THIRD AMENDED AND RESTATED
WAREHOUSING CREDIT AGREEMENT
AMONG
PLM EQUIPMENT GROWTH FUND V
PLM EQUIPMENT GROWTH FUND VI
PLM EQUIPMENT GROWTH & INCOME FUND VII
PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
PLM FINANCIAL SERVICES, INC.
AND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
BANK OF MONTREAL
AND SUCH OTHER FINANCIAL INSTITUTIONS
AS SHALL BECOME LENDERS HEREUNDER
AND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
AS AGENT
December 2, 1997
THIRD AMENDED AND RESTATED
WAREHOUSING CREDIT AGREEMENT
THIS THIRD AMENDED AND RESTATED WAREHOUSING CREDIT AGREEMENT is entered
into as of December 2, 1997, by and among PLM EQUIPMENT GROWTH FUND V, a
California limited partnership ("EGF V"), PLM EQUIPMENT GROWTH FUND VI, a
California limited partnership ("EGF VI"), PLM EQUIPMENT GROWTH & INCOME FUND
VII, a California limited partnership ("EGF VII"), and PROFESSIONAL LEASE
MANAGEMENT INCOME FUND I, L.L.C., a Delaware limited liability company ("Income
Fund I") (EGF V, EGF VI, EGF VII and Income Fund I each individually being a
"Borrower" and, collectively, the "Borrowers"), and PLM FINANCIAL SERVICES,
INC., a Delaware corporation and the sole general partner, in the case of EGF V,
EGF VI and EGF VII, and the sole manager, in the case of Income Fund I ("FSI"),
and FIRST UNION NATIONAL BANK OF NORTH CAROLINA ("FUNB"), BANK OF MONTREAL
("BMO") and each other financial institution which may hereafter execute and
deliver an instrument of assignment with respect to this Agreement pursuant to
Section 11.10 (each individually being a "Lender," and collectively, the
"Lenders"), and FIRST UNION NATIONAL BANK OF NORTH CAROLINA, as agent on behalf
and for the benefit of the Lenders (not in its individual capacity, but solely
as agent, the "Agent"). This Agreement amends, restates and supersedes the
Growth Fund Agreement (as defined below).
RECITALS
A. Borrowers, FSI, PLM Equipment Growth Fund III, a California limited
partnership ("EGF III"), PLM Equipment Growth Fund IV, a California limited
partnership ("EGF IV"), FUNB and Fleet Bank, N.A. (the "Prior Lenders") and
Agent, as agent for the Prior Lenders, entered into that Second Amended and
Restated Warehousing Credit Agreement dated as of May 31, 1996, as amended by
that Amendment No. 1 to Second Amended and Restated Warehousing Credit Agreement
dated as of November 5, 1996, that Amendment No. 2 to Second Amended and
Restated Warehousing Credit Agreement dated as of October 3, 1997 and that
Amendment No. 3 to Second Amended and Restated Warehousing Credit Agreement
dated as of November 3, 1997 (as so amended to, the "Growth Fund Agreement"),
pursuant to which the Prior Lenders have agreed to extend and make available to
Borrowers certain advances of credit.
B. Borrowers and FUNB, as the sole remaining Prior Lender having a
Commitment under the Growth Fund Agreement, and FSI desire to amend and restate
the Growth Fund Agreement and to, among other things, increase the aggregate
Commitments set forth on Schedule A of the Growth Fund Agreement, remove EGF III
and EGF IV as borrowers under the revolving credit facility, extend the
commitment Termination Date and reduce the Applicable Margin, as more fully set
forth herein.
C. On the terms and conditions set forth below, BMO desires, as of and
from the Closing Date, to become a Lender under this Agreement.
D. Lenders have agreed to make such credit available to Borrowers, but
only upon the terms and subject to the conditions hereinafter set forth and in
reliance on the representations and warranties set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants hereinafter set forth, and intending to be legally bound, the
parties hereto agree as follows:
SECTION 1. DEFINITIONS.
1.1 Defined Terms. As used herein, the following terms have the
following meanings:
"Acquisition" means, with respect to any Borrower, any transaction, or
any series of related transactions, by which such Borrower, FSI or any of FSI's
Subsidiaries, including, without limitation, TEC AcquiSub, directly or
indirectly (a) acquires any ongoing business or all or substantially all of the
assets of any Person or division thereof, whether through a purchase of assets,
merger or otherwise, or (b) acquires (in one transaction or as the most recent
transaction in a series of transactions) control of at least a majority of the
stock of a corporation having ordinary voting power for the election of
directors, or (c) acquires control of at least a majority of the ownership
interests in any partnership or joint venture.
"Adjusted LIBOR" means, for each Interest Period in respect of LIBOR
Loans, an interest rate per annum (rounded upward to the nearest 1/16th of one
percent (0.0625%)) determined pursuant to the following formula:
[GRAPHIC OMITTED]The Adjusted LIBOR shall be adjusted automatically as of the
effective date of any change in the Eurodollar Reserve Percentage.
"Advance" means any Advance made or to be made by any Lender to any
Borrower as set forth in Section 2.1.1.
"Affiliate" means, with respect to any Person, (a) each Person that,
directly or indirectly, through one or more intermediaries, owns or controls,
whether beneficially or as a trustee, guardian or other fiduciary, five percent
(5.0%) or more of the stock having ordinary voting power in the election of
directors of such Person or of the ownership interests in any partnership or
joint venture, (b) each Person that controls, is controlled by or is under
common control with such Person or any Affiliate of such Person, or (c) each of
such Person's officers, directors, joint venturers and partners; provided,
however, that in no case shall any Lender or Agent be deemed to be an Affiliate
of any Borrower or FSI for purposes of this Agreement. For the purpose of this
definition, "control" of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management or
policies, whether through the ownership of voting securities, by contract or
otherwise.
"AFG" means American Finance Group, Inc., a Delaware corporation.
"AFG Agreement" means the Amended and Restated Warehousing Credit
Agreement dated as of November 3, 1997, by and among AFG, Lenders and Agent, as
the same from time to time may be amended, modified, supplemented, renewed,
extended or restated.
"Agent" means FUNB solely when acting in its capacity as the Agent
under this Agreement or any of the other Loan Documents, and any successor
Agent.
"Agent's Side Letter" means the side letter agreement dated November 3,
1997, by and between Borrowers, TEC AcquiSub, AFG and Agent.
"Agreement" means this Third Amended and Restated Warehousing Credit
Agreement dated as of November 3, 1997, including all amendments, modifications
and supplements hereto, renewals, extensions or restatements hereof, and all
appendices, exhibits and schedules to any of the foregoing, and shall refer to
the Agreement as the same may be in effect from time to time.
"Aircraft" means any corporate, commuter, or commercial aircraft or
helicopters, with modifications (as applicable) and replacement or spare parts
used in connection therewith, including, without limitation, engines, rotables
or propellers, and any engines, rotables and propellers used on a stand-lone
basis.
"Applicable Margin" means:
(a) with respect to Prime Rate Loans, zero percent (0.00%); and
(b) with respect to LIBOR Loans, one and five-eighths percent
(1.625%).
"Assignment and Acceptance" has the meaning set forth in Section
11.10.2.
"Bank Affiliate" means a Person engaged primarily in the business of
commercial banking and that is an Affiliate of a Lender or of a Person of which
a Lender is an Affiliate.
"Bankruptcy Code" means the Bankruptcy Code of 1978, as amended, as
codified under Title 11 of the United States Code, and the Bankruptcy Rules
promulgated thereunder, as the same may be in effect from time to time.
"Borrowing Base" means, as calculated separately for each Borrower
individually as at any date of determination, an amount not to exceed the sum
of:
(a) fifty percent (50.0%) of the unrestricted cash available for the
purchase of Eligible Inventory by such Borrower,
plus
(b) an amount equal to the lesser of (i) seventy percent
(70.0%) of the aggregate net book value or (ii) fifty percent (50.0%) of the
aggregate net fair market value of all Eligible Inventory then owned by such
Borrower or a Marine Subsidiary or owned of record by an Owner Trustee for the
beneficial interest of such Borrower or any Marine Subsidiary of such Borrower
(provided, however, that there shall be excluded from this clause (b) the
aggregate net book value or aggregate net fair market value, as the case may be,
of all items of Eligible Inventory which are either (i) off-lease or (ii)
subject to a Lease under which any applicable lease or rental payment is more
than ninety (90) days past due, but only to the extent and in the amount that
the aggregate net book value or net fair market value, as the case may be, of
such otherwise excluded Eligible Inventory exceeds fifteen percent (15.0%) of
the respective net book value or net fair market value of all Eligible Inventory
included in this clause (b) notwithstanding this proviso),
less
(c) the aggregate Consolidated Funded Debt of such Borrower then
outstanding, excluding the aggregate principal amounts of the Loans outstanding
for such Borrower under the Facility,
in each case computed, (1) with respect to any requested Loan, as of the
requested Funding Date (and shall include the item(s) of Eligible Inventory to
be acquired with the proceeds of the requested Loan), and (2) with respect to
the delivery of any monthly Borrowing Base Certificate to be furnished pursuant
to Section 5.1.3, as of the last day of the calendar month for which such
Borrowing Base Certificate is furnished (provided, that for the purpose of
computing the Borrowing Base, in the event that any Borrower or a Marine
Subsidiary of such Borrower shall own less than one hundred percent (100.0%) of
the record or beneficial interests in any item of Eligible Inventory, with one
or more of the other Equipment Growth Funds owning of record or beneficially the
remaining interests, there shall be included only such Borrower's or such Marine
Subsidiary's, as the case may be, ratable interest in such item of Eligible
Inventory).
"Borrowing Base Certificate" means, with respect to any Borrower, a
certificate with appropriate insertions setting forth the components of the
Borrowing Base of such Borrower as of the last day of the month for which such
certificate is submitted or as of a requested Funding Date, as the case may be,
which certificate shall be substantially in the form set forth in Exhibit B and
certified by a Responsible Officer of such Borrower.
"Business Day" means any day which is not a Saturday, Sunday or a legal
holiday under the laws of the States of California or North Carolina or is not a
day on which banking institutions located in the States of California or North
Carolina are authorized or permitted by law or other governmental action to
close and, with respect to LIBOR Loans, means any day on which dealings in
foreign currencies and exchanges may be carried on by Agent and Lenders in the
London interbank market.
"Casualty Loss" means any of the following events with respect to any
item of Eligible Inventory: (a) the actual total loss or compromised total loss
of such item of Eligible Inventory; (b) such item of Eligible Inventory shall
become lost, stolen, destroyed, damaged beyond repair or permanently rendered
unfit for use for any reason whatsoever; (c) the seizure of such item of
Eligible Inventory for a period exceeding sixty (60) days or the condemnation or
confiscation of such item of Eligible Inventory; or (d) such item of Eligible
Inventory shall be deemed under its lease to have suffered a casualty loss as to
the entire item of Eligible Inventory.
"Charges" means, with respect to any Borrower, all federal, state,
county, city, municipal, local, foreign or other governmental taxes, levies,
assessments, charges or claims, in each case then due and payable, upon or
relating to (a) the Loans made to such Borrower hereunder, (b) such Borrower's
employees, payroll, income or gross receipts, (c) such Borrower's ownership or
use of any of its Properties or assets or (d) any other aspect of such
Borrower's business.
"Closing" means the time at which each of the conditions precedent set
forth in Section 3 to the making of the first Loan hereunder shall have been
duly fulfilled or satisfied by each Borrower.
"Closing Date" means the date on which Closing occurs.
"Code" means the Internal Revenue Code of 1986, as amended, the
Treasury Regulations adopted thereunder and the Treasury Regulations proposed
thereunder (to the extent Requisite Lenders, in their sole discretion,
reasonably determine that such proposed regulations set forth the regulations
that apply in the circumstances), as the same may be in effect from time to
time.
"Commitment" means with respect to each Lender the amounts set forth on
Schedule A and "Commitments" means all such amounts collectively, as each may be
amended from time to time upon the execution and delivery of an instrument of
assignment pursuant to Section 11.10, which amendments shall be evidenced on
Schedule 1.1.
"Commitment Termination Date" means November 2, 1998.
"Compliance Certificate" means, with respect to any Borrower, a
certificate signed by a Responsible Officer of such Borrower, substantially in
the form of Exhibit E, with such changes as Agent may from time to time
reasonably request for the purpose of having such certificate disclose the
matters certified therein and the method of computation thereof.
"Consolidated EBITDA" means, for any Borrower, as measured as at any
date of determination for any period on a consolidated basis, the sum of (a) the
Consolidated Net Income of such Borrower, plus (b) all amounts treated as
expenses for depreciation and the amortization of intangibles of any kind, plus
(c) all accrued taxes on or measured by income, plus (d) Consolidated Interest
Expense, and in the cases of clauses (b), (c) and (d), above, each to the extent
included in the determination of Consolidated Net Income.
"Consolidated Funded Debt" means, for any Borrower, as measured at any
date of determination on a consolidated basis, the total amount of all interest
bearing obligations (including Indebtedness for borrowed money) of such
Borrower, capital lease obligations of such Borrower as a lessee and the stated
amount of all outstanding undrawn letters of credit issued on behalf of such
Borrower or for which such Borrower is liable.
"Consolidated Intangible Assets" means, for any Person, as measured at
any date of determination on a consolidated basis, all intangible assets of such
Person.
"Consolidated Interest Expense" means, for any Borrower, as measured at
any date of determination for any period on a consolidated basis, the gross
interest expense of such Borrower for the period (including all commissions,
discounts, fees and other charges in connection with standby letters of credit
and similar instruments), less interest income for that period.
"Consolidated Net Income" means, for any Borrower, as measured at any
date of determination for any period on a consolidated basis, the net income (or
loss) of such Borrower for such period taken as a single accounting period.
"Consolidated Net Worth" means, for any Person, as measured at any date
of determination, the difference between Consolidated Total Assets and
Consolidated Total Liabilities.
"Consolidated Tangible Net Worth" means, for any Person, as measured at
any date of determination, the difference between Consolidated Net Worth and
Consolidated Intangible Assets.
"Consolidated Total Assets" means, for any Person, as measured at any
date of determination on a consolidated basis, all assets of such Person.
"Consolidated Total Liabilities" means, for any Person, as measured at
any date of determination on a consolidated basis, all liabilities of such
Person.
"Contingent Obligation" means, as to any Person, (a) any Guaranty
Obligation of that Person and (b) any direct or indirect obligation or
liability, contingent or otherwise, of that Person, (i) in respect of any letter
of credit or similar instrument issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of drawings, (ii) with
respect to the Indebtedness of any partnership or joint venture of which such
Person is a partner or a joint venturer, (iii) to purchase any materials,
supplies or other property from, or to obtain the services of, another Person if
the relevant contract or other related document or obligation requires that
payment for such materials, supplies or other property, or for such services,
shall be made regardless of whether delivery of such materials, supplies or
other property is ever made or tendered, or such services are ever performed or
tendered, or (iv) in respect of any interest rate protection contract that is
not entered into in connection with a bona fide hedging operation that provides
offsetting benefits to such Person. The amount of any Contingent Obligation
shall (subject, in the case of Guaranty Obligations, to the last sentence of the
definition of "Guaranty Obligation") be deemed equal to the maximum reasonably
anticipated liability in respect thereof, and shall, with respect to clause
(b)(iv) of this definition, be marked to market on a current basis.
"Debt Service Ratio" means, as measured separately for each Borrower as
at any date of determination, the ratio of (a) Consolidated EBITDA to (b) the
sum of (i) Consolidated Interest Expense plus (ii) an amount equal to three and
one-eighths percent (3.125%) of Consolidated Funded Debt (Consolidated EBITDA
and Consolidated Interest Expense to be measured on a quarterly basis for the
current fiscal quarter).
"Default Rate" has the meaning set forth in Section 2.3.
"Designated Deposit Account" means a demand deposit account maintained
by Borrowers with FUNB designated by written notice from Borrowers to Agent.
"Dollars" and the sign "$" means lawful money of the United States of
America.
"EGF" means PLM Equipment Growth Fund, a California limited
partnership.
"EGF II" means PLM Equipment Growth Fund, a California limited
partnership.
"EGF III" means PLM Equipment Growth Fund III, a California limited
partnership.
"EGF IV" has the meaning set forth in the Preamble to this Agreement.
"EGF V" has the meaning set forth in the Preamble to this Agreement
"EGF VI" has the meaning set forth in the Preamble to this Agreement
"EGF VII" has the meaning set forth in the Preamble to this Agreement.
"Eligible Assignee" means (a) a commercial bank organized under the
laws of the United States, or any state thereof, and having a combined capital
and surplus of at least $100,000,000, (b) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development, or a political subdivision of any such country, and
having a combined capital and surplus of at least $100,000,000, provided that
such bank is acting through a branch or agency located in the United States, and
(c) any Bank Affiliate.
"Eligible Inventory" means, with respect to any Borrower, all Trailers,
Aircraft and Aircraft engines, Railcars, cargo-containers, marine vessels and,
if approved by Requisite Lenders, other related Equipment, in each case owned by
such Borrower or a Marine Subsidiary of such Borrower (or jointly by such
Borrower and one or more of the other Equipment Growth Funds) or, subject to the
approval of Agent, any owner trust of which such Borrower is the sole
beneficiary or owner (or is the beneficiary or owner jointly with one or more of
the other Equipment Growth Funds), as applicable, or solely with respect to any
marine vessel registered in Liberia, The Bahamas, Hong Kong, Singapore or other
registry acceptable to Agent in its sole discretion, any nominee entity of which
such Borrower or a Marine Subsidiary of such Borrower is the sole beneficiary or
direct or indirect owner (or as the beneficiary or direct or indirect owner
jointly with one or more of the other Equipment Growth Funds).
"Employee Benefit Plan" means, with respect to any Borrower, any
Pension Plan and any employee welfare benefit plan, as defined in Section 3(1)
of ERISA, that is maintained for the employees of such Borrower, FSI or any of
FSI's Subsidiaries or any ERISA Affiliate of such Borrower.
"Environmental Claims" means, with respect to any Borrower, all claims,
however asserted, by any Governmental Authority or other Person alleging
potential liability or responsibility for violation of any Environmental Law or
for release or injury to the environment or threat to public health, personal
injury (including sickness, disease or death), property damage, natural
resources damage, or otherwise alleging liability or responsibility for damages
(punitive or otherwise), cleanup, removal, remedial or response costs,
restitution, civil or criminal penalties, injunctive relief, or other type of
relief, resulting from or based upon (a) the presence, placement, discharge,
emission or release (including intentional and unintentional, negligent and
non-negligent, sudden or non-sudden, accidental or non-accidental placement,
spills, leaks, discharges, emissions or releases) of any Hazardous Material at,
in, or from Property, whether or not owned by such Borrower, FSI or any
Subsidiary of FSI, or (b) any other circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law.
"Environmental Laws" means all foreign, federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental, health, safety and land use
matters, including the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Clean Air Act, the Federal Water Pollution Control
Act of 1972, the Solid Waste Disposal Act, the Federal Resource Conservation and
Recovery Act, the Toxic Substances Control Act and the Emergency Planning and
Community Right-to-Know Act.
"Environmental Permit" has the meaning set forth in Section 4.1.15.
"Equipment" means, with respect to any Borrower, all items of
transportation related equipment owned directly or beneficially by such Borrower
or by any Marine Subsidiary of such Borrower and held for lease or rental, and
shall include items of equipment legal or record title to which is held by any
owner trust or nominee entity in which such Borrower or any Marine Subsidiary of
such Borrower holds the sole beneficial interest.
"Equipment Growth Funds" means any and all of EGF, EGF II, EGF III, EGF
IV, EGF V, EGF VI, EGF VII and Income Fund I.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, as the same may be in effect from time to time, and any successor
statute.
"ERISA Affiliate" means, as applied to any Person, any trade or
business (whether or not incorporated) which is a member of a group of which
that Person is a member and which is under common control within the meaning of
the regulations promulgated under Section 414 of the Code.
"Eurodollar Reserve Percentage" means the maximum reserve percentage
(expressed as a decimal, rounded upward to the nearest 1/100th of one percent
(0.01%)) in effect from time to time (whether or not applicable to any Lender)
under regulations issued by the Federal Reserve Board for determining the
maximum reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to Eurocurrency liabilities having a
term comparable to such Interest Period.
"Event of Default" means any of the events set forth in Section 8.1.
"Facility" means the total Commitments described in Schedule A, as such
Schedule A may be amended from time to time as set forth on Schedule 1.1, for
the revolving credit facility described in Section 2.1.1 to be provided by
Lenders to Borrowers, on a several but not joint basis, according to each
Lender's Pro Rata Share.
"Federal Funds Rate" means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)". If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the "Composite 3:30 p.m.
Quotation") for such day under the caption "Federal Funds Effective Rate". If on
any relevant day the appropriate rate for such previous day is not yet published
in either H.15(519) or the Composite 3:30 p.m. Quotation, the rate for such day
will be the arithmetic mean of the rates for the last transaction in overnight
Federal funds arranged prior to 9:00 a.m. (New York time) on that day by each of
three leading brokers of Federal funds transactions in New York City selected by
Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System and any successor thereto.
"Form 1001" has the meaning set forth in Section 2.14.6.
"Form 4224" has the meaning set forth in Section 2.14.6.
"FSI" means PLM Financial Services, Inc., a Delaware corporation.
"Funded Debt Ratio" means, as measured separately for each Borrower as
at any date of determination, the ratio of (a) the Consolidated Funded Debt of
such Borrower to (b) the sum of (i) the aggregate net fair market value of the
Equipment owned of record and beneficially by such Borrower or any Marine
Subsidiary of such Borrower or owned of record by an Owner Trustee for the
beneficial interest of such Borrower or any Marine Subsidiary of such Borrower
plus (ii) the unrestricted cash available for the purchase of Eligible Inventory
for such Borrower (provided, that for the purpose of computing the Funded Debt
Ratio, in the event that any Borrower or a Marine Subsidiary of such Borrower
shall own less than one hundred percent (100.0%) of the record or beneficial
interests in any item of Equipment, with one or more of the other Equipment
Growth Funds owning of record or beneficially the remaining interests, there
shall be included any such Borrower's or such Marine Subsidiary's, as the case
may be, ratable interest in such item of Equipment).
"Funding Date" means with respect to any proposed borrowing hereunder,
the date funds are advanced to any Borrower for any Loan requested by such
Borrower.
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar function of comparable stature and authority within the accounting
profession), or in such other statements by such other entity as may be in
general use by significant segments of the U.S. accounting profession, which are
applicable to the circumstances as of the date of determination.
"Governmental Authority" means (a) any federal, state, county,
municipal or foreign government, or political subdivision thereof, (b) any
governmental or quasi-governmental agency, authority, board, bureau, commission,
department, instrumentality or public body, (c) any court or administrative
tribunal or (d) with respect to any Person, any arbitration tribunal or other
non-governmental authority to whose jurisdiction that Person has consented.
"Guaranty" means that certain Guaranty dated as of September 27, 1995,
executed by FSI in favor of Lenders and Agent.
"Guaranty Obligation" means, as applied to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease for
capital equipment other than Equipment, dividend, letter of credit or other
obligation (the "primary obligations") of another Person (the "primary
obligor"), including any obligation of that Person, whether or not contingent,
(a) to purchase, repurchase or otherwise acquire such primary obligations or any
property constituting direct or indirect security therefor, or (b) to advance or
provide funds (i) for the payment or discharge of any such primary obligation,
or (ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet item, level
of income or financial condition of the primary obligor, or (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation, or (d) otherwise to assure or hold harmless
the holder of any such primary obligation against loss in respect thereof. The
amount of any Guaranty Obligation shall be deemed equal to the stated or
determinable amount of the primary obligation in respect of which such Guaranty
Obligation is made or, if not stated or if indeterminable, the maximum
reasonably anticipated liability in respect thereof.
"Hazardous Materials" means all those substances which are regulated
by, or which may form the basis of liability under, any Environmental Law,
including all substances identified under any Environmental Law as a pollutant,
contaminant, hazardous waste, hazardous constituent, special waste, hazardous
substance, hazardous material, or toxic substance, or petroleum or petroleum
derived substance or waste.
"IMI" means PLM Investment Management, Inc., a California corporation
and a wholly-owned Subsidiary of FSI.
"Income Fund I" has the meaning set forth in the Preamble to this
Agreement.
"Indebtedness" means, as to any Person, (a) all indebtedness of such
Person for borrowed money, (b) all leases of equipment of such Person as lessee,
(c) to the extent not included in clause (b), above, all capital leases of such
Person as lessee, (d) any obligation of such Person for the deferred purchase
price of Property or services (other than trade or other accounts payable in the
ordinary course of business and not more than ninety (90) days past due), (e)
any obligation of such Person that is secured by a Lien on assets of such
Person, whether or not that Person has assumed such obligation or whether or not
such obligation is non-recourse to the credit of such Person, (f) obligations of
such Person arising under acceptance facilities or under facilities for the
discount of accounts receivable of such Person and (g) any obligation of such
Person to reimburse the issuer of any letter of credit issued for the account of
such Person upon which a draw has been made.
"Indemnified Liability" has the meaning set forth in Section 10.2.
"Indemnified Person" has the meaning set forth in Section 10.2.
"Interest Differential" means, with respect to any prepayment of a
LIBOR Loan on a day other than an Interest Payment Date on which such LIBOR Loan
matures, the difference between (a) the per annum interest rate payable with
respect to such LIBOR Loan as of the date of the prepayment and (b) the Adjusted
LIBOR on, or as near as practicable to, the date of the prepayment for a LIBOR
Loan commencing on such date and ending on the last day of the applicable
Interest Period. The determination of the Interest Differential by Agent shall
be conclusive in the absence of manifest error.
"Interest Payment Date" means, with respect to any LIBOR Loan, the last
day of each Interest Period applicable to such Loan and, with respect to Prime
Rate Loans, the first Business Day of each calendar month following the Funding
Date of such Prime Rate Loan; provided, however, that if any Interest Period for
a LIBOR Loan exceeds three (3) months, interest shall also be paid on the date
which falls three (3) months after the beginning of such Interest Period.
"Interest Period" means, with respect to any LIBOR Loan, the one-month,
two-month or three-month period selected by the Requesting Borrower pursuant to
Section 2, in each instance commencing on the applicable Funding Date of the
Loan; provided, however, that any Interest Period which would otherwise end on a
day that is not a Business Day shall end on the next succeeding Business Day
except that in the instance of any LIBOR Loan, if such next succeeding Business
Day falls in the next calendar month, the Interest Period shall end on the next
preceding Business Day.
"Investment Company Act" means the Investment Company Act of 1940, as
amended (15 U.S.C. ss. 80a-1 et seq.), as the same may be in effect from time to
time, or any successor statute thereto.
"IRS" means the Internal Revenue Service and any successor thereto.
"Lease" means, for any Borrower, each and every item of chattel paper,
installment sales agreement, equipment lease or rental agreement (including
progress payment authorizations) relating to an item of Equipment of which such
Borrower is the record or beneficial lessor and in respect of which the lessee
and lease terms (including, without limitation, as to rental rate, maturity and
insurance coverage) are acceptable to Agent, in its reasonable discretion. The
term "Lease" includes (a) all payments to be made thereunder, (b) all rights of
such Borrower therein, and (c) any and all amendments, renewals, extensions or
guaranties thereof.
"Lender's Side Letter" means the fee letter agreement dated November 3,
1997, by and among Borrowers, TEC AcquiSub, AFG and BMO.
"Lending Office" means, with respect to any Lender, the office or
offices of the Lender specified as its lending office opposite its name on the
applicable signature page hereto, or such other office or offices of the Lender
as it may from time to time notify Borrowers and Agent.
"LIBOR" means, with respect to any Loan to be made, continued as or
converted into a LIBOR Loan, the London Inter-Bank Offered Rate (determined
solely by Agent), rounded upward to the nearest 1/16th of one percent (0.0625%),
at which Dollar deposits are offered to Agent by major banks in the London
interbank market at or about 11:00 a.m., London time, on the second Business Day
prior to the first day of the related Interest Period with respect to such Loan
in an aggregate amount approximately equal to the amount of such Loan and for a
period of time comparable to the number of days in the applicable Interest
Period. The determination of LIBOR by Agent shall be conclusive in the absence
of manifest error.
"LIBOR Loan" means a Loan that bears interest based on Adjusted LIBOR.
"Lien" means any mortgage, pledge, hypothecation, assignment for
security, security interest, encumbrance, ▇▇▇▇, ▇▇▇▇ or charge of any kind,
whether voluntarily incurred or arising by operation of law or otherwise,
affecting any Property, including any agreement to grant any of the foregoing,
any conditional sale or other title retention agreement, any lease in the nature
of a security interest, and the filing of or agreement to file or deliver any
financing statement (other than a precautionary financing statement with respect
to a lease that is not in the nature of a security interest) under the UCC or
comparable law of any jurisdiction.
"Limited Partnership Agreement" means (a) for EGF V, the Limited
Partnership Agreement dated as of November 14, 1989, (b) for EGF VI, the Amended
and Restated Limited Partnership Agreement dated as of December 20, 1991 and (c)
for EGF VII, the Third Amended and Restated Limited Partnership Agreement of EGF
VII dated as of May 10, 1993, as amended by the First Amendment to the Third
Amended and Restated Limited Partnership Agreement dated May 28, 1993 and by the
Second Amendment to Third Amended and Restated Limited Partnership Agreement
dated as of January 21, 1994.
"Loan" has the meaning set forth in Section 2.1.1.
"Loan Document" when used in the singular and "Loan Documents" when
used in the plural means any and all of this Agreement, the Notes, the Lockbox
Agreement and the Guaranty and any and all other agreements, documents and
instruments executed and delivered by or on behalf or support of any Borrower to
Agent or any Lender or any of their respective authorized designees evidencing
or otherwise relating to the Advances and the Liens granted to Agent, on behalf
of Lenders, with respect to the Advances, as the same may from time to time be
amended, modified, supplemented or renewed.
"Lockbox" has the meaning set forth in Section 5.9.
"Lockbox Agreement" means the Lockbox Agreement dated May 31, 1996,
among Borrowers, FUNB and Agent on behalf of Lenders, relating to the Lockbox.
"Marine Subsidiary" means, for any Borrower, a Subsidiary of such
Borrower (in which the remaining record or beneficial ownership interests may be
held by TEC AcquiSub or any Equipment Growth Fund) organized for the purpose of
holding legal record title to one or more marine vessels or to aircraft rotables
and spare parts.
"Material Adverse Effect" means, with respect to any Borrower, any set
of circumstances or events which (a) has or could reasonably be expected to have
any material adverse effect whatsoever upon the validity or enforceability of
any Loan Document, (b) is or could reasonably be expected to be material and
adverse to the condition (financial or otherwise) or business operations of such
Borrower or FSI, (c) materially impairs or could reasonably be expected to
materially impair the ability of such Borrower or FSI to perform its
Obligations, or (d) materially impairs or could reasonably be expected to
materially impair the ability of Agent or any Lender to enforce any of its or
their legal remedies pursuant to the Loan Documents.
"Maturity Date" means, with respect to each Loan advanced by Lenders
hereunder, the date which is one hundred seventy-nine (179) days after the
Funding Date of such Loan or such earlier or later date as requested by the
Requesting Borrower and approved by Requisite Lenders, in their sole and
absolute discretion; provided, however, in no event shall any Maturity Date be a
date which is later than the Commitment Termination Date.
"Maximum Availability" has the meaning set forth in Section 2.1.1.
"Multiemployer Plan" means, with respect to any Borrower, a
"multiemployer plan" as defined in Section 4001(a)(3) of ERISA, and to which
such Borrower, FSI or any of FSI's Subsidiaries or any ERISA Affiliate of such
Borrower, FSI or any of FSI's Subsidiaries is making, or is obligated to make,
contributions or has made, or been obligated to make, contributions within the
preceding five (5) years.
"Note" has the meaning set forth in Section 2.1.1(a)(i), and any and
all replacements, substitutions and renewals thereof.
"Notice of Borrowing" means a notice given by any Borrower to Agent in
accordance with Section 2.7, substantially in the form of Exhibit F, with
appropriate insertions.
"Notice of Conversion/Continuation" means a notice given by any
Borrower to Agent in accordance with Section 2.8, substantially in the form of
Exhibit G, with appropriate insertions.
"Obligations" means, with respect to any Borrower, all loans, advances,
liabilities and obligations for monetary amounts owing by such Borrower to any
Lender or Agent, whether due or to become due, matured or unmatured, liquidated
or unliquidated, contingent or non-contingent, and all covenants and duties
regarding such amounts, of any kind or nature, arising under any of the Loan
Documents. This term includes, without limitation, all principal, interest
(including interest that accrues after the commencement of a case or proceeding
against such Borrower under the Bankruptcy Code), fees, including, without
limitation, any and all prepayment fees, facility fees, commitment fees,
arrangement fees, agent fees and attorneys' fees and any and all other fees,
expenses, costs or other sums chargeable to such Borrower under any of the Loan
Documents.
"Operating Agreement" means the Fifth Amended and Restated Operating
Agreement of Income Fund I, entered into as of January 24, 1995.
"Opinion of Counsel" means the favorable written legal opinion of ▇▇▇▇▇
▇▇▇▇▇, general counsel of FSI, on behalf of FSI for itself and as the sole
general partner or managing member, as applicable, of each Borrower,
substantially in the form of Exhibit D.
"Other Taxes" has the meaning set forth in Section 2.14.2.
"Overadvance" has the meaning set forth in Sections 2.1.1(a)(iii) and
(iv).
"Owner Trustee" means any Person acting in the capacity of (a) a
trustee for any owner trust or (b) a nominee entity, in each case holding title
to any Eligible Inventory pursuant to a trust or similar agreement with any
Borrower or FSI.
"PBGC" means the Pension Benefit Guaranty Corporation and any successor
thereto.
"Pension Plan" means, with respect to any Borrower, any employee
pension benefit plan, as defined in Section 3(2) of ERISA, that is maintained
for the employees of such Borrower, FSI or any of FSI's Subsidiaries or any
ERISA Affiliate of such Borrower, FSI or any of FSI's Subsidiaries, other than a
Multiemployer Plan.
"Permitted Liens" has the meaning set forth in Section 6.1.
"Permitted Rights of Others" means, as to any Property in which a
Person has an interest, (a) an option or right to acquire a Lien that would be a
Permitted Lien, (b) the reversionary interest of a lessor under a lease of such
Property and (c) an option or right of the lessee under a lease of such Property
to purchase such property at fair market value.
"Person" means any individual, sole proprietorship, partnership, joint
venture, limited liability company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or Governmental Authority.
"PLMI" means PLM International, Inc., a Delaware corporation.
"Potential Event of Default" means a condition or event which, after
notice or lapse of time or both, will constitute an Event of Default.
"Prepayment Date" has the meaning set forth in Section 2.2.2.
"Prime Rate" means, at any time, the rate of interest per annum
publicly announced from time to time by FUNB as its prime rate. Each change in
the Prime Rate shall be effective as of the opening of business on the day such
change in the Prime Rate occurs. The parties hereto acknowledge that the rate
announced publicly by FUNB as its Prime Rate is an index or base rate and shall
not necessarily be its lowest rate charged to FUNB's customers or other banks.
"Prime Rate Loan" means any borrowing which bears interest at a rate
determined with reference to the Prime Rate.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, whether tangible or intangible.
"Pro Rata Share" means, for any Lender, the proportion such Lender's
Commitment with respect to the Facility has to the aggregate of all Commitments
with respect to the Facility.
"Public Utility Holding Company Act" means the Public Utility Holding
Company Act of 1935, as amended (15 U.S.C. ss. 79 et seq.) as the same shall be
in effect from time to time, and any successor statute thereto.
"Railcar" means all railroad rolling stock, including, without
limitation, all coal, timber, plastic pellet, tank, ▇▇▇▇▇▇, flat and box cars
and locomotives.
"Reaffirmation of Guaranty" means the Acknowledgement and Reaffirmation
of Guaranty, dated as of November 3, 1997, executed by each of FSI and PMI in
favor of Lenders reaffirming its obligations under its respective Guaranty.
"Regulations G, T, U and X" means, collectively, Regulations G, T, U
and X adopted by the Federal Reserve Board (12 C.F.R. Parts 207, 220, 221 and
224, respectively) and any other regulation in substance substituted therefor.
"Requesting Borrower" means any Borrower requesting a Loan pursuant to
Section 2.1.1.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule, regulation, guideline or determination of an arbitrator
or of a Governmental Authority, in each case applicable to or binding upon the
Person or any of its property or to which the Person or any of its property is
subject.
"Requisite Lenders" means any combination of Lenders whose combined Pro
Rata Share (and voting interest with respect thereto) of all amounts outstanding
under this Agreement, or, in the event there are no amounts outstanding, the
Commitments, is greater than sixty-six and two-thirds percent (66 2/3%) of all
such amounts outstanding or the total Commitments, as the case may be; provided,
however, that in the event there are only two (2) Lenders, Requisite Lenders
means both Lenders.
"Responsible Officer" means for (i) FSI, any of the President,
Executive Vice President, Chief Financial Officer, Secretary or Corporate
Controller of FSI having authority to request Advances or perform other duties
required hereunder, and (ii) Borrowers, any of the President, Executive Vice
President, Chief Financial Officer, Secretary or Corporate Controller of FSI as
the sole general partner of EGF V, EGF VI or EGF VII, as the case may be, or
sole manager of Income Fund I, in each case having authority to request Advances
or perform other duties required hereunder
"SEC" means the Securities and Exchange Commission and any successor
thereto.
"Solvent" means, as to any Person at any time, that (a) the fair value
of the Property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code; (b) the present fair saleable value of the
Property in an orderly liquidation of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its debts
as they become absolute and matured; (c) such Person is able to realize upon its
Property and pay its debts and other liabilities (including disputed, contingent
and unliquidated liabilities) as they mature in the normal course of business;
(d) such Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature; and (e) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person's property would constitute unreasonably small capital.
"Subsidiary" means, with respect to any Person, any corporation,
association, partnership, limited liability company or other business entity
(other than Equipment Growth Funds) of which an aggregate of fifty percent
(50.0%) or more of the beneficial interest (in the case of a partnership) or
fifty percent (50%) or more of the outstanding stock, units or other voting
interest having ordinary voting power to elect a majority of the directors,
managers or trustees of such Person (irrespective of whether, at the time, the
stock, units or other voting interest of any other class or classes of such
Person shall have or might have voting power by reason of the happening of any
contingency) is at the time, directly or indirectly, owned legally or
beneficially by such Person and/or one or more Subsidiaries of such Person.
"Taxes" has the meaning set forth in Section 2.14.1.
"TEC" means PLM Transportation Equipment Corporation, a California
corporation and a wholly-owned Subsidiary of FSI.
"TEC AcquiSub" means TEC AcquiSub, Inc., a California special purpose
corporation and a wholly-owned Subsidiary of TEC.
"TEC AcquiSub Agreement" means the Second Amended and Restated
Warehousing Credit Agreement dated as of November 3, 1997, by and among TEC
AcquiSub, Lenders and Agent, and as the same may from time to time be further
amended, modified, supplemented, renewed, extended or restated.
"Termination Event" means, with respect to any Borrower, (a) a
"reportable event" described in Section 4043 of ERISA and the regulations issued
thereunder (other than a reportable event not subject to the provision for
30-day notice to the PBGC under such regulations), or (b) the withdrawal of such
Borrower, FSI or any of FSI's Subsidiaries or any of their ERISA Affiliates from
a Pension Plan during a plan year in which any of them was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA, or (c) the filing of a
notice of intent to terminate a Pension Plan or the treatment of a Pension Plan
amendment as a termination under Section 4041 of ERISA, or (d) the institution
of proceedings to terminate a Pension Plan by the PBGC, or (e) any other event
or condition which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan.
"Trailer" means (a) vehicles having a minimum length of twenty (20)
feet used in trailer or freight car service and constructed for the transport of
commodities or containers from point to point and (b) associated equipment.
"UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of North Carolina; provided, however, in the
event that, by reason of mandatory provisions of law, any and all of the
attachment, perfection or priority of the Lien of Agent, on behalf of Lenders,
in and to any collateral is governed by the Uniform Commercial Code as in effect
in a jurisdiction other than the State of North Carolina, the term "UCC" shall
mean the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such attachment, perfection or
priority and for purposes of definitions related to such provisions.
"Utilization Leases" means Leases for Equipment held for lease in
pooling or similar arrangements where the actual rental payments under such
Lease is based on and for the actual period of utilization of such item of
Equipment rather than the Lease term.
1.2 Accounting Terms. Any accounting term used in this Agreement shall
have, unless otherwise specifically provided herein, the meaning customarily
given such term in accordance with GAAP, and all financial data required to be
submitted by this Agreement shall be prepared and computed, unless otherwise
specifically provided herein, in accordance with GAAP. That certain terms or
computations are explicitly modified by the phrase "in accordance with GAAP"
shall in no way be construed to limit the foregoing. In the event that GAAP
changes during the term of this Agreement such that the covenants contained in
Section 7 would then be calculated in a different manner or with different
components, (a) the parties hereto agree to amend this Agreement in such
respects as are necessary to conform those covenants as criteria for evaluating
each Borrower's financial condition to substantially the same criteria as were
effective prior to such change in GAAP and (b) each Borrower shall be deemed to
be in compliance with the covenants contained in the aforesaid subsections
during the sixty (60) day period following any such change in GAAP if and to the
extent that each Borrower would have been in compliance therewith under GAAP as
in effect immediately prior to such change.
1.3 Other Terms. All other undefined terms contained in this Agreement
shall, unless the context indicates otherwise, have the meanings provided for by
the UCC to the extent the same are used or defined therein. The words "herein,"
"hereof" and "hereunder" and other words of similar import refer to this
Agreement as a whole, including the Exhibits and Schedules hereto, all of which
are by this reference incorporated into this Agreement, as the same may from
time to time be amended, modified or supplemented, and not to any particular
section, subsection or clause contained in this Agreement. The term "including"
shall not be limiting or exclusive, unless specifically indicated to the
contrary. The term "or" is disjunctive; the term "and" is conjunctive. The term
"shall" is mandatory; the term "may" is permissive. Wherever from the context it
appears appropriate, each term stated in either the singular or plural shall
include the singular and plural, and pronouns stated in the masculine, feminine
or neuter gender shall include the masculine, feminine and the neuter.
1.4 Schedules And Exhibits. Any reference to a "Section," "Subsection,"
"Exhibit," or "Schedule" shall refer to the relevant Section or Subsection of or
Exhibit or Schedule to this Agreement, unless specifically indicated to the
contrary.
SECTION 2. AMOUNT AND TERMS OF CREDIT.
2.1 Commitment To Lend.
2.1.1 Revolving Facility. Subject to the terms and conditions
of this Agreement and in reliance upon the representations and warranties of
Borrowers set forth herein, Lenders hereby agree to make Advances (as defined
below) of immediately available funds to Borrowers, on a revolving basis, from
the Closing Date until the Business Day immediately preceding the Commitment
Termination Date, in the aggregate principal amount outstanding at any time not
to exceed the lesser of (a the total Commitments for the Facility less the
aggregate principal amount then outstanding under the TEC AcquiSub Agreement and
under the AFG Agreement or (b) for any one Borrower, its respective Borrowing
Base, or (c) $35,000,000 (such lesser amount being the "Maximum Availability"),
as more fully set forth in this Section 2.1.1. The obligation of Borrowers to
repay the Advances made to any Borrower shall be several but not joint.
(a) Facility Commitments.
(i) On the Funding Date requested by any Borrower (the "Requesting
Borrower"), after such Borrower shall have satisfied all applicable conditions
precedent set forth in Section 3, each Lender shall advance immediately
available funds to Agent (each such advance being an "Advance") evidencing such
Lender's Pro Rata Share of a loan ("Loan"). Agent shall immediately advance such
immediately available funds to such Borrower at the Designated Deposit Account
(or such other deposit account at FUNB or such other financial institution as to
which such Borrower and Agent shall agree at least three (3) Business Days prior
to the requested Funding Date) on the Funding Date with respect to such Loan.
The Requesting Borrower shall pay interest accrued on the Loan at the rates and
in the manner set forth in Section 2.1.1(b). Subject to the terms and conditions
of this Agreement, the unpaid principal amount of each Loan and all unpaid
interest accrued thereon, together with all other fees, expenses, costs and
other sums chargeable to the Requesting Borrower incurred in connection
therewith shall be due and payable no later than the Maturity Date of such Loan.
Each Loan advanced hereunder by each Lender shall be evidenced by the Requesting
Borrower's revolving promissory note substantially in the form of Exhibit A
(each a "Note").
(ii) The obligation of Lenders to make any Loan from time to time
hereunder shall be limited to the then applicable Maximum Availability. For the
purpose of determining the amount of the Borrowing Base available at any one
time, the amount available shall be the total amount of the Borrowing Base as
set forth in the Borrowing Base Certificate delivered to Agent pursuant to
Section 3.2.1 with respect to such requested Loan. Nothing contained in this
Agreement shall under any circumstance be deemed to require any Lender to make
any Advance under the Facility which, in the aggregate principal amount, either
(1) taking into account such Lender's portion of the principal amounts
outstanding under this Agreement and the making of such Advance, exceeds the
lesser of (A) such Lender's Commitment for the Facility and (B) such Lender's
Pro Rata Share of the Requesting Borrower's Borrowing Base, or (2) taking into
account such Lender's portion of the aggregate principal amounts outstanding
under this Agreement, under the TEC AcquiSub Agreement, under the AFG Agreement
and the making of such Advance, exceeds such Lender's Commitment for the
Facility.
If at any time and for any reason the aggregate principal amount of the
Loan(s) then outstanding to any Borrower shall exceed the Maximum
Availability for such Borrower (the amount of such excess, if any,
being an "Overadvance"), such Borrower shall immediately repay the full
amount of such Overadvance, together with all interest accrued thereon;
provided, however, that if such Overadvance occurs solely as a result
of a decrease in the amount of the Borrowing Base due solely to a
decrease in the computation of the Borrowing Base under clause (b), as
set forth on a Borrowing Base Certificate delivered to Agent pursuant
to Section 5.1.3, then, to the extent of such decrease, such Borrower
shall not be required under this Section 2.1.1(a)(iii) to prepay such
Overadvance but Lenders shall have no obligation to make or fund any
Loans hereunder so long as such Overadvance condition shall remain in
effect.
Amounts borrowed by Borrowers under this Facility may be repaid and,
prior to the Commitment Termination Date and subject to the applicable terms and
conditions precedent to borrowings hereunder, reborrowed; provided, however,
that no Loan shall have a Maturity Date which is later than the Commitment
Termination Date and no LIBOR Loan shall have an Interest Period ending after
the Maturity Date.
Each request for a Loan hereunder shall constitute a reaffirmation by
the Requesting Borrower and the Responsible Officer requesting the same
that the representations and warranties contained in this Agreement are
true, correct and complete in all material respects to the same extent
as though made on and as of the date of the request, except to the
extent such representations and warranties specifically relate to an
earlier date, in which event they shall be true, correct and complete
in all material respects as of such earlier date.
(b) Each Loan. Each Loan made by Lenders hereunder shall, at the
Requesting Borrower's option in accordance with the terms of this Agreement, be
either in the form of a Prime Rate Loan or a LIBOR Loan. Subject to the terms
and conditions of this Agreement, each Loan shall bear interest on the sum of
the unpaid principal balance thereof outstanding on each day from the date when
made, continued or converted until such Loan shall have been fully repaid at a
rate per annum equal to the Prime Rate, as the same may fluctuate on a daily
basis, or the Adjusted LIBOR, as the case may be, plus the Applicable Margin.
Interest on each Loan funded hereunder shall be due and payable by the
Requesting Borrower in arrears on each Interest Payment Date, with all accrued
but unpaid interest on such Loan being due and payable on the date such Loan is
repaid, whether by prepayment or at maturity, and with all accrued but unpaid
interest being due and payable by the Requesting Borrower on the Maturity Date
for such Loan.
Each Advance made by a Lender as part of a Loan hereunder and all
repayments of principal with respect to such Advance shall be evidenced by
notations made by such Lender on the books and records of such Lender; provided,
however, that the failure by such Lender to make such notations shall not limit
or otherwise affect the obligations of any Borrower with respect to the
repayments of principal or payments of interest on any Advance or Loan. The
aggregate unpaid amount of each Advance set forth on the books and records of a
Lender shall be presumptive evidence of such Lender's Pro Rata Share of the
principal amount owing and unpaid by any Borrower under its Note.
2.1.2 Funding. Promptly following the receipt of such documents
required pursuant to Section 3.2.1 and approval of a Loan by the Agent, Agent
shall notify by telephone, telecopier, facsimile or telex each Lender of the (a)
Requesting Borrower, (b) the principal amount (including Lender's Pro Rata Share
thereof) and (c) Funding Date of the Loan requested by such Requesting Borrower.
Not later than 1:00 p.m., North Carolina time, on the Funding Date for any Loan,
each Lender shall make an Advance to Agent for the account of Requesting
Borrower in the amount of its Pro Rata Share of the Loan being requested. Upon
satisfaction of the applicable conditions precedent set forth in Section 3, all
Advances shall be credited in immediately available funds to the Designated
Deposit Account.
2.1.3 Utilization Of The Loans. The Loans made under the Facility may
be used solely for the purpose of acquiring the specific items of Equipment.
2.2 Repayment And Prepayment.
2.2.1 Repayment. Unless prepaid pursuant to Section 2.2.2, the
principal amount of each Loan hereunder made to a Requesting Borrower shall be
repaid by the Requesting Borrower to Lenders not later than the Maturity Date of
such Loan.
2.2.2 Voluntary Prepayment. Subject to Section 2.18, any Borrower may
in the ordinary course of such Borrower's business, upon at least three (3)
Business Days' written notice, or telephonic notice promptly confirmed in
writing to Agent, which notice shall be irrevocable, prepay any Loan in whole or
in part. Such notice of prepayment shall specify the date and amount of such
prepayment and whether such prepayment is of Prime Rate Loans or LIBOR Loans, or
any combination thereof. Such prepayment of Loans, together with any amounts
required pursuant to Section 2.18, shall be in immediately available funds and
delivered to Agent not later than 1:00 p.m., North Carolina time, on the date
for prepayment stated in such notice (the "Prepayment Date"). With respect to
any prepayment under this Section 2.2.2, all interest on the amount prepaid
accrued up to but excluding the date of such prepayment shall be due and payable
on the Prepayment Date.
2.2.3 Mandatory Prepayments.
(a) In the event that any item of Eligible Inventory shall be sold or
assigned by any Borrower or any Marine Subsidiary of such Borrower, or the
ownership interests (whether Stock or otherwise) of any Borrower in any Marine
Subsidiary of such Borrower owning record or beneficial title to any item of
Eligible Inventory shall be sold or transferred, then such Borrower shall
immediately prepay the Loan made with respect to such Eligible Inventory so sold
or assigned or with respect to the Eligible Inventory owned by such Marine
Subsidiary so sold or transferred, together with any accrued interest on such
Loan to the date of prepayment and any amounts required pursuant to Section
2.18. The sale or assignment of Eligible Inventory by an Owner Trustee, or the
sale or assignment of any Borrower's or any Marine Subsidiary's beneficial
interest in any owner trust (or nominee entity) holding title to Eligible
Inventory, shall be considered a sale or assignment, as the case may be, of such
Eligible Inventory by such Borrower or such Marine Subsidiary, as the case may
be.
(b) In the event that any of the Eligible Inventory shall have
sustained a Casualty Loss, the applicable Borrower shall promptly notify Agent
and Lenders of such Casualty Loss and make arrangements reasonably acceptable to
the Agent to cause any and all cash proceeds received by such Borrower to be
paid to Lenders as a prepayment hereunder. To the extent not so prepaid, the
Loan funded with respect to such Eligible Inventory will nevertheless be paid by
such Borrower as provided in Section 2.2.1.
2.3 Calculation Of Interest; Post-Maturity Interest. Interest on the
Loans shall be computed on the basis of a 365/366-day year for all Prime Rate
Loans and a 360-day year for all LIBOR Loans and the actual number of days
elapsed in the period during which such interest accrues. In computing interest
on any Loan, the date of the making of such Loan shall be included and the date
of payment shall be excluded. Each change in the interest rate of Prime Rate
Loans based on changes in the Prime Rate and each change in the Adjusted LIBOR
based on changes in the Eurodollar Reserve Percentage shall be effective on the
effective date of such change and to the extent of such change. Agent shall give
Borrowers notice of any such change in the Prime Rate; provided, however, that
any failure by Agent to provide Borrowers with notice hereunder shall not affect
Agent's right to make changes in the interest rate of any Loan based on changes
in the Prime Rate. Upon the occurrence and during the continuation of any Event
of Default under this Agreement, Advances under this Agreement will, at the
option of Requisite Lenders, bear interest at a rate per annum which is
determined by adding two percent (2.00%) to the Applicable Margin for such Loan
(the "Default Rate"). This may result in the compounding of interest. The
imposition of a Default Rate will not constitute a waiver of any Event of
Default.
2.4 Manner Of Payments. All repayments or prepayments of principal and
all payments of interest, fees, costs, expenses and other sums chargeable to
Borrowers under this Agreement, the Notes or any of the other Loan Documents
shall be in lawful money of the United States of America in immediately
available funds and delivered to Agent, for the account of Lenders, not later
than 1:00 p.m., North Carolina time, on the date due at First Union National
Bank of North Carolina, One First Union Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, or such other place
as shall have been designated in writing by Agent.
2.5 Payment On Non-Business Days. Whenever any payment to be made under
this Agreement, the Note or any of the other Loan Documents shall be stated to
be due on a day which is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall in such case be
included in the computation of the payment of interest thereon; provided,
however, that no Loan shall have remained outstanding after the Maturity Date of
such Loan.
2.6 Application Of Payments. All payments to or for the benefit of
Lenders hereunder shall be applied to the Obligations of any Borrower making
payment in the following order: (a) then due and payable fees as set forth in
Section 2.1.1(a)(i) and, at the direction of such Borrower or upon prior notice
given to such Borrower by Agent, other then due and payable fees, expenses and
costs; (b) then due and payable interest payments and mandatory prepayments; and
(c) then due and payable principal payments and optional prepayments; provided
that if an Event of Default shall have occurred and be continuing, Lenders shall
have the exclusive right to apply any and all such payments against the then due
and owing Obligations of such Borrower as Lenders may deem advisable. To the
extent any Borrower fails to make payment required hereunder or under any of the
other Loan Documents, each Lender is authorized to, and at its sole option may,
make such payments on behalf of such Borrower. To the extent permitted by law,
all amounts advanced by any Lender hereunder or under other provisions of the
Loan Documents shall accrue interest at the same rate as Loans hereunder.
s2.7 Procedure For The Borrowing Of Loans.
2.7.1 Notice Of Borrowing. Each borrowing of Loans shall be made upon
any Requesting Borrower's irrevocable written notice delivered to Agent in the
form of a Notice of Borrowing, executed by a Responsible Person of such
Requesting Borrower, with appropriate insertions (which Notice of Borrowing must
be received by Lender prior to 12:00 noon, Charlotte, North Carolina time, three
(3) Business Days prior to the requested Funding Date) specifying:
(a) the amount of the requested borrowing, which, if a LIBOR Loan is
requested, shall be not less than One Million Dollars ($1,000,000);
(b) the requested Funding Date, which shall be a Business Day;
(c) whether the borrowing is to be comprised of one or more LIBOR Loans
or Prime Rate Loans; and
(d) the duration of the Interest Period applicable to any such LIBOR
Loans included in such Notice of Borrowing. If the Notice of Borrowing shall
fail to specify the duration of the Interest Period for any borrowing comprised
of LIBOR Loans, such Interest Period shall be three (3) months.
2.7.2 Unavailability Of LIBOR Loans. Unless Agent shall otherwise
consent, during the existence of an Event of Default or Potential Event of
Default, Borrowers may not elect to have a Loan made as a LIBOR Loan.
2.8 Conversion And Continuation Elections.
2.8.1 Election. Each Borrower may, upon irrevocable written notice to
Agent:
(a) elect to convert on any Business Day, any Prime Rate Loan (or any
portion thereof in an amount equal to at least One Million Dollars ($1,000,000))
into a LIBOR Loan; or
(b) elect to convert on any Interest Payment Date any LIBOR Loan
maturing on such Interest Payment Date (or any portion thereof) into a Prime
Rate Loan; or
(c) elect to continue on any Interest Payment Date any LIBOR Loan
maturing on such Interest Payment Date (or any portion thereof in an amount
equal to at least One Million Dollars ($1,000,000));
provided, that if the aggregate amount of LIBOR Loans outstanding to such
Borrower shall have been reduced, by payment, prepayment, or conversion of
portion thereof, to be less than $1,000,000, such LIBOR Loans shall
automatically convert into Prime Rate Loans, and on and after such date the
right of such Borrower to continue such Loans as, and convert such Loans into,
LIBOR Loans shall terminate.
2.8.2 Notice Of Conversion. Each conversion or continuation of Loans
shall be made upon any Borrower's irrevocable written notice delivered to Agent
in the form of a Notice of Conversion/Continuation, executed by a Responsible
Person of such Borrower, with appropriate insertions (which Notice of
Conversion/Continuation must be received by Lender prior to 12:00 noon,
Charlotte, North Carolina time, at least three (3) Business Days in advance of
the proposed conversion date or continuation date specifying:
(a) the proposed conversion date or continuation date;
(b) the aggregate amount of Loans to be converted or continued;
(c) the nature of the proposed conversion or continuation; and
(d) the duration of the requested Interest Period.
2.8.3 Interest Period. If upon the expiration of any Interest Period
applicable to any LIBOR Loan, the Requesting Borrower has failed to select a new
Interest Period to be applicable to such LIBOR Loan, such Borrower shall be
deemed to have elected to convert such LIBOR Loan into a Prime Rate Loan
effective as of the last day of such current Interest Period.
2.8.4 Unavailability Of LIBOR Loans. Unless Agent shall otherwise
consent, during the existence of an Event of Default or Potential Event of
Default, Borrowers may not elect to have a Loan converted into or continued as a
LIBOR Loan.
2.9 Discretion Of Lenders As To Manner Of Funding2.9 Discretion Of
Lenders As To Manner Of Funding. Notwithstanding any provision of this Agreement
to the contrary, each Lender shall be entitled to fund and maintain its funding
of all or any part of its LIBOR Loans in any manner it elects, it being
understood, however, that for the purposes of this Agreement all determinations
hereunder shall be made as if such Lender actually funded and maintained each
LIBOR Loan through the purchase of deposits having a maturity corresponding to
the maturity of the LIBOR Loan and bearing an interest rate equal to the LIBOR
rate (whether or not, in any instance, Lender shall have granted any
participations in such Loan). Each Lender may, if it so elects, fulfill any
commitment to make LIBOR Loans by causing a foreign branch or affiliate to make
or continue such LIBOR Loans; provided, however, that in such event such Loans
shall be deemed for the purposes of this Agreement to have been made by such
Lender, and the obligation of Borrowers to repay such Loans shall nevertheless
be to such Lender and shall be deemed held by such Lender, to the extent of such
Loans, for the account of such branch or affiliate.
2.10 Distribution Of Payments2.10 Distribution Of Payments. Agent shall
immediately distribute to each Lender, at such address as each Lender shall
designate, its respective interest in all repayments and prepayments of
principal and all payments of interest and all fees, expenses and costs received
by Agent on the same day and in the same type of funds as payment was received.
In the event Agent does not distribute such payments on the same day received,
if such payments are received by Agent by 1:00 p.m., North Carolina time, or if
received after such time, on the next succeeding Business Day, such payment
shall accrue interest at the Federal Funds Rate.
2.11 Agent's Right To Assume Funds Available For Advances2.11 Agent's
Right To Assume Funds Available For Advances. Unless Agent shall have been
notified by any Lender no later than the Business Day prior to the respective
Funding Date of a Loan that such Lender does not intend to make available to
Agent an Advance in immediately available funds equal to such Lender's Pro Rata
Share of the total principal amount of such Loan, Agent may assume that such
Lender has made such Advance to Agent on the date of the Loan and Agent may, in
reliance upon such assumption, make available to the Requesting Borrower a
corresponding Advance. If Agent has made funds available to such Borrower based
on such assumption and such Advance is not in fact made to Agent by such Lender,
Agent shall be entitled to recover the corresponding amount of such Advance on
demand from such Lender. If such Lender does not promptly pay such corresponding
amount upon Agent's demand, Agent shall notify such Requesting Borrower and such
Requesting Borrower shall repay such Advance to Agent. Agent also shall be
entitled to recover from such Lender interest on such Advance in respect of each
day from the date such Advance was made by Agent to such Requesting Borrower to
the date such corresponding amount is recovered by Agent at the Federal Funds
Rate. Nothing in this Section 2.11 shall be deemed to relieve any Lender from
its obligation to fulfill its Commitment or to prejudice any rights which Agent
or such Requesting Borrower may have against such Lender as a result of any
default by such Lender under this Agreement.
2.12 Agent's Right To Assume Payments Will Be Made By Borrower2.12
Agent's Right To Assume Payments Will Be Made By Borrower. Unless Agent shall
have been notified by any Borrower prior to the date on which any payment to be
made by such Borrower hereunder is due that such Borrower does not intend to
remit such payment, Agent may, in its sole discretion, assume that such Borrower
has remitted such payment when so due and Agent may, in its sole discretion and
in reliance upon such assumption, make available to each Lender on such payment
date an amount equal to such Lender's Pro Rata Share of such assumed payment. If
such Borrower has not in fact remitted such payment to Agent, each Lender shall
forthwith on demand repay to Agent the amount of such assumed payment made
available to such Lender, together with interest thereon in respect of each date
from and including the date such amount was made available by Agent to such
Lender to the date such amount is repaid to Agent at the Federal Funds Rate.
2.13 Capital Requirements. If any Lender determines that compliance
with any law or regulation or with any guideline or request from any central
bank or other Governmental Authority (whether or not having the force of law)
has or would have the effect of reducing the rate of return on the capital of
such Lender or any corporation controlling such Lender as a consequence of, or
with reference to, such Lender's Commitment or its making or maintaining its Pro
Rata Share of the Loans below the rate which such Lender or such other
corporation could have achieved but for such compliance (taking into account the
policies of such Lender or corporation with regard to capital), then each
Borrower shall, from time to time, upon written demand by such Lender (with a
copy of such demand to Agent), immediately pay to such Lender (a) such
additional amounts as shall be sufficient to compensate such Lender or other
corporation for such reduction resulting from such Borrower's Loans or (b) in
the case where such reduction results from compliance with any such law,
regulation, guideline or request affecting only the Commitments and not the
Loans, such additional amounts as shall be sufficient to compensate such Lender
or other corporation for such reduction based on each Borrower's percentage of
average usage of the Commitments versus the total average usage by all
Borrowers. A certificate submitted by such Lender to any Borrower, stating that
the amounts set forth as payable to such Lender are true and correct, shall be
conclusive and binding for all purposes, absent manifest error. Each Lender
agrees promptly to notify effected Borrowers and Agent of any circumstances that
would cause any Borrower to pay additional amounts pursuant to this section,
provided that the failure to give such notice shall not affect Borrowers'
obligation to pay any such additional amounts.
2.14 Taxes.
2.14.1 No Deductions. Subject to Subsection 2.14.7, any and all
payments by each Borrower to each Lender or Agent under this Agreement shall be
made free and clear of, and without deduction or withholding for, any and all
present or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding, in the case of each Lender
and Agent, such taxes (including income taxes or franchise taxes) as are imposed
on or measured by each Lender's net income (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as "Taxes").
2.14.2 Miscellaneous Taxes. In addition, Borrowers shall pay any
present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise with respect to,
this Agreement or any other Loan Documents (hereinafter referred to as "Other
Taxes").
2.14.3 Indemnity. Subject to Subsection 2.14.7, each Borrower shall
indemnify and hold harmless each Lender and Agent for the full amount of Taxes
or Other Taxes (including any Taxes or Other Taxes imposed by any jurisdiction
on amounts payable under this Section 2.14) paid by such Lender or Agent in
relation to any payments made by or Obligations of such Borrower and any
liability (including penalties, interest, additions to tax and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. Payment under this indemnification shall be made
within thirty (30) days from the date any Lender or Agent makes written demand
therefor.
2.14.4 Required Deductions. If any Borrower shall be required by law to
deduct or withhold any Taxes or Other Taxes from or in respect of any sum
payable hereunder to any Lender or Agent, then, subject to Subsection 2.14.7:
(a) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 2.14) such Lender or Agent, as the case may be,
receives an amount equal to the sum it would have received had no such
deductions been made;
(b) such Borrower shall make such deductions, and
(c) such Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
2.14.5 Evidence of Payment. Within thirty (30) days after the date of
any payment by any Borrower of Taxes or Other Taxes, such Borrower shall furnish
to Agent the original or a certified copy of a receipt evidencing payment
thereof, or other evidence of payment satisfactory to Agent.
2.14.6 Foreign Persons. Each Lender which is a foreign person (i.e., a
person other than a United States person for United States Federal income tax
purposes) shall:
(a) No later than the date upon which such Lender becomes a party
hereto deliver to Borrowers through Agent two (2) accurate and complete signed
originals of IRS Form 4224 or any successor thereto ("Form 4224"), or two
accurate and complete signed originals of IRS Form 1001 or any successor thereto
("Form 1001"), as appropriate, in each case indicating that such Lender is on
the date of delivery thereof entitled to receive payments of principal, interest
and fees under this Agreement free from withholding of United States Federal
income tax;
(b) If at any time such Lender makes any changes necessitating a new
Form 4224 or Form 1001, with reasonable promptness deliver to Borrowers through
Agent in replacement for, or in addition to, the forms previously delivered by
it hereunder, two accurate and complete signed originals of Form 4224; or two
accurate and complete signed originals of Form 1001, as appropriate, in each
case indicating that the Lender is on the date of delivery thereof entitled to
receive payments of principal, interest and fees under this Agreement free from
withholding of United States Federal income tax;
(c) Before or promptly after the occurrence of any event (including the
passing of time but excluding any event mentioned in (ii) above) requiring a
change in or renewal of the most recent Form 4224 or Form 1001 previously
delivered by such Lender, deliver to Borrowers through Agent two accurate and
complete original signed copies of Form 4224 or Form 1001 in replacement for the
forms previously delivered by the Lender; and
(d) Promptly upon any Borrower's or Agent's reasonable request to that
effect, deliver to such Borrower or Agent (as the case may be) such other forms
or similar documentation as may be required from time to time by any applicable
law, treaty, rule or regulation in order to establish such Lender's tax status
for withholding purposes.
2.14.7 Income Taxes. Borrowers will not be required to pay any
additional amounts in respect of United States Federal income tax pursuant to
Subsection 2.14.4 to Lender for the account of any Lending Office of such
Lender:
(a) If the obligation to pay such additional amounts would not have
arisen but for a failure by such Lender to comply with its obligations under
Subsection 2.14.6 in respect of such Lending Office;
(b) If such Lender shall have delivered to Borrowers a Form 4224 in
respect of such Lending Office pursuant to Subsection 2.14.6 and such Lender
shall not at any time be entitled to exemption from deduction or withholding of
United States Federal income tax in respect of payments by Borrowers hereunder
for the account of such Lending Office for any reason other than a change in
United States law or regulations or in the official interpretation of such law
or regulations by any Governmental Authority charged with the interpretation or
administration thereof (whether or not having the force of law) after the date
of delivery of such Form 4224; or
(c) If such Lender shall have delivered to Borrowers a Form 1001 in
respect of such Lending Office pursuant to Subsection 2.14.6, and such Lender
shall not at any time be entitled to exemption from deduction or withholding of
United States Federal income tax in respect of payments by Borrowers hereunder
for the account of such Lending Office for any reason other than a change in
United States law or regulations or any applicable tax treaty or regulations or
in the official interpretation of any such law, treaty or regulations by any
Governmental Authority charged with the interpretation or administration thereof
(whether or not having the force of law) after the date of delivery of such Form
1001.
2.14.8 Reimbursement Of Costs. If, at any time, any Borrower requests
any Lender to deliver any forms or other documentation pursuant to Subsection
2.14.6(a), then such Borrower shall, on demand of such Lender through Agent,
reimburse such Lender for any costs and expenses (including reasonable attorney
fees) reasonably incurred by such Lender in the preparation or delivery of such
forms or other documentation.
2.14.9 Jurisdiction. If any Borrower is required to pay additional
amounts to any Lender or Agent pursuant to Subsection 2.14.4, then such Lender
shall use its reasonable good faith efforts (consistent with legal and
regulatory restrictions) to change the jurisdiction of its Lending Office so as
to eliminate any such additional payment by such Borrower which may thereafter
accrue if such change, in the judgment of such Lender, is not otherwise
disadvantageous to such Lender.
2.15 Illegality.
2.15.1 LIBOR Loans. If any Lender shall determine that the introduction
of any Requirement of Law, or any change in any Requirement of Law or in the
interpretation or administration thereof, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for such Lender or its Lending Office to make LIBOR Loans, then, on notice
thereof by Lender to the Requesting Borrower, the obligation of such Lender to
make LIBOR Loans shall be suspended until such Lender shall have notified the
Requesting Borrower that the circumstances giving rise to such determination no
longer exists.
2.15.2 Prepayment. If a Lender shall determine that it is unlawful to
maintain any LIBOR Loan, Borrowers shall prepay in full all LIBOR Loans of such
Lender then outstanding, together with interest accrued thereon, either on the
last day of the Interest Period thereof if such Lender may lawfully continue to
maintain such LIBOR Loans to such day, or immediately, if such Lender may not
lawfully continue to maintain such LIBOR Loans, together with any amounts
required to be paid in connection therewith pursuant to Section 2.18.
2.15.3 Prime Rate Borrowing. If any Borrower is required to prepay any
LIBOR Loan immediately as provided in Section 2.2.3, then concurrently with such
prepayment, such Borrower shall borrow, in the amount of such prepayment, a
Prime Rate Loan.
2.16 Increased Costs. If any Lender shall determine that, due to either
(a) the introduction of or any change (other than any change by way of
imposition of or increase in reserve requirements included in the calculation of
the LIBOR) in or in the interpretation of any Requirement of Law or (b) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to such Lender of agreeing to make or making, funding
or maintaining any LIBOR Loans, then Borrowers shall be liable on a joint and
several basis for, and shall from time to time, upon demand therefor by such
Lender, pay to such Lender such additional amounts as are sufficient to
compensate such Lender for such increased costs.
2.17 Inability To Determine Rates. If Agent shall have determined that
for any reason adequate and reasonable means do not exist for ascertaining the
LIBOR for any requested Interest Period with respect to a proposed LIBOR Loan or
that the LIBOR applicable for any requested Interest Period with respect to a
proposed LIBOR Loan does not adequately and fairly reflect the cost to Lenders
of funding such Loan, Agent will forthwith give notice of such determination to
Borrowers and each Lender. Thereafter, the obligation of Lenders to make or
maintain LIBOR Loans, as the case may be, hereunder shall be suspended until
Agent, upon instruction from Requisite Lenders, revokes such notice in writing.
Upon receipt of such notice, Borrowers may revoke any Notice of Borrowing or
Notice of Conversion/Continuation then submitted. If a Borrower does not revoke
such notice, Lenders shall make, convert or continue the Loans, as proposed by
such Borrower, in the amount specified in the applicable notice submitted by
such Borrower, but such Loans shall be made, converted or continued as Prime
Rate Loans instead of LIBOR Loans, as the case may be.
2.18 Prepayment Of LIBOR Loans. Each Borrower agrees, severally but not
jointly, that in the event that such Borrower prepays or is required to prepay
any LIBOR Loan by acceleration or otherwise or fails to draw down or convert to
a LIBOR Loan after giving notice thereof, it shall reimburse each Lender for its
funding losses due to such prepayment or failure to draw. Borrowers and Lenders
hereby agree that such funding losses shall consist of the sum of the discounted
monthly differences for each month during the applicable or requested Interest
Period, calculated as follows for each such month:
(a) Principal amount of such LIBOR Loan times (number of days between
the date of prepayment and the last day in the applicable Interest Period
divided by 360), times the applicable Interest Differential, plus
(b) all actual out-of-pocket expenses (other than those taken into
account in the calculation of the Interest Differential) incurred by Lenders and
Agent (excluding allocation of any expense internal to Lenders and Agent) and
reasonably attributable to such payment, prepayment or failure to draw down or
convert as described above; provided that no prepayment fee shall be payable
(and no credit or rebate shall be required) if the product of the foregoing
formula is not a positive number.
3. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS AGREEMENT AND THE MAKING
OF LOANS.
3.1 Effectiveness of This Agreement. The effectiveness of this
Agreement is subject to the satisfaction of the following conditions precedent:
3.1.1 Partnership, Company And Corporate Documents. Agent shall have
received, in form and substance satisfactory to Lenders and their respective
counsel a certified copy of the records of all actions taken by each Borrower,
FSI and PLMI, including all resolutions of each Borrower and corporate
resolutions of FSI and PLMI, authorizing or relating to the execution, delivery
and performance of this Agreement and the other Loan Documents and the
consummation of the transactions contemplated hereby and thereby.
3.1.2 Notes. Agent shall have received new Notes, in form and substance
satisfactory to Lenders, and duly executed and delivered by each Borrower, which
Notes shall replace and supersede the Notes issued by Borrowers to Agent
pursuant to the Growth Fund Agreement.
3.1.3 Opinion Of Counsel. Agent shall have received an originally
executed Opinion of Counsel, in form and substance satisfactory to Lenders,
dated as of the Closing Date and addressed to Lenders, together with copies of
any officer's certificate or legal opinion of other counsel or law firm
specifically identified and expressly relied upon by such counsel.
3.1.4 Reaffirmation of Guaranty. Agent shall have received the
Reaffirmation of Guaranty, in form and substance satisfactory to Lenders, duly
executed and delivered by PLMI.
3.1.5 TEC AcquiSub Amendment. Agent shall have received the TEC
AcquiSub Agreement, duly executed and delivered by TEC AcquiSub, and all
conditions precedent to the effectiveness of the TEC AcquiSub Agreement shall
have been satisfied.
3.1.6 AFG Agreement. Agent shall have received the AFG Agreement, duly
executed and delivered by AFG, and all conditions precedent to the effectiveness
of the AFG Agreement shall have been satisfied.
3.1.7 Bringdown Certificate. Separate certificates, dated as of the
Closing Date, of the Chief Financial Officer or Corporate Controller of FSI, in
its capacity as the sole general partner of EGF V, EGF VI and EGF VII and as the
sole manager of Income Fund I, to the effect that (i) the representations and
warranties of each Borrower contained in Section 4 are true, accurate and
complete in all material respects as of the Closing Date as though made on such
date and (ii) no Event of Default or Potential Event of Default under this
Agreement has occurred.
3.1.8 Fees. Agent shall have received the Agent's Side Letter and BMO
shall have received the Lender's Side Letter, each duly executed by Borrowers,
TEC AcquiSub and AFG, and Agent and BMO shall have received the fees described
in the Agent's Side Letter and Lender's Side Letter, respectively.
3.1.9 Other Documents. Agent shall have received such other documents,
information and items from Borrowers and FSI as reasonably requested by Agent.
3.2 All Loans3.2 All Loans. Unless waived in writing by Requisite Lenders, the
obligation of any Lender to make any Advance is subject to the satisfaction of
the following further conditions precedent:
3.2.1 Notice Of Borrowing. At least three (3) Business Days before each
Loan hereunder with respect to any acquisition of Equipment by any Borrower,
Agent shall have received (i) Notice of Borrowing and (ii) a Borrowing Base
Certificate, with appropriate insertions, executed by the Chief Financial
Officer or Corporate Controller of such Borrower.
3.2.2 No Event Of Default. No event shall have occurred and be
continuing or would result from the making of any Loan on such Funding Date
which constitutes an Event of Default or Potential Event of Default under this
Agreement or under (and as separately defined in) the TEC AcquiSub Agreement or
under (and as separately defined in) the AFG Agreement, or which with notice or
lapse of time or both would constitute an Event of Default or Potential Event of
Default under this Agreement or under the TEC AcquiSub Agreement or the AFG
Agreement.
3.2.3 Representations And Warranties. All representations and
warranties contained in the Loan Documents shall be true, accurate and complete
in all material respects with the same effect as though such representations and
warranties had been made on and as of such Funding Date (except to the extent
such representations and warranties specifically relate to an earlier date, in
which case they shall be true, accurate and complete in all material respects as
of such earlier date).
3.2.4 Insurance. The insurance required to be maintained by such
Borrower pursuant to the Loan Documents shall be in full force and effect.
3.2.5 Other Instruments. Agent shall have received such other
instruments and documents as it may have reasonably requested from Borrowers in
connection with the Loans to be made on such date.
3.3 Further Conditions To All Loans. Notwithstanding anything to the
contrary contained in this Agreement, unless waived in writing by Requisite
Lenders, no Lender shall have any obligation hereunder to make any Advance if
any of the following events shall occur:
3.3.1 General Partner Or Manager. FSI shall have ceased to be the sole
general partner of any of EGF V, EGF VI or EGF VII or the sole manager of Income
Fund I, whether due to the voluntary or involuntary withdrawal, substitution,
removal or transfer of FSI from or of all or any portion of FSI's general
partnership interest or capital contribution in such Borrower.
3.3.2 Removal Of General Partner Or Manager. Twenty five percent
(25.0%) or more of the limited partners (measured by such partners' percentage
interest) of any Equipment Growth Fund shall at any time vote to remove FSI as
the general partner of such Equipment Growth Fund or a majority in interest of
Class A members, as that term is defined in the Operating Agreement, of Income
Fund I shall at any time vote to remove FSI as manager of Income Fund I, in each
case, regardless of whether FSI is actually removed.
3.3.3 Purchaser. Requesting Borrower, TEC AcquiSub, FSI or their
Subsidiaries shall have ceased to be the purchaser of Eligible Inventory for
such Requesting Borrower.
4. BORROWERS' AND FSI'S REPRESENTATIONS AND WARRANTIES.
4.1 General Representations And Warranties. Each Borrower, severally,
as to itself, but not jointly as to the other Borrowers and FSI, and FSI,
jointly and severally with each Borrower as to each such Borrower and as to
itself, hereby warrant and represent to Agent and each Lender as follows, and
agree that each of said warranties and representations shall be deemed to
continue until full, complete and indefeasible payment and performance of the
Obligations and shall apply anew to each borrowing hereunder:
4.1.1 Existence And Power. Each Borrower is a limited partnership or,
in the case of Income Fund I, a limited liability company, and FSI is a
corporation, each duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization and is duly qualified and
licensed as a foreign corporation, partnership or limited liability company, as
applicable, and authorized to do business in each jurisdiction within the United
States where its ownership of Property and assets or conduct of business
requires such qualification. Each Borrower and FSI has the power and authority,
rights and franchises to own their Property and assets and to carry on their
businesses as now conducted. Each Borrower and FSI has the power and authority
to execute and deliver the Loan Documents (to the extent each is a party
thereto) and all other instruments and documents contemplated hereby or thereby.
4.1.2 Loan Documents And Notes Authorized; Binding Obligations. The
execution, delivery and performance of this Agreement and each of the other Loan
Documents to which any Borrower is a party and delivery and payment of such
Borrower's respective Note have been duly authorized by all necessary and proper
action on the part of such Borrower. The execution, delivery and performance of
this Agreement and each of the other Loan Documents to which FSI is a party have
been duly authorized by all necessary and proper corporate action on the part of
FSI. The Loan Documents constitute legally valid and binding obligations of each
Borrower and FSI, as the case may be, enforceable against each Borrower and FSI,
to the extent any one of them is a party thereto, in accordance with their
respective terms, except as enforcement thereof may be limited by bankruptcy,
insolvency or other laws affecting the enforcement of creditors' rights
generally.
4.1.3 No Conflict; Legal Compliance. (a) The execution, delivery and
performance of this Agreement, and each of the other Loan Documents and the
execution, delivery and payment of the Notes will not: (i) contravene any
provision of FSI's certificate of incorporation or bylaws; (ii) contravene any
provision of any Borrowers' Limited Partnership Agreements or, in the case of
Income Fund I, Operating Agreement or other formation or organization document;
or (iii) contravene, conflict with or violate any applicable law or regulation,
or any order, writ, judgment, injunction, decree, determination or award of any
Governmental Authority, which contravention, conflict or violation, in the
aggregate, may have Material Adverse Effect; and (b) the execution and delivery
of this Agreement, and each of the other Loan Documents and the execution and
delivery of the Notes will not violate or result in the breach of, or constitute
a default under any indenture or other loan or credit agreement, or other
agreement or instrument which are, in the aggregate, material and to which any
Borrower or FSI is a party or by which any Borrower, FSI or their Property and
assets may be bound or affected. Neither any Borrower nor FSI is in violation or
breach of or default under any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or any contract, agreement, lease,
license, indenture or other instrument to which any one of them is a party, the
non-compliance with, the violation or breach of or the default under which
would, with reasonable likelihood, have a Material Adverse Effect.
4.1.4 Financial Condition. Each Borrower's and FSI's audited
consolidated financial statements as of December 31, 1996 and Borrowers' and
FSI's unaudited consolidated financial statements as of June 30, 1997, copies of
which heretofore have been delivered to Agent by such Borrower and FSI,
respectively, and all other financial statements and other data submitted in
writing by any Borrower and FSI to Agent or any Lender in connection with the
request for credit granted by this Agreement, are true, accurate and complete in
all material respects, and said financial statements and other data fairly
present the consolidated financial condition of such Borrower and FSI, as of the
date thereof, and have been prepared in accordance with GAAP, subject to fiscal
year-end audit adjustments. There has been no material adverse change in the
business, properties or assets, operations, prospects, profitability or
financial or other condition of any Borrower or FSI since December 31, 1996.
4.1.5 Executive Offices. The current location of each Borrower's and
FSI's chief executive offices and principal places of business is set forth on
Schedule 4.1.5.
4.1.6 Litigation. Except as disclosed on Schedule 4.1.6, there are no
claims, actions, suits, proceedings or other litigation pending or, to the best
of each Borrower's and FSI's knowledge, after due inquiry, threatened against
any Borrower, FSI or any of FSI's Subsidiaries, including, without limitation,
TEC AcquiSub, at law or in equity before any Governmental Authority or, to the
best of each Borrower's and FSI's knowledge, after due inquiry, any
investigation by any Governmental Authority of any Borrower's or FSI's or any of
FSI's Subsidiaries', including, without limitation, TEC AcquiSub's, affairs,
Properties or assets which would, with reasonable likelihood, if adversely
determined, have a Material Adverse Effect. Other than any liability incident to
the litigation or proceedings disclosed on Schedule 4.1.6, neither any Borrower,
nor FSI nor any of FSI's Subsidiaries, including, without limitation, TEC
AcquiSub, has any Contingent Obligations which are not provided for or disclosed
in the financial statements delivered to Agent pursuant to Sections 4.1.4 and
5.1.
4.1.7 Material Contracts. Schedule 4.1.7 lists all currently effective
contracts and agreements (whether written or oral) to which each Borrower is a
party and which (i) could involve the payment or receipt by such Borrower after
the date of this Agreement of more than $250,000 or (ii) otherwise materially
affect the business, operations or financial condition of any Borrower (the
"Material Contracts"). Except as disclosed on Schedule 4.1.7, there are no
material defaults under any such Material Contract by any Borrower, to the best
of each Borrower's knowledge, by any other party to any such Material Contract.
Each Borrower has delivered to Agent true and correct copies of all such
contracts or agreements (or, with respect to oral contracts or agreements,
written descriptions of the material terms thereof).
4.1.8 Consents And Approvals. Except as set forth in Schedule 4.1.8,
all consents and approvals of, filings and registrations with, and other actions
in respect of, all Governmental Authorities required to be obtained by any
Borrower, FSI or any of FSI's Subsidiaries in order to make or consummate the
transactions contemplated under the Loan Documents have been, or prior to the
time when required will have been, obtained, given, filed or taken and are or
will be in full force and effect.
4.1.9 Other Agreements. Neither any Borrower, FSI nor any of FSI's
Subsidiaries, including, without limitation, TEC AcquiSub, is a party to or is
bound by any agreement, contract, lease, license or instrument, or is subject to
any restriction under its respective charter or formation documents, which has,
or is likely in the foreseeable future to have, a Material Adverse Effect.
Neither any Borrower nor FSI has entered into and, as of the Closing Date does
not contemplate entering into, any material agreement or contract with any
Affiliate of any Borrower or FSI on terms that are less favorable to such
Borrower or FSI than those that might be obtained at the time from Persons who
are not such Affiliates.
4.1.10 Employment And Labor Agreements. There are no collective
bargaining agreements or other labor agreements covering any employees of any
Borrower, FSI or any of FSI's Subsidiaries.
4.1.11 ERISA. No Borrower has an Employee Benefit Plan subject to
ERISA. All Pension Plans of FSI and any of FSI's Subsidiaries, that are intended
to be qualified under Section 401(a) of the Code have been determined by the IRS
to be qualified or FSI or any of FSI's Subsidiaries will obtain such
determination prior to instituting such a Pension Plan. All Pension Plans
existing as of the date hereof continue to be so qualified. No "reportable event
(as defined in Section 4043 of ERISA) has occurred and is continuing with
respect to any Pension Plan for which the thirty-day notice requirement may not
be waived other than those of which the appropriate Governmental Authority has
been notified. All Employee Benefit Plans of FSI or any of FSI's Subsidiaries
have been operated in all material respects in accordance with their terms and
applicable law, including ERISA, and no "prohibited transaction" (as defined in
ERISA and the Code) that would result in any material liability to FSI or any of
FSI's Subsidiaries has occurred with respect to any such Employee Benefit Plan.
4.1.12 Labor Matters. There are no strikes or other labor disputes
against any Borrower, FSI or any of FSI's Subsidiaries or, to the best of each
Borrower's and FSI's knowledge, after due inquiry, threatened against any
Borrower, FSI or any of FSI's Subsidiaries, which would, with reasonable
likelihood, have a Material Adverse Effect. All payments due from any Borrower
or FSI on account of employee health and welfare insurance which would, with
reasonable likelihood, have a Material Adverse Effect if not paid have been paid
or, if not due, accrued as a liability on the books of such Borrower or FSI.
4.1.13 Margin Regulations. Neither any Borrower nor FSI own any "margin
security", as that term is defined in Regulations G and U of the Federal Reserve
Board, and the proceeds of the Loans under this Agreement will be used only for
the purposes contemplated hereunder. None of the Loans will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin security, for
the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry any margin security or for any other purpose which
might cause any of the Loans under this Agreement to be considered a "purpose
credit" within the meaning of Regulations G, T, U and X. Neither any Borrower
nor FSI will take or permit any agent acting on its behalf to take any action
which might cause this Agreement or any document or instrument delivered
pursuant hereto to violate any regulation of the Federal Reserve Board.
4.1.14 Taxes. All federal, state, local and foreign tax returns,
reports and statements required to be filed by any Borrower, FSI and, to the
best of each Borrower's and FSI's knowledge, after due inquiry, by any of FSI's
Subsidiaries have been filed with the appropriate Governmental Authorities where
failure to file would, with reasonable likelihood, have a Material Adverse
Effect, and all material Charges and other impositions shown thereon to be due
and payable by any Borrower, FSI or such Subsidiary have been paid prior to the
date on which any fine, penalty, interest or late charge may be added thereto
for nonpayment thereof, or any such fine, penalty, interest, late charge or loss
has been paid, or such Borrower, FSI or such Subsidiary is contesting its
liability therefore in good faith and has fully reserved all such amounts
according to GAAP in the financial statements provided to Agent pursuant to
Section 5.1. Each Borrower, FSI and, to the best of each Borrower's and FSI's
knowledge, after due inquiry, each of FSI's Subsidiaries has paid when due and
payable all material Charges upon the books of any Borrower, FSI or such
Subsidiary and no Government Authority has asserted any Lien against any
Borrower, FSI or any of FSI's Subsidiaries with respect to unpaid Charges.
Proper and accurate amounts have been withheld by each Borrower, FSI and, to the
best of each Borrower's and FSI's knowledge, after due inquiry, each of FSI's
Subsidiaries from its employees for all periods in full and complete compliance
with the tax, social security and unemployment withholding provisions of
applicable federal, state, local and foreign law and such withholdings have been
timely paid to the respective Governmental Authorities.
4.1.15 Environmental Quality.
(a) Except as specifically disclosed in Schedule 4.1.15, the on-going
operations of each Borrower, FSI and each of FSI's Subsidiaries comply in all
material respects with all Environmental Laws, except such non-compliance which
would not (if enforced in accordance with applicable law) result in liability in
excess of $250,000 in the aggregate.
(b) Except as specifically disclosed in Schedule 4.1.15, each Borrower,
FSI and each of FSI's Subsidiaries has obtained all licenses, permits,
authorizations and registrations required under any Environmental Law
("Environmental Permits") and necessary for its ordinary course operations, all
such Environmental Permits are in good standing, and each Borrower, FSI and each
of FSI's Subsidiaries is in compliance with all material terms and conditions of
such Environmental
Permits.
(c) Except as specifically disclosed in Schedule 4.1.15, neither any
Borrower, FSI or any of FSI's Subsidiaries nor any of their respective present
Property or operations is subject to any outstanding written order from or
agreement with any Governmental Authority nor subject to any judicial or
docketed administrative proceeding, respecting any Environmental Law,
Environmental Claim or Hazardous Material.
(d) Except as specifically disclosed in Schedule 4.1.15, there are no
Hazardous Materials or other conditions or circumstances existing with respect
to any Property, or arising from operations prior to the Closing Date, of any
Borrower, FSI or any of FSI's Subsidiaries that would reasonably be expected to
give rise to Environmental Claims with a potential liability of any Borrower,
FSI or any of FSI's Subsidiaries in excess of $250,000 in the aggregate for any
such condition, circumstance or Property.
4.1.16 Trademarks, Patents, Copyrights, Franchises And Licenses. Each
Borrower and FSI and, to the best of their knowledge, after due inquiry, each of
FSI's Subsidiaries possess and owns all necessary trademarks, trade names,
copyrights, patents, patent rights, franchises and licenses which are material
to the conduct of their business as now operated.
4.1.17 Full Disclosure. As of the Closing Date, no information
contained in this Agreement, the other Loan Documents or any other documents or
written materials furnished by or on behalf of any Borrower or FSI to Agent or
any Lender pursuant to the terms of this Agreement or any of the other Loan
Documents contains any untrue or inaccurate statement of a material fact or
omits to state a material fact necessary to make the statement contained herein
or therein not misleading in light of the circumstances under which made.
4.1.18 Other Regulations. Neither any Borrower nor FSI is: (a) a
"public utility company" or a "holding company," or an "affiliate" or a
"subsidiary company" of a "holding company," or an "affiliate" of such a
"subsidiary company," as such terms are defined in the Public Utility Holding
Company Act or (b) an "investment company," or an "affiliated person" of, or a
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act. The making of the Loans
hereunder and the application of the proceeds and repayment thereof by each
Borrower and the performance of the transactions contemplated by this Agreement
and the other Loan Documents will not violate any provision of the Investment
Company Act or the Public Utility Holding Company Act, or any rule, regulation
or order issued by the SEC thereunder.
4.1.19 Solvency. Each Borrower and FSI are Solvent.
4.2 Representations And Warranties At Time Of First Advance4.2
Representations And Warranties At Time Of First Advance. At the time any
Borrower makes a request for an initial borrowing hereunder, each such Borrower,
severally, as to itself, but not jointly as to the other Borrowers and FSI, and
FSI, jointly and severally with each Borrower as to each such Borrower and as to
itself, hereby warrant and represent to Agent and each Lender as follows, and
agree that each of said warranties and representations shall be deemed to
continue until full, complete and indefeasible payment and performance of the
Obligations and shall apply anew to each additional borrowing hereunder:
4.2.1 Power And Authority. Each Borrower and FSI has the power and
authority to perform the terms of the Loan Documents (to the extent each is a
party thereto) and all other instruments and documents contemplated hereby or
thereby.
4.2.2 No Conflict. The performance of this Agreement, and each of the
other Loan Documents and the payment of the Notes will not violate or result in
the breach of, or constitute a default under any indenture or other loan or
credit agreement, or other agreement or instrument which are, in the aggregate,
material and to which any Borrower or FSI is a party or by which any Borrower,
FSI or their Property and assets may be bound or affected.
4.2.3 Consents And Approvals. No approval, authorization or consent of
any trustee or holder of any indebtedness or obligation of any Borrower or FSI
or of any other Person under any such material agreement, contract, lease or
license or similar document or instrument to which such Borrower, FSI or any of
FSI's Subsidiaries is a party or by which such Borrower, FSI or any such
Subsidiary is bound, is required to be obtained by any such Borrower, FSI or any
such Subsidiary in order to make or consummate the transactions contemplated
under the Loan Documents.
4.3 Survival Of Representations And Warranties. So long as any of the
Commitments shall be available and until payment and performance in full of the
Obligations, the representations and warranties contained herein shall have a
continuing effect as having been true when made.
5. BORROWERS' AND FSI'S AFFIRMATIVE COVENANTS.
Each Borrower, severally, as to itself, but not jointly as to the other
Borrowers and FSI, and FSI, jointly and severally with each Borrower as to each
Borrower and as to itself (and, where applicable, PLMI) covenant and agree that,
so long as any of the Commitments shall be available and until full, complete
and indefeasible payment and performance of the Obligations, unless Requisite
Lenders shall otherwise consent in writing, each Borrower and FSI shall do or
cause to have done all of the following:
5.1 Records And Reports. Maintain, and cause each of FSI's Subsidiaries
to maintain, a system of accounting administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP, and deliver to Agent or caused to be delivered to Agent:
5.1.1 Quarterly Statements. As soon as practicable and in any event
within sixty (60) days after the end of each quarterly accounting period of each
Borrower, FSI and PLMI, except with respect to the final fiscal quarter of each
fiscal year, in which case as soon as practicable and in any event within one
hundred twenty (120) days after the end of such fiscal quarter, consolidated and
consolidating balance sheets of FSI and PLMI and a balance sheet of each
Borrower as at the end of such period and the related consolidated (and, as to
statements of income only for FSI, consolidating) statements of income and
stockholders' or members' equity of each Borrower and FSI and the related
consolidated statements of income, stockholders' or members' equity and cash
flows of PLMI (and, as to statements of income only, consolidating) for such
quarterly accounting period, setting forth in each case in comparative form the
consolidated figures for the corresponding periods of the previous year, all in
reasonable detail and certified by the Chief Financial Officer or Corporate
Controller of the general partner or manager of each Borrower, as applicable,
FSI and PLMI that they (i) are complete and fairly present the financial
condition of such Borrower, FSI and PLMI as at the dates indicated and the
results of their operations and changes in their cash flow for the periods
indicated, (ii) disclose all liabilities of each Borrower, FSI and PLMI that are
required to be reflected or reserved against under GAAP, whether liquidated or
unliquidated, fixed or contingent and (iii) have been prepared in accordance
with GAAP, subject to changes resulting from audit and normal year-end
adjustment;
5.1.2 Annual Statements. As soon as practicable and in any event within
one hundred twenty (120) days after the end of each fiscal year of each Borrower
and PLMI, consolidated and consolidating balance sheets of PLMI and a balance
sheet of each Borrower as at the end of such year and the related consolidated
(and, as to statements of income only for PLMI, consolidating) statements of
income, stockholders' or members' equity and cash flows of each Borrower, if
applicable, and PLMI for such fiscal year, setting forth in each case, in
comparative form the consolidated figures for the previous year, all in
reasonable detail and (i) in the case of such consolidated financial statements,
accompanied by a report thereon of an independent public accountant of
recognized national standing selected by each Borrower and PLMI and satisfactory
to Agent, which report shall contain an opinion which is not qualified in any
manner or which otherwise is satisfactory to Requisite Lenders, in their sole
discretion, and (ii) in the case of such consolidating financial statements,
certified by the Chief Financial Officer or Corporate Controller of PLMI;
5.1.3 Borrowing Base Certificate. As soon as practicable, and in any
event not later than fifteen (15) days after the end of each calendar month in
which a Loan has been, or is, outstanding, a Borrowing Base Certificate dated as
of the last day of such month, duly executed by a Chief Financial Officer or
Corporate Controller of the general partner or manager of each Borrower, with
appropriate insertions;
5.1.4 Compliance Certificate. As soon as practicable, and in any event
not later than forty-five (45) days after the end of each fiscal quarter of each
Borrower, a Compliance Certificate dated as of the last day of such fiscal
quarter, and executed by the Chief Financial Officer or Corporate Controller of
the general partner or manager of such Borrower, with appropriate insertions.
5.1.5 Reports. At Agent's request, promptly upon receipt thereof,
copies of all reports submitted to each Borrower, FSI or PLMI by independent
public accountants in connection with each annual, interim or special audit of
the financial statements of such Borrower, FSI or PLMI made by such accountants;
5.1.6 Insurance Reports. (i) On the date six months after the Closing
Date and thereafter upon Agent's reasonable request, which request will not be
made more than once during any calendar year (unless an Event of Default shall
have occurred and be continuing), a report from each Borrower's insurance
broker, in such detail as Agent may reasonably request, as to the insurance
maintained or caused to be maintained by each Borrower pursuant to this
Agreement, demonstrating compliance with the requirements hereof and thereof,
and (ii) as soon as possible and in no event later than fifteen (15) days prior
to the expiration date of any insurance policy of any Borrower, a written
confirmation that such policy is in process of renewal and is not terminated or
subject to a notice of non-renewal from such Borrower's insurance broker;
provided, however, that such Borrower shall give Agent prompt written notice if
changes affecting risk coverage will be made to such policy or if the policy
will be terminated;
5.1.7 Certificate Of Responsible Officer. Promptly upon any officer of
any Borrower or FSI obtaining knowledge (a) of any condition or event which
constitutes an Event of Default or Potential Event of Default under this
Agreement, (b) that any Person has given any notice to any Borrower, FSI, TEC,
TEC AcquiSub or PLMI or taken any other action with respect to a claimed default
or event or condition of the type referred to in Section 8.1.2, (c) of the
institution of any litigation or of the receipt of written notice from any
Governmental Authority as to the commencement of any formal investigation
involving an alleged or asserted liability of any Borrower, FSI, TEC, TEC
AcquiSub or PLMI equal to or greater than $500,000 or any adverse judgment in
any litigation involving a potential liability of any Borrower, FSI, TEC, TEC
AcquiSub or PLMI equal to or greater than $500,000, or (d) of a material adverse
change in the business, operations, properties, assets or condition (financial
or otherwise) of any Borrower, FSI, TEC, TEC AcquiSub or PLMI, a certificate of
a Responsible Officer of any Borrower or FSI, as applicable, specifying the
notice given or action taken by such Person and the nature of such claimed
default, Event of Default, Potential Event of Default, event or condition and
what action such Borrower, FSI, TEC, TEC AcquiSub or PLMI has taken, is taking
and proposes to take with respect thereto;
5.1.8 Employee Benefit Plans. Promptly upon becoming aware of the
occurrence of any (a) Termination Event in connection with any Pension Plan or
(b) "prohibited transaction" (as such term is defined in ERISA and the Code) in
connection with any Employee Benefit Plan or any trust created thereunder, a
written notice specifying the nature thereof, what action any Borrower or any of
its ERISA Affiliates has taken, is taking or proposes to take with respect
thereto, and, when known, any action taken or threatened by the IRS or the PBGC
with respect thereto;
5.1.9 ERISA Notices. With reasonable promptness, copies of (a) all
notices received by any Borrower, FSI, any of FSI's Subsidiaries or any of their
ERISA Affiliates of the PBGC's intent to terminate any Pension Plan or to have a
trustee appointed to administer any Pension Plan, (b) each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) filed by any Borrower, FSI,
any of FSI's Subsidiaries or any of their ERISA Affiliates with the IRS with
respect to each Pension Plan covering employees of any Borrower, FSI or any of
FSI's Subsidiaries, and (c) all notices received by any Borrower, FSI, any of
FSI's Subsidiaries or any of their ERISA Affiliates from a Multiemployer Plan
sponsor concerning the imposition or amount of withdrawal liability pursuant to
Section 4202 of ERISA;
5.1.10 Pension Plans. Promptly upon receipt by any Borrower, FSI or any
of FSI's Subsidiaries, any challenge by the IRS to the qualification under
Section 401 or 501 of the Code of any Pension Plan;
5.1.11 SEC Reports. As soon as available and in no event later than
five (5) days after the same shall have been filed with the SEC, a copy of each
Form 8-K Current Report, Form 10-K Annual Report, Form 10-Q Quarterly Report,
Annual Report to Shareholders, Proxy Statement and Registration Statement of any
Borrower and PLMI;
5.1.12 Tax Returns. Upon the request of Agent, copies of all federal,
state, local and foreign tax returns and reports in respect of income, franchise
or other taxes on or measured by income (excluding sales, use or like taxes)
filed by or on behalf of any Borrower and FSI; and
5.1.13 Additional Information. Such other information respecting the
condition or operations, financial or otherwise, of any Borrower and PLMI and
its Subsidiaries as Agent or any Lender may from time to time reasonably
request, and such information regarding the lessees under Leases as any Borrower
from time to time receives or Agent or any Lender reasonably requests.
All financial statements of Borrowers, FSI and PLMI to be delivered by
any Borrower and FSI to Agent pursuant to this Section 5.1 will be complete and
correct and present fairly the financial condition of each Borrower, FSI and
PLMI as of the date thereof; will disclose all liabilities of each Borrower, FSI
and PLMI that are required to be reflected or reserved against under GAAP,
whether liquidated or unliquidated, fixed or contingent; and will have been
prepared in accordance with GAAP. All tax returns submitted to Agent by
Borrowers and FSI will, to the best of each Borrower's and FSI's knowledge,
after due inquiry, be true and correct. Each Borrower and FSI hereby agree that
each time any one of them submits a financial statement or tax return to Agent,
such Borrower and FSI shall be deemed to represent and warrant to Lenders that
such financial statement or tax return complies with all of the preceding
requirements set forth in this paragraph.
5.2 Existence; Compliance With Law. Each Borrower and FSI shall
preserve and maintain, and FSI shall cause each of FSI's Subsidiaries,
including, without limitation, TEC AcquiSub, to preserve and maintain, their
existence and all of their licenses, permits, governmental approvals, rights,
privileges and franchises necessary or desirable in the normal conduct of their
businesses as now conducted or presently proposed to be conducted (including,
without limitation, their qualification to do business in each jurisdiction in
which such qualification is necessary or desirable in view of its business);
conduct, and cause each of FSI's Subsidiaries, including, without limitation,
TEC AcquiSub, and any Owner Trustee to conduct, its business in an orderly and
regular manner; and comply, and cause each of FSI's Subsidiaries, including,
without limitation, TEC AcquiSub, and any Owner Trustee, to comply, with (a) as
to any Borrower, its Limited Partnership Agreement, Operating Agreement and
other organizational documents, as applicable, and as to FSI and each of its
Subsidiaries, including, without limitation, TEC AcquiSub, the provisions of its
respective certificate or articles of incorporation, as applicable, and bylaws
and (b) the requirements of all applicable laws, rules, regulations or orders of
any Governmental Authority and requirements for the maintenance of any
Borrower's, FSI's or such Subsidiary's insurance, licenses, permits,
governmental approvals, rights, privileges and franchises, except, in either
case, to the extent that the failure to comply therewith would not, in the
aggregate, with reasonable likelihood, have a Material Adverse Effect.
5.3 Insurance. Each Borrower and FSI shall maintain and keep in force,
and cause each of FSI's Subsidiaries, including, without limitation, TEC
AcquiSub, to maintain and keep in force insurance of the types and in amounts
then customarily carried in lines of business similar to that of Borrowers, FSI
or any of FSI's Subsidiaries as the case may be, including, but not limited to,
fire, extended coverage, public liability, property damage, environmental hazard
and workers' compensation, in each case carried with financially sound Persons
and in amounts satisfactory to Requisite Lenders (subject to commercial
reasonableness as to each type of insurance); provided, however, that the types
and amounts of insurance shall not provide any less coverage for any Borrower
than provided as of the Closing Date by the existing blanket policies of
insurance for PLMI and its Subsidiaries. All such policies as to liability
insurance shall carry endorsements naming Agent and each Lender as an additional
insured and, upon the reasonable request of Agent, all such policies of property
insurance shall carry endorsements naming Agent as principal loss payee as to
any property owned by Borrowers and financed by Lenders, and in each case
indicating that (a) any loss thereunder shall be payable to Agent or Lenders, as
the case may be, notwithstanding any action, inaction or breach of
representation or warranty by any Borrower or FSI; (b) there shall be no
recourse against any Lender for payment of premiums or other amounts with
respect thereto, and (c) at least fifteen (15) days' prior written notice of
cancellation, lapse or material change in coverage shall be given to Agent by
the insurer.
5.4 Taxes And Other Liabilities. Promptly pay and discharge and cause
each of FSI's Subsidiaries, including, without limitation, TEC AcquiSub,
promptly to pay and discharge all material Charges when due and payable, except
(a) such as may be paid thereafter without penalty or (b) such as may be
contested in good faith by appropriate proceedings and for which an adequate
reserve has been established and is maintained in accordance with GAAP. Each
Borrower and FSI shall promptly notify Agent of any material challenge, contest
or proceeding pending by or against any Borrower, FSI and PLMI or any of FSI's
Subsidiaries before any taxing authority.
5.5 Inspection Rights; Assistance. At any reasonable time and from time
to time during normal business hours, permit Agent or any Lender or any agent,
representative or employee thereof, to examine and make copies of and abstracts
from the financial records and books of account of each Borrower, FSI or any of
FSI's Subsidiaries, including, without limitation, TEC AcquiSub, and other
documents in the possession or under the control of any Borrower, FSI or any of
FSI's Subsidiaries, including, without limitation, TEC AcquiSub, relating to any
obligation of any Borrower or FSI arising under or contemplated by this
Agreement and to visit the offices of any Borrower or FSI to discuss the
affairs, finances and accounts of any Borrower or FSI with any of the officers
of any Borrower or FSI, and, upon reasonable notice and during normal business
hours (unless an Event of Default or Potential Event of Default shall have
occurred and be continuing, in which event no notice is required), to conduct
audits of and appraise Equipment. Such audits and appraisals shall be subject to
the lessee's right to quiet enjoyment as set forth in the respective lease.
5.6 Maintenance Of Facilities; Modifications.
5.6.1 Maintenance Of Facilities. Each Borrower and FSI shall keep and
cause each of FSI's Subsidiaries, including, without limitation, TEC AcquiSub,
to keep, all of their respective Properties which are useful or necessary to
such Borrower's, FSI's or such Subsidiary's business, in good repair and
condition, normal wear and tear excepted, and from time to time make, and cause
each such Subsidiary to make necessary repairs thereto, and renewals and
replacements thereof so that each Borrower's, FSI's or such Subsidiary's
Properties shall be fully and efficiently preserved and maintained.
5.6.2 Certain Modifications To The Equipment. Subject to Section 5.6.1,
each Borrower and FSI shall promptly make, or cause to be made, all
modifications, additions and adjustments to the Eligible Inventory as may from
time to time be required by any Governmental Authority having jurisdiction over
the operation, safety or use thereof.
5.7 Supplemental Disclosure. From time to time as may be necessary (in
the event that such information is not otherwise delivered by Borrowers or FSI
to Agent or Lenders pursuant to this Agreement), so long as there are
Obligations outstanding hereunder, disclose to Agent in writing any material
matter hereafter arising which, if existing or occurring at the date of this
Agreement, would have been required to be set forth or described by any Borrower
or FSI in this Agreement or any of the other Loan Documents (including all
Schedules and Exhibits hereto or thereto) or which is necessary to correct any
information set forth or described by Borrowers or FSI hereunder or thereunder
or in connection herewith which has been rendered inaccurate thereby.
5.8 Further Assurances. In addition to the obligations and documents
which this Agreement expressly requires Borrowers or FSI to execute, deliver and
perform, each Borrower or FSI shall execute, deliver and perform, and shall
cause FSI's Subsidiaries to execute, deliver and perform, any and all further
acts or documents which Agent or Lenders may reasonably require to effectuate
the purposes of this Agreement or any of the other Loan Documents.
5.9 Lockbox. Each Borrower shall, unless otherwise directed in writing
by Agent, cause all remittances made by the obligor under any Lease to be made
to a lock box (the "Lockbox") maintained with FUNB pursuant to the Lockbox
Agreement. Unless otherwise directed by Agent in writing, all invoices and other
instructions submitted by any Borrower to the obligor relating to Lease payments
shall designate the Lockbox as the place to which such payments shall be made.
5.10 Environmental Laws. Each Borrower and FSI shall, and FSI shall
cause each of its Subsidiaries to, conduct its operations and keep and maintain
its Property in material compliance with all Environmental Laws.
SECTION 6. BORROWER'S AND FSI'S NEGATIVE COVENANTS.
So long as any of the Commitments shall be available and until full,
complete and indefeasible payment and performance of the Obligations, unless
Requisite Lenders shall otherwise consent in writing, each Borrower, severally,
as to itself, but not jointly as to the other Borrowers and FSI, and FSI,
jointly and severally with each Borrower as to such Borrower and to itself,
covenants and agrees as follows:
6.1 Liens; Negative Pledges; And Encumbrances. Each Borrower shall not
create, incur, assume or suffer to exist, and shall not permit any Marine
Subsidiary of such Borrower or Owner Trustee holding record title to any
Eligible Inventory for the beneficial interest of such Borrower to create,
incur, assume or suffer to exist, and FSI shall not permit any of its
Subsidiaries (including, without limitation, TEC and TEC AcquiSub) to create,
incur, assume or suffer to exist, any Lien of any nature upon or with respect to
any of their respective Property, whether now or hereafter owned, leased or
acquired, except (collectively, the "Permitted Liens"):
6.1.1 Existing Liens disclosed on Schedule 6.1, provided that the
obligations secured thereby are not increased;
6.1.2 Liens for Charges if payment shall not at the time be required to
be made in accordance with Section 5.4;
6.1.3 Liens in respect of pledges, obligations or deposits (a) under
workers' compensation laws, unemployment insurance and other types of social
security or similar legislation, (b) in connection with surety, appeal and
similar bonds incidental to the conduct of litigation, (c) in connection with
bid, performance or similar bonds and mechanics', laborers' and materialmen's
and similar statutory Liens not then delinquent, or (d) incidental to the
conduct of the business of such Borrower, any Marine Subsidiary of such
Borrower, or any Owner Trustee or any of FSI's Subsidiaries and which were not
incurred in connection with the borrowing of money or the obtaining of advances
or credit; provided that the Liens permitted by this Section 6.1.3 do not in the
aggregate materially detract from the value of any assets or property of or
materially impair the use thereof in the operation of the business of such
Borrower, any Owner Trustee or any of FSI's Subsidiaries; and provided further
that the adverse determination of any claim or liability, contingent or
otherwise, secured by any of such Liens would not either individually or in the
aggregate, with reasonable likelihood, have a Material Adverse Effect;
6.1.4 Permitted Rights of Others; and
6.1.5 Liens granted in favor of Agent on behalf of Lenders under the
TEC AcquiSub Agreement and the security agreement and other loan documents
delivered by TEC AcquiSub pursuant thereto.
6.2 Acquisitions. Each Borrower shall not, and shall not permit any
Marine Subsidiary of such Borrower to, and FSI shall not permit TEC and TEC
AcquiSub to, make any Acquisition or enter into any agreement to make any
Acquisition, other than with respect to the purchase of Equipment in the
ordinary course of business or the formation or acquisition of a Marine
Subsidiary.
6.3 Limitations On Indebtedness. Each Borrower shall not create, incur,
assume or suffer to exist, nor permit any Marine Subsidiary of such Borrower or
Owner Trustee holding record title to any Eligible Inventory for the beneficial
interest of such Borrower to create, incur, assume or suffer to exist, and FSI
shall not permit any of its Subsidiaries (including, without limitation, TEC and
TEC AcquiSub) to create, incur, assume or suffer to exist, any Indebtedness or
Contingent Obligation; provided, however, that this Section 6.3 shall not be
deemed to prohibit:
6.3.1 The Obligations to Lenders and Agent arising hereunder and under
the other Loan Documents;
6.3.2 Existing Indebtedness disclosed on Schedule 6.3(a) and
anticipated Indebtedness disclosed on Schedule 6.3(b);
6.3.3 Indebtedness of any Subsidiary of FSI, provided that such
Indebtedness is non-recourse as to FSI, TEC and TEC AcquiSub;
6.3.4 The acquisition of goods, supplies or merchandise on normal trade
credit;
6.3.5 The endorsement of negotiable instruments received in the
ordinary course of any Borrower's business as presently conducted;
6.3.6 Indebtedness incurred in respect of the deferred purchase price
for an item of Equipment, but only to the extent that the incurrence of such
Indebtedness is customary in the industry with respect to the purchase of this
type of equipment (provided that such Indebtedness shall only be permitted under
this Section 6.3.6 if, taking into account the incurrence of such Indebtedness,
the Borrower incurring such Indebtedness shall not be in violation of any of the
financial covenants set forth in Section 7 if measured as of the date of
incurrence as determined by GAAP); and
6.3.7 Any Guaranty Obligations of any Borrower in the form of
performance guaranties undertaken on behalf of a Marine Subsidiary of such
Borrower in favor of the charter party in connection with the leasing of a
marine vessel on a time charter;
6.4 Use Of Proceeds. Each Borrower and FSI shall not, and shall not
permit any Marine Subsidiary of such Borrower or Owner Trustee holding record
title to any Eligible Inventory for the beneficial interest of such Borrower or
FSI to, use the proceeds of any Loan except for the purpose set forth in Recital
C, above, and shall not, and shall not permit any such Marine Subsidiary or such
Owner Trustee to, use the proceeds to repay any loans or advances made by any
other Person.
6.5 Disposition Of Assets. Each Borrower and FSI shall not, and shall
not permit any Marine Subsidiary of such Borrower or any Owner Trustee holding
record title to any Eligible Inventory for the beneficial interest of such
Borrower or FSI to, sell, assign or otherwise dispose of, any of its or their
respective assets, except for full, fair and reasonable consideration, or enter
into any sale and leaseback agreement covering any of its or their respective
fixed or capital assets.
6.6 Restriction On Fundamental Changes. Each Borrower and FSI shall
not, and shall not permit any Marine Subsidiary of such Borrower to, enter into
any transaction of merger, consolidation or recapitalization, directly or
indirectly, whether by operation of law or otherwise, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease, assign, transfer or otherwise dispose of, in one transaction or a series
of transactions, all or any part of its business, Property or assets, whether
now owned or hereafter acquired, or acquire by purchase or otherwise all or
substantially all the business, Property or assets of, or stock or other
evidence of beneficial ownership of, any Person, except sales (a) of Equipment
in the ordinary course of business (for the purposes of this Section 6.6, with
respect to any Borrower and any Marine Subsidiary of such Borrower, ordinary
course of business shall refer to the business of the Equipment Growth Funds and
all Marine Subsidiaries, collectively) and (b) any Subsidiary of FSI (other than
TEC AcquiSub) may be merged or consolidated with or into FSI or any wholly-owned
Subsidiary of FSI, or be liquidated, wound up or dissolved, or all or
substantially all of its business, property or assets may be conveyed, sold,
leased, transferred or otherwise disposed of, in one transaction or a series of
transactions, to, FSI or any wholly-owned Subsidiary of FSI; provided that, in
the case of such a merger or consolidation, FSI or such wholly-owned Subsidiary
shall be the continuing or surviving corporation.
.6.7 Transactions With Affiliates. Each Borrower shall not, and shall
not permit any Marine Subsidiary of such Borrower to, directly or indirectly,
enter into or permit to exist any transaction (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any of its Affiliates on terms that are less favorable to such
Borrower or such Marine Subsidiary than those that might be obtained at the time
from Persons who are not such Affiliates.
6.8 Maintenance Of Business. Each Borrower shall not, and FSI shall not
permit any of its existing Subsidiaries to, engage in any business materially
different than the business currently engaged in by such Person.
6.9 No Distributions. Each Borrower shall not make, pay or set apart
any funds for the payment of distribution to its partners or members if such
distribution would cause or result in an Event of Default or Potential Event of
Default.
6.10 Events Of Default. Each Borrower and FSI shall not take or omit to
take any action, which act or omission would, with the lapse of time, or
otherwise constitute (a) a default, event of default or Event of Default under
any of the Loan Documents or (b) a default or an event of default under any
other material agreement, contract, lease, license, mortgage, deed of trust or
instrument to which either is a party or by which either or any of their
Properties or assets is bound, which default or event of default would, with
reasonable likelihood, have a Material Adverse Effect.
6.11 ERISA. If any Borrower or FSI or any of their ERISA Affiliates
incurs any obligation to contribute to any Pension Plan, then such Borrower or
FSI, as the case may be, shall not (a) terminate, or permit such ERISA Affiliate
to terminate, any Pension Plan so as to result in any liability that would, with
reasonable likelihood, have a Material Adverse Effect or (b) make or permit such
ERISA Affiliate to make a complete or partial withdrawal (within the meaning of
Section 4201 of ERISA) from any Multiemployer Plan so as to result in any
liability that would, with reasonable likelihood, have a Material Adverse
Effect.
6.12 No Use Of Any Lender's Name. Each Borrower and FSI shall not use
or authorize others to use any Lender's name or marks in any publication or
medium, including, without limitation, any prospectus, without such Lender's
advance written authorization.
6.13 Certain Accounting Changes. Each Borrower shall not change its
fiscal year end from December 31, nor make any change in its accounting
treatment and reporting practices except as permitted by GAAP; provided,
however, that should any Borrower change its accounting treatment or reporting
practices in a way that would cause a change in the calculation, or in the
results of a calculation, of any of the financial covenants set forth in Section
7, below, then such Borrower shall continue to calculate such covenants as if
such accounting treatment or reporting practice had not been changed unless
otherwise agreed to by Requisite Lenders.
6.14 Amendments Of Limited Partnership Or Operating Agreements. Each
Borrower shall not, shall not cause to occur and shall not permit any amendment,
modification or supplement of or to any of the terms or provisions of such
Borrower's Limited Partnership Agreement or, in the case of Income Fund I, its
Operating Agreement, which amendment, modification or supplement would affect,
limit or otherwise impair such Borrower's ability to pay the Obligations or
perform its obligations under this Agreement or any of the other Loan Documents.
SECTION 7. FINANCIAL COVENANTS OF BORROWER AND FSI.
Each Borrower, severally, as to itself, but not jointly as to the other
Borrowers and FSI, and FSI, jointly and severally with each Borrower as to each
Borrower and as to itself, covenant and agree that, so long as the Commitments
hereunder shall be available, and until full, complete and indefeasible payment
and performance of the Obligations, including, without limitation, all Loans
evidenced by the Notes, unless Requisite Lenders shall otherwise consent in
writing, Borrowers and FSI shall perform the following financial covenants. Each
Borrower and FSI agree and understand that (except as expressly provided herein)
all covenants under this Section 7 shall be subject to quarterly compliance or
compliance as of the date of any request for a Loan pursuant to Section 3.2.1
(as measured on the last day of each fiscal quarter of such Borrower, or FSI, as
the case may be, or as of the date of any request for a Loan pursuant to Section
3.2.1), and in each case review by Lenders of the respective fiscal quarter's
consolidated financial statements delivered to Agent by each Borrower and FSI
pursuant to Section 5.1; provided, however, that the following financial
covenants shall apply only as to those Borrowers requesting a Loan or as to
which a Loan remains outstanding.
7.1 Maximum Funded Debt Ratio. Each Borrower shall maintain a Funded
Debt Ratio of not greater than 0.5:1.0.
7.2 Minimum Debt Service Ratio. Each Borrower shall maintain a Debt
Service Ratio of not less than 1.75:1.0.
7.3 Cash Balances. The Equipment Growth Funds of which FSI is the sole
general partner shall maintain aggregate unrestricted cash balances of
$10,000,000.
SECTION 8. EVENTS OF DEFAULT AND REMEDIES.
8.1 Events Of Default. As to any Borrower, the occurrence of any one or
more of the following shall constitute an Event of Default for each such
Borrower individually:
8.1.1 Failure To Make Payments. Such Borrower, any Marine Subsidiary of
such Borrower or any Owner Trustee holding record title to any Eligible
Inventory for the beneficial interest of such Borrower or FSI fails to pay any
sum due to Lenders or Agent arising under this Agreement, the Note of such
Borrower or any of the other Loan Documents when and as the same shall become
due and payable, whether by acceleration or otherwise and such failure shall not
have been cured to Lenders' satisfaction within five (5) calendar days; or
8.1.2 Other Agreements. (a) Such Borrower, any Marine Subsidiary of
such Borrower, FSI, TEC, TEC AcquiSub or any Owner Trustee holding record title
to any Eligible Inventory for the beneficial interest of such Borrower defaults
in the repayment of any principal of or the payment of any interest on any
Indebtedness of such Borrower, any such Marine Subsidiary, FSI, TEC, TEC
AcquiSub or any such Owner Trustee, respectively, or breaches any term of any
evidence of such Indebtedness or defaults in any payment in respect of any
Contingent Obligation (excluding, as to FSI, any Contingent Obligation of FSI
arising solely as a result of FSI's status as a general partner of any Person
other than such Borrower), in each case exceeding, in the aggregate outstanding
principal amount, $2,000,000, or such Borrower, any Marine Subsidiary, FSI, TEC,
TEC AcquiSub or any Owner Trustee breaches or violates any term or provision of
any evidence of such Indebtedness or Contingent Obligation or of any such loan
agreement, mortgage, indenture, guaranty or other agreement relating thereto if
the effect of such breach is to permit acceleration under the applicable
instrument, loan agreement, mortgage, indenture, guaranty or other agreement and
such failure shall not have been cured within the applicable cure period, or
there is an acceleration under the applicable instrument, loan agreement,
mortgage, indenture, guaranty or other agreement; or (b) PLMI defaults in the
repayment of any principal of or the payment of any interest on any Indebtedness
or defaults in any payment in respect of any Contingent Obligation, in each case
exceeding, in the aggregate outstanding principal amount, $2,000,000, or PLMI
breaches or violates any term or provision of any evidence of such Indebtedness
or Contingent Obligation or of any such loan agreement, mortgage, indenture,
guaranty or other agreement relating thereto with the result that such
Indebtedness or Contingent Obligation becomes or is caused to become then due
and payable in its entirety, whether by acceleration of otherwise; or
8.1.3 Breach Of Covenants. Such Borrower or FSI fails or neglects to
perform, keep or observe any of the covenants contained in Sections 2.1.3, 5.2,
5.3, 5.9, 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9 or 6.13, or any of the
financial covenants contained in Section 7 of this Agreement; or
8.1.4 Breach Of Representations Or Warranties. Any representation or
warranty made by or on behalf of such Borrower or FSI in this Agreement or any
statement or certificate at any time given in writing pursuant hereto or in
connection herewith shall be false, misleading or incomplete in any material
respect when made; or
8.1.5 Failure To Cure. Except as provided in Sections 8.1.1 and 8.1.3,
such Borrower, FSI or any Marine Subsidiary of such Borrower or Owner Trustee
holding record title to any Eligible Inventory for the beneficial interest of
such Borrower or FSI fails or neglects to perform, keep or observe any covenant
or provision of this Agreement or of any of the other Loan Documents or any
other document or agreement executed by such Borrower, FSI or any Marine
Subsidiary of such Borrower or Owner Trustee holding record title to any
Eligible Inventory for the beneficial interest of such Borrower or FSI in
connection therewith and the same has not been cured to Requisite Lenders'
satisfaction within thirty (30) calendar days after such Borrower, FSI or any
Marine Subsidiary of such Borrower or Owner Trustee holding record title to any
Eligible Inventory for the beneficial interest of such Borrower or FSI shall
become aware thereof, whether by written notice from Agent or any Lender or
otherwise; or
8.1.6 Insolvency. Such Borrower, any Marine Subsidiary of such
Borrower, TEC AcquiSub, any other Borrower (but only for so long as Obligations
of such other Borrower remain or Commitments to such other Borrower are
available under this Agreement), FSI, TEC, PLMI or any Owner Trustee holding
record title to any Eligible Inventory for the beneficial interest of such
Borrower or FSI or any other guarantor of any of such Borrower's or FSI's
obligations to Lenders shall (a) cease to be Solvent, (b) admit in writing its
inability to pay its debts as they mature, (c) make an assignment for the
benefit of creditors, (d) apply for or consent to the appointment of a receiver,
liquidator, custodian or trustee for it or for a substantial part of its
Properties or business, or such a receiver, liquidator, custodian or trustee
otherwise shall be appointed and shall not be discharged within sixty (60) days
after such appointment; or
8.1.7 Bankruptcy Proceedings. Bankruptcy, insolvency, reorganization or
liquidation proceedings or other proceedings for relief under any bankruptcy law
or any law for the relief of debtors shall be instituted by or against such
Borrower, any Marine Subsidiary of such Borrower, TEC AcquiSub, any other
Borrower (but only for so long as Obligations of such other Borrower remain or
Commitments to such other Borrower are available under this Agreement), FSI,
TEC, PLMI or any Owner Trustee holding record title to any Eligible Inventory
for the beneficial interest of such Borrower or FSI or any other guarantor of
any of such Borrower's or FSI's obligations to Lenders or any order, judgment or
decree shall be entered against such Borrower, any Marine Subsidiary of such
Borrower, TEC AcquiSub, any other Borrower (but only for so long as Obligations
of such other Borrower remain or Commitments to such other Borrower are
available under this Agreement), FSI, TEC, PLMI or any Owner Trustee holding
record title to any Eligible Inventory for the beneficial interest of such
Borrower or FSI or any other guarantor of any of such Borrower's or FSI's
obligations to Lenders decreeing its dissolution or division; provided, however,
with respect to an involuntary petition in bankruptcy, such petition shall not
have been dismissed within sixty (60) days after the filing of such petition; or
8.1.8 Material Adverse Effect. There shall have been a change in the
assets, liabilities, financial condition, operations, affairs or prospects of
such Borrower, any Marine Subsidiary of such Borrower, TEC AcquiSub, FSI, TEC,
PLMI or any Owner Trustee holding record title to any Eligible Inventory for the
beneficial interest of such Borrower or FSI or any other guarantor of any of
such Borrower's or FSI's obligations to Lenders which, in the reasonable
determination of Requisite Lenders has, either individually or in the aggregate,
had a Material Adverse Effect; or
8.1.9 Judgments, Writs And Attachments. There shall be a money
judgment, writ or warrant of attachment or similar process entered or filed
against such Borrower, any Marine Subsidiary of such Borrower, TEC AcquiSub,
FSI, TEC or any Owner Trustee holding record title to any Eligible Inventory for
the beneficial interest of such Borrower or FSI which (net of insurance
coverage) remains unvacated, unbonded, unstayed or unpaid or undischarged for
more than sixty (60) days (whether or not consecutive) or in any event later
than five (5) calendar days prior to the date of any proposed sale thereunder,
which, together with all such other unvacated, unbonded, unstayed, unpaid and
undischarged judgments or attachments against such Borrower or any Marine
Subsidiary of such Borrower exceeds in the aggregate $1,000,000; against FSI
exceeds in the aggregate $500,000; against TEC or TEC AcquiSub exceeds in the
aggregate $500,000; or against any Owner Trustee holding record title to any
Eligible Inventory for the beneficial interest of such Borrower or FSI exceeds
in the aggregate $1,000,000; or against any combination of the foregoing Persons
exceeds in the aggregate $1,000,000; or
8.1.10 Legal Obligations. Any of the Loan Documents shall for any
reason other than the full, complete and indefeasible satisfaction of the
Obligations thereunder cease to be, or be asserted by such Borrower, FSI or any
Marine Subsidiary of such Borrower or Owner Trustee holding record title to any
Eligible Inventory for the beneficial interest of such Borrower or FSI not to
be, a legal, valid and binding obligation of such Borrower, FSI or any Marine
Subsidiary of such Borrower or Owner Trustee holding record title to any
Eligible Inventory for the beneficial interest of such Borrower or FSI,
respectively enforceable against such Person in accordance with its terms; or
8.1.11 TEC AcquiSub Agreement. The occurrence of any "Event of Default"
as defined under the TEC AcquiSub Agreement or any other loan or security
document related to the TEC AcquiSub Agreement; or
8.1.12 AFG Agreement. The occurrence of any "Event of Default" as
defined under the AFG Agreement or any other loan or security document related
to the AFG Agreement; or
8.1.13 Change Of General Partner Or Manager. FSI shall cease to be the
sole general partner or the sole manager, as applicable, of such Borrower,
whether due to the voluntary or involuntary withdrawal, substitution, removal or
transfer of FSI from or of all or any portion of FSI's general partnership
interest or capital contribution in such Borrower; or
8.1.14 Change Of Purchaser. Requesting Borrower, TEC AcquiSub, FSI or
their Subsidiaries shall cease to be the purchaser of Eligible Inventory for
such Requesting Borrower.
8.1.15 Criminal Proceedings. A criminal proceeding shall have been
filed in any court naming any Borrower, FSI or any Marine Subsidiary of such
Borrower or Owner Trustee holding record title to any Eligible Inventory for the
beneficial interest of such Borrower or FSI as a defendant for which forfeiture
is a potential penalty under applicable federal or state law which, in the
reasonable determination of Requisite Lenders, may have a Material Adverse
Effect; or
8.1.16 Action By Governmental Authority. Any Governmental Authority
enters a decree, order or ruling ("Government Action") which will materially and
adversely affect any Borrower's, any Marine Subsidiary of such Borrower's,
FSI's, TEC's, TEC AcquiSub's or PLMI's financial condition, operations or
ability to perform or pay such party's obligations arising under this Agreement
or any instrument or agreement executed pursuant to the terms of this Agreement
or which will similarly affect any Owner Trustee holding record title to any
Eligible Inventory for the beneficial interest of such Borrower or FSI. Such
Borrower or FSI shall have thirty (30) days from the earlier of the date (a)
Borrower or FSI, as applicable, first discovers it is the subject of Government
Action or (b) a Lender or any agency gives notice of Government Action to take
such steps as are necessary to obtain relief from the Government Action. For the
purpose of this paragraph, "relief from Government Action" means to discharge or
to obtain a dismissal of or release or relief from (i) any Government Action so
that the affected party or parties do not incur monetary liability (A) of more
than $1,000,000 in the case of any Borrower or any Marine Subsidiary of such
Borrower, (B) of more than $500,000 in the case of FSI, (C) of more than
$500,000 in the case of TEC, (D) of more than $250,000 in the case of TEC
AcquiSub, (E) of more than $1,000,000 in the case of PLMI, or (F) of more than
$1,000,000, in the aggregate, in the case of any combination of the foregoing
Persons, or (ii) any disqualification of or other limitation on the operation of
any Borrower, any Marine Subsidiary of such Borrower, FSI, TEC, TEC AcquiSub and
PLMI, or any of them, which in the reasonable determination of Requisite Lenders
may have a Material Adverse Effect; or
8.1.17 Governmental Decrees. Any Governmental Authority, including,
without limitation, the SEC, shall enter a decree, order or ruling prohibiting
the Equipment Growth Funds from releasing or paying to FSI any funds in the form
of management fees, profits or otherwise which, in the reasonable determination
of Requisite Lenders, may have a Material Adverse Effect.
8.2 Waiver Of Default. An Event of Default may be waived only with the
written consent of Requisite Lenders, or if expressly provided, of all Lenders.
Any Event of Default so waived shall be deemed to have been cured and not to be
continuing; but no such waiver shall be deemed a continuing waiver or shall
extend to or affect any subsequent like default or impair any rights arising
therefrom.
8.3 Remedies. Upon the occurrence and continuance of any Event of
Default or Potential Event of Default, Lenders shall have no further obligation
to advance money or extend credit to or for the benefit of the defaulting
Borrower or any other Borrower, regardless of whether such Event of Default or
Potential Event of Default has occurred with respect to such Borrower or another
Borrower.
In addition, upon the occurrence and during the continuance of an Event
of Default, except an Event of Default arising under Section 8.1.11 hereof (the
remedies for which shall be limited to those set forth in the preceding
paragraph), Lenders or Agent, on behalf of Lenders, may, as to such defaulting
Borrower, or as to all Borrowers should such Event of Default result from the
actions or inactions of FSI, at the option of Requisite Lenders, do any one or
more of the following, all of which are hereby authorized by each Borrower and
FSI:
8.3.1 Declare all or any of the Obligations of such Borrower
under this Agreement, the Note of such Borrower, the other Loan Documents and
any other instrument executed by such Borrower pursuant to the Loan Documents to
be immediately due and payable, and upon such declaration such obligations so
declared due and payable shall immediately become due and payable; provided that
if such Event of Default is under part 8.1.6 or 8.1.7 of Section 8.1, then all
of the Obligations of each Borrower shall become immediately due and payable
forthwith without the requirement of any notice or other action by Lenders or
Agent;
8.3.2 Terminate this Agreement as to any future liability or obligation
of Agent or Lenders as to such Borrower or as to each Borrower if such Event of
Default results from the actions, inactions or violation of any covenant of or
by FSI (excluding, as to FSI, Events of Default under Section 8.1.2 arising in
relation to Contingent Obligation of FSI arising solely as a result of FSI's
status as a general partner of any Person other than such Borrower); and
8.3.3 Exercise in addition to all other rights and remedies granted
hereunder, any and all rights and remedies granted under the Loan Documents or
otherwise available at law or in equity.
8.4 Set-Off.
8.4.1 During the continuance of an Event of Default, any deposits or
other sums credited by or due from any Lender to any Borrower or FSI (exclusive
of deposits in accounts expressly held in the name of third parties or held in
trust for benefit of third parties) may be set-off against the Obligations of
such Borrower and any and all other liabilities, due or existing or hereafter
arising and owing by such Borrower or FSI to Lenders. Each Lender agrees to
notify promptly Borrowers and FSI and Agent of any such set-off; provided, that
the failure to give such notice shall not affect the validity of any such
set-off.
8.4.2 Each Lender agrees that if it shall, whether by right of
set-off, banker's lien or similar remedy pursuant to Section 8.4.1, obtain any
payment as a result of which the outstanding and unpaid principal portion of the
Commitments of such Lender shall be less than such Lender's Pro Rata Share of
the outstanding and unpaid principal portion of the aggregate of all
Commitments, such Lender receiving such payment shall simultaneously purchase
from each other Lender a participation in the Commitments held by such Lenders
so that the outstanding and unpaid principal amount of the Commitments and
participations in Commitments of such Lender shall be in the same proportion to
the unpaid principal amount of the aggregate of all Commitments then outstanding
as the unpaid principal amount under the Commitments of such Lender outstanding
immediately prior to receipt of such payment was to the unpaid principal amount
of the aggregate of all Commitments outstanding immediately prior to such
Lender's receipt of such payment; provided, however, that if any such purchase
shall be made pursuant to this Section 8.4.2 and the payment giving rise thereto
shall thereafter be recovered, such purchase shall be rescinded to the extent of
such recovery and the purchase price restored without interest. Each Borrower
expressly consents to the foregoing arrangements and agrees that any Lender
holding a participation in a Commitment deemed to have been so purchased may
exercise any and all rights of set-off, banker's lien or similar remedy with
respect to any and all moneys owing by Borrower to such Lender as fully as if
such Lender held a Commitment in the amount of such participation.
8.5 Rights And Remedies Cumulative. The enumeration of the rights and
remedies of Agent and Lenders set forth in this Agreement is not intended to be
exhaustive and the exercise by Agent and Lenders of any right or remedy shall
not preclude the exercise of any other rights or remedies, all of which shall be
cumulative, and shall be in addition to any other right or remedy given
hereunder or under the Loan Documents or that may now or hereafter exist in law
or in equity or by suit or otherwise. No delay or failure to take action on the
part of Agent and Lenders in exercising any right, power or privilege shall
operate as a waiver hereof, nor shall any single or partial exercise of any such
right, power or privilege preclude other or further exercise thereof or the
exercise of any other right, power or privilege or shall be construed to be a
waiver of any Event of Default or Potential Event of Default. No course of
dealing between any Borrower, FSI, Agent, or any Lender or their respective
agents or employees shall be effective to change, modify or discharge any
provision of this Agreement or any of the Loan Documents or to constitute a
waiver of any Event of Default or Potential Event of Default.
SECTION 9. AGENT.
9.1 Appointment. Each of the Lenders hereby irrevocably designates and
appoints First Union National Bank of North Carolina as the Agent of such Lender
under this Agreement and the other Loan Documents, and each such Lender
irrevocably authorizes First Union National Bank of North Carolina as the Agent
for such Lender to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms of this
Agreement and such other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement or such other Loan Documents, the Agent shall not
have any duties or responsibilities, except those expressly set forth herein and
therein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or the other Loan Documents or otherwise exist
against Agent. To the extent any provision of this Agreement permits action by
Agent, Agent shall, subject to the provisions of this Section 9, take such
action if directed in writing to do so by Requisite Lenders.
9.2 Delegation Of Duties. Agent may execute any of its duties under
this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
9.3 Exculpatory Provisions9.3 Exculpatory Provisions. Neither Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (a) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or the
other Loan Documents (except for its or such Person's own gross negligence or
willful misconduct), or (b) responsible in any manner to any Lender for any
recitals, statements, representations or warranties made by any Borrower or any
officer thereof contained in this Agreement or the other Loan Documents or in
any certificate, report, statement or other document referred to or provided for
in, or received by Agent under or in connection with, this Agreement or the
other Loan Documents or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or the other Loan Documents or
for any failure of any Borrower to perform its obligations hereunder or
thereunder. Agent shall not be under any obligation to any Lender to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement, or to inspect the Properties,
books or records of any Borrower.
9.4 Reliance By Agent. Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to Borrowers), independent accountants and other experts
selected by Agent. Agent may deem and treat the payee of any promissory note
issued pursuant to this Agreement as the owner thereof for all purposes unless
such promissory note shall have been transferred in accordance with Section
11.10 hereof. Agent shall be fully justified in failing or refusing to take any
action under this Agreement and the other Loan Documents unless it shall first
receive such advice or concurrence of Requisite Lenders as it deems appropriate
or it shall first be indemnified to its satisfaction by Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action except for its own gross negligence or
willful misconduct. Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a request of
Requisite Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all Lenders.
9.5 Notice Of Default. Agent shall not be deemed to have knowledge or
notice of the occurrence of any Event of Default or Potential Event of Default
hereunder unless Agent has received notice from a Lender or any Borrower
referring to this Agreement, describing such Event of Default or Potential Event
of Default and stating that such notice is a "notice of default". In the event
that Agent receives such a notice, Agent shall promptly give notice thereof to
Lenders. The Agent shall take such action with respect to such Event of Default
or Potential Event of Default as shall be reasonably directed by Requisite
Lenders; provided that unless and until Agent shall have received such
directions, Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Event of Default or
Potential Event of Default as it shall deem advisable in the best interests of
Lenders.
9.6 Non-Reliance On Agent And Other Lenders. Each Lender expressly
acknowledges that neither Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates has made any representations or
warranties to it and that no act by Agent hereinafter taken, including any
review of the affairs of Borrower, shall be deemed to constitute any
representation or warranty by Agent to any Lender. Each Lender represents to
Agent that it has, independently and without reliance upon Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of each
Borrower and FSI and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Lender also represents 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 analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of each Borrower and FSI.
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by Agent hereunder or by the other Loan Documents,
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, operations, property,
financial and other condition or creditworthiness of each Borrower and FSI which
may come into the possession of Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
9.7 Indemnification. Each Lender agrees to indemnify Agent in its
capacity as such (to the extent not reimbursed by Borrowers and without limiting
the obligation of Borrowers to do so), ratably according to the respective
amounts of their Pro Rata Share of the Commitments, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against Agent in any way relating to or
arising out of this Agreement or the other Loan Documents, or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by Agent under or
in connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from Agent's bad faith, gross negligence or willful misconduct.
The agreements in this Section 9.7 shall survive the repayment of the Loans and
all other amounts payable hereunder.
9.8 Agent In Its Individual Capacity. Agent and its Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
any Borrower or FSI as though Agent were not Agent hereunder. With respect to
Advances made or renewed by it, Agent shall have the same rights and powers
under this Agreement and the other Loan Documents as any Lender and may exercise
the same as though it were not Agent, and the terms "Lender" and "Lenders" shall
include Agent in its individual capacity.
9.9 Resignation And Appointment Of Successor Agent. Agent may resign at
any time by giving thirty (30) days' prior written notice thereof to Lenders and
Borrowers; provided, however, that the retiring Agent shall continue to serve
until a successor Agent shall have been selected and approved pursuant to this
Section 9.9. Upon any such notice, Agent shall have the right to appoint a
successor Agent; provided, however, that if such successor shall not be a
signatory to this Agreement, such appointment shall be subject to the consent of
Requisite Lenders. Agent may be replaced by Requisite Lenders, with or without
cause; provided, however, that any successor agent shall be subject to
Borrowers' consent, which consent shall not be unreasonably withheld. Upon the
acceptance of any appointment as an Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this Agreement.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement.
SECTION 10. EXPENSES AND INDEMNITIES.
10.1 Expenses. Borrowers and Lenders agree that, as the following
costs, expenses, charges and other disbursements benefit each Borrower and as
such costs, expenses, charges and other disbursements cannot easily be ratably
allocated to the account of any Borrower or Borrowers, each Borrower, unless
otherwise specified in this Section 10.1, shall pay, as its Obligation, promptly
on demand, and in any event within thirty (30) days of the invoice date
therefor, (a) all costs, expenses, charges and other disbursements (including,
without limitation, all reasonable attorneys' fees and allocated expenses of
outside counsel and in-house legal staff) incurred by or on behalf of Agent or
any Lender in connection with the preparation of the Loan Documents and all
amendments and modifications thereof, extensions thereto or substitutions
therefor, and all costs, expenses, charges or other disbursements incurred by or
on behalf of Agent or any Lender (including, without limitation all reasonable
attorney's fees and allocated expenses of outside counsel and in-house legal
staff) in connection with the furnishing of opinions of counsel (including,
without limitation, any opinions requested by Lenders as to any legal matters
arising hereunder) and of Borrowers' performance of and compliance with all
agreements and conditions contained herein or in any of the other Loan Documents
on its part to be performed or complied with; (b) all other costs, expenses,
charges and other disbursements incurred by or on behalf of Agent or any Lender
in connection with the negotiation, preparation, execution, administration,
continuation and enforcement of the Loan Documents, and the making of the Loans
hereunder; (c) all costs, expenses, charges and other disbursements (including,
without limitation, all reasonable attorney's fees and allocated expenses of
outside counsel and in-house legal staff) incurred by or on behalf of Agent or
any Lender in connection with the assignment or attempted assignment to any
other Person of all or any portion of any Lender's interest under this Agreement
pursuant to Section 11.10; and (d) regardless of the existence of an Event of
Default or Potential Event of Default, all legal, appraisal, audit, accounting,
consulting or other fees, costs, expenses, charges or other disbursements
incurred by or on behalf of Agent or any Lender in connection with any
litigation, contest, dispute, suit, proceeding or action (whether instituted by
Lenders, Agent, any Borrower or any other Person) seeking to enforce any
Obligations of, or collecting any payments due from, any Borrower under this
Agreement and the Notes, all of which amounts shall be deemed to be part of the
Obligations; provided, however, that Lenders shall be entitled to collect the
full amount of such costs, expenses, charges and other disbursements only once.
Notwithstanding anything to the contrary contained in this Section 10.1, so long
as no Event of Default or Potential Event of Default shall have occurred and be
continuing, all appraisals of the Eligible Inventory shall be at the expense of
Lenders. If an Event of Default or Potential Event of Default shall have
occurred and be continuing, such appraisals shall be at the expense of the
Requesting Borrower.
10.2 Indemnification. Whether or not the transactions contemplated
hereby shall be consummated:
10.2.1 General Indemnity. Each Borrower, as to itself, and FSI, jointly
and severally as to itself and each Borrower, shall pay, indemnify, and hold
each Lender, Agent and each of their respective officers, directors, employees,
counsel, agents and attorneys-in-fact (each, an "Indemnified Person") harmless
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, charges, expenses or disbursements
(including reasonable attorney's fees and the allocated cost of in-house
counsel) of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement and any
other Loan Documents, or the transactions contemplated hereby and thereby, and
with respect to any investigation, litigation or proceeding (including any case,
action or proceeding before any court or other Governmental Authority relating
to bankruptcy, reorganization, insolvency, liquidation, dissolution or relief of
debtors or any appellate proceeding) related to this Agreement or the Loans or
the use of the proceeds thereof, whether or not any Indemnified Person is a
party thereto (all the foregoing, collectively, the "Indemnified Liabilities");
provided, that Borrowers and FSI shall have no obligation hereunder to any
Indemnified Person with respect to Indemnified Liabilities arising from the
gross negligence or willful misconduct of such Indemnified Person.
10.2.2 Environmental Indemnity.
(a) Each Borrower, to the extent of its pro rata share
of ownership of Property involved in any investigation, litigation or
proceeding, as set forth below, and FSI hereby jointly and severally
agree to indemnify, defend and hold harmless each Indemnified Person,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, charges, expenses or
disbursements (including reasonable attorneys' fees and the allocated
cost of in-house counsel and of internal environmental audit or review
services), which may be incurred by or asserted against such
Indemnified Person in connection with or arising out of any pending or
threatened investigation, litigation or proceeding, or any action taken
by any Person, with respect to any Environmental Claim arising out of
or related to any Property owned, leased or operated by such Borrower.
No action taken by legal counsel chosen by Agent or any Lender in
defending against any such investigation, litigation or proceeding or
requested remedial, removal or response action shall (except for
actions which constitute fraud, willful misconduct, gross negligence or
material violations of law) vitiate or in any way impair Borrowers' or
FSI's obligation and duty hereunder to indemnify and hold harmless
Agent and each Lender. Agent and all Lenders agree to use reasonable
efforts to cooperate with Borrowers respecting the defense of any
matter indemnified hereunder, except insofar as and to the extent that
their respective interests may be adverse to Borrowers' or FSI's in
Agent's or such Lender's sole discretion.
(b) In no event shall any site visit, observation, or
testing by Agent or any Lender be deemed a representation or warranty
that Hazardous Materials are or are not present in, on, or under the
site, or that there has been or shall be compliance with any
Environmental Law. Neither Borrowers, FSI nor any other Person is
entitled to rely on any site visit, observation, or testing by Agent or
any Lender. Except as otherwise provided by law, neither Agent nor any
Lender owes any duty of care to protect Borrowers, or any one of them,
or any other Person against, or to inform Borrowers or any other party
of, any Hazardous Materials or any other adverse condition affecting
any site or Property. Neither Agent nor any Lender shall be obligated
to disclose to Borrowers, FSI or any other Person any report or
findings made as a result of, or in connection with, any site visit,
observation, or testing by Agent or any Lender.
10.2.3 Survival; Defense. The obligations in this Section 10.2 shall
survive payment of all other Obligations. At the election of any Indemnified
Person, Borrowers shall defend such Indemnified Person using legal counsel
satisfactory to such Indemnified Person in such Person's reasonable discretion,
at the sole cost and expense of Borrowers, which cost and expense shall be
allocated to Borrowers according to such Borrower's pro rata share of ownership
of any Property in relation to which such obligations arise. All amounts owing
under this Section 10.2 shall be paid within thirty (30) days after written
demand.
SECTION 11. MISCELLANEOUS.
11.1 Survival. All covenants, agreements, representations and
warranties made herein shall survive the execution and delivery of the Loan
Documents and the making of the Loans hereunder.
11.2 No Waiver By Agent Or Lenders. No failure or delay on the part of
Agent or any Lender in the exercise of any power, right or privilege under this
Agreement, the Note or any of the other Loan Documents shall impair such power,
right or privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other right,
power or privilege.
11.3 Notices. Except as otherwise provided in this Agreement, any
notice or other communication herein required or permitted to be given shall be
in writing and may be delivered in person, with receipt acknowledged, or sent by
telex, facsimile, telecopy, computer transmission or by United States mail,
registered or certified, return receipt requested, or by Federal Express or
other nationally recognized overnight courier service, postage prepaid and
confirmation of receipt requested, and addressed as set forth on the signature
pages to this Agreement or at such other address as may be substituted by notice
given as herein provided. The giving of any notice required hereunder may be
waived in writing by the party entitled to receive such notice. Every notice,
demand, request, consent, approval, declaration or other communication hereunder
shall be deemed to have been duly given or served on the date on which the same
shall have been personally delivered, with receipt acknowledged, or sent by
telex, facsimile, telecopy or computer transmission (with appropriate
answerback), three (3) Business Days after the same shall have been deposited in
the United States mail or on the next succeeding Business Day if the same has
been sent by Federal Express or other nationally recognized overnight courier
service. Failure or delay in delivering copies of any notice, demand, request,
consent, approval, declaration or other communication to the persons designated
above to receive copies shall in no way adversely affect the effectiveness of
such notice, demand, request, consent, approval, declaration or other
communication.
11.4 Headings. Section and subsection headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
11.5 Severability11.5 Severability. Whenever possible, each provision
of this Agreement, the Note and each of the other Loan Documents shall be
interpreted in such a manner as to be valid, legal and enforceable under the
applicable law of any jurisdiction. Without limiting the generality of the
foregoing sentence, in case any provision of this Agreement, the Note or any of
the other Loan Documents shall be invalid, illegal or unenforceable under the
applicable law of any jurisdiction, the validity, legality and enforceability of
the remaining provisions, or of such provision in any other jurisdiction, shall
not in any way be affected or impaired thereby.
11.6 Entire Agreement; Construction; Amendments And Waivers.
11.6.1 This Agreement, the Notes and each of the other Loan Documents
dated as of the date hereof, taken together, constitute and contain the entire
agreement among Borrowers, Lenders and Agent and supersede any and all prior
agreements, negotiations, correspondence, understandings and communications
between the parties, whether written or oral, respecting the subject matter
hereof.
11.6.2 This Agreement is the result of negotiations between
and has been reviewed by each Borrower, FSI, and each Lender executing this
Agreement as of the Closing Date and Agent and their respective counsel;
accordingly, this Agreement shall be deemed to be the product of the parties
hereto, and no ambiguity shall be construed in favor of or against Borrowers,
FSI, Lenders or Agent. Borrowers, FSI, Lenders and Agent agree that they intend
the literal words of this Agreement and the other Loan Documents and that no
parol evidence shall be necessary or appropriate to establish Borrowers', FSI's
any Lender's or Agent's actual intentions.
11.6.3 No amendment, modification, discharge or waiver of or
consent to any departure by any Borrower or FSI from, any provision in this
Agreement or any of the other Loan Documents relating to (a) the definition of
"Borrowing Base" or "Requisite Lenders," (b) any increase of the amount of any
Commitment, (c) any reduction of principal, interest or fees payable hereunder,
(d) any postponement of any date fixed for any payment or prepayment of
principal or interest hereunder or (e) this Section 11.6.3 shall be effective
without the written consent of all Lenders. Any and all other amendments,
modifications, discharges or waivers of, or consents to any departures from any
provision of this Agreement or of any of the other Loan Documents shall not be
effective without the written consent of Requisite Lenders. Any waiver or
consent with respect to any provision of the Loan Documents shall be effective
only in the specific instance and for the specific purpose for which it was
given. No notice to or demand on any Borrower or FSI in any case shall entitle
any Borrower or FSI to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, waiver or consent effected in
accordance with this Section 11.6 shall be binding upon each Lender then party
hereto and each subsequent Lender, on Borrower, and on FSI.
11.7 Reliance By Lenders. All covenants, agreements, representations
and warranties made herein by each Borrower or FSI shall, notwithstanding any
investigation by Lenders or Agent be deemed to be material to and to have been
relied upon by Lenders.
11.8 Marshalling; Payments Set Aside. Lenders shall be under no
obligation to ▇▇▇▇▇▇▇▇ any assets in favor of any Borrower or any other person
or against or in payment of any or all of the Obligations. To the extent that
any Borrower makes a payment or payments to Lenders or Agent, or Lenders or
Agent, on behalf of Lenders, enforce their or its Liens or exercises their or
its rights of set-off, and such payment or payments or the proceeds of such
enforcement or set-off or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, receiver or any other party under Title 11 of the United States Code
or under any other similar federal or state law, common law or equitable cause,
then to the extent of such recovery the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or set-off had not
occurred.
11.9 No Set-Offs By Borrowers. All sums payable by Borrowers or FSI
pursuant to this Agreement, the Note or any of the other Loan Documents shall be
payable without notice or demand and shall be payable in United States Dollars
without set-off or reduction of any manner whatsoever.
11.10 Binding Effect, Assignment.
11.10.1 This Agreement, the Note and the other Loan Documents
shall be binding upon and shall inure to the benefit of the parties hereto and
thereto and their respective successors and assigns, except that no Borrower nor
FSI may assign its rights hereunder or thereunder or any interest herein or
therein without the prior written consent of each Lender. Each Lender shall (a)
have the right in accordance with this Section 11.10 to sell and assign to any
Eligible Assignee all or any portion of its interest (provided that any such
partial assignment shall not be for a principal amount of less than Five Million
Dollars ($5,000,000)) under this Agreement, the Notes and the other Loan
Documents, together with a ratable interest in the AFG Agreement and the TEC
AcquiSub Agreement and the related Notes and other Loan Documents (as separately
described and defined in those agreements), subject to the prior written consent
of the affected Borrower, which consent shall not be unreasonably withheld, and
(b) to grant any participation or other interest herein or therein, except that
each potential participant to which a Lender intends to grant any rights under
Sections 2.9, 2.10, 5.1 or 10.2 shall be subject to the prior written consent of
the affected Borrower, which consent shall not be unreasonably withheld;
provided, however, that no such sale, assignment or participation grant shall
result in requiring registration under the Securities Act of 1933, as amended,
or qualification under any state securities law.
11.10.2 Subject to the limitations of this Section 11.10.2,
each Lender may sell and assign, from time to time, all or any portion of its
Pro Rata Share of the Commitments to any of its Affiliates or, with the approval
of the affected Borrower and FSI (which approval shall not be unreasonably
withheld), to any other financial institution acceptable to Agent, subject to
the assumption by such assignee of the share of the Commitments so assigned. The
assignment to such Affiliate or other financial institution shall be evidenced
by an Assignment and Assumption in the form of Exhibit H ("Assignment and
Acceptance") executed by the assignor Lender (hereinafter from time to time
referred to as the "Assignor Lender") and such Affiliate or other financial
institution (which, upon such assignment shall become a Lender hereunder
(hereinafter from time to time referred to as the "Assignee Lender")). The
Assignment and Assumption need not include any of the economic or financial
terms upon which such Assignee Lender receives the assignment from the Assignor
Lender, and such terms need not be disclosed to or approved by such Borrower or
FSI; provided only that such terms do not diminish the obligations undertaken by
such Assignee Lender in the Assignment and Assumption or increase the
obligations of Borrowers or FSI under this Agreement. Upon execution of such
Assignment and Assumption, (a) the definition of "Commitments" in Section 1
hereof and the Pro Rata Shares set forth therein shall be deemed to be amended
to reflect each Lender's share of the Commitments, giving effect to the
assignment and (b) the Assignee Lender shall, from the effective date of the
instrument of assignment and assumption, be subject to all of the obligations,
and entitled to all of the rights, of a Lender hereunder, except as may be
expressly provided to the contrary in the Assignment and Assumption. To the
extent the obligations hereunder of the Assignor Lender are assumed by the
Assignee Lender, the Assignor Lender shall be relieved of such obligations. Upon
the assignment of any interest by any Assignor Lender pursuant to this Section
11.10.2, such Assignor Lender agrees to supplement Schedule 1.1 to show the date
of such assignment, the Assignor Lender, the Assignee Lender, the Assignee
Lender's address for notice purposes and the amount of the Commitments so
assigned.
11.10.3 Subject to the limitations of this Section 11.10.3,
any Lender may also grant, from time to time, participation interests in the
interests of such Lender under this Agreement, the Notes and the other Loan
Documents to any other financial institution without notice to, or approval of,
any Borrower or FSI. The grant of such a participation interest shall be on such
terms as the granting Lender determines are appropriate, provided only that (a)
the holder of such participation interest shall not have any of the rights of a
Lender under this Agreement except, if the participation agreement expressly
provides, rights under Sections 2.9, 2.10, 5.1 and 10.2, and (b) the consent of
the holder of such a participation interest shall not be required for amendments
or waivers of provisions of the Loan Documents other than, if the participation
agreement expressly provides, those which (i) increase the monetary amount of
any Commitment, (ii) decrease any fee or any other monetary amount payable to
Lenders, or (iii) extend the date upon which any monetary amount is payable to
Lenders.
11.11 Counterparts. This Agreement and any amendments, waivers,
consents or supplements hereto may be executed in any number of counterparts,
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument. Each such agreement
shall become effective upon the execution of a counterpart hereof or thereof by
each of the parties hereto or thereto, delivery of each such counterpart to
Agent.
11.12 Equitable Relief. Borrowers and FSI recognize that, in the event
any Borrower or FSI fails to perform, observe or discharge any of its
obligations or liabilities under this Agreement, the Notes or any of the other
Loan Agreements, any remedy at law may prove to be inadequate relief to Lenders
or Agent; therefore, Borrowers and FSI agree that Lenders or Agent, if Lenders
or Agents so request, shall be entitled to temporary and permanent injunctive
relief in any such case without the necessity of proving actual damages.
11.13 Written Notice Of Claims; Claims Bar11.13 Written Notice Of
Claims; Claims Bar. EACH BORROWER AND FSI HEREBY AGREE THAT EACH SHALL GIVE
PROMPT WRITTEN NOTICE OF ANY CLAIM OR CAUSE OF ACTION IT BELIEVES IT HAS, OR MAY
SEEK TO ASSERT OR ALLEGE AGAINST ANY LENDER OR AGENT, WHETHER SUCH CLAIM IS
BASED IN LAW OR EQUITY, ARISING UNDER OR RELATED TO THIS AGREEMENT, THE NOTES OR
ANY OF THE OTHER LOAN DOCUMENTS OR TO THE LOANS CONTEMPLATED HEREBY OR THEREBY
OR ANY ACT OR OMISSION TO ACT BY ANY LENDER OR AGENT WITH RESPECT HERETO OR
THERETO, AND THAT IF IT SHALL FAIL TO GIVE SUCH PROMPT NOTICE TO AGENT WITH
REGARD TO ANY SUCH CLAIM OR CAUSE OF ACTION, IT SHALL BE DEEMED TO HAVE WAIVED,
AND SHALL BE FOREVER BARRED FROM BRINGING OR ASSERTING SUCH CLAIM OR CAUSE OF
ACTION IN ANY SUIT, ACTION OR PROCEEDING IN ANY COURT OR BEFORE ANY GOVERNMENTAL
AUTHORITY.
11.14 Waiver Of Punitive Damages. NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED IN THIS AGREEMENT, EACH BORROWER AND FSI HEREBY AGREE THAT
EACH SHALL NOT SEEK FROM LENDERS OR AGENT, UNDER ANY THEORY OF LIABILITY,
INCLUDING, WITHOUT LIMITATION, ANY THEORY IN TORTS, ANY PUNITIVE DAMAGES.
11.15 Relationship Of Parties. The relationship between Borrowers and
FSI, on the one hand, and Lenders and Agent, on the other, is, and at all time
shall remain solely that of a borrower and lenders. Neither Lenders nor Agent
shall under any circumstances be construed to be partners or joint venturers of
Borrowers or FSI or any of their Affiliates; nor shall Lenders nor Agent under
any circumstances be deemed to be in a relationship of confidence or trust or a
fiduciary relationship with Borrowers or FSI or any of their Affiliates, or to
owe any fiduciary duty to any Borrower or any of its Affiliates. Lenders and
Agent do not undertake or assume any responsibility or duty to Borrowers or FSI
or any of their Affiliates to select, review, inspect, supervise, pass judgment
upon or otherwise inform Borrowers or any of their Affiliates of any matter in
connection with its or their Property, any collateral held by Agent or any
Lender or the operations of Borrowers or FSI or any of their Affiliates.
Borrowers and each of their Affiliates shall rely entirely on their own judgment
with respect to such matters, and any review, inspection, supervision, exercise
of judgment or supply of information undertaken or assumed by any Lender or
Agent in connection with such matters is solely for the protection of Lenders
and Agent and neither Borrowers nor any Affiliate is entitled to rely thereon.
11.16 Obligations Of Each Borrower. Each Borrower and FSI agrees that
its liability hereunder shall be the immediate, direct, and primary obligation
of such Borrower or FSI, as the case may be, and shall not be contingent upon
the Agent's or any Lender's exercise or enforcement of any remedy it may have
against any other Borrower, FSI or any other person, or against any collateral
or any security for the Obligations. Without limiting the generality of the
foregoing, the Obligations shall remain in full force and effect without regard
to and shall not be impaired or affected by, nor shall such Borrower or FSI be
exonerated or discharged by, any of the following events:
11.16.1 Insolvency, bankruptcy, reorganization, arrangement,
adjustment, composition, assignment for the benefit of creditors, death,
liquidation, winding up or dissolution of any Borrower or any guarantor of the
Obligations of any Borrower;
11.16.2 Any limitation, discharge, or cessation of the liability of any
other Borrower or any guarantor for the Obligations of such other Borrower due
to any statute, regulation or rule of law, or any invalidity or unenforceability
in whole or in part of the documents evidencing the Obligations of such other
Borrower or any guaranty of the Obligations of such other Borrower;
11.16.3 Any merger, acquisition, consolidation or change in structure
of any Borrower or any guarantor of the Obligations of any Borrower or any sale,
lease, transfer or other disposition of any or all of the assets, shares or
interests in or of any Borrower or any guarantor of the Obligations of any
Borrower;
11.16.4 Any assignment or other transfer, in whole or in part, of any
Lender's interests in and rights under this Agreement or any of the other Loan
Documents, including, without limitation, any assignment or other transfer, in
whole or in part, of Banks' interests in and to any collateral;
11.16.5 Any claim, defense, counterclaim or setoff, other than that of
prior performance, that any Borrower or any guarantor of the Obligations of any
Borrower may have or assert, including, but not limited to, any defense of
incapacity or lack of corporate or other authority to execute any documents
relating to the Obligations of any Borrower or any collateral;
11.16.6 Agent's or any Lender's amendment, modification, renewal,
extension, cancellation or surrender of any agreement, document or instrument
relating to this Agreement, the Obligations of any Borrower or any collateral,
or any exchange, release, or waiver of any collateral;
11.16.7 Agent's or any Lender's exercise or nonexercise of any power,
right or remedy with respect to the Obligations of any Borrower or any
collateral, including, but not limited to, the compromise, release, settlement
or waiver with or of any Borrower or any other person;
11.16.8 Agent's or any Lender's vote, claim, distribution, election,
acceptance, action or inaction in any bankruptcy case related to the Obligations
of any Borrower or any collateral; and
11.16.9 Any impairment or invalidity of any collateral or any failure
to perfect any of Agent's liens thereon.
11.17 Co-Borrower Waivers. Each Borrower and FSI hereby expressly
waives (a) diligence, presentment, demand for payment and protest affecting any
other Borrower's or FSI's liability under the Loan Documents; (b) discharge due
to any disability of any Borrower or FSI; (c) any defenses of any other Borrower
or FSI to obligations under the Loan Documents not arising under the express
terms of the Loan Documents or from a material breach thereof by Agent or any
Lender which under applicable law has the effect of discharging any other
Borrower from the Obligations of any Borrower as to which this Agreement is
sought to be enforced; (d) the benefit of any act or omission by Agent or any
Lender which directly or indirectly results in or aids the discharge of any
other Borrower from any of the Obligations of any such Borrower by operation of
law or otherwise; (e) all notices whatsoever, including, without limitation,
notice of acceptance of the incurring of the Obligations of any Borrower; (f)
any right it may have to require Agent or any Lender to disclose to it any
information that Agent or Lenders may now or hereafter acquire concerning the
financial condition or any circumstances that bear on the risk of nonpayment by
any other Borrower, including the release of such other Borrower from its
Obligations hereunder; and (g) any requirement that Agent and Lenders exhaust
any right, power or remedy or proceed against any other Borrower or any other
security for, or any guarantor of, or any other party liable for, any of the
Obligations of any Borrower, or any portion thereof (including without
limitation any requirements set forth in Section 26-7 of the North Carolina
General Statutes). Each Borrower specifically agrees that it shall not be
necessary or required, and Borrowers shall not be entitled to require, that
Agent or any Lender (i) file suit or proceed to assert or obtain a claim for
personal judgment against any other Borrower for all or any part of the
Obligations of any Borrower; (ii) make any effort at collection or enforcement
of all or any part of the Obligations of any Borrower from any Borrower; (iii)
foreclose against or seek to realize upon any collateral or any other security
now or hereafter existing for all or any part of the Obligations of any
Borrower; (iv) file suit or proceed to obtain or assert a claim for personal
judgment against any Borrower or any guarantor or other party liable for all or
any part of the Obligations of any Borrower; (v) exercise or assert any other
right or remedy to which Agent or any Lender is or may be entitled in connection
with the Obligations of any Borrower or any security or guaranty relating
thereto to assert; or (vi) file any claim against assets of one Borrower before
or as a condition of enforcing the liability of any other Borrower under this
Agreement or the Notes.
11.18 Governing Law. Except as otherwise expressly provided in any of
the Loan Documents, in all respects, including all matters of construction,
validity and performance, this Agreement and the Obligations arising hereunder
shall be governed by, and construed and enforced in accordance with, the laws of
the State of North Carolina applicable to contracts made and performed in such
state, without regard to the principles thereof regarding conflict of laws, and
any applicable laws of the United States of America.
11.19 Consent To Jurisdiction. Each Borrower and FSI hereby irrevocably
consent to the personal jurisdiction of the state and federal courts located in
Mecklenburg County, North Carolina, in any action, claim or other proceeding
arising out of any dispute in connection with this Agreement, the Note and the
other Loan Documents, any rights or obligations hereunder or thereunder, or the
performance of such rights and obligations. Each Borrower hereby irrevocably
consents to the service of a summons and complaint and other process in any
action, claim or proceeding brought by Agent or any Lender in connection with
this Agreement or the other Loan Documents, any rights or obligations hereunder
or thereunder, or the performance of such rights and obligations, on behalf of
itself or its Property, in the manner specified in Section 11.3. Nothing in this
Section 11.19 shall affect the right of the Agent or any Lender to serve legal
process in any other manner permitted by applicable law or affect the right of
Agent or any Lender to bring any action or proceeding against any Borrower or
its properties in the courts of any other jurisdictions.
11.20 No Novation. This Agreement is not intended to be, and shall not
be construed to create, a novation or accord and satisfaction, and, except as
otherwise provided herein, the Growth Fund Agreement shall remain in full force
and effect. Without limiting the generality of the foregoing, Section 10.2 of
the Growth Fund Agreement shall survive the effectiveness of the Agreement and
shall remain enforceable against both the Borrowers and EGF II, EGF III and EGF
IV.
11.21 Waiver Of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
EACH BORROWER AND FSI, BY EXECUTION HEREOF, AND THE AGENT AND EACH LENDER, BY
ACCEPTANCE HEREOF, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS
AGREEMENT, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION WITH THIS AGREEMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY WITH RESPECT HERETO. THIS PROVISION IS A MATERIAL
INDUCEMENT TO THE AGENT AND EACH LENDER TO ACCEPT THIS AGREEMENT AND THE NOTES
EXECUTED AND DELIVERED BY EACH BORROWER PURSUANT TO THIS AGREEMENT.
11.22 BMO As Lender. Upon the Closing, BMO shall be a Lender for all
purposes of this Agreement and the other Loan Documents, and shall be entitled
to the rights and benefits and be subject to the obligations of a Lender under
and in accordance with and subject to the terms of this Agreement and the other
Loan Documents.
WITNESS the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
BORROWER PLM EQUIPMENT GROWTH FUND V
BY PLM FINANCIAL SERVICES, INC.,
ITS GENERAL PARTNER
By
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer
PLM EQUIPMENT GROWTH FUND VI
BY PLM FINANCIAL SERVICES, INC.,
ITS GENERAL PARTNER
By
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer
PLM EQUIPMENT GROWTH & INCOME FUND VII
BY PLM FINANCIAL SERVICES, INC.,
ITS GENERAL PARTNER
By
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer
PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
BY PLM FINANCIAL SERVICES, INC.,
ITS MANAGER
By
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer
Notice to any Borrower to be sent to:
[Insert name of Borrower]
c/o PLM Financial Services, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President of Finance
and Chief Financial Officer
Telephone: 415/974-1399
Telecopy: 415/882-0860
With a copy to:
TEC AcquiSub, Inc.
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: 415/896-1138
Facsimile: 415/882-0860
FSI PLM FINANCIAL SERVICES, INC.
By
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer
Notice to be sent to:
PLM Financial Services, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President of Finance
and Chief Financial Officer
Telephone: 415/974-1399
Telecopy: 415/882-0860
AGENT FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
By
Printed Name:
Title:
Notice to be sent to:
First Union National Bank of North Carolina
One First Union Center
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
Director
Telephone: 704/383-5164
Facsimile: 704/374-4092
LENDERS FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
By
Printed Name:
Title:
Notice to be sent to:
First Union National Bank of North Carolina
One First Union Center
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
Director
Telephone: 704/383-5164
Facsimile: 704/374-4092
BANK OF MONTREAL
By:
Printed Name:
Title:
Notice to be sent to:
Bank of Montreal
==========================
Attention: ______________
Telephone: ______________
Facsimile: ______________
The undersigned acknowledges and agrees to Section 11.20 of this Agreement.
PLM EQUIPMENT GROWTH FUND II
BY PLM FINANCIAL SERVICES, INC.,
ITS GENERAL PARTNER
By
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer
PLM EQUIPMENT GROWTH FUND III
BY PLM FINANCIAL SERVICES, INC.,
ITS GENERAL PARTNER
By
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer
PLM EQUIPMENT GROWTH FUND IV
BY PLM FINANCIAL SERVICES, INC.,
ITS GENERAL PARTNER
By
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer
ACKNOWLEDGEMENT OF AMENDMENT
AND REAFFIRMATION OF GUARANTY
(Growth Funds)
SECTION 1. PLM International, Inc. ("PLMI") hereby acknowledges and
confirms that it has reviewed and approved the terms and conditions of this
Third Amended and Restated Warehousing Credit Agreement ("Agreement").
SECTION 2. PLMI hereby consents to this Agreement and agrees that its
Guaranty of the Obligations of Borrowers under the Growth Fund Agreement shall
continue in full force and effect under the Agreement, shall be valid and
enforceable and shall not be impaired or otherwise affected by the execution of
this Agreement or any other document or instrument delivered in connection
herewith.
SECTION 3. PLMI represents and warrants that, after giving effect to
this Agreement, all representations and warranties contained in its Guaranty are
true, accurate and complete as if made the date hereof.
GUARANTOR PLM INTERNATIONAL, INC.
By
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer
SCHEDULE A
(COMMITMENTS)
Pro
Rate
Lender Commitment Share
First Union National Bank $35,000,000 70%
of North Carolina
Bank of Montreal $15,000,000 30%
WAREHOUSING CREDIT AGREEMENT
TABLE OF CONTENTS
Page
SECTION 1.......................................................DEFINITIONS 2
1.1 Defined Terms.................................2
1.2 Accounting Terms..............................18
1.3 Other Terms...................................18
1.4 Schedules And Exhibits........................19
SECTION 2........................................AMOUNT AND TERMS OF CREDIT 19
2.1 Commitment To Lend............................19
(a) Facility Commitments........19
(b) Each Loan...................20
2.1.2 Funding............................21
2.1.3 Utilization Of The Loans...........21
2.2 Repayment And Prepayment......................21
2.2.1 Repayment..........................21
2.2.2 Voluntary Prepayment...............21
2.2.3 Mandatory Prepayments..............22
2.3 Calculation Of Interest; Post-Maturity Interest..22
2.4 Manner Of Payments...............................22
2.5 Payment On Non-Business Days.....................23
2.6 Application Of Payments..........................23
2.7 ...............Procedure For The Borrowing Of Loans 23
2.7.1 ....Notice Of Borrowing 23
2.7.2 ....Unavailability Of LIBOR Loans 24
2.8 ...............Conversion And Continuation Elections 24
2.8.1 ....Election 24
2.8.2 ....Notice Of Conversion 24
2.8.3 ....Interest Period 24
2.8.4 ....Unavailability Of LIBOR Loans 25
2.9 .............Discretion Of Lenders As To Manner Of Funding 25
2.10 Distribution Of Payments..................................25
2.11 Agent's Right To Assume Funds Available For Advances......25
2.12 Agent's Right To Assume Payments Will Be Made By Borrower.26
2.13 Capital Requirements......................................26
2.14 Taxes.....................................................26
2.14.1 ..........................No Deductions 26
2.14.2 ........Miscellaneous Taxes 27
2.14.3 ........Indemnity 27
2.14.4 ........Required Deductions 27
2.14.5 ........Evidence of Payment 27
2.14.6 ........Foreign Persons 27
2.14.7 ........Income Taxes 28
2.14.8 ........Reimbursement Of Costs 29
2.14.9 ........Jurisdiction 29
2.15 ...................Illegality 29
2.15.1 ........LIBOR Loans 29
2.15.2 ........Prepayment 29
2.15.3 ........Prime Rate Borrowing 29
2.16 ...................Increased Costs 29
2.17 ...................Inability To Determine Rates 30
2.18 Prepayment Of LIBOR Loans.............30
SECTION 3. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS AGREEMENT
AND THE MAKING OF LOANS 30
3.1 Effectiveness of This Agreement.........................30
3.1.1 Partnership, Company And Corporate Documents.30
3.1.2 ............Notes 31
3.1.3 Opinion Of Counsel...........................31
3.1.4 Reaffirmation of Guaranty....................31
3.1.5 .................TEC AcquiSub Amendment 31
3.1.6 .................AFG Agreement 31
3.1.7 Bringdown Certificate...........31
3.1.8 ................................Fees 31
3.1.9 ....................Other Documents 31
3.2 All Loans...................31
3.2.1 .................Notice Of Borrowing 32
3.2.2 .................No Event Of Default 32
3.2.3 .................Representations And Warranties 32
3.2.4 .................Insurance 32
3.2.5 .................Other Instruments 32
3.3 Further Conditions To All Loans..32
3.3.1 .................General Partner Or Manager 32
3.3.2 ......Removal Of General Partner Or Manager 32
3.3.3 ............ Purchaser. 33
SECTION 4.............BORROWERS' AND FSI'S REPRESENTATIONS AND WARRANTIES 33
4.1 ...............General Representations And Warranties 33
4.1.1 Existence And Power.................33
4.1.2 Loan Documents And Notes Authorized; Binding
Obligations........................... 33
4.1.3 No Conflict; Legal Compliance...........33
4.1.4 Financial Condition.....................34
4.1.5 Executive Offices.......................34
4.1.6 Litigation..............................34
4.1.7 Material Contracts......................34
4.1.8 Consents And Approvals..................35
4.1.9 Other Agreements........................35
4.1.10 ........Employment And Labor Agreements 35
4.1.11 .......ERISA 35
4.1.12 .......Labor Matters 35
4.1.13 .......Margin Regulations 36
4.1.14 .......Taxes 36
4.1.15 .......Environmental Quality 36
4.1.16 .......Trademarks, Patents, Copyrights,
Franchises And Licenses 37
4.1.17 .......Full Disclosure 37
4.1.18 .......Other Regulations 37
4.1.19 .......Solvency 37
4.2 ..................Representations And Warranties
At Time Of First Advance 37
4.2.1 Power And Authority.............38
4.2.2 No Conflict.....................38
4.2.3 Consents And Approvals..........38
4.3 Survival Of Representations And Warranties..38
SECTION 5..................BORROWERS' AND FSI'S AFFIRMATIVE COVENANTS 38
5.1 Records And Reports........................38
5.1.1 .........Quarterly Statements 38
5.1.2 Annual Statements.................39
5.1.3 ....Borrowing Base Certificate 39
5.1.4 ....Compliance Certificate 39
5.1.5 ....Reports 39
5.1.6 ....Insurance Reports 40
5.1.7 ....Certificate Of Responsible Officer 40
5.1.8 ....Employee Benefit Plans 40
5.1.9 ....ERISA Notices 40
5.1.10 ....Pension Plans 41
5.1.11 ....SEC Reports 41
5.1.12 ....Tax Returns 41
5.1.13 ....Additional Information 41
5.2 Existence; Compliance With Law.....41
5.3 Insurance..........................42
5.4 Taxes And Other Liabilities........42
5.5 Inspection Rights; Assistance......42
5.6 Maintenance Of Facilities; Modifications....43
5.6.1 Maintenance Of Facilities........43
5.6.2 Certain Modifications To The Equipment...43
5.7 Supplemental Disclosure.............................43
5.8 Further Assurances..................................43
5.9 ...........Lockbox 43
5.10 ...........Environmental Laws 44
SECTION 6..................BORROWER'S AND FSI'S NEGATIVE COVENANTS 44
6.1 Liens; Negative Pledges; And Encumbrances...........44
6.2 Acquisitions........................................45
6.3 Limitations On Indebtedness.........................45
6.4 Use Of Proceeds.....................................46
6.5 Disposition Of Assets...............................46
6.6 Restriction On Fundamental Changes..................46
6.7 Transactions With Affiliates........................46
6.8 Maintenance Of Business.............................46
6.9 No Distributions....................................47
6.10 Events Of Default...................................47
6.11 ERISA...............................................47
6.12 No Use Of Any Lender's Name.........................47
6.13 Certain Accounting Changes..........................47
6.14 Amendments Of Limited Partnership Or Operating Agreements..47
SECTION 7...................FINANCIAL COVENANTS OF BORROWER AND FSI 47
7.1 .............Maximum Funded Debt Ratio 48
7.2 .............Minimum Debt Service Ratio 48
7.3 .............Cash Balances 48
SECTION 8......................EVENTS OF DEFAULT AND REMEDIES 48
8.1 Events Of Default...48
8.1.1 .........Failure To Make Payments 48
8.1.2 .........Other Agreements 48
8.1.3 .........Breach Of Covenants 49
8.1.4 .........Breach Of Representations Or Warranties 49
8.1.5 .........Failure To Cure 49
8.1.6 .........Insolvency 49
8.1.7 .........Bankruptcy Proceedings 50
8.1.8 .........Material Adverse Effect 50
8.1.9 .........Judgments, Writs And Attachments 50
8.1.10 .........Legal Obligations 50
8.1.11 .........TEC AcquiSub Agreement 51
8.1.12 .........AFG Agreement 51
8.1.13 .........Change Of General Partner Or Manager 51
8.1.14 .........Change Of Purchaser 51
8.1.15 .........Criminal Proceedings 51
8.1.16 .........Action By Governmental Authority 51
8.1.17 .........Governmental Decrees 52
8.2 Waiver Of Default...52
8.3 Remedies............52
8.4 Set-Off.............53
8.5 Rights And Remedies Cumulative..53
SECTION 9...................................................AGENT 54
9.1 Appointment...............................54
9.2 Delegation Of Duties......................54
9.3 Exculpatory Provisions....................54
9.4 Reliance By Agent.........................54
9.5 Notice Of Default.........................55
9.6 Non-Reliance On Agent And Other Lenders...55
9.7 Indemnification...........................56
9.8 Agent In Its Individual Capacity..........56
9.9 Resignation And Appointment Of Successor Agent..56
SECTION 10................EXPENSES AND INDEMNITIES 56
10.1 Expenses.................................56
10.2 Indemnification..........................57
10.2.1 ...................General Indemnity 57
10.2.2 .............Environmental Indemnity 58
10.2.3 .............Survival; Defense 58
SECTION 11.............................MISCELLANEOUS 59
11.1 Survival..............................................59
11.2 No Waiver By Agent Or Lenders.........................59
11.3 Notices...............................................59
11.4 Headings..............................................59
11.5 Severability..........................................59
11.6 Entire Agreement; Construction; Amendments And Waivers..60
11.7 Reliance By Lenders..................................60
11.8 Marshalling; Payments Set Aside......................60
11.9 No Set-Offs By Borrowers.............................61
11.10 ...........Binding Effect, Assignment 61
11.11 ...........Counterparts 62
11.12 ...........Equitable Relief 62
11.13 ...........Written Notice Of Claims; Claims Bar 62
11.14 ...........Waiver Of Punitive Damages 63
11.15 ...........Relationship Of Parties 63
11.16 ...........Obligations Of Each Borrower 63
11.17 ...........Co-Borrower Waivers 64
11.18 ...........Governing Law 65
11.19 ...........Consent To Jurisdiction 65
11.20 ...........No Novation 66
11.21 ...........Waiver Of Jury Trial 66
11.22 ...........BMO As Lender. 66
INDEX OF EXHIBITS
Exhibit A Form of Revolving Promissory Note
Exhibit B Form of Borrowing Base Certificate
Exhibit C Form of Opinion of Counsel
Exhibit D Form of Compliance Certificate
Exhibit E Form of Notice of Borrowing
Exhibit F Form of Notice of Conversion/Continuation
Exhibit G Form of Assignment and Acceptance
INDEX OF SCHEDULES
Schedule A Commitments
Schedule 1.1 Amendments to Schedule A
Schedule 4.1.5 Executive Offices and Principal Places of Business
Schedule 4.1.6 Litigation
Schedule 4.1.7 Material Contracts
Schedule 4.1.8 Consent and Approvals
Schedule 4.1.15 Environmental Disclosures
Schedule 6.1 Existing Liens
Schedule 6.3(a) Existing Indebtedness
Schedule 6.3(b) Anticipated Indebtedness