume or suffer to
exist any Indebtedness other than:
(a) Indebtedness under the Loan Documents and Derivative Obligations
under which a Lender (or its Affiliate) is the counterparty incurred in the
ordinary course of business;
(b) Unsecured Derivative Obligations incurred in the ordinary course
of business;
(c) Indebtedness described on Exhibit 7.2.2, and any refinancing of
such Indebtedness, so long as the aggregate principal amount of the Indebtedness
so refinanced shall not be increased and the refinancing shall be on terms and
conditions no more restrictive than the terms and conditions of the Indebtedness
to be refinanced;
(d) Indebtedness, including Capitalized Lease Obligations, secured by
purchase money liens on or respecting Equipment the title to or leasehold
interest in which is acquired after the Restatement Date, not to exceed
US$5,000,000 in the aggregate (irrespective of when due) outstanding at any one
time ("Purchase Money Liens and Leases") so long as each Purchase Money Lien or
Lease shall attach or relate only to the property (and accessions thereto and
proceeds thereof) to be acquired or the acquisition cost of which is financed
through leasing and the principal amount of the debt incurred (including the
principal component of lease payments) shall not exceed one hundred percent
(100%) of the purchase price of the item or items of equipment;
(e) Indebtedness consisting of loans or advances by Borrower to a
Guarantor or by a Guarantor to Borrower or another Guarantor; provided that all
such loans and advances are evidenced by a promissory note, which is pledged to
Agent;
(f) the Senior Notes;
(g) Indebtedness (other than Indebtedness under this Agreement)
incurred to finance insurance premiums, not to exceed US$5,000,000 in any fiscal
year;
(h) unsecured Indebtedness which matures no earlier than six (6)
months after the end of the Term, and (i) Borrower was in compliance with the
financial covenant set forth on Exhibit 7.3.2 (Debt Ratio) calculated on a pro
forma basis (whether or not then tested) immediately after giving effect to the
incurrence of such Indebtedness, (ii) immediately after giving effect to the
incurrence of such Indebtedness and any contemporaneous use of the proceeds
thereof, no Default or Event of Default has occurred or would be created
thereby, and (iii) such Indebtedness is not prohibited by the Senior Note
Documents;
(i) unsecured Indebtedness in an aggregate principal amount not to
exceed US$25,000,000 so long as no Default or Event of Default has occurred and
is continuing or would be created thereby and such Indebtedness is not
prohibited by the Senior Note Documents;
(j) Indebtedness which is secured by a Lien junior to the Lien granted
to Agent for the benefit of the Lenders hereunder, and (i) which matures no
earlier than six (6) months after the end of the Term, (ii) Borrower was in
compliance with the financial covenant
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set forth on Exhibit 7.3.2 (Debt Ratio) calculated on a pro forma basis (whether
or not then tested) immediately after giving effect to the incurrence of such
Indebtedness, (iii) the creditors with respect to such Indebtedness enter into
an intercreditor agreement in form and substance satisfactory to Agent, (iv)
immediately after giving effect to such Indebtedness and any contemporaneous use
of the proceeds thereof, no Default or Event of Default has occurred or would be
created thereby, and (v) such Indebtedness is not prohibited by the Senior Notes
Documents;
(k) Indebtedness which is secured by a first or second priority Lien
on the assets of the Borrower or a Guarantor, in an aggregate principal amount
not to exceed US$5,000,000 so long as (i) no Default or Event of Default has
occurred and is continuing or would be created thereby, (ii) such Indebtedness
is not prohibited by the Senior Note Documents and (iii) the creditors with
respect to such Indebtedness enter into an intercreditor agreement in form and
substance satisfactory to Agent; and
(l) Capitalized Lease Obligations respecting leasehold interest in
container Inventory which is sold in a sale and leaseback transaction (with the
sale portion of such transaction being permitted pursuant to Section 7.2.5(v))
so long as each lease shall attach or relate only to the property subject to
such sale leaseback transaction and the principal amount of the debt incurred
(including the principal component of lease payments) shall not exceed one
hundred percent (100%) of the purchase price of the item or items of container
Inventory.
7.2.3 Liens. Neither Borrower nor any of its Subsidiaries shall
directly or indirectly create, incur, assume, or suffer to exist any Lien on any
of its property now owned or hereafter acquired except:
(a) Liens granted to Agent for the benefit of the Lenders under the
Security Documents to secure the Obligations;
(b) Liens listed on Exhibit 7.2.3;
(c) Liens for taxes not yet due or being contested in good faith and
by appropriate proceedings to the extent permitted under this Agreement;
(d) Purchase Money Liens and Leases;
(e) Liens of warehousemen, mechanics, materialmen, workers, repairmen,
common carriers, or landlords, liens for taxes, assessments or other
governmental charges, and other similar Liens arising by operation of law for
amounts that are not yet due and payable or which are being diligently contested
in good faith by Borrower or a Guarantor, and for which adequate reserves are
maintained by Borrower for their payment;
(f) Attachment or judgment Liens not to exceed an aggregate of
US$1,000,000 excluding in each case amounts (i) bonded to the reasonable
satisfaction of Agent or (ii) covered by insurance to the reasonable
satisfaction of Agent;
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(g) Deposits or pledges to secure obligations under worker's
compensation, social security or similar laws, or under unemployment insurance,
not to exceed an aggregate of US$3,000,000;
(h) Deposits or pledges to secure bids, tenders, contracts (other than
contracts for the payment of money), leases, statutory obligations, surety and
appeal bonds and other obligations of like nature arising in the ordinary course
of business not to exceed an aggregate of US$2,000,000;
(i) Easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not materially detract
from the value of the property subject thereto or materially interfere with the
ordinary conduct of the business of Borrower or any of its Subsidiaries;
(j) Liens securing Indebtedness described in Subsection 7.2.2(d) which
has been refinanced so long as such refinanced Indebtedness is not secured by
any collateral which did not secure the Indebtedness prior to such refinancing;
(k) Liens securing Indebtedness described in Subsection 7.2.2(j) and
(k);
(l) Extensions and renewals of any of the foregoing so long as the
aggregate amount of extended or renewed Liens are not increased and are on terms
and conditions no more restrictive than the terms and conditions of the Liens
extended or renewed; and
(m) Liens securing Capitalized Lease Obligations permitted pursuant to
Subsection 7.2.2(l).
7.2.4 Contingent Obligations. Neither Borrower nor any of its
Subsidiaries shall directly or indirectly incur, assume, or suffer to exist any
Contingent Obligation, excluding indemnities given in connection with the sale
of Inventory or other asset dispositions permitted hereunder and Contingent
Obligations for Indebtedness permitted to be incurred under Subsection 7.2.2
hereof.
7.2.5 Sale of Assets. Borrower shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, sell, lease, assign, transfer or
otherwise dispose of any assets other than (i) Inventory (including containers
held for lease) in the ordinary course of business, (ii) individual items of
Collateral with a book value of less than US$2,000,000 in the aggregate during
any fiscal year, (iii) obsolete or worn out property disposed of in the ordinary
course of business, (iv) dispositions of assets not otherwise addressed by this
Subsection 7.2.5 with an aggregate fair market value not in excess of
US$2,000,000 in any fiscal year, (v) so long as no Default or Event of Default
has occurred and is continuing, to the extent permitted by the Senior Note
Indenture, sales of container Inventory held for lease for the purpose of
securitization or like off-balance sheet financing, provided that the orderly
liquidation value of such container Inventory sold during the Term of this
Agreement shall not exceed US$50,000,000; (vi) transfers of Inventory and
Equipment from Borrower to a Credit Party, or from one Credit Party to another
Credit Party or to Borrower, and (vii) sales of Trailers acquired in Permitted
Acquisitions or owned by Borrower or a Credit Party on the date hereof; provided
that, with respect to clauses (ii), (iii), (iv), (v), and (vii), (a) such
dispositions are for fair value,
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(b) the aggregate consideration is paid in full in cash at the time of
disposition and is either reinvested in the business of Borrower or its
Subsidiaries (subject to the limitations of this Agreement) or used to repay
Revolving Credit Loans in accordance with Section 3.3.3 and (viii) sales of
Equipment which Borrower or a Credit Party will lease back under a capital lease
permitted under Subsection 7.2.2(d) or an operating lease permitted under
Subsection 7.2.13.
7.2.6 Restricted Payments. Borrower shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly:
(a) declare or pay any dividend (other than dividends payable solely
in common stock of Borrower) on, or make any payment on account of, or set apart
assets for a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of, any shares of any class of
Securities of Borrower or any warrants, options or rights to purchase any such
Securities, whether now or hereafter outstanding, or make any other distribution
in respect thereof, either directly or indirectly, whether in cash or property
or in obligations of Borrower or any of its Subsidiaries (each of the foregoing,
a "Restricted Payment"); provided, (i) any Subsidiary may declare and pay
dividends or distributions to Borrower or any other Subsidiary of Borrower which
is a Credit Party; (ii) Borrower may purchase on the open market Securities
consisting of its common stock for an aggregate amount not to exceed
US$10,000,000 if, (A) both before and after giving effect to such purchase, no
Default or Event of Default exists or would result therefrom and Borrower has
Availability of at least US$30,000,000, (C) all shares of such Securities so
purchased are thereafter immediately cancelled or shall have the status of
treasury stock of Borrower and (D) if the Restricted Payment under this clause
(ii) is to be made with the proceeds of a Loan, the request for such Loan shall
be made under a separate request for borrowing and shall be accompanied by
calculations in reasonable detail evidencing that Borrower may make any
Restricted Payment in compliance with this Subsection 7.2.6(a)(ii); and (iii)
Borrower may make any Restricted Payment permitted pursuant to the Senior Note
Documents so long as at the time of such Restricted Payment, the Payment
Conditions shall have been satisfied; or
(b) make any payment or prepayment of principal of, or any prepayment
of interest on, or any redemption (including, without limitation, by making
payments to a sinking or analogous fund), repurchase or defeasance of, any
Indebtedness (other than Indebtedness pursuant to this Agreement) or of any
Mandatory Redeemable Obligation; provided that (i) any Subsidiary may make
payments on account of Indebtedness owing to Borrower or any other Subsidiary,
(ii) on or prior to July 1, 2006, Borrower may repurchase or redeem up to 35% of
the aggregate principal amount of the Senior Notes outstanding on the
Restatement Date and pay accrued interest and premium thereon with the proceeds
of the issuance of Borrower's Securities in an "Equity Offering" under and as
defined in the Senior Note Indenture if, both before and after giving effect to
such repurchase or redemption, (x) no Default or Event of Default exists and (y)
Borrower has Availability of at least US$35,000,000; (iii) on or before December
31, 2006, Borrower may terminate Derivative Obligations outstanding and pay the
costs of such termination, (iv) Borrower and its Subsidiaries may make scheduled
principal and interest payments on Indebtedness permitted under Subsections
7.2.2(a), (b), (c), (d), (g), (h), (i), (j) and (k) and scheduled interest
payments on the Senior Notes and (v) Borrower may prepay, repurchase or redeem
any Indebtedness if (A) the average Availability over the 90 days prior to such
transaction is greater than US$50,000,000; (B) the Availability calculated on a
pro forma
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basis before and after giving effect to such payment shall be greater than
US$50,000,000; (C) after giving effect to such payment and any Indebtedness
incurred, Borrower shall be in compliance with the financial covenants set forth
on Exhibit 7.3.1 (Fixed Charge Coverage Ratio), Exhibit 7.3.2 (Debt Ratio) and
Exhibit 7.3.3 (Minimum Utilization) hereof, each calculated on a pro forma basis
(whether or not Section 7.3 hereof would then require compliance with such
covenant) for the most recently ended fiscal quarter for which the financial
statements in Section 7.1.3(iii) have been delivered to Agent; not later than
three Business Days prior to making such Restricted Payment Agent shall receive
(a) a certificate of Borrower with supporting detail acceptable Agent to the
effect that on the date on which such prepayment, repurchase or redemption is
consummated, Borrower has satisfied the requirements of clauses (A), (B) and
(C), and (b) financial projections demonstrating that during the six month
period following the making of such Restricted Payment, Availability shall not
be less then US$50,000,000; and (D), no Default or Event of Default has occurred
and its continuing or would be created thereby.
7.2.7 Investments. Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, make any Investment in any Person,
whether in cash, securities, or other property of any kind including, without
limitation, any Subsidiary or Affiliate of Borrower, other than:
(a) Advances or loans (but not sales on open account on ordinary
course of business terms) made in the ordinary course of business, including
those made to finance the sale of Inventory, not to exceed US$100,000
outstanding at any one time to any one Person and US$500,000 in the aggregate
outstanding at any one time;
(b) loans, investments and advances between Borrower and Guarantors
permitted under this Agreement;
(c) Cash Equivalents;
(d) Permitted Acquisitions;
(e) Deposits with financial institutions, disclosed on Exhibit 7.2.7,
and which are insured by the Federal Deposit Insurance Corporation ("FDIC") or a
similar federal insurance program; provided, however, that Borrower may, in the
ordinary course of its business, maintain in its disbursement accounts from time
to time amounts in excess of then applicable FDIC or other program insurance
limits; and
(f) Such other Investments as Majority Lenders may approve in writing
in their sole discretion.
7.2.8 Affiliate Transactions. Borrower shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, enter into any transaction
with, including, without limitation, the purchase, sale or exchange of property
or the rendering of any service to, any Subsidiary or Affiliate of Borrower,
except (a) the transactions in existence on the Restatement Date as described on
Exhibit 7.2.8, (b) transactions between or among Borrower and its wholly-owned
Subsidiaries which are Credit Parties and (c) transactions in the ordinary
course of and pursuant to the reasonable requirements of Borrower's or such
Subsidiary's or Affiliate's
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business, as the case may be, and upon fair and reasonable terms no less
favorable to Borrower or such Subsidiary than could be obtained in a comparable
arm's-length transaction with an unaffiliated Person.
7.2.9 Additional Bank Accounts. Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, open, maintain or
otherwise have any checking, savings or other accounts at any bank or other
financial institution, or any other account where money is or may be deposited
or maintained with any Person, other than the accounts set forth on Exhibit
7.2.7 and such other accounts as have been previously approved by Agent. All
accounts of the Borrower and its Subsidiaries shall be subject to blocked
account or control agreements in form and substance satisfactory to Agent, other
than such accounts which have an aggregate cash flow during any month of not
more than $50,000.
7.2.10 Excess Cash. Except upon prior written consent of Agent, at
such time as a Liquidity Event or an Event of Default has occurred and is
continuing, Borrower shall not, and shall not permit its Subsidiaries to,
directly or indirectly, maintain (a) in the aggregate in all U.S. deposit
accounts of Borrower and its Subsidiaries (other than the payroll accounts and
the account with Bank described in Subsection 3.3.5), total cash balances and
Investments permitted by Subsection 7.2.7(c), in excess of an average daily
balance of US$750,000, exclusive of uncollected funds, (calculated monthly) for
any three consecutive months during which any Revolving Credit Loans are
outstanding hereunder and no U.S. disbursement account shall contain more than
US$20,000, and (b) in the aggregate in all Canadian deposit accounts of Borrower
and its Subsidiaries (other than the payroll accounts and the account with Bank
described in Subsection 3.3.5), total cash balances and Investments permitted by
Subsection 7.2.7(c), in excess of an average daily balance of CA$1,000,000,
exclusive of uncollected funds, (calculated monthly) for any three consecutive
months during which any Revolving Credit Loans are outstanding hereunder and no
Canadian disbursement account shall contain more than CA$20,000.
7.2.11 Additional Negative Pledges. Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective, (i) any prohibition or restriction
(including any agreement to provide equal and ratable security to any other
Person in the event a Lien is granted to or for the benefit of Agent and the
Lenders) on the creation or existence of any Lien upon the assets of Borrower or
its Subsidiaries or (ii) any contractual obligation which may restrict or
inhibit Agent's rights or ability to sell or otherwise dispose of the Collateral
or any part thereof after the occurrence of an Event of Default, other than
pursuant to the Senior Note Documents as in effect on the date on which the
Senior Notes were issued.
7.2.12 No Subsidiaries. Borrower shall not, directly or indirectly,
form or acquire any new Subsidiaries, except (a) in connection with Permitted
Acquisitions in compliance with Subsection 7.2.14 or the formation of UK
Borrower, and (b) if each of the following conditions is met:
(i) each new Subsidiary is a wholly-owned Subsidiary of Borrower
created to conduct business in a specific jurisdiction;
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(ii) both before and after giving effect to the creation of such
Subsidiary and the transfer of any assets from Borrower to such Subsidiary, all
representations and warranties of Borrower and its Subsidiaries contained in any
Loan Document are true and correct, on and as of such date as if made as of such
date (except (x) such revisions as are necessary to reflect the formation of
such new Subsidiary and (y) to the extent a representation and warranty was made
only as of a specified date, such representation and warranty shall have been
true and correct as of such date), no Default or Event of Default shall have
occurred and be continuing, and Borrower and its Subsidiaries shall be Solvent;
(iii) Borrower shall have delivered to Agent written notice at least
fifteen (15) Business Days prior to consummation of any transfer of assets to,
or acquisition of assets by, such new Subsidiary, describing in reasonable
detail the proposed new Subsidiary and its assets;
(iv) any such new Domestic Subsidiary or UK Subsidiary shall become a
Guarantor, and all new Domestic and UK Subsidiaries shall have executed and
delivered to Agent such Security Documents (or joinders thereto, in form and
substance satisfactory to Agent) and other documents as are necessary (or
advisable in Agent's judgment) under applicable law in order to grant Agent for
the benefit of the Lenders a perfected first priority security interest and Lien
in the assets of, and ownership interests in, such Subsidiary (subject only to
Permitted Liens); and Borrower or the applicable Credit Party shall execute and
deliver an amendment to the Pledge Agreement in form and substance satisfactory
to Agent, together with stock certificates and promissory notes and other
instruments endorsed in blank, to pledge its equity interests in such new
Subsidiary and all intercompany Loans to such Subsidiary; and
(v) if required by Agent, Agent shall have received opinions of
counsel, in form and substance satisfactory to it, as to the due execution,
delivery and enforceability of the Loan Documents executed by such new
Subsidiary, together with such evidences of solvency, certificates, Certificates
of Title, and other documents and instruments reasonably requested by Agent.
7.2.13 Operating Leases, Off-Balance Sheet Financing. Neither Borrower
nor any of its Subsidiaries shall directly or indirectly incur, create, assume
or suffer to exist any liabilities for operating leases or other indebtedness or
liabilities not reflected as such on their financial statements other than
liabilities described on Exhibit 7.2.13, and any refinancing of such
liabilities, so long as the aggregate amount thereof so refinanced shall not be
increased and the refinancing shall be on terms and conditions no more
restrictive than the terms and conditions of the liabilities to be refinanced;
provided, however, that Borrower and its Subsidiaries may incur liabilities in
connection with operating leases of real property (including office and yard
space) and office Equipment in the ordinary course of business and of other
Equipment with values of up to US$5,000,000 in any fiscal year (exclusive of
Equipment acquired under operating leases executed prior to the Original Closing
Date and listed on Exhibit 7.2.13) (and up to 50% of any amount not incurred in
any fiscal year may be carried over to the next fiscal year).
7.2.14 Permitted Acquisitions. Borrower shall not, and shall not
permit any of its Subsidiaries to, make an Acquisition unless each of the
following conditions is satisfied:
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(a) such Acquisition is made by Borrower or another Credit Party;
(b) such Acquisition shall be consensual and, if required under state
law, shall have been approved by the board of directors or other governing body
of the Person to be acquired (if there is such a governing body) and shall be
permitted by the Senior Note Documents;
(c) both before and after giving effect to such Acquisition, all
representations and warranties of Borrower and its Subsidiaries contained in any
Loan Document are true and correct on such date as if made as of such date
(except to the extent that a representation and warranty was made only as of a
specified date, such representation and warranty shall have been true and
correct as of such date) and no Default or Event of Default shall have occurred
and be continuing, and Agent shall receive a certificate of Borrower to such
effect on the date on which such Acquisition is consummated;
(d) both before and after giving effect to such Acquisition and the
incurrence of Indebtedness in connection therewith, Borrower and its
Subsidiaries (including any Subsidiary acquired in such Acquisition) shall be
Solvent;
(e) No Default or Event of Default shall have occurred and be
continuing or shall be created thereby and the Payment Conditions shall have
been satisfied, each calculated on a pro forma basis (whether or not Section 7.3
hereof would then require compliance with such covenant) after giving effect to
such payments and any Indebtedness incurred in connection therewith, and Agent
shall receive a certificate of Borrower to such effect on the date on which such
Acquisition is consummated;
(f) if a Revolving Credit Loan is to be made in connection with such
Acquisition, Agent shall have received a Notice of Borrowing and, if Borrower
desires to include the assets to be acquired in the US Borrowing Base or the UK
Borrowing Base for such Revolving Credit Loan, a Borrowing Base Certificate; if
the increase in Availability resulting from such Acquisition is greater than
US$20,000,000, then Agent shall have the right to request an appraisal in
connection with such Acquisition;
(g) As soon as reasonably practicable following consummation of the
Acquisition, Agent shall have received such financing statements, filings,
Certificates of Title and other Security Documents as required (or advisable in
Agent's judgment) to create and perfect Liens on any assets to be acquired,
including assets of any new Subsidiary, together with evidence (including Lien
search results) satisfactory to Agent that such Liens are first and prior Liens
subject only to Permitted Liens;
(h) all new Subsidiaries formed or acquired in such Permitted
Acquisition shall be wholly-owned, directly or indirectly, by Borrower;
(i) the business and assets to be acquired in such Acquisition shall
be acquired free and clear of all Liens (other than Permitted Liens);
(j) any new Domestic Subsidiary shall become a Guarantor and all new
Domestic Subsidiaries shall execute and deliver to Agent such Security Documents
as are
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required to be executed by a Guarantor (or joinder agreements in form and
substance satisfactory to Agent) and such other documents as are necessary (or
advisable in Agent's judgment) under applicable law in order to grant Agent for
the benefit of the Lenders a perfected first priority security interest and Lien
in the assets of, and ownership interests in, such Subsidiary (subject only to
Permitted Liens); and Borrower or its Subsidiary, as applicable, shall execute
and deliver an amendment to the Pledge Agreement in form and substance
satisfactory to Agent, together with stock certificates and promissory notes and
other instruments endorsed in blank in accordance therewith;
(k) prior to inclusion of any assets in the US Borrowing Base or the
UK Borrowing Base, if Agent in its reasonable discretion requires, Agent shall
have received appraisals, in form and substance satisfactory to Agent, of all
Inventory and Equipment to be included in the Borrowing Base and shall have
completed such review of Accounts and Inventory as it deems necessary or
desirable for inclusion in the applicable Borrowing Base;
(l) the Person or business to be acquired is engaged in the business
conducted by Borrower and its Subsidiaries immediately prior to the Closing Date
or similar activities related or incidental thereto; and
(m) in the case of any Acquisition with a purchase price of
US$10,000,000 or more, on or prior to the date of such Acquisition, Agent shall
have received, in form and substance satisfactory to Agent, all acquisition
documents related thereto and certificates, and other documents and instruments
reasonably requested by Agent, which collectively shall confirm, to Agent's
satisfaction that the conditions set forth herein have been satisfied.
7.2.15 Amendments of Senior Note Documents. Borrower shall not, nor
permit any Subsidiary of Borrower to, amend or modify any Senior Note Document,
other than to add Subsidiaries of Borrower as guarantors thereunder. All
Subsidiaries of Borrower which are guarantors of the Senior Notes shall be
Guarantors.
7.2.16 Securities of Subsidiaries. Borrower shall not permit any of
its Subsidiaries to issue any additional Securities except director's qualifying
Securities.
7.2.17 ▇▇▇▇-and-Hold Sales, Etc. Borrower shall not make, or permit
any Subsidiary of Borrower to make, a sale to any customer on a ▇▇▇▇-and-hold or
consignment basis.
7.2.18 Tax Consolidation. Borrower shall not file or consent to the
filing of any consolidated income tax return with any Person other than
Borrower's Subsidiaries.
7.2.19 Organizational Documents. Borrower shall not agree to, or
suffer to occur, any amendment, supplement or addition to its or any of its
Subsidiaries' charter, articles or certificate of incorporation, certificate of
formation, limited partnership agreement, bylaws, limited liability agreement,
operating agreement or other organizational documents (as the case may be), that
would reasonably be expected to have a Material Adverse Effect.
7.2.20 Fiscal Year End. Borrower shall not change, or permit any
Subsidiary of Borrower to change, its fiscal year end.
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7.3 Specific Financial Covenants. During the Term, and thereafter for so
long as there are any Obligations outstanding, Borrower covenants that if a
Liquidity Event has occurred, then as of the end of the most recent fiscal
quarter for which financial statements shall have been required to be delivered
pursuant to Subsection 7.1(i) or (iii) and as of the end of each subsequent
fiscal quarter until a Liquidity Event is not in effect, Borrower shall comply
with all of the financial covenants set forth in Exhibit 7.3 hereto. If GAAP
changes from the basis used in preparing the audited financial statements
delivered to Agent by Borrower on or before the Restatement Date, Borrower will
provide Agent with certificates demonstrating compliance with such financial
covenants and will include, at the election of Borrower or upon the request of
Agent, calculations setting forth the adjustments necessary to demonstrate how
Borrower is in compliance with such financial covenants based upon GAAP as in
effect on the Restatement Date.
SECTION 8. CONDITIONS PRECEDENT
8.1 Conditions Precedent to Effectiveness of this Agreement.
Notwithstanding any other provision of this Agreement or any of the other Loan
Documents, and without affecting in any manner the rights of Agent or any Lender
under the other sections of this Agreement, this Agreement shall not become
effective and no Lender shall be required to make any Loan, nor shall Agent be
required to or issue or procure any Letter of Credit or LC Guaranty unless and
until each of the following conditions has been satisfied and this Agreement has
become effective in accordance with Section 11.7:
(a) Documentation. Agent shall have received, in form and substance
satisfactory to Agent and its counsel, a duly executed copy of this Agreement,
the Revolving Notes, the Master Assignment Agreement, the Reaffirmations and
amendments to the Mortgages, together with such additional documents,
instruments and certificates as Agent and its counsel shall require in
connection therewith from time to time, all in form and substance satisfactory
to Agent and its counsel.
(b) No Default; Representations and Warranties. No Default or Event of
Default shall exist and all representation and warranties made by Borrower or
any Guarantor in any Loan Document shall be true and correct on such date as if
made as of such date (except to the extent a representation and warranty was
made only as of a specified date, in which case it shall have been true and
correct as of such date).
(c) No Litigation. No action, proceeding, investigation, regulation or
legislation shall have been threatened, or instituted or proposed before any
court, arbitrator, governmental agency or legislative body to enjoin, restrain
or prohibit, or to obtain damages in respect of, or which is related to or
arises out of this Agreement or the Senior Notes or the consummation of the
transactions contemplated hereby or thereby, or which could have a Material
Adverse Effect.
(d) Material Adverse Effect. Since December 31, 2004, there has not
been any material adverse change in the business, assets, financial condition,
income or prospects of Borrower and its Subsidiaries, taken as a whole, and no
event or condition exists which would be reasonably likely to result in any
Material Adverse Effect.
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(d) Cash Management System; Lockboxes. Borrower and its Subsidiaries
shall have established cash management systems for their respective operations
in accordance with Subsection 5.2.4 and on terms and conditions satisfactory to
Agent.
(e) Lien Perfection; Title Insurance. Borrower and its Subsidiaries
shall have delivered to Agent such documents as requested by Agent to perfect or
to continue the perfection of the Liens granted to the Existing Agent for the
benefit of the Prior Lenders and evidence that Agent has duly perfected first
priority Liens in the assets of Borrower and its Subsidiaries, subject only to
Permitted Liens. Agent shall have received policies of title insurance or
endorsements thereto satisfactory in form and substance to Agent and its counsel
or commitments therefor, insuring that the Mortgages, as amended, constitute
first priority Liens on the Specified Real Property, subject only to Permitted
Liens.
(f) Insurance. Agent shall have received and approved evidence of
insurance coverage in amount and scope, and Borrower's insurers shall have
provided endorsements in form and substance satisfactory to Agent naming Agent,
for the benefit of the Lenders, as loss payee for all casualty insurance and
business interruption insurance, with customary lender loss payable
endorsements, and naming Agent as an additional insured with respect to all
other insurance.
(g) Opinions. Agent shall have received opinions of outside counsel to
Borrower and Guarantors, in form and substance reasonably satisfactory to Agent
and its counsel.
(h) Existing Loan Agreement. On the Restatement Date, all Revolving
Credit Loans shall have been converted to Base Rate Loans, all amounts owing
under the Existing Loan Agreement to Prior Lenders which are not Lenders
hereunder shall have been paid (including interest, fees and costs required by
Section 3.2.5 of the Existing Loan Agreement), and Borrower shall have paid to
Agent and the Lenders all interest, fees and costs (including those required by
Section 3.2.5 of the Existing Loan Agreement) due under the Existing Loan
Agreement and the Loan Documents.
(i) Corporate Structure and Management. The corporate and capital
structure (including any agreements among the stockholders of the Borrower), and
the composition of the Board of Directors and senior management of the Borrower
shall be satisfactory to Agent in all respects.
(j) Approvals and Consents. All governmental, stockholder (including
in relation to the UK Guarantors, unanimous shareholder resolutions) and third
party approvals required in connection with the consummation of the transactions
contemplated by this Agreement, including any consents required under the Senior
Note Documents, shall have been obtained and shall be in full force and effect.
(k) Financial Statements. Agent and each Arranger shall have received
and be satisfied with each of (i) the unaudited financial statements (including,
but not limited to, balance sheet, income statement and statement of cash flows)
of Borrower and its Subsidiaries as of the fiscal quarter ended September 30,
2005, on a Consolidated basis, (ii) the unaudited interim
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financial statements (including, but not limited to, balance sheet, income
statement and statement of cash flows) of Borrower and its Subsidiaries as of
the end of the most recent month, and for the period from December 31, 2005 to
such month-end, and (iii) projected financial statements (including, but not
limited to, balance sheet, income statement, statement of cash flows,
Availability and calculations of projected covenant compliance) of the Borrower
and its Subsidiaries for the three-year period beginning on the Closing Date
(prepared on a quarterly basis for the first year and an annual basis
thereafter).
(l) Availability. Agent and the Lenders shall have received a
Borrowing Base Certificate, dated as of the Restatement Date, prepared on a pro
forma basis giving effect to the consummation of the transactions contemplated
by this Agreement (including the initial borrowing under this Agreement and the
amount of any loans or letters of credit outstanding under the Existing Loan
Agreement that shall remain outstanding), which demonstrates Availability of not
less than US$100,000,000.
(m) Resignation of Agent under the Existing Loan Agreement. The agent
under the Existing Loan Agreement shall have resigned and the DB AG shall have
been appointed as the agent under this Agreement.
(n) Restatement Date. The Restatement Date shall have occurred on or
before March 31, 2006.
8.2 Conditions Precedent to Revolving Credit Loans. Notwithstanding any
other provision of this Agreement or any of the other Loan Documents, and
without affecting in any manner the rights of Agent or any Lender under the
other sections of this Agreement, no Lender shall be required to make any Loan,
nor shall Agent be required to or issue or procure any Letter of Credit or LC
Guaranty unless and until each of the following conditions has been satisfied:
(a) No Default; Representations and Warranties. No Default or Event of
Default shall exist and all representation and warranties made by Borrower or
any Guarantor in any Loan Document shall be true and correct on such date as if
made as of such date (except to the extent a representation and warranty was
made only as of a specified date, in which case it shall have been true and
correct as of such date).
(b) Request for Revolving Credit Loan. A request for a Revolving
Credit Loan shall have been made in compliance with Section 3.1.
SECTION 9. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
9.1 Events of Default. The occurrence of one or more of the following
events shall constitute an "Event of Default":
9.1.1 Payment of Obligations. Any Credit Party shall fail to pay (i)
any principal or interest on the Loans or any reimbursement obligation in
respect of any Letter of Credit or LC Guaranty on the due date thereof or (ii)
any other Obligation within two (2) Business Days of the date the same becomes
due and payable.
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9.1.2 Misrepresentations. Any representation, warranty or other
statement made or furnished to Agent or any Lender by or on behalf of Borrower,
or any other Credit Party in this Agreement, any of the other Loan Documents or
any instrument, certificate or financial statement furnished in compliance with
or in reference thereto proves to have been false or misleading in any material
respect when made, furnished or remade pursuant to Section 7.2 hereof.
9.1.3 Breach of Specific Covenants. Borrower shall (i) fail or neglect
to perform, keep or observe any covenant contained in Subsections 5.1.2, 7.1.1,
7.1.4, 7.2 or 7.3 hereof on the date that Borrower is required to perform, keep
or observe such covenant or (ii) fail or neglect to perform, keep or observe any
covenant contained in Sections 4.2, 7.1.2 or 7.1.3 hereof within ten (10)
Business Days following the date on which Borrower is required to perform, keep
or observe such covenant.
9.1.4 Breach of Other Covenants. Any Credit Party shall fail or
neglect to perform, keep or observe any covenant contained in this Agreement
(other than a covenant which is dealt with specifically elsewhere in Section 9.1
hereof) or any other Loan Document and the breach of such other covenant is not
cured to Agent's satisfaction by the earlier to occur of ten (10) Business Days
after (i) the date Borrower or such Subsidiary or Credit Party knew or should
have known of such occurrence and (ii) the date of giving of notice thereof by
Agent to Borrower.
9.1.5 Change of Control. A Change of Control shall occur.
9.1.6 Cross Default. A default or event of default shall occur (and
continue beyond any applicable grace period) under any note, agreement or
instrument evidencing any other Indebtedness of the Borrower or any of its
Subsidiaries, which default or event of default permits the acceleration of its
maturity, provided that the aggregate principal amount of all such Indebtedness
for which the default or event of default has occurred exceeds US$15,000,000.
9.1.7 Failure of Enforceability of Loan Documents; Security. Any
material covenant, agreement or Obligation of Borrower or any other Credit Party
contained in or evidenced by any of the Loan Documents shall cease to be
enforceable, or shall be determined to be unenforceable, in accordance with its
terms; Borrower or any other Credit Party shall deny or disaffirm any of its
material Obligations under any of the Loan Documents or any Liens granted in
connection therewith; or, any Liens granted in any of the Collateral shall be
determined to be void, voidable, invalid or unperfected, are subordinated or not
given the priority contemplated by this Agreement (except where such
circumstance arises as a result of any action or inaction by any Lender).
9.1.8 Uninsured Losses. Any material loss, theft, damage or
destruction of any portion of the Collateral having a fair market value of the
lesser of (i) US$15,000,000 in the aggregate or (ii) 20% of Availability at such
time, if not fully covered (subject to such deductibles and self-insurance
retentions as Agent shall have permitted) by insurance.
9.1.9 Insolvency and Related Proceedings. Borrower, any Subsidiary of
Borrower or any other Credit Party shall cease to be Solvent or shall suffer the
appointment of a
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receiver, trustee, custodian or similar fiduciary, or shall make an assignment
for the benefit of creditors, or any petition for an order for relief shall be
filed by or against Borrower, any Subsidiary of Borrower or any other Credit
Party under the federal bankruptcy laws (if against Borrower, any Subsidiary of
Borrower or any Credit Party the continuation of such proceeding for more than
30 days), or Borrower, any Subsidiary of Borrower or any other Credit Party
shall make any offer of settlement, extension or composition to their respective
unsecured creditors generally; or, with respect to the UK Credit Parties: (in
addition to the preceding provisions of this Section 9.1.9, such provisions not
to be deemed to otherwise limit the following) (i) such UK Credit Party stops or
suspends or threatens or announces an intention to stop or suspend payment of
its debts or is for the purpose of section 123(1) of the Insolvency ▇▇▇ ▇▇▇▇ of
England and Wales (on the basis that the words "proved to the satisfaction of
the court" are deemed omitted from section 123(1)(e)) or any other applicable
law deemed to be unable or shall admit in writing its inability to pay its debts
as they fall due or shall become insolvent or a moratorium is declared in
respect of its indebtedness; (ii) a petition is presented or meeting convened or
application made for the purpose of appointing an administrator (either in or
out of court) or receiver or other similar officer of, or for the making of an
administration order in respect of, any UK Credit Party and (A) (other than in
the case of a petition to appoint an administrator) such petition or application
is not discharged within 14 days; or (B) in the case of a petition to appoint an
administrator, the Agent is not satisfied that it will be discharged before it
is heard; (iii) any UK Credit Party convenes a meeting of its creditors
generally or proposes or makes any arrangement or composition with, or any
assignment for the benefit of, its creditors generally; (iv) any UK Credit Party
enters into any negotiations for or in connection with the re-scheduling,
restructuring or readjustment of any Indebtedness by reason of, or with a view
to avoiding, financial difficulties; (v) any meeting of any UK Credit Party is
convened for the purpose of considering any resolution for (or to petition for)
its winding up or any UK Credit Party passes such a resolution; (vi) a petition
is presented for the winding-up of any UK Credit Party (other than a frivolous
or vexatious petition discharged within 14 days of being presented or any other
petition which is contested on bona fide grounds and discharged at least 7 days
before its hearing date); or (vi) any order is made or resolution passed or
other action taken for the suspension of payments, protection from creditors or
bankruptcy of any UK Credit Party.
9.1.10 Business Disruption; Condemnation. There shall occur a
cessation of a substantial part of the business of Borrower, any Subsidiary of
Borrower or any Guarantor for a period which materially adversely affects the
capacity of the Borrower and its Subsidiaries, taken as a whole, to continue its
business on a profitable basis; or Borrower, any Subsidiary of Borrower or any
Guarantor shall suffer the loss or revocation of any material license or permit
now held or hereafter acquired by Borrower, any Subsidiary of Borrower or any
Guarantor which is necessary to the continued or lawful operation of its
business; or Borrower, any Subsidiary of Borrower or any Guarantor shall be
enjoined, restrained or in any way prevented by court, governmental or
administrative order from conducting all or any material part of its business
affairs; or any material lease or agreement pursuant to which Borrower, any
Subsidiary of Borrower or any Guarantor leases, uses or occupies any Property
shall be canceled or terminated prior to the expiration of its stated term,
except any such lease or agreement the cancellation or termination of which
would not reasonably be expected to have a Material Adverse Effect; or any
material portion of the Collateral shall be taken through condemnation or the
value of such Property shall be impaired through condemnation.
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9.1.11 ERISA. A Reportable Event shall occur which, in Agent's
determination, constitutes grounds for the termination by the Pension Benefit
Guaranty Corporation of any Plan or for the appointment by the appropriate
United States district court of a trustee for any Plan, or if any Plan shall be
terminated or any such trustee shall be requested or appointed, or if Borrower,
any Subsidiary of Borrower or any other Guarantor is in "default" (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan
resulting from Borrower's, such Subsidiary's or such Guarantor's complete or
partial withdrawal from such Plan and any such event would reasonably be
expected to have a Material Adverse Effect.
9.1.12 Criminal Forfeiture. Borrower, any Subsidiary of Borrower or
any Guarantor shall be criminally indicted or convicted under any law that could
lead to a forfeiture of any Property of Borrower, any Subsidiary of Borrower or
any Guarantor.
9.1.13 Judgments. Any money judgments, writ of attachment or similar
processes (collectively, "Judgments") are issued or rendered against Borrower,
any Subsidiary of Borrower or any other Guarantor, or any of their respective
Property (i) in the case of money judgments in an amount of US$2,500,000 or more
for any single judgment, attachment or process or US$5,000,000 or more for all
such judgments, attachments or processes in the aggregate, in each case in
excess of any applicable insurance with respect to which the insurer has
admitted liability, and (ii) in the case of non-monetary Judgments, such
Judgment or Judgments (in the aggregate) would reasonably be expected to have a
Material Adverse Effect, in each case which Judgment is not stayed, released or
discharged within 30 days.
9.2 Acceleration of the Obligations. Upon or at any time after the
occurrence and during the continuance of an Event of Default, (i) Agent may
(with the consent of the Majority Lenders) and shall at the direction of the
Majority Lenders terminate the Revolving Loan Commitments and/or (ii) Agent may
(with the consent of the Majority Lenders) and shall at the direction of the
Majority Lenders declare all or any portion of the Obligations other than
Derivative Obligations (and all such Obligations shall thereupon become) at once
due and payable without presentment, demand, protest or further notice by Agent
or any Lender, and Borrower shall forthwith pay to Agent, the full amount of
such Obligations, provided, that upon the occurrence of an Event of Default
specified in Subsection 9.1.9 hereof, all of the Obligations shall become
automatically due and payable without declaration, notice or demand by Agent or
any Lender, and the Revolving Loan Commitments shall be terminated.
9.3 Other Remedies. Upon the occurrence and during the continuance of an
Event of Default, Agent shall have and may (and shall at the direction of the
Majority Lenders) exercise on behalf of the Lenders from time to time the
following rights and remedies:
9.3.1 All of the rights and remedies of a secured party under the UCC
or under other applicable law, and all other legal and equitable rights to which
Agent or Lenders may be entitled, all of which rights and remedies shall be
cumulative and shall be in addition to any other rights or remedies contained in
this Agreement or any of the other Loan Documents, and none of which shall be
exclusive.
9.3.2 The right to take immediate possession of the Collateral, and to
(i) require Borrower and each of its Subsidiaries to assemble the Collateral, at
Borrower's expense, and
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make it available to Agent at a place designated by Agent which is reasonably
convenient to both parties, and (ii) enter any premises where any of the
Collateral shall be located and to keep and store the Collateral on said
premises until sold (and if said premises be the Property of Borrower or any
Subsidiary of Borrower, Borrower agrees not to charge, or permit any of its
Subsidiaries to charge, Agent for storage thereof).
9.3.3 The right to sell or otherwise dispose of all or any Collateral
in its then condition, or after any further manufacturing or processing thereof,
at public or private sale or sales, with such notice as may be required by law,
in lots or in bulk, for cash or on credit, all as Agent, in its sole discretion,
may deem advisable. Agent may, at Agent's option, disclaim any and all
warranties regarding the Collateral in connection with any such sale. Borrower
agrees that five (5) Business Days' written notice to Borrower or any of its
Subsidiaries of any public or private sale or other disposition of Collateral
shall be reasonable notice thereof, and such sale shall be at such locations as
Agent may designate in said notice. Agent shall have the right to conduct such
sales on Borrower's or any of its Subsidiaries' premises, without charge
therefore, and such sales may be adjourned from time to time in accordance with
applicable law. Agent shall have the right to sell, lease or otherwise dispose
of the Collateral, or any part thereof, for cash, credit or any combination
thereof, and Agent, on behalf of Lenders, may purchase all or any part of the
Collateral at public or, if permitted by law, private sale and, in lieu of
actual payment of such purchase price, may set off the amount of such price
against the Obligations. The proceeds realized from the sale of any Collateral
shall be applied, after allowing two (2) Business Days for collection, first to
the costs, expenses and attorneys' fees incurred by Agent in collecting the
Obligations (other than Banking Product Obligations or Derivative Obligations),
in enforcing the rights of Agent and Lenders under the Loan Documents and in
collecting, retaking, completing, protecting, removing, storing, advertising for
sale, selling and delivering any Collateral, second to the interest due upon any
of the Obligations (other than Banking Product Obligations or Derivative
Obligations), third, to the principal of the Obligations (other than Banking
Product Obligations or Derivative Obligations), and fourth to any other
Obligations, including Banking Product Obligations and Derivative Obligations
and any costs of collection of any Banking Product Obligations or Derivative
Obligations. If any deficiency shall arise, Borrower and each Guarantor shall
remain jointly and severally liable to Agent and Lenders therefore.
9.3.4 Agent is hereby granted a license or other right to use, without
charge, Borrower's and each of its Subsidiary's labels, patents, copyrights,
licenses, rights of use of any name, trade secrets, trade names, trademarks and
advertising matter, consistent with Borrower's reasonable quality control
requirements, or any Property of a similar nature, as it pertains to the
Collateral, in completing, advertising for sale and selling any Collateral and
Borrower's and each of its Subsidiary's rights under all licenses and all
franchise agreements shall inure to Agent's benefit.
9.3.5 Agent may, at its option, require Borrower to deposit with Agent
funds equal to 105% of the sum of (x) the LC Amount and (y) all unpaid LC
Obligations and, if Borrower fails to promptly make such deposit, Agent may
advance such amount as a Revolving Credit Loan (whether or not an Overadvance is
created thereby). Each such Revolving Credit Loan shall be secured by all of the
Collateral and shall bear interest and be payable at the same rate and in the
same manner as Loans. Any such deposit or advance shall be held by Agent as a
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reserve to fund future payments on such LC Guaranties and future drawings
against such Letters of Credit, including fees and charges related to Letters of
Credit and LC Guaranties. At such time as all LC Guaranties have been paid or
terminated and all Letters of Credit have been drawn upon or expired, any
amounts remaining in such reserve shall be applied against any outstanding
Obligations, or, if all Obligations have been indefeasibly paid in full,
returned to Borrower.
9.4 Set Off and Sharing of Payments. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, during the continuance of any Event of Default, each Lender is hereby
authorized by Borrower at any time or from time to time, with prior written
consent of Agent and with reasonably prompt subsequent notice to Borrower (any
prior or contemporaneous notice to Borrower being hereby expressly waived) to
set off and to appropriate and to apply any and all (i) balances held by such
Lender at any of its offices for the account of Borrower or any of its
Subsidiaries (regardless of whether such balances are then due to Borrower or
its Subsidiaries), and (ii) other property at any time held or owing by such
Lender to or for the credit or for the account of Borrower or any of its
Subsidiaries, against and on account of any of the Obligations; provided, that
each Lender exercising such rights shall notify Agent thereof prior to exercise,
shall refrain from exercising such right until Agent shall have confirmed to
such Lender that such exercise will not prejudice the rights of the Lenders, and
any amount received as a result of the exercise of such rights shall be shared
in accordance with Subsection 3.8. Any Lender exercising a right to set off
shall, to the extent the amount of any such set off exceeds its Revolving Loan
Percentage of the amount set off, purchase for cash (and the other Lenders shall
sell) interests in each such other Lender's Revolving Loan Percentage of the
Obligations as would be necessary to cause such Lender to share such excess with
each other Lender in accordance with their respective Revolving Loan
Percentages. Borrower agrees, to the fullest extent permitted by law, that any
Lender may exercise its right to set off with respect to amounts in excess of
its Revolving Loan Percentage of the Obligations and upon doing so shall deliver
such excess to Agent for the benefit of all Lenders in accordance with the
Revolving Loan Percentages.
9.5 Remedies Cumulative; No Waiver. All covenants, conditions, provisions,
warranties, guaranties, indemnities, and other undertakings of Borrower and its
Subsidiaries contained in this Agreement and the other Loan Documents, or in any
document referred to herein or contained in any agreement supplementary hereto
or in any schedule or in any Guaranty Agreement given to Agent or any Lender or
contained in any other agreement between any Lender and Borrower or any of its
Subsidiaries or between Agent and Borrower or any of its Subsidiaries
heretofore, concurrently, or hereafter entered into, shall be deemed cumulative
to and not in derogation or substitution of any of the terms, covenants,
conditions, or agreements of Borrower herein contained. The failure or delay of
Agent or any Lender to require strict performance by Borrower or any of its
Subsidiaries of any provision of this Agreement or to exercise or enforce any
rights, Liens, powers, or remedies hereunder or under any of the aforesaid
agreements or other documents or security or Collateral shall not operate as a
waiver of such performance, Liens, rights, powers and remedies, but all such
requirements, Liens, rights, powers, and remedies shall continue in full force
and effect until all Loans and other Obligations owing or to become owing from
Borrower or any of its Subsidiaries to Agent and each Lender have been fully
satisfied. None of the undertakings, agreements, warranties, covenants and
representations of Borrower or any of its Subsidiaries contained in this
Agreement or any of the other Loan Documents and no Event of Default by Borrower
under this Agreement or any other
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Loan Documents shall be deemed to have been suspended or waived by Lenders,
unless such suspension or waiver is by an instrument in writing specifying such
suspension or waiver and is signed by a duly authorized representative of
Majority Lenders or all Lenders (as required by Section 11.10) or by Agent, at
the direction of Majority Lenders or all Lenders, as the case may be and
directed to Borrower.
SECTION 10. THE AGENT
10.1 Authorization and Action. Each Lender hereby appoints and authorizes
Agent to take such action on its behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to Agent by the terms
hereof and thereof, together with such powers as are reasonably incidental
thereto. Each Lender hereby acknowledges that Agent shall not have by reason of
this Agreement assumed a fiduciary relationship in respect of any Lender. In
performing its functions and duties under this Agreement, Agent shall act solely
as agent of Lenders and shall not assume, or be deemed to have assumed, any
obligation toward, or relationship of agency or trust with or for, Borrower or
any of its Subsidiaries. As to any matters not expressly provided for by this
Agreement and the other Loan Documents (including without limitation enforcement
and collection of the Notes), Agent may, but shall not be required to, exercise
any discretion or take any action, but shall be required to act or to refrain
from acting (and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Majority Lenders, whenever such instruction
shall be requested by Agent or required hereunder, or a greater or lesser number
of Lenders if so required hereunder, and such instructions shall be binding upon
all Lenders; provided, that Agent shall be fully justified in failing or
refusing to take any action which exposes Agent to any liability or which is
contrary to this Agreement, the other Loan Documents or applicable law, unless
Agent is indemnified to its satisfaction by the other Lenders against any and
all liability and expense which it may incur by reason of taking or continuing
to take any such action. If Agent seeks the consent or approval of the Majority
Lenders (or a greater or lesser number of Lenders as required in this
Agreement), with respect to any action hereunder, Agent shall send notice
thereof to each Lender and shall notify each Lender at any time that the
Majority Lenders (or such greater or lesser number of Lenders) have instructed
Agent to act or refrain from acting pursuant hereto.
10.2 Agent's Reliance, Etc. Neither Agent, any Affiliate of Agent, nor any
of their respective directors, officers, agents or employees shall be liable for
any action taken or omitted to be taken by it or them under or in connection
with this Agreement or the other Loan Documents, except for its or their own
gross negligence or willful misconduct. Without limitation of the generality of
the foregoing, Agent: (i) may treat each Lender party hereto as the holder of
Obligations until Agent receives written notice of the assignment or transfer or
such lender's portion of the Obligations signed by such Lender and in form
reasonably satisfactory to Agent; (ii) may consult with legal counsel,
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts, (iii) makes
no warranties or representations to any Lender and shall not be responsible to
any Lender for any recitals, statements, warranties or representations made in
or in connection with this Agreement or any other Loan Documents; (iv) shall not
have any duty beyond Agent's customary practices in respect of loans in which
Agent is the only lender, to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement or the
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other Loan Documents on the part of Borrower or any of its Subsidiaries, to
inspect the property (including the books and records) of Borrower or any of its
Subsidiaries, to monitor the financial condition of Borrower or to ascertain the
existence or possible existence or continuation of any Default or Event of
Default; (v) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto; (vi) shall not be liable to any Lender for
any action taken, or inaction, by Agent upon the instructions of Majority
Lenders pursuant to Section 10.1 hereof or refraining to take any action pending
such instructions; (vii) shall not be liable for any apportionment or
distributions of payments made by it in good faith pursuant to Section 3 hereof;
(viii) shall incur no liability under or in respect of this Agreement or the
other Loan Documents by acting upon any notice, consent, certificate, message or
other instrument or writing (which may be by telephone, facsimile, telegram,
cable or telex) believed in good faith by it to be genuine and signed or sent by
the proper party or parties; and (ix) may assume that no Event of Default has
occurred and is continuing, unless Agent has actual knowledge of the Event of
Default, has received notice from Borrower or Borrower's independent certified
public accounts stating the nature of the Event of Default, or has received
notice from a Lender stating the nature of the Event of Default and that such
Lender considers the Event of Default to have occurred and to be continuing. In
the event any apportionment or distribution described in clause (vii) above is
determined to have been made in error, the sole recourse of any Person to whom
payment was due but not made shall be to recover from the recipients of such
payments any payment in excess of the amount to which they are determined to
have been entitled.
10.3 DB AG and Affiliates. With respect to its commitment hereunder to make
Loans, DB AG shall have the same rights and powers under this Agreement and the
other Loan Documents as any other Lender and may exercise the same as though it
were not Agent; and the terms "Lender," "Lenders" or "Majority Lenders" shall,
unless otherwise expressly indicated, include DB AG in its individual capacity
as a Lender. DB AG and its Affiliates may lend money to, and generally engage in
any kind of business with, Borrower and its Subsidiaries and Affiliates, and any
Person who may do business with or own Securities of Borrower all as if DB AG
were not Agent and without any duty to account therefore to any other Lender.
10.4 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based on
the financial statements referred to herein and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon Agent or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement. Agent shall not have any duty or responsibility, either
initially or on an ongoing basis, to provide any Lender with any credit or other
similar information regarding Borrower or any of its Subsidiaries.
10.5 Indemnification. Lenders agree to indemnify Agent (to the extent not
reimbursed by Borrower), in accordance with their respective Revolving Loan
Percentages, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against Agent in any way relating to or arising out of this Agreement
or any other
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Loan Document or any action taken or omitted by Agent under this Agreement;
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to reimburse
Agent promptly upon demand for its ratable share, as set forth above, of any
out-of-pocket expenses (including reasonable attorneys' fees) incurred by Agent
in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiation, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and each other Loan Document, to the
extent that Agent is not reimbursed for such expenses by Borrower. The
obligations of Lenders under this Section 10.5 shall survive the payment in full
of all Obligations and the termination of this Agreement. If after payment and
distribution of any amount by Agent to Lenders, any Lender or any other Person,
including Borrower, any creditor of Borrower, a liquidator, administrator or
trustee in bankruptcy, recovers from Agent any amount found to have been
wrongfully paid to Agent or disbursed by Agent to Lenders, then Lenders, in
accordance with their respective Revolving Loan Percentages, shall reimburse
Agent for all such amounts.
10.6 Rights and Remedies to be Exercised by Agent Only. Each Lender agrees
that, except as set forth in Section 9.4, no Lender shall have any right
individually (i) to realize upon the security created by this Agreement or any
other Loan Document, (ii) to enforce any provision of this Agreement or any
other Loan Document, or (iii) to make demand under this Agreement or any other
Loan Document.
10.7 Agency Provisions Relating to Collateral. Each Lender authorizes and
ratifies Agent's entry into this Agreement and the Security Documents for the
benefit of Lenders. Each Lender agrees that any action taken by Agent with
respect to the Collateral in accordance with the provisions of this Agreement or
the Security Documents, and the exercise by Agent of the powers set forth herein
or therein, together with such other powers as are reasonably incidental
thereto, shall be authorized and binding upon all Lenders. Agent is hereby
authorized on behalf of all Lenders, without the necessity of any notice to or
further consent from any Lender, from time to time prior to an Event of Default,
to take any action with respect to any Collateral or the Loan Documents which
may be necessary to perfect and maintain perfected Agent's Liens upon the
Collateral, for its benefit and the ratable benefit of Lenders. Lenders hereby
irrevocably authorize Agent, at its option and in its discretion, to (a) release
any Lien granted to or held by Agent upon any Collateral (i) upon termination of
the Agreement and payment and satisfaction of all Obligations; or (ii)
constituting property being sold or disposed of to a Person other than Borrower
or any of its Subsidiaries if Borrower certifies to Agent that the sale or
disposition is made in compliance with Subsection 7.2.5 hereof (and Agent may
rely conclusively on any such certificate, without further inquiry); or (iii)
constituting property in which Borrower or such Subsidiary owned no interest at
the time the Lien was granted or at any time thereafter; (iv) constituting
property subject to an operating lease permitted by Subsection 7.2.13; or (v) in
connection with any foreclosure sale or other disposition of Collateral after
the occurrence and during the continuation of an Event of Default or (vi) if
approved, authorized or ratified in writing by Agent at the direction of all
Lenders and (b) subordinate any Lien granted to Agent on Equipment if required
by the holder of any Indebtedness (including Capitalized Lease Obligations)
secured by Purchase Money Liens and Leases permitted hereunder. Upon request by
Agent at any time, Lenders will confirm in writing Agent's authority to release
particular
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types or items of Collateral pursuant hereto, or subordinate Liens on Equipment.
Agent shall have no obligation whatsoever to any Lender or to any other Person
to assure that the Collateral exists or is owned by Borrower or any of its
Subsidiaries or is cared for, protected or insured or has been encumbered or
that the Liens granted to Agent herein or pursuant to the Security Documents
have been properly or sufficiently or lawfully created, perfected, protected or
enforced or are entitled to any particular priority, or to exercise at all or in
any particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of its rights, authorities and powers granted or
available to Agent in this Section 10.7 or in any of the Loan Documents, it
being understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, Agent may act in any manner it may deem
appropriate, in its sole discretion, but consistent with the provisions of this
Agreement, including given Agent's own interest in the Collateral as a Lender
and that Agent shall have no duty or liability whatsoever to any Lender.
10.8 Agent's Right to Purchase Commitments. Agent shall have the right, but
shall not be obligated, at any time upon written notice to any Lender and with
the consent of such Lender, which may be granted or withheld in such Lender's
sole discretion, to purchase for Agent's own account all of such Lender's
interests in this Agreement, the other Loan Documents and the Obligations, for
the face amount of the outstanding Obligations owed to such Lender, including
without limitation all accrued and unpaid interest and fees.
10.9 Right of Sale, Assignment, Participations. Borrower hereby consents to
any Lender's participation, sale, assignment, transfer or other disposition, at
any time or times hereafter, of this Agreement and any of the other Loan
Documents, or of any portion hereof or thereof, including, without limitation,
such Lender's rights, title, interests, remedies, powers, and duties hereunder
or thereunder subject to the terms and conditions set forth below:
10.9.1 Sales, Assignments. Each Lender hereby agrees that, with
respect to any sale or assignment (i) such assignment must be made to an
Eligible Assignee, (ii) Agent must consent, such consent not to be unreasonably
withheld, to each such assignment to a Person that is not an original signatory
to this Agreement or any Affiliate thereof, and (ii) the assignee Lender shall
pay to Agent a processing and recordation fee of US$3,500 and any reasonable
out-of-pocket attorneys' fees and expenses incurred by Agent in connection with
any such sale or assignment; provided however that the principal amount of the
Revolving Loan Commitment together with the Loans of the assigning Lender
together with its Affiliates that is the subject of such assignment shall in no
event be less than US$5,000,000 (except in the case of an assignment to a Person
who is already a Lender or an Affiliate of a Lender or the assignment represents
all of the remaining Revolving Loan Commitment and Loans of the assigning
Lender). After such sale or assignment has been consummated (x) the assignee
Lender thereupon shall become a "Lender" for all purposes of this Agreement and
(y) the assigning Lender shall have no further liability for funding the portion
of Revolving Loan Commitments assumed by such other Lender.
10.9.2 Participations. Any Lender may grant participations in its
extensions of credit hereunder to any other Lender or other lending institution
(a "Participant"), provided that (i) no Participant shall thereby acquire any
direct rights under this Agreement, (ii) no Participant shall be granted any
right to consent to any amendment, except to the extent any of the same
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pertain to (1) reducing the aggregate principal amount of, or interest rate on,
or fees applicable to, any Loan or (2) extending the final stated maturity of
any Loan or the stated maturity of any portion of any payment of principal of,
or interest or fees applicable to, any of the Loans; provided, that the rights
described in this subclause (2) shall not be deemed to include the right to
consent to any amendment with respect to or which has the effect of requiring or
waiving any mandatory prepayment of any portion of any Loan or any amendment or
waiver of any Default or Event of Default, (iii) no sale of a participation in
extensions of credit shall in any manner relieve the originating Lender of its
obligations hereunder, (iv) the originating Lender shall remain solely
responsible for the performance of such obligations, (v) Borrower and Agent
shall continue to deal solely and directly with the originating Lender in
connection with the originating Lender's rights and obligations under this
Agreement and the other Loan Documents, (vi) in no event shall any financial
institution purchasing the participation grant a participation in its
participation interest in the Loans without the prior written consent of Agent,
and, in the absence of a Default or an Event of Default, Borrower, which
consents shall not unreasonably be withheld and (vii) all amounts payable by
Borrower hereunder shall be determined as if the originating Lender had not sold
any such participation.
10.9.3 Certain Agreements of Borrower. Borrower agrees that (i) it
will use reasonable efforts to assist and cooperate with each Lender in any
manner reasonably requested by such Lender to effect the sale of participation
in or assignments of any of the Loan Documents or any portion thereof or
interest therein, including, without limitation, assisting in the preparation of
appropriate disclosure documents and making members of management available at
reasonable times to meet with and answer questions of potential assignees and
Participants; and (ii) subject to the provisions of Section 11.14 hereof, such
Lender may disclose credit information regarding Borrower to any potential
Participant or assignee.
10.9.4 Non U.S. Resident Transferees. If, pursuant to this Subsection
10.9.4, any interest in this Agreement or any Loans is transferred to any
transferee which is organized under the laws of any jurisdiction other than the
United States or any state thereof, the transferor Lender shall cause such
transferee (other than any Participant), and may cause any Participant,
concurrently with and as a condition precedent to the effectiveness of such
transfer, to (i) represent to the transferor Lender (for the benefit of the
transferor Lender, Agent, and Borrower) that under applicable law and treaties
no taxes will be required to be withheld by Agent, Borrower or the transferor
Lender with respect to any payments to be made to such transferee in respect of
the interest so transferred, (ii) furnish to the transferor Lender, Agent and
Borrower either United States Internal Revenue Service Form W-8ECI or United
States Internal Revenue Service Form W-8BEN (wherein such transferee claims
entitlement to complete exemption from United States federal withholding tax on
all interest payments hereunder), and (iii) agree (for the benefit of the
transferor Lender, Agent and Borrower) to provide the transferor Lender, Agent
and Borrower a new Form W-8ECI or Form W-8BEN upon the obsolescence of any
previously delivered form and comparable statements in accordance with
applicable United States laws and regulations and amendments duly executed and
completed by such transferee, and to comply from time to time with all
applicable United States laws and regulations with regard to such withholding
tax exemption.
10.10 Amendments. No amendment or waiver of any provision of this Agreement
or any other Loan Document (including without limitation any Note), nor consent
to any departure
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by Borrower therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Majority Lenders and Borrower, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, that no amendment, waiver or consent shall be
effective, unless (i) in writing and signed by each Lender, if such amendment,
waiver or consent does any of the following: (1) increases the aggregate
Revolving Loan Commitments, or any Lender's Revolving Loan Commitment, (2)
reduces the principal of, or interest on, any amount payable hereunder or under
any Note, or any fees payable to Lenders hereunder, other than those payable
only to DB AG in its capacity as Agent or Letter of Credit issuer, which may be
reduced by DB AG unilaterally, (3) decreases any interest rate payable hereunder
or any fee payable to Lenders hereunder, other than those payable to DB AG in
its capacity as Agent or Letter of Credit issuer, which may be reduced by DB AG
unilaterally, (4) postpones any date fixed for any payment of principal of, or
interest on, any amounts payable hereunder or under any Note, other than those
payable only to DB AG in its capacity as Agent, which may be postponed by DB AG
unilaterally, (5) reduces the number of Lenders that shall be required for
Lenders or any of them to take any action hereunder, (6) releases or discharges
any Person liable for the performance of any Obligations of Borrower or any UK
Borrower hereunder or under any of the Loan Documents, (7) amends any provision
of this Agreement that requires the consent of all Lenders or consent to or
waive any breach thereof, (8) amends the definition of the terms "Majority
Lenders" or "Supermajority Lenders", (9) amends this Section 10.10, (10)
releases Collateral with a value in excess of US$5,000,000, unless otherwise
permitted pursuant to Section 10.7 hereof; or (11) amends the pro rata sharing
provisions of Section 3.8 hereof; or (ii) in writing and signed by Supermajority
Lenders, if such amendment, waiver or consent does any of the following: (1)
increases the advance rates contained in the definition of "UK Borrowing Base"
or "US Borrowing Base" to a level greater than those set forth on the date
hereof; or (2) amends the definitions of "Liquidity Event", "UK Borrowing Base"
or "US Borrowing Base" (or any component thereof) to make such definitions less
restrictive (provided that the foregoing shall not affect Agent's discretion in
determining eligibility); or (3) increases the amount of Protective Advances or
(4) increases the period of time for which Protective Advances are permitted to
be outstanding or (5) releases any Guarantor with assets in the US Borrowing
Base or UK Borrowing Base from any obligations arising under a Guaranty
Agreement, or (6) increases the amount of the "UK Sublimit" or any sublimit
under any Canadian subfacility established pursuant to Subsection 1.1.4, or
(iii) in writing and signed by Agent in addition to the Lenders required above
to take such action, if such action affects the rights or duties of Agent under
this Agreement, any Note or any other Loan Document.
10.11 Resignation of Agent; Appointment of Successor. Agent may resign as
Agent by giving not less than thirty (30) days prior written notice to the
Lenders and Borrower. If Agent shall resign under this Agreement, then, (i)
subject to the consent of Borrower (which consent shall not be unreasonably
withheld and which consent shall not be required during any period in which a
Default or an Event of Default exists), the Majority Lenders shall appoint from
among the Lenders a successor agent for the Lenders or (ii) if a successor agent
shall not be so appointed and approved within the thirty (30) day period
following Agent's notice to the Lenders and Borrower of its resignation, then
Agent shall appoint a successor agent who shall serve as Agent until such time
as the Majority Lenders appoint a successor agent, subject to Borrower's consent
as set forth above. Upon its appointment, such successor agent shall succeed to
the rights, powers and duties of Agent and the term "Agent" shall mean such
successor effective upon its appointment, and the former Agent's rights, powers
and duties as Agent shall be
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terminated without any other or further act or deed on the part of such former
Agent or any of the parties to this Agreement. After the resignation of any
Agent hereunder, the provisions of this Section 11 shall inure to the benefit of
such former Agent and such former Agent shall not by reason of such resignation
be deemed to be released from liability for any actions taken or not taken by it
while it was an Agent under this Agreement. Each Lender waives any notice
required by the Existing Loan Agreement in connection with the resignation of
Fleet as agent thereunder on the date hereof.
10.12 Co-Agents. The Co-Documentation Agents and the Syndication Agent
shall have no right, duty, responsibility or obligation under this Agreement and
the other Loan Documents other than in their capacities as Lenders, and shall
have no fiduciary relationship to any Person.
SECTION 11. MISCELLANEOUS
11.1 Power of Attorney. Borrower hereby irrevocably designates, makes,
constitutes and appoints Agent (and all Persons designated by Agent) as
Borrower's true and lawful attorney (and agent-in-fact), solely with respect to
the matters set forth in this Section 11.1, and Agent, or Agent's agent, may,
without notice to Borrower and in Borrower's or Agent's name, but at the cost
and expense of Borrower:
11.1.1 At such time or times as Agent or said agent, in its sole
discretion, may determine, endorse Borrower's name on any checks, notes,
acceptances, drafts, money orders or any other evidence of payment or proceeds
of the Collateral which come into the possession of Agent or under Agent's
control.
11.1.2 At such time or times upon or after the occurrence and during
the continuance of an Event of Default (provided that the occurrence of an Event
of Default shall not be required with respect to clauses (iv), (viii) and (ix)
below), as Agent or its agent in its sole discretion may determine: (i) demand
payment of the Accounts from the Account Debtors, enforce payment of the
Accounts by legal proceedings or otherwise, and generally exercise all of
Borrower's rights and remedies with respect to the collection of the Accounts;
(ii) settle, adjust, compromise, discharge or release any of the Accounts or
other Collateral or any legal proceedings brought to collect any of the Accounts
or other Collateral; (iii) sell or assign any of the Accounts and other
Collateral upon such terms, for such amounts and at such time or times as Agent
deems advisable; (iv) take control, in any manner, of any item of payment or
proceeds relating to any Collateral; (v) prepare, file and sign Borrower's name
to a proof of claim in bankruptcy or similar document against any Account Debtor
or to any notice of lien, assignment or satisfaction of lien or similar document
in connection with any of the Collateral; (vi) receive, open and dispose of all
mail addressed to Borrower and notify postal authorities to change the address
for delivery thereof to such address as Agent may designate; (vii) endorse the
name of Borrower upon any of the items of payment or proceeds relating to any
Collateral and deposit the same to the account of Agent on account of the
Obligations; (viii) endorse the name of Borrower upon any chattel paper,
document, instrument, invoice, freight ▇▇▇▇, ▇▇▇▇ of lading or similar document
or agreement relating to the Accounts, Inventory and any other Collateral; (ix)
use Borrower's stationery and sign the name of Borrower to verifications of the
Accounts and notices thereof to Account Debtors; (x) use the information
recorded on or contained in any data processing equipment and computer hardware
and software relating to the Accounts, Inventory,
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Equipment and any other Collateral; (xi) make and adjust claims under policies
of insurance; and (xii) do all other acts and things necessary, in Agent's
determination, to fulfill Borrower's obligations under this Agreement.
The power of attorney granted hereby shall constitute a power coupled
with an interest and shall be irrevocable.
11.2 Indemnity. Borrower and each other Credit Party party to this
Agreement hereby agrees to indemnify Agent, each Arranger and each Lender (and
each of their Affiliates) and hold Agent, each Arranger and each Lender (and
each of their Affiliates) harmless from and against any liability, loss, damage,
suit, action or proceeding ever suffered or incurred by any such Person
(including reasonable attorneys fees (or allocated costs of in-house counsel in
lieu of outside counsel) and legal expenses) as the result of the failure of
Borrower or any of its Subsidiaries to observe, perform or discharge Borrower's
duties hereunder or under any other Loan Document or arising out of, relating to
or in connection with this Agreement and the other Loan Documents or the use of
the proceeds thereof, except as to any such Person to the extent that such
liability, loss or damage is found in a non-appealable judgment by a court of
competent jurisdiction to have resulted from such Person's own gross negligence
or willful misconduct. In addition, Borrower shall defend Agent and each Lender
(and each of their Affiliates) against and save it harmless from all claims of
any Person with respect to the Collateral (except those resulting from the gross
negligence or intentional misconduct of any such Person). Notwithstanding any
contrary provision in this Agreement, the obligation of Borrower under this
Section 11.2 shall survive the payment in full of the Obligations and the
termination of this Agreement.
11.3 Sale of Interest. No Credit Party may sell, assign or transfer any
interest in this Agreement, any of the other Loan Documents, or any of the
Obligations, or any portion thereof, including, without limitation, any Credit
Party's rights, title, interests, remedies, powers, and duties hereunder or
thereunder without the prior written consent of all Lenders, which consent by
any Lender or Lenders may be granted or denied in the sole discretion of such
Lender.
11.4 Severability. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
11.5 Successors and Assigns. This Agreement, the Other Agreements and the
Security Documents shall be binding upon and inure to the benefit of the
successors and assigns of each Credit Party which is a party hereto, Agent and
each Lender permitted under Section 10.9 hereof.
11.6 Cumulative Effect; Conflict of Terms. The provisions of the Other
Agreements and the Security Documents are hereby made cumulative with the
provisions of this Agreement. Except as otherwise provided in any of the other
Loan Documents by specific reference to the applicable provision of this
Agreement, if any provision contained in this Agreement is in direct conflict
with, or inconsistent with, any provision in any of the other Loan Documents,
the provision contained in this Agreement shall govern and control.
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11.7 Execution in Counterparts; Effectiveness. This Agreement 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 to be an original and all of which counterparts taken together shall
constitute but one and the same instrument. This Agreement shall become
effective upon the execution of a counterpart of the Master Assignment Agreement
by each party thereto and the execution of a counterpart hereof by Borrower,
each Lender and Agent and delivery of such counterparts to Agent or its counsel
(which execution and delivery may be by facsimile); provided that unless and
until all conditions set forth in Section 8 have been satisfied or waived, the
Existing Loan Agreement shall remain in full force and effect as if this
Agreement had never been executed and delivered.
11.8 Notices. Except as otherwise provided herein, all notices, requests
and demands to or upon a party hereto, to be effective, shall be in writing and
shall be sent by certified or registered mail, return receipt requested, by
personal delivery against receipt, by overnight courier or by facsimile and,
unless otherwise expressly provided herein, shall be deemed to have been validly
served, given, delivered or received immediately when delivered against receipt,
one Business Day after deposit with an overnight courier or, in the case of
facsimile notice, when sent, addressed as follows:
If to Agent: Deutsche Bank AG, New York Branch
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Borrower: Mobile Mini, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇ ▇▇▇▇ LLP
Two N. Central, 22nd Floor
Phoenix, Arizona 85004
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as each party may designate for itself by notice given
in accordance with this Section 11.8; provided, however, that any notice,
request or demand to or upon a Lender pursuant to Subsection 3.1.1 or 4.2.2
hereof shall not be effective until received by such Lender.
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11.9 Consent. Whenever Agent's or Majority's Lenders' consent is required
to be obtained under this Agreement, any of the Other Agreements or any of the
Security Documents as a condition to any action, inaction, condition or event,
except as otherwise specifically provided herein, Agent or Majority Lenders, as
applicable, shall be authorized to give or withhold such consent in their sole
and absolute discretion.
11.10 Credit Inquiries. Borrower hereby authorizes and permits Agent and
each Lender to respond to usual and customary credit inquiries from third
parties concerning Borrower or any of its Subsidiaries.
11.11 Time of Essence. Time is of the essence of this Agreement, the Other
Agreements and the Security Documents.
11.12 Entire Agreement. This Agreement and the other Loan Documents,
together with all other instruments, agreements and certificates executed by the
parties in connection therewith or with reference thereto, embody the entire
understanding and agreement between the parties hereto and thereto with respect
to the subject matter hereof and thereof and supersede all prior agreements,
understandings and inducements, whether express or implied, oral or written.
11.13 Interpretation. No provision of this Agreement or any of the other
Loan Documents shall be construed against or interpreted to the disadvantage of
any party hereto by any court or other governmental or judicial authority by
reason of such party having or being deemed to have structured or dictated such
provision.
11.14 Confidentiality. Agent and each Lender shall hold all nonpublic
information obtained pursuant to the requirements of this Agreement in
accordance with Agent's and such Lender's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices and in any event may make disclosure reasonably required by a
prospective participant or assignee in connection with the contemplated
participation or assignment or as required or requested by any governmental
authority or representative thereof or pursuant to legal process and shall
require any such participant or assignee to agree to comply with this Section
11.14.
11.15 GOVERNING LAW; CONSENT TO FORUM. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO CONFLICT OF LAW PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF ANY
LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK; PROVIDED, HOWEVER, THAT IF ANY
OF THE COLLATERAL SHALL BE LOCATED IN ANY JURISDICTION OTHER THAN NEW YORK, THE
LAWS OF SUCH JURISDICTION SHALL GOVERN THE METHOD, MANNER AND PROCEDURE FOR
FORECLOSURE OF AGENT'S LIEN UPON SUCH COLLATERAL AND THE ENFORCEMENT OF AGENT'S
OTHER REMEDIES IN RESPECT OF SUCH COLLATERAL TO THE EXTENT THAT THE LAWS OF SUCH
JURISDICTION ARE DIFFERENT FROM OR INCONSISTENT WITH THE LAWS OF NEW YORK. AS
PART OF THE CONSIDERATION FOR NEW VALUE RECEIVED, AND REGARDLESS OF ANY PRESENT
OR FUTURE DOMICILE OR PRINCIPAL PLACE OF BUSINESS OF BORROWER, AGENT, ANY
ARRANGER OR ANY LENDER, BORROWER
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HEREBY CONSENTS AND AGREES THAT ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ SITTING IN
NEW YORK COUNTY, OR, AT AGENT'S OPTION, THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN BORROWER ON THE ONE HAND AND AGENT, ANY
ARRANGER OR ANY LENDER ON THE OTHER HAND PERTAINING TO THIS AGREEMENT OR TO ANY
MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT. BORROWER EXPRESSLY SUBMITS
AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN
ANY SUCH COURT, AND BORROWER HEREBY WAIVES ANY OBJECTION WHICH BORROWER MAY HAVE
BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS
AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS
DEEMED APPROPRIATE BY SUCH COURT. BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE
SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO BORROWER AT THE ADDRESS SET FORTH IN
THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE
EARLIER OF BORROWER'S ACTUAL RECEIPT THEREOF OR FIVE (5) BUSINESS DAYS AFTER
DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID. NOTHING IN THIS AGREEMENT
SHALL BE DEEMED OR OPERATE TO AFFECT THE RIGHT OF AGENT, ANY ARRANGER OR ANY
LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR TO
PRECLUDE THE ENFORCEMENT BY AGENT, ANY ARRANGER OR ANY LENDER OF ANY JUDGMENT OR
ORDER OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO
ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR JURISDICTION.
11.16 WAIVERS BY BORROWER. BORROWER WAIVES (i) THE RIGHT TO TRIAL BY JURY
(WHICH AGENT AND EACH LENDER HEREBY ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING
OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO ANY OF THE LOAN
DOCUMENTS, THE OBLIGATIONS OR THE COLLATERAL; (ii) PRESENTMENT, DEMAND AND
PROTEST AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NON PAYMENT, MATURITY,
RELEASE, COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF ANY OR ALL COMMERCIAL
PAPER, ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS, CHATTEL PAPER AND
GUARANTIES AT ANY TIME HELD BY AGENT OR ANY LENDER ON WHICH BORROWER MAY IN ANY
WAY BE LIABLE AND HEREBY RATIFIES AND CONFIRMS WHATEVER AGENT OR ANY LENDER MAY
DO IN THIS REGARD; (iii) NOTICE PRIOR TO AGENT'S TAKING POSSESSION OR CONTROL OF
THE COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT
PRIOR TO ALLOWING AGENT TO EXERCISE ANY OF AGENT'S REMEDIES; (iv) THE BENEFIT OF
ALL VALUATION, APPRAISEMENT AND EXEMPTION LAWS; AND (v) NOTICE OF ACCEPTANCE
HEREOF. BORROWER ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A MATERIAL
INDUCEMENT TO AGENT'S AND EACH LENDER'S ENTERING INTO THIS AGREEMENT AND THAT
AGENT AND EACH LENDER IS RELYING UPON THE
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FOREGOING WAIVERS IN ITS FUTURE DEALINGS WITH BORROWER. BORROWER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND
HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY
BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
11.17 Increases In Total Revolving Loan Commitments.
11.17.1 Increasing Lenders and New Lenders. Borrower may, no more than
once in any calendar year, by notice to Agent, request that the Revolving Loan
Commitments be increased by an amount up to US$75,000,000 in the aggregate (the
amount of any increase effected hereunder, the "Commitment Increase"); provided,
that (i) in no event shall the Revolving Loan Commitments exceed the amount of
Indebtedness and Liens permitted to be incurred under the Senior Note Indenture,
(ii) any Commitment Increase shall be in the minimum amount of US$5,000,000,
(iii) on the date on which any Commitment Increase is effective, no Default or
Event of Default shall exist, both before and after giving effect to such
Commitment Increase and (iv) all conditions set forth in Section 8 have been
satisfied or waived in accordance with this Agreement. Agent shall notify the
Lenders of such request, and the amount thereof, which notice shall specify the
date by which Lenders must respond if they are willing to issue a commitment to
participate in the Commitment Increase (the "Response Date"). Each Lender which,
in its sole discretion, desires to commit to participate in the Commitment
Increase (each, an "Increasing Lender") shall notify Agent on or before the
Response Date of the amount by which it commits to increase its Revolving Loan
Commitment. If Increasing Lenders commit to participate in the Commitment
Increase in an aggregate amount in excess of the amount permitted under this
Subsection 11.17.1, the Commitment Increase shall be allocated among the
Increasing Lenders as determined by Agent. If the aggregate amount committed by
the Increasing Lenders is less than the amount requested by the Borrower and
permitted hereunder, Agent agrees to use its best efforts to find additional
financial institutions (the "New Lenders") that are willing to undertake
Revolving Loan Commitments; provided that the Revolving Loan Commitment of each
New Lender shall be in a minimum amount of US$5,000,000. Agent shall have no
liability to Borrower or any of its Subsidiaries or the Lenders if Agent is
unable to successfully syndicate the Commitment Increase with Increasing Lenders
and/or New Lenders. If Agent is able to successfully syndicate the Commitment
Increase, on the Commitment Increase Effective Date (as defined below), Borrower
shall pay to Agent for the account of all Increasing Lenders and New Lenders
such fees as shall have been agreed among Borrower, Agent and the Increasing
Lenders or New Lenders, as the case may be, with respect to such Commitment
Increase. The Commitment Increase shall become effective on the date specified
by Agent (the "Commitment Increase Effective Date"); provided, however, that (i)
the conditions set forth above shall have been satisfied on such date, (ii) the
New Lenders shall have entered into one or more joinder agreements, in form and
substance satisfactory to Agent, to become Lenders hereunder, (iii) Borrower
shall have paid all fees (including but not limited to those fees provided in
any fee letters related to the Commitment Increase) and expenses in connection
with the syndication and arrangement of the Commitment Increase, (iv) Borrower
shall have executed and delivered to Agent for the benefit of the New Lenders
and Increasing Lenders Revolving Notes, (v) Borrower shall have delivered or
caused to be delivered to Agent such legal opinions, certificates (including
evidence that the Indebtedness under the Commitment Increase is
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permitted to be incurred under the Senior Note Indenture) and other documents as
Agent may reasonably request, all in form and substance satisfactory to Agent,
and (vi) the relevant parties shall have delivered such other documents and
taken such other action as may be necessary or appropriate to effect the
Commitment Increase.
11.17.2 Commitment Increase Effective Date. On the Commitment Increase
Effective Date (i) the Revolving Loan Commitment of each Increasing Lender shall
be increased and each New Lender shall become a Lender hereunder and under the
other Loan Documents; (ii) Borrower shall pay the principal amount of, and
accrued and unpaid interest on, Revolving Credit Loans of the Lenders other than
the New Lenders in an amount sufficient (as determined by Agent) to permit the
New Lenders and Increasing Lenders to fund Revolving Credit Loans in an amount
equal to their respective Revolving Loan Percentages of the then outstanding
Revolving Credit Loans, and in connection with such payment shall also pay
breakage losses required by Subsection 3.2.5 on such repayment, if any; and
(iii) each New Lender and Increasing Lender shall fund Revolving Credit Loans in
an amount equal to its Revolving Loan Percentage of the then outstanding
Revolving Credit Loans.
11.18 Existing Loan Agreement And Loan Documents. The parties hereto agree
that on the Restatement Date, and Agent's determination that the conditions
precedent set forth in Section 8 have been satisfied or waived, the Existing
Loan Agreement shall be deemed to be amended and restated in its entirety and
all Obligations under and as defined in the Existing Loan Agreement (the "Prior
Obligations") and the promissory notes delivered thereunder shall, to the extent
not paid on such date, be deemed to be Obligations outstanding under this
Agreement. Upon the Restatement Date, and the effectiveness of this Agreement in
accordance with Section 8 hereof, the Existing Loan Agreement will be superseded
in its entirety, and all references in the Loan Documents shall be deemed to
refer to this Agreement, without the need for further amendment of any Loan
Document. Notwithstanding the foregoing, all Liens and security interests
securing the Prior Obligations shall continue in full force and effect in all
respects, securing the Obligations. The parties hereto acknowledge that this
Agreement, the Revolving Notes and the other Loan Documents do not constitute a
repayment and reborrowing, an accord and satisfaction or a novation of such
Prior Obligations. Borrower hereby ratifies and reaffirms all of its Obligations
and liabilities under each of the Loan Documents, including without limitation
the Security Documents and that the Liens granted to Agent thereunder continue
to secure the Obligations arising under this Agreement.
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IN WITNESS WHEREOF, this Second Amended and Restated Loan and Security
Agreement has been duly executed on the day and year specified at the beginning
of this Second Amended and Restated Loan and Security Agreement.
MOBILE MINI, INC.,
a Delaware corporation
By:
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
▇-▇-
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇ BRANCH,
as Agent and as a Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
S-2-
BANK OF AMERICA, N.A.,
as Syndication Agent and as a Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
S-3-
APPENDIX A
GENERAL DEFINITIONS
When used in the Second Amended and Restated Loan and Security
Agreement dated as of February 17, 2006, by and among DEUTSCHE BANK AG, NEW YORK
BRANCH, individually and as Agent, the other financial institutions which are or
become parties thereto and MOBILE MINI, INC., a Delaware corporation, (a) the
terms Certificated Security, Chattel Paper, Commercial Tort Claims, Deposit
Account, Document, Electronic Chattel Paper, Financial Asset, Fixture, General
Intangibles, Goods, Instruments, Inventory, Investment Property,
Letter-of-Credit Right, Payment Intangibles, Proceeds, Security, Security
Entitlement, Software, Supporting Obligations and Tangible Chattel Paper and
Uncertificated Security have the respective meanings assigned thereto under the
UCC (as defined below); (b) all terms indicating Collateral having the meanings
assigned thereto under the UCC shall be deemed to mean such Property, whether
now owned or hereafter created or acquired by Borrower or any Guarantor or in
which Borrower or any Guarantor now has or hereafter acquires any interest; (c)
capitalized terms which are not otherwise defined have the respective meanings
assigned thereto in said Second Amended and Restated Loan and Security
Agreement; and (d) the following terms shall have the following meanings (terms
defined in the singular to have the same meaning when used in the plural and
vice versa):
"Account Debtor" - any Person who is or may become obligated on or
under or on account of any Account, Contract Right, Chattel Paper or General
Intangible.
"Account" - the meaning assigned under the UCC and all rights to
payments under leases and Chattel Paper.
"Acquisition" - (i) the acquisition by Borrower or any of its
Subsidiaries of all of the issued and outstanding Securities or other equity
interests of a Person, (ii) the acquisition by Borrower or any of its
Subsidiaries of all or substantially all of the assets of a Person or a line of
business of a Person or (iii) the merger or consolidation of Borrower or any of
its Subsidiaries with a Person other than a Person that was a Subsidiary of
Borrower or such Subsidiary immediately prior to such merger.
"Affiliate" - a Person (other than a Subsidiary): (i) which directly
or indirectly through one or more intermediaries controls, or is controlled by,
or is under common control with, a Person; (ii) which beneficially owns or holds
15% or more of any class of the Voting Stock of a Person; or (iii) 15% or more
of the Voting Stock (or in the case of a Person which is not a corporation, 15%
or more of the equity interest) of which is beneficially owned or held by a
Person or a Subsidiary of a Person.
"Aggregate Borrowing Base" - as at any date of determination thereof,
an amount equal to the least of:
(i) the Revolving Credit Maximum Amount;
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(ii) the sum of (A) the amount calculated under clause (ii) of the
definition of US Borrowing Base; plus (B) the amount calculated under
clause (ii) of the definition of UK Borrowing Base (excluding from such
calculation, subclause (A) thereof); or
(iii) the amount permitted to be outstanding under this Agreement by
the Senior Note Indenture.
"Agent" - DB AG in its capacity as agent for the Lenders under the
Agreement and its successors and assigns, including any successor in that
capacity appointed pursuant to Section 10.11.
"Agreement" - the Second Amended and Restated Loan and Security
Agreement referred to in the first sentence of this Appendix A, all Exhibits and
Schedules thereto and this Appendix A, as each of the same may be amended or
otherwise modified from time to time.
"Applicable Law" - all laws, rules and regulations applicable to the
Person, conduct, transaction, covenant, Loan Document or other material contract
in question, including all applicable common law and equitable principles; all
provisions of all applicable state, federal and foreign constitutions, statutes,
rules, regulations and legally enforceable orders of governmental bodies; and
legally enforceable orders, judgments and decrees of all courts and arbitrators.
"Applicable Margin" - initially, the percentages set forth below with
respect to the Base Rate Portion and the LIBOR Portion:
Base Rate Portion (0.25)%
LIBOR Portion 1.50%
The percentages set forth above will be adjusted on the first day of the month
following receipt by Agent from Borrower of the financial statements required to
be delivered pursuant to Subsection 7.1.3(iii) of the Agreement for each fiscal
quarter ended on the last day of March, June, September and December during the
Term (each such date an "Adjustment Date"), effective prospectively, by
reference to the Debt Ratio for the four quarters most recently ended in
accordance with the following:
Debt Ratio Base Rate Portion LIBOR Portion
---------- ----------------- -------------
> or = 5.00:1 0.25% 2.00%
> or = 4.00:1 but < 5.00:1 0% 1.75%
> or = 3.00:1 but < 4.00:1 (0.25)% 1.50%
< 3.00:1 (0.25)% 1.25%
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provided that, (i) until the Adjustment Date following the fiscal quarter ended
June 30, 2006, the Applicable Margin shall not be less than (0.25)% for the Base
Rate Portion and 1.50% for the LIBOR Portion of the Loans, (ii) if Borrower's
audited financial statements for any fiscal year delivered pursuant to
Subsection 7.1.3(i) of the Agreement reflect a Debt Ratio that yields a
different Applicable Margin than that yielded by the quarterly financial
statements previously delivered pursuant to Subsection 7.1.3(iii) of the
Agreement for the last quarter of such fiscal year, the Applicable Margin shall
be readjusted retroactive to the preceding Adjustment Date and (iii) if Borrower
fails to deliver the financial statements required to be delivered pursuant to
Subsection 7.1.3(i) or Subsection 7.1.3(iii) of the Agreement on or before the
due date thereof, the interest rate shall automatically adjust to the highest
interest rate set forth above, effective prospectively from such due date until
the next Adjustment Date.
"Appraiser" - an appraiser employed by Agent or an independent third
party appraiser engaged by Agent, at Borrower's expense.
"Approved Fund" - any Person (other than a natural person) that (a) is
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business,
(b) has the ability to fund revolving bank loans (including the Loans) in the
ordinary course of its business on the terms and conditions set forth in the
Loan Documents to the extent it is purchasing a Revolving Loan Commitment, and
(c) is administered or managed by (i) a Lender, (ii) an Affiliate of a Lender or
(iii) an entity or an Affiliate of an entity that administers or manages a
Lender.
"Arranger" - each of Deutsche Bank Securities Inc. and Bank of America
Securities LLC and collectively, the "Arrangers".
"Availability" - the amount of additional money which Borrower is
entitled to borrow from time to time as US Revolving Credit Loans, such amount
being the difference derived when the sum of the principal amount of US
Revolving Credit Loans then outstanding (including any amounts which Agent or
any Lender may have paid for the account of Borrower pursuant to any of the Loan
Documents and which have not been reimbursed by Borrower), the LC Amount and all
unpaid LC Obligations subtracted from the US Borrowing Base. If the amount
outstanding is equal to or greater than the US Borrowing Base, Availability is
zero (0).
"Bank" - means Deutsche Bank AG, New York Branch.
"Banking Products" means each and any of the following bank services
provided to any Credit Party by any Lender or any of its Affiliates: (a)
commercial credit cards, (b) stored value cards and (c) treasury management
services (including, without limitation, controlled disbursement, automated
clearinghouse transactions, return items, overdrafts and interstate depository
network services).
"Banking Product Obligations" of the Credit Parties means any and all
obligations of the Credit Parties, whether absolute or contingent and howsoever
and whensoever created, arising, evidenced or acquired (including all renewals,
extensions
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and modifications thereof and substitutions therefor) in connection with Banking
Products of which the Agent has received written notice.
"Base Rate" - with respect to all Obligations denominated in US
Dollars, the rate of interest announced or quoted by Bank from time to time as
its prime rate for commercial loans, whether or not such rate is the lowest rate
charged by Bank to its most preferred borrowers; and, if such prime rate for
commercial loans is discontinued by Bank as a standard, a comparable reference
rate designated by Bank as a substitute therefore shall be the Base Rate.
"Base Rate Advance" - any Revolving Credit Loan bearing interest
computed by reference to the Base Rate.
"Base Rate Portion" - that portion of the Revolving Credit Loans that
is subject to interest computed by reference to the Base Rate.
"Borrower" - Mobile Mini, Inc., a Delaware corporation with its chief
executive office and principal place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
"Borrowing Base Certificate" - a certificate by a senior financial
officer of Borrower, substantially in the form of Exhibit 7.1.4 (or another form
acceptable to Agent) setting forth the calculation of the US Borrowing Base and
the UK Borrowing Base, including a calculation of each component thereof, all in
such detail as shall be satisfactory to Agent. All calculations of the US
Borrowing Base and the UK Borrowing Base in connection with the preparation of
any Borrowing Base Certificate shall originally be made by Borrower and
certified to Agent; provided, that Agent shall have the right to review and
adjust, in the exercise of its reasonable credit judgment, any such calculation
after giving notice thereof to Borrower, (1) to reflect its reasonable estimate
of declines in value of any of the Collateral described therein, and (2) to the
extent that such calculation is not in accordance with this Agreement.
"Business Day" - (i) when used with respect to the LIBOR option, shall
mean a day on which dealings may be effected in deposits of US Dollars in the
London interbank foreign currency deposits market and on which Bank is
conducting and other banks may conduct business in London, England, in the State
of New York and (ii) when used with respect to any other provision of the
Agreement, any day excluding Saturday, Sunday and any day which is a legal
holiday under the laws of the State of New York or is a day on which banking
institutions located in such state are closed.
"Canadian Borrower" - means a Subsidiary of Borrower with operations
in Canada approved by Agent in its discretion.
"Canadian Dollars" or "CA$"- lawful money of Canada.
"Capital Expenditures" - expenditures made or liabilities incurred for
the acquisition of any fixed assets (including but not limited to containers) or
improvements,
A-4
replacements, substitutions or additions thereto which have a useful life of
more than one year, including the total principal portion of Capitalized Lease
Obligations and that portion of Investments allocable to property, plant or
equipment. Capital Expenditures shall exclude (i) new and used manufactured or
remanufactured portable container Inventory held for sale, (ii) proceeds of a
Casualty Loss applied to the repair or replacement of the property affected by
the Casualty Loss and (iii) Inventory or Equipment acquired in a Permitted
Acquisition.
"Capitalized Lease Obligation" - any Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.
"Cash Equivalents" - means either of the following, so long as the
same are maintained in accounts in which Agent has a perfected security
interest: (i) securities issued, guarantied or insured by the United States or
any of its agencies and having maturities of not more than one year; and (ii)
certificates of deposit having maturities of not more than one year issued by
Agent, any Lender or by a U.S. federal or state chartered commercial bank of
recognized standing whose capital and unimpaired surplus is in excess of
US$100,000,000 and whose short-term commercial paper rating, or that of its
parent holding company, is at least A-2 or the equivalent by Standard & Poor's
Corporation and at least P-2 or the equivalent by ▇▇▇▇▇'▇ Investors Services,
Inc.
"Casualty Loss" - (i) the loss, damage, or destruction of any asset
owned or used by Borrower or any of its Subsidiaries, (ii) the condemnation,
confiscation, or other taking, in whole or in part, of any such asset, or (iii)
the diminishment of such asset so as to render use for its intended purpose
impracticable or unreasonable.
"Certificate of Title" - a certificate of title, certificate of
ownership or other registration certificate issued or required to be issued for
any asset under the certificate of title or similar laws of any jurisdiction.
"Change of Control" - either: (i) other than members of management as
of the Restatement Date, any "person" (as such term is used in Subsections 13(d)
and 14(d) of the Securities and Exchange Act of 1934, as amended) on or after
the Restatement Date is or becomes a "beneficial owner" (as defined in Rule
13d-3 under such Act), directly or indirectly, of Securities of Borrower
representing 15% or more of the combined voting power of Borrower's
then-outstanding Securities; or (ii) the existing directors for any reason cease
to constitute 75% of Borrower's Board of Directors or (iii) any Guarantor ceases
to be a wholly-owned Subsidiary of Borrower, except as expressly permitted by
the Loan Documents; or (iv) a "Change of Control" (as defined in the Senior Note
Indenture) occurs. For purposes of this definition, "existing directors" means
(x) individuals constituting Borrower's Board of Directors on the Restatement
Date, and (y) any subsequent director whose election by the Board of Directors
or nomination for election by Borrower's shareholders was approved by a vote of
at least 75% of the directors then in office which directors either were
directors on the Restatement Date or whose election or nomination for election
was previously so approved.
"Collateral" - all of the Property and interests in Property described
in Section 4 of the Agreement, and all other Property and interests in Property
that now or
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hereafter secure the payment and performance of any of the Obligations or any
Guaranty Agreement.
"Collateral Access Agreement" - any landlord waivers, mortgagee
waivers, bailee letters or any similar acknowledgment agreements of any
warehouseman or processor in possession of Inventory, in form and substance
approved by Agent.
"Commitment Increase" - as defined in Subsection 11.17.1 of the
Agreement.
"Commitment Increase Effective Date" - as defined in Subsection
11.17.1 of the Agreement.
"Computation Date" - the date on which the Equivalent Amount of any
currency is determined.
"Computer Hardware and Software" - all rights (including rights as
licensee and lessee) with respect to (i) computer and other electronic data
processing hardware, including all integrated computer systems, central
processing units, memory units, display terminals, printers, computer elements,
card readers, tape drives, hard and soft disk drives, cables, electrical supply
hardware, generators, power equalizers, accessories, peripheral devices and
other related computer hardware; (ii) all Software and all software programs
designed for use on the computers and electronic data processing hardware
described in clause (i) above, including all operating system software,
utilities and application programs in any form (source code and object code in
magnetic tape, disk or hard copy format or any other listings whatsoever); (iii)
any firmware associated with any of the foregoing; and (iv) any documentation
for hardware, Software and firmware described in clauses (i), (ii) and (iii)
above, including flow charts, logic diagrams, manuals, specifications, training
materials, charts and pseudo codes.
"Consolidated" - the consolidation in accordance with GAAP of the
accounts or other items as to which such term applies.
"Consolidated EBITDA" - for a period, the Consolidated net income of
Borrower and its Subsidiaries (excluding (a) extraordinary gains, (b) non-cash
extraordinary losses and (c) debt restructuring costs arising from payment of
termination costs of Derivative Obligations that were entered into in connection
with the Existing Loan Agreement and from the write-off of fees and expenses in
connection with the initial funding under the Existing Loan Agreement) for the
period and without duplication (i) plus all Interest Expense, income tax
expense, depreciation and amortization (including amortization of any goodwill
or other intangibles) for the period, (ii) less gains or plus losses
attributable to any fixed asset sales (excluding sales of containers held for
lease) in the period and (iii) plus or minus any other non-cash charges which
have been subtracted or added in calculating Consolidated net income. For all
purposes other than calculating Consolidated Net Cash Flow, Consolidated EBITDA
for any such period shall be calculated by giving pro forma effect to any
Permitted Acquisition and any Asset Sale specifically permitted pursuant to
Subsection 7.2.5 (iv) or (v) during such period, as if such Acquisition or Asset
Sale, as the case may be, had been consummated on the first day of such period,
as long as Borrower shall have delivered to
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Agent audited financial statements for such period for the Person or assets
acquired or if consented to by Agent, other reasonably acceptable financial
statements or other supporting documentation.
"Consolidated Net Cash Flow" - for a period, Consolidated EBITDA less
the sum of (i) Unfinanced Capital Expenditures during such period plus (ii)
income taxes paid in cash during such period plus (iii) Restricted Payments paid
in cash during such period (other than Restricted Payments paid by a Subsidiary
of Borrower to a Credit Party).
"Container Fleet Inventory" - new and used manufactured or
remanufactured portable and ISO containers and portable mobile offices held by
Borrower or another Credit Party for intended lease or rental by Borrower and
its Subsidiaries to third parties.
"Contingent Obligation" - any direct, indirect, contingent or
non-contingent guaranty or obligation for the Indebtedness of another, except
endorsements in the ordinary course of business.
"Contract Right" - any right to payment under a contract for the sale
or lease of goods or the rendering of services, which right is at the time not
yet earned by performance.
"Controlled Foreign Corporation" shall mean "controlled foreign
corporation" as defined in the Internal Revenue Code.
"Credit Party" - Borrower, each UK Borrower and each Guarantor.
"Debt Ratio" - as of any date of determination, the ratio of (i)
Funded Debt as of such date to (ii) Consolidated EBITDA in each case for the
four fiscal quarters ending on such date.
"Default" - an event or condition the occurrence of which would, with
the lapse of time or the giving of notice, or both, become an Event of Default.
"Default Rate" - as defined in Subsection 2.1.2 of the Agreement.
"Derivative Obligations" - every obligation of a Person under any
forward contract, futures contract, swap, option or other financing agreement or
arrangement (including, without limitation, caps, floors, collars and similar
agreements), the value of which is dependent upon interest rates, currency or
exchange rates or valuations.
"Domestic Subsidiary" - any Subsidiary of Borrower formed or organized
under the laws of a state of the United States.
"Dominion Account" - a special bank account or accounts of Agent
established by any Credit Party pursuant to Subsection 5.2.4 of the Agreement at
a bank selected by Borrower, but acceptable to Agent in its reasonable
discretion, and over which Agent shall have sole and exclusive access and
control for withdrawal purposes.
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"Eligible Account" - an Account of Borrower or another Credit Party
arising in the ordinary course of the business of Borrower or such Credit Party
from the sale of goods, the lease of goods or rendition of services which Agent,
in its reasonable credit judgment, deems to be an Eligible Account less all
returns, rebates, discounts (which may at Agent's option be calculated on
shortest terms), service charges, customer deposits, credits, allowances or
excise taxes of any nature at any time issued, owing, claimed by Account
Debtors, granted, outstanding or payable in connection with such Accounts.
Without limiting the generality of the foregoing, unless otherwise approved in
writing by Agent, no Account shall be an Eligible Account if:
(i) it arises out of a sale made or services rendered by Borrower
or a Credit Party to a Subsidiary of Borrower or an Affiliate of Borrower
or to a Person controlled by an Affiliate of Borrower; or
(ii) it is an Account that has payment terms longer than 45 days
from the date of invoice; provided, however, that US$200,000 may be
considered Eligible Accounts with payment terms longer than 45 days but no
longer than 90 days from the date of the invoice;
(iii) it remains unpaid more than 90 days after the original
invoice date; or
(iv) it is owed by an Account Debtor and the total unpaid
Accounts of such Account Debtor exceed 10% of the net amount of all
Eligible Accounts, but only to the extent of such excess; or
(v) any covenant, representation or warranty contained in the
Agreement with respect to such Account has been breached; or
(vi) the Account Debtor is also a creditor or supplier of
Borrower or any Subsidiary of Borrower, or the Account Debtor has disputed
liability with respect to such Account, or the Account Debtor has made any
claim with respect to any other Account due from such Account Debtor to
Borrower or any Subsidiary of Borrower, or the Account otherwise is or may
become subject to right of setoff by the Account Debtor, provided, that any
such Account shall be eligible to the extent such amount thereof exceeds
such contract, dispute, claim, setoff or similar right; or
(vii) 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 a decree or order for relief
has been entered by a court having jurisdiction in the premises in respect
of the Account Debtor in an involuntary case under the federal or other
similar bankruptcy, reorganization or insolvency laws, as now constituted
or hereafter amended, or any other petition or other application for relief
under the federal or other similar bankruptcy reorganization or insolvency
laws of any jurisdiction, as now constituted or hereafter amended, has been
filed 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,
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liquidator or custodian to be appointed for it or for all or a significant
portion of its assets or affairs; or
(viii) it arises from a sale made or services rendered to an
Account Debtor outside the United States, unless the sale is either (1) to
an Account Debtor located in Ontario or any other province of Canada in
which the Personal Property Security Act has been adopted in substantially
the same form as currently in effect in Ontario or (2) on letter of credit,
guaranty or acceptance terms, in each case acceptable to Agent in its
reasonable credit judgment; or
(ix) (1) it arises from a sale to the Account Debtor on a
▇▇▇▇-and-hold or consignment basis; or (2) it is subject to a reserve
established by Borrower or any of its Subsidiaries for potential returns or
refunds, to the extent of such reserve; or
(x) the Account Debtor is the United States of America, any State
or any political subdivision or department, agency or instrumentality
thereof, unless Borrower or any such Guarantor, as applicable, assigns its
right to payment of such Account to Agent, in a manner satisfactory to
Agent, in its reasonable credit judgment, so as to comply with the
Assignment of Claims Act of 1940 (31 U.S.C. Section 203 et seq., as
amended) or complies with any similar applicable state or local law as
Agent may require; or
(xi) it is not at all times subject to Agent's duly perfected,
first priority security interest and to no other Lien that is not a
Permitted Lien; or
(xii) the goods giving rise to such Account have not been
delivered to and accepted by the Account Debtor or the services giving rise
to such Account have not been performed by Borrower or the applicable
Credit Party and accepted by the Account Debtor or the Account otherwise
does not represent a final sale; or
(xiii) the Account is evidenced by an instrument of any kind, or
has been reduced to judgment; or
(xiv) Borrower or a Subsidiary of Borrower has made any agreement
with the Account Debtor for any deduction therefrom, except for discounts
or allowances which are made in the ordinary course of business for prompt
payment and which discounts or allowances are reflected in the calculation
of the face value of each invoice related to such Account; or
(xv) more than 50% of the Accounts owing from the Account Debtor
are not Eligible Accounts hereunder; provided that Agent may, in its sole
discretion, reduce such percentage to a lesser percentage, but not below
25%; or
(xvi) the Account is subject to any progress payment or other
similar advance made by or for the benefit of the applicable Account
Debtor; or
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(xvii) the Account evidences a lease to an Account Debtor that is
an individual and the aggregate amount of such Accounts included as
Eligible Accounts hereunder equals or exceeds US$750,000; or
(xvii) the Account evidences a sale to an Account Debtor that is
an individual; or
(xviii) the Account represents amounts which have not yet been
billed to the applicable Account Debtor and the amount of such Account
together with the amount of all other Accounts which represent amounts
which have not yet been billed to the applicable Account Debtors to the
extent such amount exceeds US$1,000,000.
"Eligible Assignee" - means (a) a Person that is an original signatory
to this Agreement or any Affiliate thereof; (b) an Approved Fund; (c) a
commercial bank organized under the laws of the United States or any state that
has total assets in excess of $2 billion (or the foreign currency equivalent
thereof) and that is acceptable to Agent; and any other Person (except Borrower
or a Guarantor, or an Affiliate of either) approved by Agent; provided, with
respect to any prospective Lender, that such Person has the ability to fund
revolving bank loans (including the Loans) in the ordinary course of its
business on the terms and conditions set forth in the Loan Documents.
"Eligible Container Fleet Inventory" - Eligible Goods Inventory of
Borrower and the other Credit Parties consisting of Container Fleet Inventory,
valued at the lower of Borrower's and its Subsidiaries' cost or orderly
liquidation value, except for custom containers that are pre-sold and ISO
containers that are pre-sold, which will be valued at the lower of Borrower's
cost or sales invoice price.
"Eligible Container Inventory Held For Sale" - Eligible Goods
Inventory of Borrower and the other Credit Parties consisting of (a) new and
used manufactured or remanufactured portable and ISO containers and portable
mobile offices held by Borrower or a Credit Party for intended sale to third
parties and (b) containers used by Borrower or the Credit Parties, containers
temporarily out of service and otherwise unrefurbished ISO units, whether or not
held for sale, each of which containers in clauses (a) and (b) shall be valued
at the lower of cost or orderly liquidation value; provided, that if any such
containers have not been appraised, containers manufactured by Borrower shall be
valued at cost and all other containers shall be valued at the lower of cost or
the orderly liquidation value equivalent percentage established by the most
recent appraisal for that particular type or category of Inventory, and (c)
custom containers and ISO containers that have been pre-sold, which shall be
valued at the lower of cost or the sales invoice price.
"Eligible Goods Inventory" - Inventory of Borrower and the Credit
Parties which Agent, in its reasonable credit judgment, deems to be Eligible
Goods Inventory. In determining the amount to be so included, Eligible Goods
Inventory shall be valued at the lower of cost or orderly liquidation value,
except for custom containers that are pre-sold and ISO containers that are
pre-sold, which will be valued at the lower of Borrower's cost or sales invoice
price. Unless otherwise approved in writing by Agent, no Inventory shall be
deemed Eligible Goods Inventory if:
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(a) it is not owned solely by Borrower or a Credit Party or
Borrower or a Credit Party does not have good, valid and marketable title
thereto; or
(b) it is not located in (i) for the US Borrowing Base, the
United States or Canada, or (ii) for the UK Borrowing Base, the United
Kingdom; or
(c) it (i) is not subject to valid, current rental or lease
agreements between Borrower or a Credit Party and the renters or lessees
thereof or (ii) if not leased, is not located on property owned or leased
by Borrower or a Credit Party or is not located in a contract warehouse,
subject to a Collateral Access Agreement executed by the mortgagee, the
lessor or the contract warehouseman, as the case may be, and segregated or
otherwise separately identifiable from goods of others, if any, stored on
the premises; provided however, that Inventory located on property not
subject to a Collateral Access Agreement may be deemed Eligible Goods
Inventory at the discretion of the Agent, subject to the implementation of
a rent reserve in an amount determined by the Agent, in its sole
discretion; or
(d) it is not subject to a valid and perfected first priority
Lien in favor of Agent except, with respect to Inventory stored at sites
described in clause (c) above, for Liens for unpaid rent or normal and
customary warehousing charges; or
(e) it consists of goods returned or rejected by Borrower or a
Subsidiary's or Affiliate's customers or goods in transit to third parties
(other than to warehouse sites covered by a Collateral Access Agreement);
or
(f) it is not first-quality finished goods or work in process, is
obsolete, or does not otherwise conform to the representations and
warranties contained in the Loan Documents; or
(g) it is subject to a lease which should be classified as a
capital lease under GAAP or contains a purchase option for an amount less
than the amount equal to the net book value; or
(h) Inventory which is located on a Credit Party's premises and
is being repaired; or
(i) Inventory which can not be located at the time of Borrower's
physical inventory; or
(j) it is Eligible Raw Materials Inventory or Eligible Machinery
and Equipment.
"Eligible Inventory" - Eligible Goods Inventory and Eligible Raw
Materials Inventory.
"Eligible Machinery and Equipment" - Equipment of Borrower or a Credit
Party which Agent, in its reasonable credit judgment, deems to be Eligible
Machinery and
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Equipment. Without limiting the generality of the foregoing,
unless otherwise approved in writing by Agent, no Equipment shall be deemed
Eligible Machinery and Equipment if:
(a) it is not owned solely by Borrower or a Credit Party or
Borrower or a Credit Party does not have good, valid and marketable title
thereto; or
(b) it is not located in (i) for the US Borrowing Base, the
United States or Canada, or (ii) for the UK Borrowing Base, the United
Kingdom; or
(c) it is not located on property owned or leased by Borrower or
a Credit Party subject to a Collateral Access Agreement executed by the
lessor; provided however, that Equipment located on property not subject to
a Collateral Access Agreement may be deemed Eligible Machinery and
Equipment at the discretion of the Agent, subject to the implementation of
a rent reserve in an amount determined by the Agent, in its sole
discretion; or
(d) it is not subject to a valid and perfected first priority
Lien in favor of Agent except, with respect to Equipment stored at sites
described in clause (c) above, for Liens for unpaid rent or normal and
customary warehousing charges; or
(e) it is not of a like kind or type of Equipment that has been
appraised and it has not been appraised by the Appraiser with an appraisal
in form and substance satisfactory to Agent and reasonably satisfactory to
Majority Lenders.
"Eligible Other Raw Materials Component Inventory" - Eligible Raw
Materials Inventory, valued at Borrowers' cost, of Borrower or a Credit Party
purchased from third parties consisting of plumbing, drywall, electrical
components, insulation materials, HVAC materials, doors and windows, and
fasteners, and located on the Restatement Date or thereafter at Borrower's
Maricopa facility or such other facility of Borrower or a Credit Party as to
which Borrower implements a perpetual inventory accounting system comparable to
that of the Maricopa facility.
"Eligible Primary Raw Materials Inventory" - Eligible Raw Materials
Inventory, valued at Borrowers' cost (except for fiscal year end calculations
where the value will be the lower of Borrower's cost or market), of Borrower or
a Credit Party consisting of steel, lumber, plywood and paint, and located on
the Restatement Date or thereafter at Borrower's Maricopa facility or such other
facility of Borrower or a Credit Party as to which Borrower implements a
perpetual inventory accounting system comparable to that of the Maricopa
facility.
"Eligible Raw Materials Inventory" - Eligible Primary Raw Materials
Inventory or Eligible Other Raw Materials Inventory which Agent, in its
reasonable credit judgment, deems to be Eligible Raw Materials Inventory.
Without limiting the generality of the foregoing, unless otherwise approved in
writing by Agent, no Inventory shall be deemed Eligible Raw Materials Inventory
if:
(a) it is not owned solely by Borrower or a Credit Party or
Borrower or a Credit Party does not have good, valid and marketable title
thereto; or
A-12
(b) it is not located in (i) for the US Borrowing Base, the
United States or Canada, or (ii) for the UK Borrowing Base, the United
Kingdom; or
(c) it is not located on property owned or leased by Borrower or
a Credit Party or in a contract warehouse, subject to a Collateral Access
Agreement executed by the lessor or the contract warehouseman, as the case
may be, and segregated or otherwise separately identifiable from goods of
others, if any, stored on the premises; provided however, that Inventory
located on property not subject to a Collateral Access Agreement may be
deemed Eligible Primary Raw Materials Inventory or Eligible Other Raw
Materials Inventory at the discretion of the Agent, subject to the
implementation of a rent reserve in an amount determined by the Agent, in
its sole discretion; or
(d) it is not subject to a valid and perfected first priority
Lien in favor of Agent except, with respect to Inventory stored at sites
described in clause (c) above, for Liens for unpaid rent or normal and
customary warehousing charges; or
(e) it is goods returned or rejected by Borrower or a Credit
Party's customers or goods in transit to third parties (other than to
warehouse sites covered by a Collateral Access Agreement); or
(f) it is not first-quality raw materials, is obsolete or slow
moving, or does not otherwise conform to the representations and warranties
contained in the Credit Documents; or
(g) it is Eligible Goods Inventory or Eligible Machinery and
Equipment; or
(h) it is Inventory being repaired at Borrower's or any other
Credit Party's facility.
"Eligible Trailer Fleet Inventory" - Eligible Goods Inventory
consisting of Trailer Fleet Inventory, valued at the lower of cost or orderly
liquidation value, excluding any Inventory that is not manufactured in
accordance with and does not meet all standards imposed by all requirements of
law or by any governmental authority having regulatory authority over such goods
or their manufacture, use, sale, or lease.
"Eligible UK Account" - an Eligible Account of UK Borrower or another
UK Credit Party.
"Eligible UK Container Fleet Inventory" - Eligible Container Fleet
Inventory of UK Borrower or another UK Credit Party.
"Eligible UK Goods Inventory" - Eligible Goods Inventory of UK
Borrower or another UK Credit Party.
"Eligible UK Inventory" - Eligible UK Goods Inventory and Eligible UK
Raw Materials Inventory.
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"Eligible UK Raw Materials Inventory" - Eligible Raw Materials
Inventory of UK Borrower or another UK Credit Party.
"Eligible UK Trailer Fleet Inventory" - Eligible Trailer Fleet
Inventory of UK Borrower or another UK Credit Party.
"Eligible US Account" - an Eligible Account of Borrower or another US
Credit Party.
"Eligible US Container Fleet Inventory" - Eligible Container Fleet
Inventory of Borrower or another US Credit Party.
"Eligible US Container Inventory Held For Sale" - Eligible Container
Inventory Held For Sale of Borrower or another US Credit Party.
"Eligible US Goods Inventory" - Eligible Goods Inventory of Borrower
or another US Credit Party.
"Eligible US Inventory" - Eligible US Goods Inventory and Eligible US
Raw Materials Inventory.
"Eligible US Machinery and Equipment" - Eligible Machinery and
Equipment of Borrower or another US Credit Party.
"Eligible US Other Raw Materials Component Inventory" - Eligible Other
Raw Materials Component Inventory of Borrower or another US Credit Party.
"Eligible US Primary Raw Materials Inventory" - Eligible Primary Raw
Materials Inventory of Borrower or another US Credit Party.
"Eligible US Raw Materials Inventory" - Eligible Raw Materials
Inventory of Borrower or another US Credit Party.
"Eligible US Trailer Fleet Inventory" - Eligible Trailer Fleet
Inventory of Borrower or another US Credit Party.
"Eligible US Work-In-Process Container Inventory" - Eligible
Work-In-Process Container Inventory of Borrower or another US Credit Party.
"Eligible Work-In-Process Container Inventory" - Eligible Goods
Inventory, valued at cost, consisting of : (a) new and used manufactured or
remanufactured portable containers, which is in the work-in-process phase of
manufacturing; (b) shaped steel component parts; or (c) sub-assemblies and which
are located on the Restatement Date or thereafter at Borrower's Maricopa
facility or at such other facility of Borrower or a Guarantor as to which
Borrower and the Guarantors implement after the Restatement Date a perpetual
inventory accounting system comparable to that of the Maricopa facility.
A-14
"Environmental Laws" - all federal, state and local laws, rules,
regulations, ordinances, orders and consent decrees relating to pollution or the
protection of the environment.
"Equipment" - all machinery, apparatus, equipment, fittings,
furniture, fixtures, motor vehicles and other tangible personal Property (other
than Inventory) of every kind and description used in the operations of Borrower
or any of its Subsidiaries or Affiliates or owned by Borrower or any of its
Subsidiaries or Affiliates or in which Borrower or any of its Subsidiaries or
Affiliates has an interest, whether now owned or hereafter acquired by Borrower
or any of its Subsidiaries or Affiliates and wherever located, and all parts,
accessories and special tools and all increases and accessions thereto and
substitutions and replacements therefore.
"Equivalent Amount" - (i) whenever this Agreement requires or permits
a determination on any date of the equivalent amount in US Dollars of an amount
expressed in Pounds Sterling, the equivalent amount in US Dollars of such amount
expressed in Pounds Sterling as determined by Agent on such date on the basis of
the Spot Rate for the purchase of US Dollars with Pounds Sterling on the
relevant Computation Date provided for hereunder; or (ii) whenever this
Agreement requires or permits a determination on any date of the equivalent
amount in Pounds Sterling of an amount expressed in US Dollars, the equivalent
amount in Pounds Sterling of such amount expressed in US Dollars as determined
by Agent on such date on the basis of the Spot Rate for the purchase of Pounds
Sterling with Dollars on the relevant Computation Date provided for hereunder.
"ERISA" - the Employee Retirement Income Security Act of 1974, as
amended, and all rules and regulations from time to time promulgated thereunder.
"Event of Default" -as defined in Section 9.1 of the Agreement.
"Existing Loan Agreement" - as defined in the recitals to the
Agreement.
"Facility Utilization" - the outstanding principal balance of the
Revolving Credit Loans and Swing Line Loans plus the L/C Amount.
"Fee Letter" - as defined in Section 2.3 of the Agreement.
"Fixed Charge Coverage Ratio" - as of any date of determination, the
ratio of (i) Consolidated Net Cash Flow for the four fiscal quarters ending on
such date to (ii) the sum of Interest Expense for the four fiscal quarters
ending on such date plus the principal payments with respect to Funded Debt
(other than payments of Revolving Credit Loans) made during the four fiscal
quarters ending on such date.
"Funded Debt" - means, without duplication, (i) Indebtedness arising
from the lending of money by any Person to Borrower or any of its Subsidiaries;
(ii) Indebtedness, whether or not in any such case arising from the lending by
any Person of money to Borrower or any of its Subsidiaries, (1) which is
represented by notes payable or drafts accepted that evidence extensions of
credit, (2) which constitutes obligations evidenced by bonds, debentures, notes
or similar instruments, or (3) upon which interest charges are customarily
A-15
paid (other than accounts payable) or that was issued or assumed as full or
partial payment for Property; (iii) Indebtedness that constitutes a Capitalized
Lease Obligation; (iv) reimbursement obligations with respect to letters of
credit or guaranties of letters of credit; and (v) Indebtedness of Borrower or
any of its Subsidiaries under any guaranty of obligations that would constitute
Funded Debt under clauses (i) through (iii) hereof, if owed directly by Borrower
or any of its Subsidiaries. Funded Debt shall not include trade payables or
accrued expenses or Indebtedness (other than Indebtedness under the Agreement)
of up to the amount permitted pursuant to Subsection 7.2.2(g) incurred to
finance insurance premiums.
"Funded Pounds Sterling Participation" - with respect to any
Participating Pounds Lender relating to Pounds Sterling Revolving Credit Loans
funded by DB AG, (i) the aggregate amount paid by such Participating Pounds
Lender to DB AG pursuant to Subsection 3.13.2 of the Agreement in respect of
such Participating Pounds Lender's participation in the principal amount of UK
Revolving Credit Loans funded by DB AG minus (ii) the aggregate amount paid to
such Participating Pounds Lender by DB AG pursuant to Subsection 3.13.2 of the
Agreement in respect of its participation in the principal amount of UK
Revolving Credit Loans funded by DB AG, excluding in each case any payments made
in respect of interest accrued on the UK Revolving Credit Loans funded by DB AG.
DB AG's Funded Pounds Sterling Participation in any UK Revolving Credit Loans
funded by DB AG shall be equal to the outstanding principal amount of such UK
Revolving Credit Loans minus the total Funded Pounds Sterling Participation of
all other Lenders therein.
"Guarantors" - each US Guarantor and each UK Guarantor.
"Guaranty Agreements" - the Guaranty executed on the Original Closing
Date by each Subsidiary of Borrower and reaffirmed on the Restatement Date, in
form and substance satisfactory to Agent, together with each other guaranty
hereafter executed by any Guarantor.
"Increasing Lender" - as defined in Subsection 11.17.1 of the
Agreement.
"Indebtedness" - (a) indebtedness for borrowed money or for the
deferred purchase price of property or services (other than trade liabilities
incurred in the ordinary course of business and payable in accordance with
customary practices), whether on open account or evidenced by a note, bond,
debenture or similar instrument, (b) Capitalized Lease Obligations, (c)
reimbursement obligations for letters of credit, banker's acceptances or other
credit accommodations, (d) Derivative Obligations, as determined by Agent, (e)
Contingent Obligations and (f) obligations secured by any Lien on that Person's
property, even if that Person has not assumed such obligations.
"Indemnified Taxes" - all Taxes other than (i) Taxes imposed on, or
measured by net income or overall gross receipts, and (ii) franchise taxes.
"Insolvency Proceeding" - any action, case or proceeding commenced by
or against a Person, or any agreement of such Person, for (a) the entry of an
order for relief under any chapter of the Bankruptcy Code or other insolvency or
debt adjustment law (whether state, federal or foreign), (b) the appointment of
a receiver, trustee, liquidator or
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other custodian for such Person or any part of its Property, (c) an assignment
or trust mortgage for the benefit of creditors of such Person, or (d) the
liquidation, dissolution or winding up of the affairs of such Person.
"Intellectual Property" - all past, present and future: trade secrets,
know-how and other proprietary information; trademarks, internet domain names,
service marks, trade dress, trade names, business names, designs, logos, slogans
(and all translations, adaptations, derivations and combinations of the
foregoing) indicia and other source and/or business identifiers, and the
goodwill of the business relating thereto and all registrations or applications
for registrations which have heretofore been or may hereafter be issued thereon
throughout the world; copyrights (including copyrights for computer programs)
and copyright registrations or applications for registrations which have
heretofore been or may hereafter be issued throughout the world and all tangible
property embodying the copyrights, unpatented inventions (whether or not
patentable); patent applications and patents; industrial design applications and
registered industrial designs; license agreements related to any of the
foregoing and income therefrom; books, records, writings, computer tapes or
disks, flow diagrams, specification sheets, computer software, source codes,
object codes, executable code, data, databases and other physical
manifestations, embodiments or incorporations of any of the foregoing; the right
to ▇▇▇ for all past, present and future infringements of any of the foregoing;
all other intellectual property; and all common law and other rights throughout
the world in and to all of the foregoing.
"Interest Expense" - the consolidated expense of Borrower and its
Subsidiaries for interest on Indebtedness, including, without limitation,
amortization of original issue discount, incurrence fees (to the extent included
in interest expense), the interest portion of any deferred payment obligation
and the interest component of any capital lease obligation.
"Interest Period" - as applicable to any LIBOR Advance, a period
commencing on the date a LIBOR Advance is made, and ending on the date which is
one (1) month, two (2) months, three (3) months, six (6) months, or if available
to all Lenders, nine (9) months later, as may then be requested by Borrower;
provided that (i) any Interest Period which would otherwise end on a day which
is not a Business Day shall end in the next preceding or succeeding Business Day
as is Agent's custom in the market to which such LIBOR Advance relates; and (ii)
there remains a minimum of one (1) month, two (2) months, three (3) months, six
(6) months or nine (9) months (depending upon which Interest Period Borrower
selects) in the Term.
"Internal Revenue Code" - the Internal Revenue Code of 1986, as
amended, and all rules and regulations from time to time promulgated thereunder.
"Investment" - all expenditures made and all liabilities incurred
(including Contingent Obligations) for or in connection with the acquisition of
Securities or Indebtedness of a Person, loans, advances, capital contributions
or transfers of property to a Person, or acquisition of substantially all the
assets of a Person. In determining the aggregate amount of Investments
outstanding at any particular time, (i) a guaranty shall be valued at not less
than the principal amount guaranteed and outstanding; (ii) returns of capital
(but only by repurchase, redemption, retirement, repayment, liquidating dividend
or liquidating
A-17
distribution) shall be deducted; (iii) earnings, whether as dividends, interest
or otherwise, shall not be deducted; and (iv) decreases in the market value
shall not be deducted.
"IP Security Agreement" - a security agreement executed by Borrower or
any other Credit Party granting to Agent, for the benefit of the Lenders, a Lien
on Intellectual Property.
"LC Amount" - at any time, the aggregate undrawn face amount of all
Letters of Credit and LC Guaranties then outstanding.
"LC Guaranty" - any guaranty pursuant to which Agent or any Affiliate
of Agent shall guaranty the payment or performance by Borrower of its
reimbursement obligation under any letter of credit.
"LC Issuer" - means any Lender which is an issuer of a Letter of
Credit hereunder in accordance with the terms hereof.
"LC Obligations" - any Obligations that arise from any draw against
any Letter of Credit or against any letter of credit supported by an LC
Guaranty.
"Legal Requirement" - any requirement imposed upon Agent or any Lender
by any law of the United States of America or the United Kingdom or Canada or by
any regulation, order, interpretation, ruling or official directive (whether or
not having the force of law) of the Federal Reserve Board, the Bank of England
or any other board, central bank or governmental or administrative agency,
institution or authority of the United States of America, the United Kingdom,
Canada or any political subdivision of either thereof.
"Lenders" - DB AG in its capacity as lender and any other financial
institution which is or becomes a party to this Agreement as a lender.
"Letter of Credit" - any standby or documentary letter of credit
issued by an LC Issuer for the account of Borrower.
"LIBOR" - with respect to any Interest Period, the average of
interbank offered rates for deposits in US Dollars or Pounds Sterling, as
applicable, having a maturity approximately equal to such Interest Period in the
London market as set forth on page 3750 (i.e., the LIBOR page), or any successor
page, of the Telerate News Services, titled "British Banker Association Interest
Settlement Rates" at approximately 11:00 a.m. (London time) two Eurodollar
Business Days prior to the first day of such Interest Period or if such rate is
not then quoted, the arithmetic average as determined by Agent of the rates at
which deposits in immediately available US Dollars or Pounds Sterling, as
applicable, in an amount equal to the amount of such LIBOR Rate Loan having a
maturity approximately equal to such Interest Period are offered to four (4)
reference banks to be selected by Agent in the London interbank market, at
approximately 11:00 a.m. (London time) two Eurodollar Business Days prior to the
first day of such Interest Period.
"LIBOR Advance" - any Loan bearing interest computed by reference to
the LIBOR.
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"LIBOR Interest Payment Date" - the last day of each Interest Period,
in the case of any Interest Period of six (6) months, the 90th day of such
Interest Period, and in the case of any Interest Period of nine (9) months, the
90th and 180th days of such Interest Period.
"LIBOR Portion" - that portion of the Revolving Credit Loans that is
subject to interest computed by reference to the LIBOR.
"Lien" - any interest in Property securing an obligation owed to, or a
claim by, a Person other than the owner of the Property, whether such interest
is based on common law, statute or contract. The term "Lien" shall also include
rights of seller under conditional sales contracts or title retention
agreements, reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other title exceptions and
encumbrances affecting Property. For the purpose of the Agreement, Borrower or
any other Credit Party, as applicable, shall be deemed to be the owner of any
Property which it has acquired or holds subject to a conditional sale agreement
or other arrangement pursuant to which title to the Property has been retained
by or vested in some other Person for security purposes.
"Liquidity Event" - means, at any time, Availability at such time is
less than the greater of (a) US$35,000,000 or (b) the Revolving Credit Maximum
Amount multiplied by ten percent (10%).
"Loan Account" - the loan account established on the books of Agent
pursuant to Section 3.6 of the Agreement.
"Loan Documents" - the Agreement, the Other Agreements and the
Security Documents.
"Loans" - all loans and advances of any kind made by Agent or any
Lender (or by any affiliate of DB AG) pursuant to the Agreement.
"London Banking Day" - any date on which commercial banks are open for
business in London, England.
"Majority Lenders" - as of any date, Lenders holding 51% of the
Revolving Loan Commitments determined on a combined basis and following the
termination of the Revolving Loan Commitments, Lenders holding 51% or more of
the outstanding Loans, LC Amounts and LC Obligations not yet reimbursed by
Borrower or funded with a Revolving Credit Loan; provided, that (i) in each
case, if there are 2 or more Lenders with outstanding Loans, LC Amounts,
unfunded and unreimbursed LC Obligations or Revolving Loan Commitments, at least
2 Lenders shall be required to constitute Majority Lenders; and (ii) prior to
termination of the Revolving Loan Commitments, if any Lender breaches its
obligation to fund any requested Revolving Credit Loan, for so long as such
breach exists, its voting rights hereunder shall be calculated with reference to
its outstanding Loans, LC Amounts and unfunded and unreimbursed LC Obligations,
rather than its Revolving Loan Commitment.
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"Mandatory Redeemable Obligation" - an obligation of Borrower or any
of its Subsidiaries (or guaranteed by any of them) which must be redeemed or
repaid (a) at a fixed or determinable date, whether by operation of sinking fund
or otherwise, (b) at the option of any Person other than Borrower or such
Subsidiary, or (c) upon the occurrence of a condition not solely within the
control of Borrower or such Subsidiary, such as a redemption required to be made
out of future earnings.
"Master Assignment Agreement" - that certain Master Assignment and
Assumption Agreement dated as of the Restatement Date among certain of the Prior
Lenders, certain of the Lenders, Agent and Borrower.
"Material Adverse Effect" - means (i) a material adverse effect on the
business, prospects, operations, results of operations, assets, liabilities or
condition (financial or otherwise) of Borrower and the other Credit Parties,
taken as a whole, (ii) the impairment of the ability of Borrower or any other
Credit Party to perform its obligations under the Loan Documents to which it is
a party or of Agent or the Lenders to enforce the Obligations or realize upon
the Collateral, or (iii) a material adverse effect on the value of a material
portion of the Collateral or the amount which Agent or the Lenders would receive
(after giving consideration to delays in payment and costs of enforcement) in
the liquidation of such Collateral.
"Mortgages" - All mortgages, deeds of trust and comparable documents
now or at any time hereafter securing the whole or any part of the Obligations.
"Multiemployer Plan" - has the meaning set forth in Section 4001(a)(3)
of ERISA.
"New Lenders" - as defined in Subsection 11.17.1 of the Agreement.
"Obligations" - UK Obligations and US Obligations.
"Organizational I.D. Number" - with respect to Borrower or any
Subsidiary of Borrower, the organizational identification number assigned to
Borrower or such Subsidiary by the applicable governmental unit or agency of the
jurisdiction of organization of Borrower or such Subsidiary.
"Original Closing Date" - February 11, 2002.
"Original Currency" - as defined in Subsection 3.14.1 of the
Agreement.
"Other Agreements" - any and all agreements, instruments and documents
(other than the Agreement and the Security Documents), heretofore, now or
hereafter executed by Borrower, any Subsidiary of Borrower or any other third
party and delivered to Agent or any Lender in respect of the transactions
contemplated by the Agreement.
"Other Currency" - as defined in Subsection 3.14.1 of the Agreement.
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"Overadvance" - the amount, if any, by which the outstanding principal
amount of Revolving Credit Loans, plus the LC Amount, plus the amount of LC
Obligations that have not been reimbursed by Borrower or funded with a Revolving
Credit Loan, plus reserves, exceeds the Aggregate Borrowing Base.
"Participating Pounds Lender" - as defined in Subsection 3.13.1 of the
Agreement.
"Payment Conditions" means with respect to any Restricted Payment or
Acquisition, each of the following conditions shall be satisfied immediately
after giving effect to such Restricted Payment or Acquisition:
(i) either (a) (x) the average daily Availability over the 90
days prior to the making of such Restricted Payment or Acquisition is
greater than US$70,000,000, (y) the Availability calculated on a pro forma
basis before and after giving effect to such Restricted Payment or
Acquisition shall be greater than US$70,000,000, and (z) after giving
effect to such Restricted Payment or Acquisition and any Indebtedness
incurred in connection therewith, Borrower shall be in compliance with the
financial covenant set forth on Exhibit 7.3.2 (Debt Ratio) hereof on a pro
forma basis (whether or not Section 7.3 hereof would then require
compliance with such covenant); or (b) (x) the average Availability over
the 90 days prior to the making of such Restricted Payment or Acquisition
is greater than US$50,000,000, (y) the Availability calculated on a pro
forma basis before and after giving effect to such Restricted Payment or
Acquisition shall be greater than US$50,000,000, and (z) after giving
effect to such Restricted Payment or Acquisition and any Indebtedness
incurred in connection therewith, Borrower shall be in compliance with the
financial covenants set forth on Exhibit 7.3.1 (Fixed Charge Coverage
Ratio), Exhibit 7.3.2 (Debt Ratio) and Exhibit 7.3.3 (Minimum Utilization)
hereof, each calculated on a pro forma basis (whether or not Section 7.3
hereof would then require compliance with such covenant) for the most
recently ended fiscal quarter for which the financial statements in Section
7.1.3(iii) have been delivered to Agent; and
(ii) not later than three Business Days prior to the making of
such Restricted Payment or Acquisition, Agent shall receive (a) a
certificate of Borrower, with supporting detail acceptable to Agent
certifying that on the date on which such Restricted Payment or Acquisition
is made Borrower has satisfied the condition set forth in clause (i) above
and (b) financial projections demonstrating that during the six month
period following the making of such Restricted Payment or Acquisition,
Availability at all times shall not be less than the amount required to
satisfy the condition set forth in clause (i) above.
"Permitted Acquisition" - an Acquisition permitted under Subsection
7.2.14 of the Agreement.
"Permitted Liens" - any Lien of a kind specified in Subsection 7.2.3
of the Agreement.
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"Person" - an individual, partnership, corporation, limited liability
company, joint stock company, land trust, business trust, or unincorporated
organization, or a government or agency or political subdivision thereof.
"Plan" - an employee benefit plan now or hereafter maintained for
employees of Borrower or any of its Subsidiaries that is covered by Title IV of
ERISA.
"Pledge Agreement" - the amended and restated pledge agreement
executed by Borrower and its Subsidiaries pledging to the Existing Agent, for
the benefit of the Lenders, all Securities owned by them, as reaffirmed on the
Restatement Date.
"Pounds Sterling" or "(pound)" - lawful money of the United Kingdom.
"Pounds Sterling Denominated Revolving Credit Loan" means any UK
Revolving Credit Loan or any US Revolving Credit Loan denominated in Pounds
Sterling.
"Pounds Sterling Funding Capacity" - at any date of determination, for
any Lender, the ability of such Lender to fund Revolving Credit Loans
denominated in Pounds Sterling, as set forth in the records of Agent upon
notification from such Lender from time to time.
"Pounds Sterling Participation" - as defined in Subsection 3.13.1 of
the Agreement.
"Pounds Sterling Participation Fee" - as defined in Subsection 3.13.6
of the Agreement.
"Pounds Sterling Participation Settlement" - as defined in Subsection
3.13.2(a) of the Agreement.
"Pounds Sterling Participation Settlement Amount" - as defined in
Subsection 3.13.2(b) of the Agreement.
"Pounds Sterling Participation Settlement Date" - as defined in
Subsection 3.13.2(a) of the Agreement.
"Pounds Sterling Participation Settlement Period" - as defined in
Subsection 3.13.2(a) of the Agreement.
"Prior Lenders" - as defined in the recitals to the Agreement.
"Projections" - Borrower's forecasted Consolidated (i) balance sheets,
(ii) profit and loss statements, (iii) cash flow statements, and (iv)
stockholders' equity statements, all prepared on a consistent basis with the
historical financial statements of Borrower and its Subsidiaries, together with
appropriate supporting details and a statement of underlying assumptions.
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"Property" - any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"PTR Scheme" - as defined in Subsection 3.10.3(f)(v) to the Agreement.
"Purchase Money Liens and Leases" - a Lien upon fixed assets which
secures Indebtedness permitted under Subsection 7.2.2, but only if such Lien
shall at all times be confined solely to the fixed assets the purchase price of
which was financed through the incurrence of the purchase money Indebtedness
secured by such Lien.
"Qualified Derivative Obligation" - any Derivative Obligation (i)
which is owing to Agent or any Affiliate of Agent or Bank; or (ii) which is
owing to any other Lender or any Affiliate of such a Lender and with respect to
which Agent has received the notice required pursuant to Subsection 7.1.12.
"Qualifying Lender" - any Lender that is (i) a company resident in the
United Kingdom for United Kingdom tax purposes; (ii) a partnership each member
of which is (a) company so resident in the United Kingdom; or (b) a company not
so resident in the United Kingdom which carries on a trade in the United Kingdom
through a permanent establishment and which brings into account in computing its
chargeable profits (for the purposes of Section 11(2) of the Taxes Act) the
whole of any share of interest payable in respect of that advance that falls to
it by reason of Sections 114 and 115 of the Taxes Act; (iii) a company not so
resident in the United Kingdom which carries on a trade in the United Kingdom
through a permanent establishment and which brings into account interest payable
in respect of that advance in computing the chargeable profits (for the purposes
of Section 11(2) of the Taxes Act) of that company; (iv) a Treaty Lender; or (v)
beneficially entitled to interest payable to that Lender in respect of an
advance under a Loan Document and is (i) a bank (as defined for the purpose of
section 349 of the Taxes Act) making an advance under a Loan Document or (ii) a
Lender in respect of an advance made under a Loan Document by a person that was
a bank (as defined for the purpose of section 349 of the Taxes Act) at the time
that that advance was made and that (in either case) is within the charge to UK
corporation tax as respects any payments of interest made in respect of that
advance.
"Reaffirmations" - the Borrower Reaffirmation and the Subsidiary
Reaffirmation executed and delivered on the Restatement Date.
"Reportable Event" - any of the events set forth in Section 4043(b) of
ERISA.
"Reserve Percentage" - the maximum aggregate reserve requirement
(including all basic, supplemental, marginal and other reserves) which is
imposed on member banks of the Federal Reserve System against "Eurocurrency
Liabilities" as defined in Regulation D.
"Response Date" - as defined in Subsection 11.17.1 of the Agreement.
"Restatement Date" - the date on which all of the conditions precedent
in Section 8 of the Agreement are satisfied or waived.
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"Restricted Payment" - as defined in Subsection 7.2.6 of the
Agreement.
"Revolving Credit Loan" - a Loan made by a Lender pursuant to Section
1 of the Agreement.
"Revolving Credit Maximum Amount" - US$350,000,000, as such amount may
be reduced or later increased from time to time pursuant to the terms of the
Agreement.
"Revolving Loan Commitment" - with respect to any Lender, the amount
of such Lender's Revolving Loan Commitment pursuant to Section 1 of the
Agreement, as set forth below such Lender's name on the signature page hereof or
in any agreement assigning such Revolving Loan Commitment, as the same may be
reduced or later increased from time to time pursuant to the terms of this
Agreement.
"Revolving Loan Exposure" - the sum of (i) the US Revolving Loan
Exposure plus (ii) the UK Revolving Loan Exposure.
"Revolving Loan Percentage" - with respect to each Lender, the
percentage equal to the quotient of such Lender's Revolving Loan Commitment
divided by the aggregate of all Revolving Loan Commitments, or if the Revolving
Loan Commitments have terminated, the percentage equal to the quotient of the
outstanding principal balance of the Revolving Credit Loans held by such Lender
divided by the aggregate of the outstanding principal balance of the Revolving
Credit Loans held by all Lenders..
"Revolving Notes" - the Revolving Notes to be executed by Borrower on
or about the Restatement Date in favor of each Lender to evidence the Revolving
Credit Loans, which shall be in the form of Exhibit 1.1 to the Agreement,
together with any replacement or successor notes therefore.
"Security" - all shares of stock, partnership interests, membership
interests, membership units or other ownership interests in any other Person and
all warrants, options or other rights to acquire the same.
"Security Documents" - the Guaranty Agreements, the Subsidiary
Security Agreements, the IP Security Agreements, the Pledge Agreement, the
Mortgages, the UK Security Documents and all other instruments and agreements
now or at any time hereafter securing the whole or any part of the Obligations
or any Guaranty thereof, including any joinder agreement pursuant to which any
Subsidiary or Affiliate of Borrower becomes a party to any other Security
Document.
"Senior Note Documents" - the Senior Note Indenture, the Senior Notes
and all other agreements, instruments and documents delivered by Borrower or any
of its subsidiaries in connection therewith.
"Senior Note Indenture" - the Indenture dated June 26, 2003 among the
Borrower, its Subsidiaries and ▇▇▇▇▇ Fargo Bank Minnesota, N.A., as trustee.
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"Senior Notes" - Borrower's senior unsecured notes in the aggregate
principal amount of US$150,000,000 due 2013 issued pursuant to the Senior Note
Indenture, and on terms and conditions satisfactory to the Lenders.
"Solvent" - as to any Person, such Person (i) owns Property whose fair
saleable value is greater than the amount required to pay all of such Person's
Indebtedness (including contingent debts discounted based on the likelihood of
their having to be paid), (ii) is able to pay all of its Indebtedness as such
Indebtedness matures and (iii) has capital sufficient to carry on its business
and transactions and all business and transactions in which it is about to
engage.
"Specified Real Property" - the four parcels of real property owned by
Borrower or Guarantor located at (i) 11755 Maricopa Industrial Parkway, Pinal
County, Arizona, (ii) ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, (▇▇▇) ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, and (iv) ▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇.
"Spot Rate" - with respect to any currency, the rate quoted by Agent
as the spot rate for the purchase by Agent of such currency with another
currency through its foreign exchange office at approximately 11:00 a.m. (New
York time) on the date of determination thereof.
"Subsidiary" - any Person of which another Person owns, directly or
indirectly through one or more intermediaries, more than 50% of the Voting Stock
at the time of determination. For purposes of clarity, the term "Subsidiary"
shall include subsidiaries of Subsidiaries.
"Subsidiary Security Agreement" - the security agreement executed by
Borrower's Subsidiaries and Affiliates in favor of the Existing Agent, for the
benefit of the Lenders, as reaffirmed on the Restatement Date.
"Supermajority Lenders" - as of any date, Lenders holding more than
2/3 of the Revolving Loan Commitments determined on a combined basis and
following the termination of the Revolving Loan Commitments, Lenders holding
more than 2/3 of the outstanding Loans, LC Amounts and LC Obligations not yet
reimbursed by Borrower or funded with a Revolving Credit Loan; provided, that
(i) in each case, if there are 2 or more Lenders with outstanding Loans, LC
Amounts, unfunded and unreimbursed LC Obligations or Revolving Loan Commitments,
at least 2 Lenders shall be required to constitute Supermajority Lenders; and
(ii) prior to termination of the Revolving Loan Commitments, if any Lender
breaches its obligation to fund any requested Revolving Credit Loan, for so long
as such breach exists, its voting rights hereunder shall be calculated with
reference to its outstanding Loans, LC Amounts and unfunded and unreimbursed LC
Obligations, rather than its Revolving Loan Commitment.
"Swing Line Loan" - as defined in Section 3.11.1 of the Agreement.
"Tax Confirmation" - a confirmation by a Lender that the person
beneficially entitled to interest payable to that Lender in respect of an
advance under a Loan Document is either: (a) a company resident in the United
Kingdom for United Kingdom tax purposes; (b) a
A-25
partnership each member of which is (i) a company so resident in the United
Kingdom, or (ii) a company not so resident in the United Kingdom which carries
on a trade in the United Kingdom through a permanent establishment and which
brings into account in computing its chargeable profits (for the purposes of
Section 11(2) of the Taxes Act) the whole of any share of interest payable in
respect of that advance that falls to it by reason of Sections 114 and 115 of
the Taxes Act; or (c) a company not so resident in the United Kingdom which
carries on a trade in the United Kingdom through a permanent establishment and
which brings into account interest payable in respect of that advance in
computing the chargeable profits (for the purposes of Section 11(2) of the Taxes
Act) of that company.
"Tax Deduction" - as defined in Subsection 3.10.1 of the Agreement.
"Taxes" - any present or future taxes, levies, imposts, duties, fees,
assessments, deductions, withholdings or other charges of whatever nature,
including income, receipts, excise, property, sales, use, transfer, license,
payroll, withholding, social security and franchise taxes now or hereafter
imposed or levied by the United States, the United Kingdom or any other
political subdivision or taxing authority and all interest, penalties, additions
to tax and similar liabilities with respect thereto.
"Taxes Act" - the Income and Corporation Taxes ▇▇▇ ▇▇▇▇ of the United
Kingdom.
"Term" - as defined in Subsection 3.16.1 of the Agreement.
"Total Credit Facility" - US$350,000,000, as reduced or increased from
time to time pursuant to the terms of the Agreement.
"Trailer Fleet Inventory" - new and used manufactured or
remanufactured Trailers held by Borrower or a Credit Party for intended lease or
rental to third parties.
"Trailers" - over-the-road tractor trailers and trailers intended for
use as storage facilities not constituting portable and ISO containers owned by
Borrower or any of its Subsidiaries.
"Treaty" - a double taxation agreement that makes provision for full
exemption from tax imposed by the United Kingdom on interest.
"Treaty Lender" - any party to which a Credit Party is required to
make payment under the Agreement and that is entitled to that payment under a
Treaty without a Tax Deduction and for this purpose it shall be assumed that
there are satisfied: (a) any relevant condition contained in the Treaty that
relates (expressly or impliedly) to the Credit Parties, and (b) any necessary
procedural formalities.
"Type of Organization" - with respect to Borrower or any Subsidiary of
Borrower, the kind or type of entity by which Borrower or such Subsidiary is
organized, such as a corporation or limited liability company.
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"UCC" - the Uniform Commercial Code as in effect in the State of New
York on the date of this Agreement, as the same may be amended or otherwise
modified from time to time.
"UK Borrower" - means a Subsidiary of Borrower with operations in the
United Kingdom approved by Agent in its discretion.
"UK Borrowing Base" - as at any date of determination thereof, an
amount equal to the least of:
(i) the Revolving Credit Maximum Amount minus the US Revolving Loan
Exposure;
(ii) an amount equal to the sum of
(A) the amount calculated under clause (ii) of the definition of
US Borrowing Base; plus
(B) eighty-five percent (85%) of the net amount of Eligible UK
Accounts; plus
(C) ninety percent (90%) of Eligible UK Container Fleet
Inventory; plus
(D) seventy percent (70%) of Eligible UK Trailer Fleet Inventory;
minus
(E) the aggregate amount of all reserves established by Agent
against the UK Borrowing Base pursuant to Subsection 1.1.1;
(iii) the amount permitted to be outstanding under this Agreement by
the Senior Note Indenture minus the US Revolving Loan Exposure; or
(iv) the UK Sublimit.
For purposes of calculating the components of the UK Borrowing Base, (1) the net
amount of Eligible UK Accounts at any time shall be the face amount of such
Eligible UK Accounts less any and all returns, rebates, discounts (which may, at
Agent's option, be calculated on shortest terms), service charges, customer
deposits, credits, allowances or excise taxes of any nature at any time issued,
owing, claimed by Account Debtors, granted, outstanding or payable in connection
with such Accounts at such time, (2) the amount of Eligible UK Inventory shall
be determined on a first-in, first-out basis; (3) Inventory "cost" shall be
determined in a manner consistent with Borrower's current and historical
accounting practices unless otherwise specifically provided in this Agreement,
and (4) orderly liquidation value of Inventory shall be based on the most recent
appraisal received by Agent from the Appraiser.
"UK Credit Party" - UK Borrower and each UK Guarantor.
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"UK Guarantor" - each UK Subsidiary of Borrower and each other Person
who now or hereafter guarantees payment or performance of the whole or any part
of the UK Obligations.
"UK Non-Bank Lender" - a Lender that is a Qualifying Lender under any
of clauses (i) through (iii) of the definition thereof.
"UK Obligations" - with respect to any UK Credit Party, all Loans, all
LC Obligations and all other advances, debts, liabilities, obligations,
covenants and duties, together with all interest, fees and other charges
thereon, owing, arising, due or payable from such UK Credit Party to Agent, any
Lender or any Affiliate of any Lender, or from UK Borrower to any LC Issuer, of
any kind or nature, present or future, whether or not evidenced by any note,
guaranty or other instrument, whether arising under the Agreement or any of the
other Loan Documents or cash management services rendered in connection
therewith, whether direct or indirect (including those acquired by assignment),
absolute or contingent, primary or secondary, due or to become due, now existing
or hereafter arising and however acquired, and any Banking Product Obligations
or Qualified Derivative Obligations owing to Agent, any Lender or any Affiliate
of a Lender.
"UK Revolving Credit Loan" - a Revolving Credit Loan made to the UK
Borrower pursuant to Subsection 1.1.3 that is denominated in Pounds Sterling.
"UK Revolving Loan Exposure" - the principal amount of the outstanding
UK Revolving Credit Loans.
"UK Security Documents" - the guaranty executed on the Restatement
Date (for UK Subsidiaries on the Restatement Date) and in substantially the same
form (for future UK Subsidiaries), in each case, in form and substance
satisfactory to Agent, together with each other guaranty hereafter executed by
any UK Guarantor.
"UK Sublimit" - any US$50,000,000.
"UK Subsidiary" - any Subsidiary of the Borrower that is incorporated
under the laws of England and Wales.
"Unfinanced Capital Expenditures" - for any period, cash expenditures
made for Capital Expenditures during such period less the sum of (i) eighty
percent (80%) of the actual cost of all additions to Container Fleet Inventory
and Trailer Fleet Inventory during such period and (ii) sixty percent (60%) of
the actual cost of all additions to machinery and equipment of Borrower and its
Subsidiaries during such period.
"US Borrowing Base" - as at any date of determination thereof, an
amount equal to the least of:
(i) the Revolving Credit Maximum Amount minus the UK Revolving Loan
Exposure;
(ii) an amount equal to the sum of
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(A) eighty-five percent (85%) of the net amount of Eligible US
Accounts; plus
(B) ninety percent (90%) of Eligible US Container Fleet
Inventory; plus
(C) seventy percent (70%) of Eligible US Trailer Fleet Inventory;
plus
(D) the lesser of (i) US$20,000,000 or (ii) the sum of (a) ninety
percent (90%) of Eligible US Container Inventory Held for Sale; plus
(b) the lesser of (x) US$5,000,000 or (y) ninety percent (90%) of
Eligible US Work-in-Process Container Inventory; plus (c) seventy-five
percent (75%) of Eligible US Primary Raw Materials Inventory; plus (d)
sixty percent (60%) of Eligible US Other Raw Materials Component
Inventory; plus
(E) the lesser of (i) US$25,000,000 and (ii) the sum of (a)
eighty percent (80%) of the value of Eligible US Machinery and
Equipment; plus (b) sixty percent (60%) of the value of the Specified
Real Property; minus
(F) the aggregate amount of all reserves established by Agent
against the US Borrowing Base pursuant to Subsection 1.1.1; or
(iii) the amount permitted to be outstanding under this Agreement by
the Senior Note Indenture minus the UK Revolving Loan Exposure.
For purposes of calculating the components of the US Borrowing Base, (1) the net
amount of Eligible US Accounts at any time shall be the face amount of such
Eligible US Accounts less any and all returns, rebates, discounts (which may, at
Agent's option, be calculated on shortest terms), service charges, customer
deposits, credits, allowances or excise taxes of any nature at any time issued,
owing, claimed by Account Debtors, granted, outstanding or payable in connection
with such Accounts at such time, (2) the amount of Eligible US Inventory shall
be determined on a first-in, first-out basis; (3) Inventory "cost" shall be
determined in a manner consistent with Borrower's current and historical
accounting practices unless otherwise specifically provided in this Agreement,
(4) the value of Eligible US Machinery and Equipment and Specified Real Property
shall be determined on the basis of the orderly liquidation value of such
Property based on the most recent appraisal received by Agent from the
Appraiser; and (5) orderly liquidation value of Inventory shall be based on the
most recent appraisal received by Agent from the Appraiser.
"US Credit Party" - Borrower and each US Guarantor.
"US Dollars" and "US$" - lawful money of the United States.
"US Guarantors" - each Domestic Subsidiary of Borrower and each other
Person who now or hereafter guarantees payment or performance of the whole or
any part of the US Obligations.
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"US Obligations" - with respect to any US Credit Party, all Loans, all
LC Obligations and all other advances, debts, liabilities, obligations,
covenants and duties, together with all interest, fees and other charges
thereon, owing, arising, due or payable from such Credit Party to Agent, any
Lender or any Affiliate of any Lender, or from Borrower to any LC Issuer, of any
kind or nature, present or future, whether or not evidenced by any note,
guaranty or other instrument, whether arising under the Agreement or any of the
other Loan Documents or cash management services rendered in connection
therewith, whether direct or indirect (including those acquired by assignment),
absolute or contingent, primary or secondary, due or to become due, now existing
or hereafter arising and however acquired, and any Banking Product Obligations
and any Qualified Derivative Obligations owing to Agent, any Lender or any
Affiliate of a Lender.
"US Revolving Credit Loan" - a Revolving Credit Loan made to the
Borrower pursuant to Subsection 1.1.1 that is denominated in US Dollars or
Pounds Sterling.
"US Revolving Loan Exposure" - the sum of (i) the principal amount of
the outstanding US Revolving Credit Loans plus (ii) the aggregate outstanding LC
Amount plus (iii) the unpaid LC Obligations.
"VAT" - the value added tax as provided for in the Value Added Tax ▇▇▇
▇▇▇▇ of the United Kingdom and any other tax of a similar nature.
"Voting Stock" - Securities of any class or classes of a
corporation, limited partnership or limited liability company or any other
entity the holders of which are ordinarily, in the absence of contingencies,
entitled to vote with respect to the election of corporate directors (or Persons
performing similar functions).
Other Terms. All other terms contained in the Agreement shall
have, when the context so indicates, the meanings provided for by the UCC to the
extent the same are used or defined therein.
Certain Matters of Construction. The terms "herein", "hereof" and
"hereunder" and other words of similar import refer to the Agreement as a whole
and not to any particular section, paragraph or subdivision. Any pronoun used
shall be deemed to cover all genders. The section titles, table of contents and
list of exhibits appear as a matter of convenience only and shall not affect the
interpretation of the Agreement. All references to statutes and related
regulations shall include any amendments of same and any successor statutes and
regulations. All references to any of the Loan Documents shall include any and
all modifications thereto and any and all extensions or renewals thereof.
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LIST OF EXHIBITS AND SCHEDULES
Exhibits:
Exhibit 1.1: Form of Revolving Note
Exhibit 5.1.1: Locations of Collateral; Chief Executive Office
Exhibit 6.1.1: Jurisdictions
Exhibit 6.1.4: Capital Structure
Exhibit 6.1.5: Names, Trade Names
Exhibit 6.1.13: Surety Obligations
Exhibit 6.1.14: Tax ID Numbers
Exhibit 6.1.15: Brokers Fees
Exhibit 6.1.16: Intellectual Property
Exhibit 6.1.19: Restrictive Agreements
Exhibit 6.1.20: Litigation
Exhibit 6.1.22: Leases
Exhibit 6.1.23: Plans
Exhibit 6.1.24: Trade Relations
Exhibit 6.1.25: Union Contracts
Exhibit 7.1.3: Form of Compliance Certificate
Exhibit 7.1.4: Form of Borrowing Base Certificate
Exhibit 7.2.2: Existing Indebtedness
Exhibit 7.2.3: Permitted Liens
Exhibit 7.2.7: Deposit Accounts
Exhibit 7.2.8: Affiliate Transactions
Exhibit 7.2.13: Liabilities (Operating Leases and Other Off Balance Sheet
Financing)
Exhibit 7.3: Financial Covenants
List of Exhibit and Schedules
EXHIBIT 1.1
FORM OF REVOLVING NOTE
Exhibit 1.1 - Page 1
EXHIBIT 7.3
FINANCIAL COVENANTS
Subject to the provisions of Section 7.3 of the Agreement, Borrower will
comply with the following financial covenants:
7.3.1 Fixed Charge Coverage Ratio. As of the end of each fiscal
quarter set forth below, Borrower and its Subsidiaries shall maintain a Fixed
Charge Coverage Ratio of not less than the ratio set forth below opposite such
date:
Fiscal Quarter Fixed Charge Coverage
Ended on Ratio
-------------- ---------------------
March 31, 2006 2.00 to 1.0
June 30, 2006 2.00 to 1.0
September 30, 2006 2.00 to 1.0
December 31, 2006 2.00 to 1.0
March 31, 2007 2.00 to 1.0
June 30, 2007 and thereafter 2.25 to 1.0
7.3.2 Debt Ratio. As of the end of each fiscal quarter, Borrower and
its Subsidiaries shall maintain a Debt Ratio of not more than the ratio set
forth below opposite such date:
Fiscal Quarter
Ended on Debt Ratio
-------------- -----------
March 31, 2006 5.50 to 1.0
June 30, 2006 5.50 to 1.0
September 30, 2006 5.50 to 1.0
December 31, 2006 5.25 to 1.0
March 31, 2007 5.25 to 1.0
Exhibit 7.3 - Page 1
Fiscal Quarter
Ended on Debt Ratio
-------------- -----------
June 30, 2007 and thereafter 5.00 to 1.0
7.3.3 Minimum Utilization.
(a) Borrower and the other Credit Parties shall maintain minimum
utilization rates for each fiscal quarter, calculated at the end of each such
quarter as the average amount during such quarter, and calculated as the number
of units of Eligible Container Fleet Inventory of Borrower and the other Credit
Parties which is then subject to valid, current rental or lease agreements
between Borrower or a Credit Party and the renters or lessees thereof, divided
by the aggregate number of units of Eligible Container Fleet Inventory of
Borrower and the other Credit Parties, of not less than seventy-six percent
(76%) for any fiscal quarter; and
(b) (i) the number of units of the Eligible Container Fleet Inventory
of Borrower and the other Credit Parties which is then subject to valid, current
rental or lease agreements between Borrower or a Credit Party and the renters or
lessees thereof, divided by (ii) sum of (A) the aggregate number of units of the
Eligible Container Fleet Inventory of Borrower and the Guarantors, and (B) the
number of units of the Eligible Container Inventory Held For Sale of Borrower
and the other Credit Parties, of not less than seventy-one percent (71%) in any
fiscal quarter; provided, that for the purposes of calculation of compliance
with this Subsection 7.3.3, the aggregate of the number of units of Eligible
Container Inventory Held For Sale, as a percentage of the sum of clauses (A) and
(B) above, shall not exceed five percent (5%).
Exhibit 7.3 - Page 2