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EXHIBIT 10.3
AMENDED AND RESTATED
LOAN AGREEMENT
BETWEEN
LEASECOMM CORPORATION, AS BORROWER
THE LENDERS NAMED THEREIN
AND
NATWEST BANK N.A., AS AGENT
JULY 28, 1995
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LOAN AGREEMENT
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LOAN AGREEMENT, dated as of July 29, 1993, as amended by the First
Amendment thereto dated as of July 26, 1994 (the "Original Loan Agreement"), as
amended and restated as of July 28, 1995 (the "Amended Agreement"), by and among
LEASECOMM CORPORATION, a Massachusetts corporation, having an office at ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "BORROWER"), NATWEST BANK N.A.,
a national banking association having an office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in its individual corporate capacity (the "BANK"), FLEET BANK OF
MASSACHUSETTS, N.A., a national banking association having an office at ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, SANWA BUSINESS CREDIT CORPORATION, a
Delaware corporation having an office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, CORESTATES BANK, N.A., a national banking association having an
office at Broad and Chestnut Streets, Philadelphia, Pennsylvania 19101, PNC
BANK, NATIONAL ASSOCIATION, a national banking association having an office at
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, COMMERZBANK AG, NEW
YORK BRANCH, a New York State licensed branch of a German banking corporation
having an office at 2 World Financial Center, New York, New York 10281, and such
other banks or financial institutions which may hereafter become parties to this
Amended Agreement from time to time (individually, a "LENDER" and, collectively
with the Bank, the "LENDERS"), and NATWEST BANK N.A., as agent for the Lenders
(the "AGENT").
W I T N E S S E T H :
WHEREAS, the Borrower, the Lenders (other than PNC Bank, National
Association) and the Agent are parties to the Original Loan Agreement, pursuant
to which, INTER ALIA, the Lenders agreed to make available to the Borrower a
revolving credit and term loan facility; and
WHEREAS, PNC Bank, National Association wishes to become a party to
the Original Loan Agreement and to be bound by all the terms, covenants and
agreements applicable to a Lender contained therein; and
WHEREAS, the Borrower has requested, INTER ALIA, that (i) the
aggregate principal amount under the Original Loan Agreement be increased, (ii)
the Credit Period (as hereinafter defined) be increased and (iii) certain other
terms and conditions thereunder be amended, as hereinafter provided; and
WHEREAS, the Lenders and the Agent are willing to amend the Original
Loan Agreement to reflect the foregoing, subject to the terms and conditions
hereinafter provided.
NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants contained therein, the parties agree that the Original Loan Agreement
is hereby amended and restated to read in its entirety as follows:
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ARTICLE I
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DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 DEFINITIONS.
As used in this Agreement, the following terms shall have the
following meanings:
"ADDITIONAL COSTS" - as defined in Section 2.15.
"ADJUSTED COST" - the Original Cost less any dealer reserve,
holdbacks and discounts to the Borrower, sales taxes, insurance, shipping,
delivery, handling and other similar charges applicable to any Equipment.
"AFFILIATE" - as to any Person, any other Person which directly or
indirectly controls, or is under common control with, or is controlled by, such
Person. As used in this definition, "control" (including, with its correlative
meanings, "controlled by land "under common control with") shall mean
possession, directly or indirectly, of power to direct or cause the direction of
management or policies (whether through ownership of securities or partnership
or other ownership interests, by contract or otherwise); PROVIDED that (i) any
Person which owns directly or indirectly 5% or more of the securities having
ordinary voting power for the election of directors or other governing body of a
corporation or 5% or more of the partnership or other ownership interests of any
other Person (other than as a limited partner of such other Person) will be
deemed to control such corporation or other Person and (ii) each stockholder,
director and officer of the Guarantor or the Borrower shall be deemed to be an
Affiliate of the Borrower.
"AGREEMENT" - this Agreement, as the same may, from time to time, be
amended, supplemented or modified.
"AMENDED AGREEMENT" - this Agreement, as amended and restated as of
July 28, 1995.
"ASSIGNMENT" - as defined in Section 10.1.
"ASSIGNMENT OF LEASES" - as defined in Section 2.22.
"BANK OF BOSTON FACILITY" - that certain revolving credit facility
between the Borrower and The First National Bank of Boston establishing a
revolving credit facility in favor of the Borrower on terms and conditions
satisfactory to the Majority Lenders, as evidenced by the written consent of the
Majority Lenders.
"BORROWING BASE" - as at the date of any determination thereof, an
amount equal to (i) in the case of Eligible Leases that are Finance Leases, 75%
of the aggregate amount of all Eligible Lease Receivables relating to all such
Eligible Leases, discounted to present value by a percentage equal to the
applicable Borrowing Rate (which calculation shall not take into account rental
payments due or payable under such Eligible Leases beyond 48 months after the
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commencement date of such Eligible Leases), (ii) in the case of Eligible Leases
that are Operating Leases (other than Rental Contracts), the lesser of (x) 60%
of the aggregate Net Book Value of the Eligible Equipment subject to such
Operating Leases or (y) 75% of the aggregate amount of all Eligible Lease
Receivables relating to all such Eligible Leases, discounted to present value by
a percentage equal to the applicable Borrowing Rate (which calculation shall not
take into account rental payments due or payable under such Eligible Leases
beyond 48 months after the commencement date of such Eligible Leases) and (iii)
in the case of Eligible Rental Contracts, an amount equal to 50% of the
aggregate Net Book Value of all Eligible Equipment subject to such Eligible
Rental Contracts. For purposes hereof, (a) the applicable Borrowing Rate shall
mean (i) with respect to Eligible Lease Receivables relating to Prime Rate
Loans, the Borrowing Rate applicable to Prime Rate Loans of the type of such
Loan as of such date or (ii) with respect to Eligible Lease Receivables relating
to Libor Term Loans, the Borrowing Rate applicable to each such Libor Term Loan
as of the applicable Borrowing Date and (b) determination of the calculation
shall be made on a lease by lease basis but the Borrowing Base shall be
comprised of the aggregate of all such calculations.
"BORROWING BASE REPORT" - as defined in Section 5.10.
"BORROWING COMPUTATION" - as defined in Section 2.3.
"BORROWING DATE" - the Business Day specified in a Notice delivered
pursuant to Section 2.2 hereof as the date on which the Borrower requests the
Agent to make a Loan.
"BORROWING RATE" - the interest rate relating to any Loan as
determined in accordance with Section 2.9 hereof.
"BUSINESS DAY" - any day other than Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required to close
under the laws of the State of New York.
"CAPITAL EXPENDITURES" - for any period, the aggregate amount of all
payments made by any Person directly or indirectly for the purpose of acquiring,
constructing or maintaining fixed assets, real property or equipment which, in
accordance with GAAP, would be added as a debit to the fixed asset account of
such Person, including, without limitation, Capitalized Lease Obligations, but
excluding therefrom the purchase of Equipment as inventory for the purpose of
being leased under an Operating Lease.
"CAPITALIZED LEASE OBLIGATIONS" - as to any Person, the obligations
of such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal property which obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP and, for purposes of this Agreement, the amount
of such obligations shall be the capitalized amount thereof, determined in
accordance with GAAP, consistently applied.
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"CODE" - the Internal Revenue Code of 1986, as it may be amended from
time to time, and any successor statute.
"COLLATERAL" - as defined in the Security Documents.
"COMMERCIAL FINANCE LEASE" - a Finance Lease which is not a Consumer
Finance Lease.
"COMMITMENT" - with respect to all of the Lenders, the sum of the
commitments of each Lender hereunder and, with respect to each Lender, such
Lender's commitment to participate in the loan facility provided under this
Agreement by making the Loans upon the terms and subject to the conditions of
this Agreement up to and including the amount set opposite its name below, which
commitment shall, subject to the terms of Sections 2.1(d) and 2.14, terminate on
the Commitment Termination Date:
NatWest Bank N.A. $20,000,000
Fleet Bank of Massachusetts, N.A. 19,000,000
Sanwa Business Credit Corporation 17,500,000
CoreStates Bank, N.A. 13,500,000
PNC Bank, National Association 7,500,000
Commerzbank AG, New York Branch 5,000,000
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Total: $82,500,000
"COMMITMENT FEE" - as defined in Section 2.5
"COMMITMENT PERCENTAGE" - the percentage of each Lender's Commitment
of the aggregate Commitment of all the Lenders.
"COMMITMENT TERMINATION DATE" - the second anniversary of the date of
this Amended Agreement, unless extended pursuant to Section 2.14 hereof.
"COMPLIANCE CERTIFICATE" - as defined in Section 4.1.
"CONSOLIDATED ASSETS" - the consolidated assets of the Guarantor and
its Subsidiaries, including the Borrower, determined in accordance with GAAP.
"CONSOLIDATED EARNINGS" - the sum of Consolidated Net Income PLUS, on
a consolidated basis for the Guarantor and its Subsidiaries, including the
Borrower, (a) all provisions for any deferred federal, state or other taxes PLUS
(b) interest on Indebtedness (including payments on
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Capitalized Lease Obligations in the nature of interest), all as determined in
accordance with GAAP.
"CONSOLIDATED INDEBTEDNESS" - the consolidated Indebtedness
(excluding Subordinated Debt but including Non-Recourse Indebtedness) of the
Guarantor and its Subsidiaries, including the Borrower, determined in accordance
with GAAP.
"CONSOLIDATED NET INCOME (DEFICIT)" - the consolidated net income (or
deficit) of the Guarantor and its Subsidiaries, including the borrower,
determined in accordance with GAAP; PROVIDED, HOWEVER, that Consolidated Net
Income shall not include amounts added to such net income (or deficit) in
respect of the write-up of any asset.
"CONSOLIDATED TANGIBLE CAPITAL FUNDS" - the sum, with respect to the
Guarantor and its Subsidiaries, including the Borrower, on a consolidated basis,
of (a) capital stock, (b) additional paid-in capital, (c) retained earnings and
(d) Subordinated Debt LESS (x) organizational costs and good will (y) treasury
stock and (z) 25% of Debt Issue Costs.
"CONSOLIDATED TANGIBLE NET WORTH" - the sum, with respect to the
Guarantor and its Subsidiaries, including the Borrower, on a consolidated basis,
of (a) capital stock, (b) additional paid-in capital and (c) retained earnings,
LESS the sum of (x) organizational costs and good will, (y) treasury stock and
(z) 25% of Debt Issue Costs.
"CONSUMER FINANCE LEASE" - a Finance Lease between the Borrower, as
lessor, and a lessee who is an individual and who takes under the lease
primarily for personal, family or household purposes.
"CONTROL" - as to any Person, the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise.
"CONTROLLED GROUP" - all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414(b), 414(c) or 414(m) of the Internal Revenue Code of
1954, as amended, and Section 4001(a)(2) of ERISA.
"CONVERSION TERM LOANS" - term loans made to the Borrower by the
Lenders on the Commitment Termination Date in the principal amount of the
outstanding Revolving Credit Loans converted on the Commitment Termination Date
to Term Loans pursuant to Section 2.1(d).
"CONVERSION TERM NOTES" - as defined in section 2. 10 (b)
"CREDIT PERIOD" - as defined in Section 2.1.
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"CREDIT PERIOD TERM LOANS" - term loans made to the Borrower by the
Lenders during the Credit Period.
"CREDIT PERIOD TERM NOTES" - as defined in Section 2.10(b).
"DEBT INSTRUMENT" - as defined in Section 8.4.
"DEBT ISSUE COSTS" - those amounts characterized as "debt issue
costs" in accordance with GAAP on the Financial Statements of the Guarantor and
its Subsidiaries.
"DEFAULT" - an event which with notice or lapse of time or both would
constitute an Event of Default.
"DOLLARS" - and "$" lawful money of the United States of America.
"ELIGIBLE EQUIPMENT" - Equipment:
(a) To which the Borrower has good and marketable title;
(b) Which is not subject to any Lien other than that in favor of
the Agent on behalf of the Lenders and in which the Agent has a
duly perfected (subject to section 4.2(e) hereof) first
priority security interest under the UCC or other similar law;
(c) Which is to be used primarily for personal, family or household
purposes or in the ordinary course of business by the
Borrower's lessees;
(d) Which is subject to an Eligible Lease or Eligible Rental
Contract;
(e) Which is insured by either the Borrower in accordance with
current practice or the lessee thereof in accordance with
industry standards; and
(f) Which, if such Equipment consists of electronic signs leased to
any one lessee, the Original Cost of such Equipment shall not
exceed $5,000.
"ELIGIBLE LEASE" - a lease contract:
(a) Which is in full force and effect;
(b) The lessor under which is the Borrower;
(c) Which is assignable by the lessor thereunder;
(d) Which is non-cancelable and provides that the lessee's
obligations thereunder are absolute and unconditional, and not
subject to defense, deduction, set-off or claim
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and as to which no defenses, set-offs, claims or counterclaims
exist or have been asserted;
(e) Which is not subject to any Lien other than that in favor of
the Agent on behalf of the Lenders and in which the Agent has a
duly perfected first priority security interest under the UCC;
(f) Which is a Finance Lease or Operating Lease;
(g) The lessee under which has not been determined by the Agent to
be unacceptable;
(h) Which is in a form approved by the Agent;
(i) Under which no payment is more than 90 days past due;
(j) Under which no default has occurred other than to the extent
permissible under clause (i) immediately above;
(k) Which covers Eligible Equipment; and
(1) Which, if an Operating Lease, has a present value of all Fixed
Rentals thereunder as of the date such Operating Lease is to be
included in the Borrowing Base of at least 70% of the Original
Cost of the Equipment leased thereunder.
"ELIGIBLE LEASE RECEIVABLES" - as at the date of determination
thereof, receivables then due and unpaid with respect to an Eligible Lease.
"ELIGIBLE RENTAL CONTRACT" - a Rental Contract:
(a) which is in full force and effect;
(b) The lessor under which is the Borrower;
(c) Which is assignable by the lessor thereunder;
(d) Which provides that the lessee's obligations thereunder are
absolute and unconditional, and not subject to defense,
deduction, set-off or claim and as to which no defenses,
set-offs, claims or counterclaims exist or have been asserted;
(e) Which is not subject to any Lien other than that in favor of
the Agent on behalf of the Lenders and in which the Agent has a
duly perfected first priority security interest under the UCC;
(f) The lessee under which has not been determined by the Agent to
be unacceptable;
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(g) Which is in a form approved by the Agent;
(h) Under which no payment is more than 90 days past due;
(i) Under which no default has occurred other than to the extent
permissible under clause (h) immediately above; and
(j) Which covers Eligible Equipment.
"ELIGIBLE RENTAL CONTRACT RECEIVABLES" - as at the date of
determination thereof, receivables then due and unpaid with respect to an
Eligible Rental Contract.
"EQUIPMENT" - bank credit card authorization terminals, electronic
signs, satellite communication equipment, security systems, water cooler
systems, office equipment, other miscellaneous equipment (provided such
miscellaneous equipment (including the Eligible Leases and Eligible Lease
Receivables relating thereto) does not, in the judgment of the Agent, comprise
at any time a material portion in value of the Borrowing Base ("Other
Equipment") and such other equipment acceptable to the Agent and the Lenders,
whether now or hereafter owned and leased to third party users by the Borrower;
provided, however, that in no event shall Equipment include cellular telephones,
software or fixtures (other than electronic signs).
"ERISA" - the Employee Retirement Income Security Act of 1974, as it
may be amended from time to time, and the regulations thereunder.
"EVENT(S) OF DEFAULT" - as defined in Article 8.
"EXPENSES" - as defined in Section 9.8.
"FEDERAL FUNDS RATE" - for any day, the weighted average of the rates
on overnight federal funds transactions with member banks of the Federal Reserve
System arranged by federal funds brokers as published by the Federal Reserve
Bank of New York for such day, or if such day is not a Business Day, for the
next preceding Business Day (or, if such rate is not so published for any such
day, the average rate charged to the Agent on such day on such transactions as
reasonably determined by the Agent).
"FINANCE LEASE" - a Lease characterized as a "finance lease,, in
accordance with GAAP.
"FINANCIAL STATEMENTS" - (a) the audited consolidated balance sheet
and consolidated statements of income and retained earnings and of cash flows of
the Guarantor and its Subsidiaries, including the Borrower, for fiscal year
ended December 31, 1992 the unaudited consolidated balance sheet and
consolidated statements of income and retained earnings and of cash flows of the
Guarantor and its Subsidiaries, including the Borrower, for the six months ended
June 30, 1993, or (b) the most recent financial statements delivered by the
Borrower to the Agent pursuant to Sections 5.1, 5.2 and 5.3.
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"FIXED CHARGE RATIO" - the ratio of Consolidated Earnings, during any
period consisting of the preceding four consecutive fiscal quarters, to Fixed
Charges, payable during such period.
"FIXED CHARGES" - on a consolidated basis for the Guarantor and its
Subsidiaries, including the Borrower, the scheduled payments of interest on all
Indebtedness (including payments on capitalized lease obligations in the nature
of interest).
"FIXED RENTALS" - the periodic rental payments under a Lease,, the
amounts of which are fixed and do not vary from time to time based on usage,
cash flow or any other factor.
"GAAP" - Generally accepted accounting principles, in effect from
time to time in the United States.
"GROSS LEASE INSTALLMENTS" - the aggregate receivables due to the
Borrower from all leases of equipment.
"GUARANTOR" - ▇▇▇▇▇ Leasing Technologies, Inc., a Massachusetts
corporation and the owner of all of the issued and outstanding shares of the
Borrower's capital stock.
"GUARANTY" - as defined in Section 2.22.
"INDEBTEDNESS" - with respect to any Person, all (i) liabilities or
obligations, direct and contingent, which in accordance with generally accepted
accounting principles would be included in determining total liabilities as
shown on the liability side of a balance sheet of such Person at the date as of
which Indebtedness is to be determined, including, without limitation, lease
obligations required to be shown as a liability on the balance sheet of the
lessee in accordance with generally accepted accounting principles; (ii)
liabilities or obligations of others for which such Person is directly or
indirectly liable, by way of guaranty (whether by direct guaranty, suretyship,
discount, endorsement, take-or-pay agreement, agreement to purchase or advance
or keep in funds or other agreement having the effect of a guaranty) or
otherwise; (iii) liabilities or obligations secured by liens on any assets of
such Person, whether or not such liabilities or obligations shall have been
assumed by it; and (iv) noncancellable liabilities under all Operating Leases.
"INTEREST PERIOD" - with respect to any Libor Term Loan and as
determined at the Borrowing Date of such Libor Term Loan, each period commencing
on the date such Loan is made or converted from a Loan or Loans of another type
and ending with the final month in a term of months equal to the weighted
average remaining number of months in respect of which installments are payable
under the Eligible Leases or Eligible Rental Contracts relating to such Loan
(without giving effect to any payments due and payable more than 48 months after
the commencement date of such Eligible Leases) , as specified in the Borrowing
Computations with respect thereto, which period shall end on the day in such
month which is the same day of the month in which such Loan was made.
Notwithstanding the foregoing, (i) no Interest Period shall end after the
Maturity Date of the Notes; and (ii) if the Interest Period would otherwise end
on a day that is not a Libor Business Day, such Interest Period shall end on the
next succeeding Libor
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Business Day, unless such next succeeding Libor Business Day is after the
Maturity Date of a Loan, in which event such Interest Period shall end on the
next preceding Libor Business Day.
"INVESTMENT" - any investment in any Person by means of purchase of
shares of stock or Indebtedness, capital contribution, loan, advance or
guarantee, or any acquisition of all or the part of the business or assets of
any Person, or any commitment or option to make any Investment.
"IRS" - Internal Revenue Service.
"LATEST BALANCE SHEET" - as defined in section 3.9.
"LEASE" - any lease agreement (including any and all schedules,
supplements and amendments thereon and modifications thereof) entered into by
the Borrower as lessor with respect to Equipment.
"LENDERS" - NatWest Bank N.A., Fleet Bank of Massachusetts, N.A.,
Sanwa Business Credit Corporation, CoreStates Bank, N.A., PNC Bank, National
Association, Commerzbank AG, New York Branch, and any of their permitted
successors and assigns pursuant to Section 10.1 hereof.
"LIBOR BUSINESS DAY" - any Business Day on which transactions in
Dollar deposits are carried out in the London Interbank Eurocurrency Market.
"LIBOR" - for any Interest Period, the rate per annum (rounded
upwards, if necessary to the nearest 1/16 of 1%) quoted by the Agent at
approximately 10:00 a.m. New York time (or as soon thereafter as practicable)
two Libor Business Days prior to the first day of such Interest Period for the
offering by the Agent to the lending banks in the London Interbank Eurocurrency
Market of Dollar deposits having a term comparable to such Interest Period and
in an amount comparable to the principal amount of the Libor Term Loan made by
the Lenders to which such Interest Period relates.
"LIBOR TERM LOAN" - a Term Loan the interest on which is determined
on the basis of Libor.
"LIEN" - any mortgage, deed of trust, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement, any
lease in the nature of a grant of a security interest or lien), and the filing
of or agreement to give any financing statement under the UCC or similar law of
any jurisdiction.
"LOAN" and "LOANS" individually a Revolving Credit Loan or a Term
Loan and collectively Revolving Credit Loan(s) and Term Loan(s).
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"LOAN DOCUMENTS" - this Agreement, the Notes, the Security Documents,
and all other documents executed and delivered in connection herewith or
therewith, including all amendments, modifications and supplements of or to all
such documents.
"LOAN PARTIES" - the Borrower and the Guarantor.
"MAJORITY LENDERS" - (i) at any time on or prior to the Commitment
Termination Date, Lenders whose Commitment Percentages aggregate more than
sixty-six and two-thirds (66 2/3%) and (ii) at any time after the Commitment
Termination Date, Lenders whose Loans outstanding to the Borrower aggregate more
than sixty-six and two thirds (66 2/3%) of the total Loans outstanding.
"MATURITY DATE" - (i) with respect to Credit Period Term Loans, the
Maturity Date shall be determined in accordance with Section 2. 1 (c) , (ii)
with respect to Revolving Credit Loans, the Maturity Date shall be the
Commitment Termination Date and (iii) with respect to Conversion Term Loans, the
Maturity Date shall be determined in accordance with Section 2.1(d).
"NET BOOK VALUE" - at a particular date, as to any Eligible
Equipment, the Original Cost of such Eligible Equipment less aggregate
depreciation thereon calculated from the date of acquisition thereof in
accordance with the Borrower's standard accounting and depreciation practices
using the straight line method over the estimated life of such Eligible
Equipment, with salvage value determined by the Borrower in accordance with such
practices.
"NON-RECOURSE INDEBTEDNESS" Indebtedness of the Borrower or the
Guarantor, as the case may be, for which the remedy for nonpayment or
non-performance of any obligation or any default in respect thereof is strictly
and absolutely limited to any collateral securing such Indebtedness and in
respect of which neither the Borrower nor the Guarantor is subject to any
personal liability.
"NOTE (S)" collectively, the Revolving Credit Notes, the Credit
Period Term Notes and the Conversion Term Notes, each of them and any note (s)
issued in substitution or replacement thereof.
"NOTICE" - as defined in Section 2.2.
"OBLIGATIONS" - as defined in Section 2.22.
"OPERATING LEASE" a Lease characterized as an "operating lease" in
accordance with GAAP.
"ORIGINAL COST" - the purchase price for any Equipment as invoiced by
the supplier thereof.
"ORIGINAL LOAN AGREEMENT" - as defined in the preamble to this
Agreement.
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"PARTICIPANT" - as defined in Section 10.2.
"PARTICIPATION" - as defined in Section 10.2.
"PBGC" - as defined in Section 3.16.
"PERMITTED LIENS" - (i) liens or charges for current taxes,
assessments or other governmental charges other than those arising from income
taxes (A) which are not yet -due and payable or (B) the validity of which is
being contested in good faith by appropriate proceedings upon stay of execution
of the enforcement thereof and which are in respect of claims for current taxes,
assessments, or other governmental charges not exceeding an aggregate of
$25,000; (ii) Liens or charges not exceeding an aggregate amount of $50,000,
incurred in the ordinary course of business of the Guarantor or the Borrower in
connection with workers' compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of statutory
obligations, leases and contracts (other than for borrowed money) entered into
in the ordinary course of business or to secure obligations on surety or appeal
bonds; (iii) Liens of attachment and judgment respecting claims, the validity of
which is being contested in good faith by appropriate proceedings upon stay of
execution of the enforcement thereof (A) in an aggregate amount not exceeding
$25,000, or (B) which shall be vacated within 30 days after the creation
thereof; and (iv) mechanic's, materialmen's, warehousemen's or other similar
liens arising in the ordinary course of Borrower's business which either (A) are
inchoate and relate to an obligation which is not yet due and payable, or (B)
are being contested in good faith and which are in respect of mechanics',
materialmen's, or other similar charges not exceeding an aggregate of $10,000.
"PERSON" - an individual, a corporation, a partnership, a joint
venture, a trust or unincorporated organization, a joint stock company or other
similar organization, a government or any political subdivision thereof, a
court, or any other legal entity, whether acting in an individual, fiduciary or
other capacity.
"PLAN" - an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code and is either (i) maintained by the Borrower or any member of the
Controlled Group for employees of the Borrower, or by the Borrower for any other
member of such Controlled Group or (ii) maintained pursuant to a collective
bargaining agreement or any other arrangement under which more than one employer
makes contributions and to which the Borrower or any member of the Controlled
Group is then making or accruing obligations to make contributions or has within
the preceding five plan years made contributions.
"POST-DEFAULT RATE" - (i) in respect of any Loans not paid when due
(whether at stated maturity, by acceleration or otherwise), a rate per annum
during the period commencing on the due date until such Loans are paid in full
equal to 2% above the applicable rate of interest in effect and (ii) in respect
of other amounts payable by the Borrower hereunder not paid when due (whether at
stated maturity, by acceleration or otherwise), a rate per annum during the
period
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commencing on the due date-until such other amounts are paid in full equal to 2%
above the Prime Rate as in effect from time to time in each such case, to the
extent permitted by applicable law.
"PRIME RATE" - the interest rate which the Agent announces from time
to time at the Principal Office as its prime commercial lending rate. Each
change in any interest rate provided for herein based upon the Prime Rate
resulting from a change in the Prime Rate shall take effect at the time of such
change in the Prime Rate. The Prime Rate is established from time to time by the
Agent as an index or base rate and at any time may or may not be the best or
lowest rate charged by the Agent on any loan.
"PRIME RATE LOANS" - a Loan the interest on which is determined on
the basis of the Prime Rate.
"PRIME RATE TERM LOANS" - a Term Loan the interest on which is
determined on the basis of the Prime Rate.
"PRINCIPAL OFFICE" - the principal office of the Agent presently
located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"PRINCIPALS" - ▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇.
"PURCHASE MONEY SECURITY INTEREST" - as defined in Section 7.2.
"REGULATION D" - Regulation D of the Board of Governors of the
Federal Reserve System, as the same may be amended or supplemented from time to
time.
"REGULATORY CHANGE" - any change after the date of this Agreement in
foreign or United States federal, state or local laws or regulations (including
Regulation D) or the adoption or making after such date of any interpretations,
directives or requests applying to a class of banks including any of the Lenders
of or under any foreign or United States federal, state, or local laws or
regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.
"RENTAL CONTRACT" - an Operating Lease which is month-to-month and
which is cancelable.
"REVOLVING CREDIT LOANS" - revolving credit loans made pursuant to
Section 2.1(a).
"REVOLVING CREDIT NOTES" - as defined in Section 2.10(a).
"SECURITY AGREEMENT" - as defined in Section 2.22.
"SECURITY AGREEMENT SUPPLEMENTS" - as defined in Section 2.22.
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"SECURITY DOCUMENTS" - as defined in Section 2.22.
"SECURITIZATION DOCUMENTS" - all of the documents evidencing and
relating to the private placement of (i) 7.23% Lease-Backed Notes, Series 1992-1
of BLT Finance Corp. I, a wholly-owned Subsidiary of the Borrower and (ii) 5.17%
Lease-Backed Certificates of BLT Finance Corp. II, a wholly-owned Subsidiary of
the Borrower, in each case, as in effect on the date of the Original Loan
Agreement.
"SOLVENT" - with respect to any Person, means that (i) the fair value
of all of such Person's properties and assets is in excess of the total amount
of its Indebtedness; (ii) it is able to pay its debts as they mature; (iii) it
does not have unreasonably small capital for the business in which it is engaged
or for any business or transaction in which it is about to engage; and (iv) it
is not "insolvent" as such term is defined in Section 101(31) of Title 11 of the
United States Code, 11 U.S.C. Section 101, ET SEQ.
"SUB-LIMIT" - 5% of the aggregate Commitment outstanding from time to
time.
"SUBORDINATED DEBT" - the existing Indebtedness of the Guarantor
listed on Schedule 3.20, and any other Indebtedness of the Guarantor and any of
its Subsidiaries, including the Borrower, subordinated to the obligations and
the Guaranteed Obligations (as defined in the Guaranty), the terms and
conditions of which Indebtedness are satisfactory to the Majority Lenders, as
evidenced by the written consent of the Majority Lenders thereto.
"SUBSIDIARY" with respect to any Person, any corporation, partnership
or joint venture whether now existing or hereafter organized or acquired: (i) in
the case of a corporation, of which a majority of the securities having ordinary
voting power for the election of directors (other than securities having such
power only by reason of the happening of a contingency) are at the time owned by
such Person and/or one or more Subsidiaries of such Person or (ii) in the case
of a partnership or joint venture in which such Person is a general partner or
joint venturer or of which a majority of the partnership or other ownership
interests are at the time owned by such Person and/or one or more of its
Subsidiaries.
"TERM LOANS" - Credit Period Term Loans and Conversion Term Loans.
"UCC" - the Uniform Commercial Code as enacted in any state of the
United States or in the District of Columbia or the United States Virgin Islands
insofar as any such statute, as in effect from time to time, may be relevant to
the creation, perfection, continuation and enforcement of Liens on Collateral.
"UNUSED COMMITMENT" - as defined in Section 2.5.
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SECTION 1.2 ACCOUNTING TERMS.
Any accounting terms used in this Agreement which are not
specifically defined herein shall have the meanings customarily given thereto in
accordance with GAAP, consistently applied.
SECTION 1.3 OTHER TERMS.
Any references herein to exhibits, schedules, sections or articles
are references to exhibits, schedules, sections or articles of this Agreement,
unless otherwise specified. Any references herein to the Security Documents are
references to such Security Documents as the same may be amended, modified,
supplemented or restated from time to time. Wherever appropriate in the context,
terms used herein in the singular also include the plural, and vice versa, and
each masculine, feminine or neuter pronoun shall also include the other genders.
ARTICLE 2
---------
COMMITMENT, LOANS AND COLLATERAL
SECTION 2.1 LOANS.
(a) Subject to the terms and conditions of this Agreement, each
Lender, severally but not jointly, hereby agrees, on the terms and subject to
the conditions of this Agreement, to make Revolving Credit Loans and Credit
Period Term Loans to the Borrower on any Business Day during the period (the
"CREDIT PERIOD") from the date of the Original Loan Agreement to and including
the Commitment Termination Date in an aggregate principal amount at any one time
outstanding up to but not exceeding such Lender's Commitment. Such Loans shall
be made by the Lenders on a PRO RATA basis, calculated for each Lender based on
its Commitment Percentage; PROVIDED, HOWEVER, that no Loan will be made
hereunder if, after giving effect thereto and to all other Loans being made
concurrently therewith, the aggregate outstanding principal amount of all Loans
would exceed the Commitment and in the case of such Loans based upon Operating
Leases or Eligible Rental Contracts, the Sub-limit.
(b) Subject to the terms and conditions of this Agreement, the
Borrower may borrow, repay and reborrow amounts in respect of the Revolving
Credit Loans available under the Commitment during the Credit Period by means of
Prime Rate Loans. Amounts repaid on or after the Commitment Termination Date may
not be reborrowed. Subject to the terms and conditions hereof, the Borrower may
borrow amounts in respect of Term Loans by means of Prime Rate Loans and Libor
Term Loans and repay amounts in respect of such Loans.
(c) The Borrower shall pay to the Agent for the benefit of the
Lenders the principal amount outstanding of each Credit Period Term Loan in
consecutive equal monthly installments equal in number to the weighted average
remaining number of monthly payments due under the Eligible Leases or Eligible
Rental Contracts relating to such Loan without giving effect to amounts due and
payable more than 48 months after the commencement date of such Eligible
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Leases and Eligible Rental Contracts, as specified in the Borrowing Computations
with respect thereto, with a payment being due on the first Business Day of each
calendar month following the applicable Borrowing Date; provided, however, that
all principal and interest on all credit Period Term Loans shall be paid in full
on the fourth anniversary of the Commitment Termination Date.
(d) On the Commitment Termination Date (which date shall also be
referred to as the "TERM PERIOD COMMENCEMENT Date"), each of the Revolving
Credit Loans shall either be paid or, provided (i) no Event of Default or
Default shall have occurred and be continuing and (ii) the Borrower shall have
delivered to each Lender a duly completed and executed Conversion Term Note, in
form and substance satisfactory to the Agent, be converted to Conversion Term
Loans the principal amount of which shall be payable by the Borrower to the
Agent in consecutive monthly installments, (provided that the last installment
shall be in an amount sufficient to pay the entire outstanding amount of such
Loan) equal in number to the weighted average remaining number of monthly
payments under the Eligible Leases or Eligible Rental Contracts relating to such
Loans without giving effect to amounts due and payable more than 48 months after
the commencement date of such Eligible Leases and Eligible Rental Contracts, as
specified in the Borrowing Computations with respect thereto, with a payment
being due on the first Business Day of each calendar month following the
Commitment Termination Date; PROVIDED, HOWEVER, that on the fourth anniversary
of the Commitment Termination Date the then outstanding principal and interest
of all Conversion Term Loans shall be paid in full.
(e) The Borrower shall be permitted, at any time prior to the
Commitment Termination Date, to reduce the amount of the Commitment to an amount
not less than the aggregate principal amount of the Loans then outstanding upon
not less than five (5) Business Days' prior written notice to the Agent,
provided that such reduction shall be in integral increments of one million
dollars ($1,000,000) and that any such notice shall be accompanied by payment of
all accrued and unpaid fees through the effective date of such reduction.
SECTION 2.2 NOTICES.
The Borrower shall give the Agent written notice in the form of
EXHIBIT A to the original Loan Agreement (a "NOTICE") of each borrowing of a
Loan, each conversion and prepayment of a Loan and, in the case of the borrowing
or prepayment of, or conversion of a Prime Rate Term Loan into, a Libor Term
Loan, the duration of each Interest Period applicable thereto. Each Notice shall
be irrevocable and shall be effective only if received by the Agent no later
than 1:00 P.M. New York City time, on the date which is, in the case of the
borrowing of a Libor Term Loan, at least three (3) Business Days or, in the case
of the borrowing of a Prime Rate Loan, at least two (2) Business Days, prior to
the date of such borrowing designated in the Notice and, in the case of the
prepayment or conversion of a Loan, at least three (3) Business Days prior to
the date of such prepayment or conversion designated in the Notice. Each such
Notice of a borrowing, conversion or prepayment shall specify (a) the amount and
type of Loan to be borrowed, converted or prepaid and (b) the date of such
borrowing, conversion or prepayment (which shall be a Business Day). Each such
Notice of the duration of an Interest Period shall specify the Libor Term Loans
to which such Interest Period is to relate. Promptly upon its
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receipt thereof, the Agent shall send to each of the Lenders copies of all
Notices received pursuant to this Section 2.2.
SECTION 2.3 BORROWING COMPUTATION.
(a) Each Notice requesting borrowing of a Loan shall be accompanied
by a computation of the Borrower substantially in the form of Exhibit B annexed
to this Amended Agreement (hereinafter referred to as a "BORROWING COMPUTATION")
certified by the president, chief financial officer, vice president-funding
operations or chief operating officer of the Borrower, setting forth (i) a
complete description of the Equipment to be acquired or financed with respect to
which such Loan has been requested, (ii) the Original Cost and Adjusted Cost of
such Equipment, (iii) a complete description of the Leases covering such
Equipment, (iv) the name of the lessees under such Leases, (v) a statement that
such Equipment and Leases, subject to the acceptance by the Agent of such
Equipment or the applicable lessee, satisfy the conditions to qualify as
Eligible Equipment and Eligible Leases or Eligible Rental Contracts,
respectively, (vi) the calculation of the projected amounts referred to in
Section 2.3(b) and (vii) such other information with respect to such Equipment
and Leases as is requested by the Agent in the Borrowing Computation or
otherwise. Within two Business Days after receipt of such information in the
form indicated above, the Agent shall notify the Borrower if any of such
Equipment or lessees are unacceptable to the Agent. In the event the Agent does
not so notify the Borrower, the Agent, on behalf of itself and the Lenders,
shall be deemed to have accepted such Equipment and lessees. The acceptance or
deemed acceptance of any lessee under any Lease at any one time by the Agent
shall not operate as an acceptance of such lessee at any future time.
(b) (i) With respect to Loans based upon Eligible Leases (other
than Operating Leases), the amount of each such Loan shall be an amount equal to
the lesser of (x) 100% of the Adjusted Cost of the Eligible Equipment subject to
such Eligible Leases or (y) 75% of the amount of the Eligible Lease Receivables
relating to such Eligible Leases, discounted to present value (which calculation
shall not take into account rental payments due and payable under such Eligible
Leases beyond 48 months after the commencement date of such Eligible Leases) by
a percentage equal to the Borrowing Rate applicable to such Loan as of the
applicable Borrowing Date.
(ii) with respect to Loans based upon Eligible Leases
consisting of Operating Leases which are not Rental Contracts, the amount of
each such Loan shall be an amount equal to the lesser of (x) 60% of the Net Book
Value of the Eligible Equipment subject to such Eligible Leases or (y) 75% of
the Eligible Lease Receivables relating to such Eligible Leases, discounted to
present value (which calculation shall not take into account rental payments due
and payable under such Eligible Leases beyond 48 months after the commencement.
date of such Eligible Leases) by a percentage equal to the Borrowing Rate
applicable to such Loan as of the applicable Borrowing Date.
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(iii) With respect to Loans based upon Eligible Rental
Contracts, the amount of each such Loan shall be an amount equal to 50% of the
Net Book Value of the Eligible Equipment subject to such Eligible Rental
Contracts.
SECTION 2.4 BORROWINGS.
(a) Upon the satisfaction by the Borrower of the applicable
conditions set forth in Article 4 hereof and Sections 2.2 and 2.3 above, and
provided that the Lease or the Equipment covered by such Lease relating to a
requested Loan shall be "Eligible" within the parameters of the eligibility
definition set forth in this Agreement with respect thereto, on each Borrowing
Date, the Lenders shall make the Loans requested by the Borrower on the
applicable Borrowing Date.
(b) on each Borrowing Date, each Lender shall make available the
respective amount of the Loan to be made by it no later than 11:00 A.M. New York
City time, on such date by depositing the proceeds thereof, in immediately
available funds, with the Agent at its Principal Office and the Agent shall pay
over such funds, upon the Agent's receipt of the documents and satisfaction of
the conditions required under Article 4 with respect to such Loans prior to the
Borrowing Date and as soon as practicable after delivery of the Notice, (i) to
an account designated by the Borrower or (ii) on instructions from the Borrower
to the Agent in the Notice related to such Loan, transmitting such amount to the
Borrower or such Person or entity as the Borrower shall have designated in such
Notice. The making by any Lender of any Loan on the requested Borrowing Date
does not and shall not imply such Lender's acceptance of such or any other Lease
or Equipment whether or not the same lessee is the lessee under such other Lease
or the same type of Equipment has been financed by the Lenders in connection
with another Loan.
SECTION 2.5 FEES.
(a) COMMITMENT FEE. The Borrower shall pay to the Agent, for the
account of each of the Lenders, a commitment fee (the "COMMITMENT FEE") on the
daily average amount of the Unused Commitment (as defined below) at a rate equal
to .425% per annum. As used herein, "Unused Commitment" shall mean the amount,
determined as of the end of each day, by which the Commitment exceeds the
aggregate principal amount of Loans outstanding. Such fee shall be payable
quarterly in arrears on the date of the original Agreement, on the last Business
Day of each December, March, June and September thereafter, and on the earlier
to occur of the Commitment Termination Date and the date the Commitment is
terminated pursuant to Article 8 hereof.
(b) FEE AGREEMENT. The Borrower shall pay to the Agent the fee set
forth in the letter agreement dated July 26, 1994 between the Borrower and the
Agent.
SECTION 2.6 BORROWING BASE; PREPAYMENTS.
(a) The aggregate principal amount of the Loans outstanding shall
not as of the date of any Borrowing Base Report exceed the amount of the
Borrowing Base as of such date. In the
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event that for any reason the aggregate outstanding principal amount of the
Loans exceeds the Borrowing Base, the Borrower shall immediately, but in any
event, not later than the next due date for the Borrowing Base Report required
to be delivered to the Agent pursuant to Section 5.10 hereof (i) prepay the
Loans in an amount sufficient to reduce the sum of the aggregate principal
amount of the Loans to an amount not greater than the Borrowing Base or (ii)
increase the amount of the Borrowing Base by granting the Agent, as agent for
the Lenders pursuant to the Security Agreement, a Lien pursuant to and as
contemplated by Section 2.22 hereof and the Security Documents on additional
Eligible Leases and Eligible Rental Contracts and Eligible Equipment or other
security acceptable to the Lenders, in their sole discretion, such that, after
giving effect to the grant of such Lien, the Borrowing Base equals or exceeds
the aggregate principal amount of the Loans outstanding.
(b) Subject to the delivery of a Notice pursuant to Section 2.2 and
to the indemnity agreement set forth in Section 2.19 hereof, but otherwise
without premium or penalty, the Borrower shall have the right to prepay any Loan
at any time and from time to time in whole or in part; PROVIDED, HOWEVER, that
(x) any such prepayment (other than a prepayment pursuant to Section 2.6 (a))
shall be in an amount not less than such amounts as provided in Section 2.13 (a)
hereof; (y) prepayment of Libor Term Loans shall be subject to the provisions of
Section 2.19 hereof; and (z) any such prepayment shall be made with interest
accrued to the date of prepayment. Any prepayments under this Section 2.6(b)
shall be applied by the Agent first to the payment of interest accrued with
respect to the Loans prepaid, and the balance to prepay the principal amount
thereof; PROVIDED, THAT with respect to the Term Loans such prepayment shall be
applied in inverse order of the maturity of the installments thereof. Upon the
making of a prepayment of the entire outstanding principal balance of a Loan in
accordance with the provisions of this Section 2.6(b) and provided that no
Default or Event of Default shall then have occurred and be continuing or would
occur as a result thereof, the Agent shall release the Eligible Equipment and
Eligible Leases and Eligible Rental Contracts to which such prepayment relates
from the security interest granted to the Agent on behalf of the Lenders
hereunder upon the receipt by the Agent of a Compliance Certificate and a
Borrowing Base Report indicating that upon such release the Borrower shall be in
compliance with the terms of Section 2.6(a) hereof.
SECTION 2.7 CONVERSION OF LOANS.
Subject to Section 2.19 hereof, the Borrower shall have the option to
convert a Prime Rate Term Loan into a Libor Term Loan; PROVIDED, HOWEVER, that
in the case of the conversion of such Loan, (a) the Borrower shall give to the
Agent notice of each such conversion as provided in Section 2.2; and (b) no Loan
may be converted if on the proposed date of conversion an Event of Default or
Default has occurred and is continuing.
SECTION 2.8 USE OF PROCEEDS OF LOANS.
The proceeds of each Loan hereunder may be used by the Borrower
solely to finance or refinance Eligible Equipment covered by Eligible Leases and
Eligible Rental Contracts referred to in the Borrowing Computation relating to
such Loan, and for no other purpose whatsoever.
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SECTION 2.9 INTEREST.
(a) Subject to subsection (b) below, the Borrower shall pay to the
Agent for the account, of each Lender interest on the unpaid principal amount of
each Loan for the period commencing on the date of such Loan until such Loan
shall be paid in full, or converted from a Revolving Credit Loan into a Term
Loan or converted from a Term Loan of one type into a Term Loan of another type,
as the case may be, at the following rates per annum:
(i) with respect to any Revolving Credit Loan, during the
period that such Loan (or any portion thereof) is outstanding, the
Prime Rate plus .75%; and
(ii) with respect to any Term Loan, (x) during such periods
that such Loan (or any portion thereof) is a Prime Rate Term Loan,
the Prime Rate plus 2.50% and (y) during such periods that such Loan
(or any portion thereof) is a Libor Term Loan, Libor plus 2.75%.
(b) Notwithstanding the foregoing, the Borrower shall pay interest
at the applicable Post-Default Rate on any Loan or any installment of principal
thereof, and on any other amount payable by the Borrower hereunder and under any
other Loan Document (including interest to the extent permitted by law) which
shall not be paid in full when due (whether at stated maturity, by acceleration
or otherwise) for the period commencing on the due date thereof to and including
the date on which the same is paid in full.
(c) Except as provided in the following sentence, accrued interest
on each Loan shall be payable monthly in arrears on the first Business Day of
each month, commencing on the first month immediately following the date of the
making of such Loan and continuing on the first Business Day of each month
thereafter until the maturity of such Loan or the payment or prepayment thereof
in full. Interest which is payable at a Post-Default Rate shall be payable from
time to time on demand of the Agent.
(d) Subject to Section 2.7 hereof, the Borrower shall be permitted
to convert a Prime Rate Term Loan, or any portion thereof in an amount equal to
or exceeding $500,000, to a Libor Term Loan.
(e) References in this Section 2.9 to each Loan shall be deemed to
refer, as applicable, to portions of such Loan.
(f) Promptly after the establishment of any interest rate provided
for herein or any change therein, the Agent will notify the Borrower thereof;
PROVIDED, HOWEVER, that the failure of the Agent to so notify the Borrower shall
not affect the obligations of the Borrower hereunder or under the Notes in any
respect.
(g) Anything in this Agreement or the Notes to the contrary
notwithstanding, the obligation of the Borrower to make payments of interest
shall be subject to the limitation that payments of interest shall not be
required to be made to the Agent for the account of any Lender
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to the extent that the Lender's receipt thereof would not be permissible under
the law or laws applicable to such Lender limiting rates of interest which may
be charged or collected by such Lender. Any such payments of interest which are
not made as a result of the limitation referred to in the preceding sentence
shall be made by the Borrower to the Agent for the account of such Lender, if at
all, on the earliest interest payment date or dates on which the receipt thereof
would be permissible under the laws applicable to such Lender limiting rates of
interest which may be charged or collected by such Lender.
SECTION 2.10 NOTES.
(a) The Revolving Credit Loans made by each Lender shall be
evidenced by a single promissory note made by the Borrower and payable to the
order of such Lender in a principal amount equal to such Lender's Commitment and
otherwise duly completed, in substantially the form of EXHIBIT C-1 to the
Original Loan Agreement (individually, a "REVOLVING CREDIT NOTE" and
collectively, the "REVOLVING CREDIT NOTES").
(b) The Credit Period Term Loans made by each Lender shall be
evidenced by a single promissory note made by the Borrower and payable to the
order of such Lender in a principal amount equal to such Lender's Commitment and
otherwise duly completed, in substantially the form of EXHIBIT C-2 to the
Original Loan Agreement (individually, a "CREDIT PERIOD TERM NOTE" and
collectively, the "CREDIT PERIOD TERM NOTES"). The Conversion Term Loans made by
each Lender shall be evidenced by a single promissory note made by the Borrower
and payable to the order of such Lender in a principal amount equal to such
Lender's pro rata share of the Revolving Credit Loans that are converted into
Conversion Term Loans on the Commitment Termination Date and otherwise duly
completed, in substantially the form of EXHIBIT C-3 to the Original Loan
Agreement (individually, a "CONVERSION TERM NOTE" and collectively, the
"CONVERSION TERM NOTES"). Upon payment in full of the Revolving Credit Loans or
conversion of such Revolving Credit Loans into Conversion Term Loans and receipt
of a duly completed Conversion Term Note by each Lender, all Revolving Credit
Notes theretofore outstanding will be returned to the Borrower. Upon payment in
full of the Credit Period Term Loans, all Credit Period Term Notes will be
returned to the Borrower.
(c) All Revolving Credit Loans and Credit Period Term Loans and all
payments and prepayments made on account of the principal of such Loans shall be
recorded by each Lender on the schedule attached to the applicable Note. The
Borrower hereby authorizes the Lenders to make all notations on such schedules
to record such matters and such notations shall, in the absence of manifest
error, be conclusive as to the outstanding balance thereunder; PROVIDED,
HOWEVER, that any failure by any Lender to make any such notation shall not
limit or otherwise affect the obligations of the Borrower hereunder or under the
Notes in respect of the Loans.
SECTION 2.11 PAYMENTS.
(a) All payments of principal, interest, fees and other amounts
payable by the Borrower hereunder shall be made in Dollars, in immediately
available funds, to the Agent for the account of the Lenders, PRO RATA at the
Principal Office of the Agent no later than 11:00 A.M.
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New York City time, on the dates on which such payments shall become due. Except
as provided in clause (ii) to the definition of "Interest Period" set forth in
Section 1.1 hereof, payments which are due on a day which is not a Business Day
shall be payable on the first Business Day thereafter and interest shall
continue to accrue, or shall be payable for any principal so extended, in each
case for the period of such extension. Each such payment made after such time on
such dates shall be deemed to have been made on the next succeeding Business Day
and interest shall accrue thereon accordingly. All payments received by the
Agent for the account of the Lenders hereunder shall be applied first, to pay
all fees and expenses then due and payable hereunder, second, to pay accrued and
unpaid interest on the Loans and third, to repay the outstanding principal
balance of the Loans. The Agent shall, once it has received such payment from
the Borrower, remit in immediately available funds to each Lender its PRO RATA
share of all such payments received by the Agent hereunder for the account of
such Lender within one Business Day after its receipt or deemed receipt thereof.
(b) If any Lender or other holder of a Note shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
offset or otherwise) on account of principal of or interest on any Note by any
means in excess of its PRO RATA share of payments and other recoveries obtained
by all Lenders or other holders on account of principal of and interest on any
Loans and any other obligation, such Lender or other holder shall promptly
purchase from the other Lenders or holders of a participation (or direct
interest) in the Notes held by the other Lenders (or in interest due thereon, as
the case may be), as shall be necessary to cause such purchasing Lender or other
holder to share the excess payment or other recovery PRO RATA with each of them;
PROVIDED, HOWEVER, that if all or any portion of the excess payment or other
recovery is thereafter recovered from such purchasing holder, the purchase shall
be rescinded and the purchase price restored to the extent of such recovery, but
without interest. To such end, all the Lenders shall make appropriate
adjustments among themselves (by the resale of participations sold or otherwise)
if such payment is rescinded or must otherwise be restored. The Borrower agrees
that any Lender so purchasing a participation (or direct interest) in the Loans
made by other Lenders (or in interest due thereon, as the case may be) may
exercise any and all rights of set-off, banker's lien, counterclaim or similar
rights with respect to such participation as fully as if such Lender were a
direct holder of Loans in the amount of such participation. Nothing in this
Agreement shall require any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other Indebtedness or Obligation
of the Borrower. If under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a set-off to which this
Section 2.11 applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders entitled under this Section 2.11 to share in the benefits of any
recovery on such secured claim.
SECTION 2.12 COMPUTATIONS.
Interest on all Loans, fees and any other amounts payable hereunder
or under the Notes or in connection herewith or therewith shall be computed on
the basis of a 360-day year and actual days elapsed.
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SECTION 2.13 MINIMUM AMOUNTS OF BORROWINGS AND PREPAYMENTS; MAXIMUM
AMOUNT OF LIBOR TERM LOANS.
(a) Except for borrowings and prepayments which exhaust the full
remaining amount of the Commitment (in the case of borrowings) or result in the
prepayment of all Loans of a particular type: (i) each borrowing of a Prime Rate
Loan (other than a Conversion Term Loan) and each prepayment of principal of the
Prime Rate Loan hereunder shall be in an amount at least equal to $500,000 or
some greater integral multiple of $100,000; and (ii) each borrowing of a Libor
Term Loan (other than a Conversion Term Loan) and each prepayment of Libor Term
Loan shall be in an amount at least equal to $500,000 or some greater integral
multiple of $100,000.
(b) Anything in this Agreement to the contrary notwithstanding,
during the Credit Period, the aggregate principal amount of all Libor Term Loans
outstanding at any time shall not exceed an amount equal to 85% of the aggregate
principal amount of all Loans outstanding at such time.
SECTION 2.14 RENEWAL OF COMMITMENT; EXTENSION OF COMMITMENT
TERMINATION DATE.
Upon (i) the written request of the Company to the Agent given at
least ninety (90) days prior to each anniversary date of the date of this
Agreement and (ii) the unanimous written consent of all the Lenders (such
consent to be given at the sole discretion of each Lender), the Commitment shall
be renewed and the Commitment Termination Date shall be extended for successive
one-year periods, provided no Default or Event of Default exists hereunder.
Promptly after the Agent's receipt of any such request, the Agent shall notify
the Lenders of the submission thereof by the Company and each Lender shall
within forty-five (45) business days after receipt of such notice, deliver
written notice to the Agent of its decision whether or not to renew its
Commitment and extend the Commitment Termination Date. In the event any Lender
has not given such notice within such forty-five (45) day period, such Lender
shall be deemed to have elected not to renew its Commitment and not to extend
the Commitment Termination Date.
SECTION 2.15 ADDITIONAL COSTS.
(a) In the event that any law or regulation or guideline or
interpretation (whether now in effect or hereafter adopted) thereof by any court
or administrative or governmental authority charged with the administration
thereof, or compliance by any Lender with any request or directive (whether or
not having the force of law) of any such authority or any Regulatory Change
shall (i) change the basis of taxation of any amounts payable to such Lender
under this Agreement or the Notes in respect of any Loans (other than taxes
imposed on the overall net income of such Lender for any such Loans by the
United States or the jurisdiction in which such Lender has its principal
office); (ii) impose or modify any reserve, Federal Deposit Insurance
Corporation premium or assessment, special deposit or similar requirements
relating to any extensions of credit or other assets of, or any deposits with or
other liabilities of, such Lender; (iii) impose, modify or deem applicable or
result in the application of, any reserve, special
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deposit, capital maintenance, capital ratio or similar requirement against loan
commitments made by any Lender or against any other extensions of credit (other
than direct loans) or commitments to extend credit or other assets of or any
deposits or other liabilities taken or entered into by any Lender; or (iv)
impose. any other conditions affecting this Agreement or the Notes in respect of
the Loans (or any of such extensions of credit, assets, deposits or liabilities)
; and the result of any event referred to in clause (i), (ii), (iii) or (iv)
above shall be to increase such Lender's costs of making or maintaining any
Loans or its Commitment, or to reduce any amount receivable by such Lender
hereunder in respect of any Loans or its Commitment or to impose upon any Lender
or increase any capital requirement applicable as a result of the making or
maintenance of such Lender's Commitment or the obligation of the Borrower
hereunder with respect to such Commitment or to reduce the amounts receivable by
any Lender or any Lender's return on equity with respect to its Commitment
hereunder as a result of any change, modification or increase set forth in this
Section 2.15(a) with respect to such Commitment (which increases in costs or
increases in (or imposition of) capital requirements or reductions in amounts
receivable or return on equity may be determined by each Lender's reasonable
allocation of the aggregate of such cost increases, capital increases or
impositions or reductions in amounts receivable or return on equity resulting
from such events are hereinafter referred to as "ADDITIONAL COSTS"), then, upon
demand made by such Lender the Borrower shall pay to the Agent, and the Agent
shall pay to such Lender from time to time as specified by such Lender, such
other amounts which shall be sufficient to compensate such Lender for such
Additional Costs, together with interest on each such amount which is not paid
within three (3) days after demand by such Lender, payable at the Post Default
Rate.
(b) Determinations by any Lender for purposes of this Section 2.15
of its costs of making or maintaining the Loans or on amounts receivable by it
in respect of the Loans, or imposing upon or increasing capital requirements or
reductions in amounts receivable or return on equity, and of the additional
amounts required to compensate such Lender in respect of any Additional Costs,
shall be set forth in writing in reasonable detail and shall be conclusive,
absent manifest error.
SECTION 2.16 LIMITATION ON TYPES OF LOANS.
Anything herein contained to the contrary notwithstanding, if, on or
prior to the determination of an interest rate for any Libor Term Loans for any
Interest Period therefor:
(a) the Agent reasonably determines (which determination shall be
conclusive) that, by reason of any event affecting the money markets in the
United States of America or the London interbank market, quotations of interest
rates for the relevant deposits are not being provided in such markets in the
relevant amounts or for the relevant maturities for purposes of determining the
rate of interest for such Loans under this Agreement; or
(b) the agent reasonably determines (which determination shall be
conclusive) that by reason of any event affecting money or financial markets in
the United States of America or the London interbank market, rates of interest
or the cost of making or maintaining loans, the rate of interest referred to in
the definition of "Libor" in Article 1 hereof upon the basis of which the rate
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of interest of any Libor Term Loans for such period is determined does not
accurately reflect the cost to any Lender of making or maintaining such Loans
for such period, then the Agent shall give the Borrower prompt notice thereof,
and so long as such condition remains in effect, such Lender shall be under no
obligation to make Libor Term, Loans and the Borrower shall either prepay such
Libor Term Loans in accordance with Section 2.6(b) hereof or convert such Libor
Term Loans into Prime Rate Term Loans in accordance with Section 2.7 hereof.
SECTION 2.17 ILLEGALITY; UNAVAILABILITY.
Notwithstanding any other provision in this Agreement, in the event
that it becomes unlawful for any Lender to (i) honor its obligations to make
Libor Term Loans hereunder or (ii) maintain Libor Term Loans hereunder, then the
Agent shall promptly notify the Borrower thereof, and the Lenders, obligation to
make Libor Term Loans hereunder shall, upon written notice given by the Agent to
the Borrower, be suspended until such time as all of the Lenders may again make
and maintain Libor Term Loans and the Lenders, outstanding Libor Term Loans
shall be converted into Prime Rate Term Loans (as shall be designated in a
Notice from the Borrower to the Agent pursuant to Section 2.2 hereof; PROVIDED,
HOWEVER, that the Borrower's failure to give such notice shall not prevent such
conversion) in accordance with Sections 2.7 and 2.18 hereof.
SECTION 2.18 CERTAIN CONVERSIONS PURSUANT TO SECTIONS 2.16 AND 2.17.
If the Libor Term Loans are to be converted to Prime Rate Term Loans
pursuant to Section 2.16 or 2.17 hereof, such Libor Term Loans shall be
converted into Prime Rate Term Loans on the date as may be required by law or as
the Agent may specify to the Borrower and, until the Agent gives notice as
provided below that the circumstances specified in Section 2.16 or 2.17 hereof
which gave rise to such conversion no longer exist:
(a) to the extent that such Libor Term Loans have been so
converted, all payments and prepayments of principal which would otherwise be
applied to such Libor Term Loans shall be applied instead to Prime Rate Term
Loans; and
(b) all Loans which would otherwise be made as Libor Term Loans
shall be made instead as Prime Rate Term Loans and all Prime Rate Term Loans
which would otherwise be converted into Libor term Loans shall remain as Prime
Rate Term Loans or be prepaid by the Borrower.
SECTION 2.19 INDEMNIFICATION.
The Borrower hereby indemnities the Lenders against any loss or
expense which any Lender may sustain or incur as a consequence of (a) any
default in payment of interest accrued on any Loan outstanding hereunder, (b)
any prepayment or conversion of a Libor Term Loan on a date other than the last
day of the Interest period for such Libor Term Loan, (c) any failure by the
Borrower to prepay or convert a Loan on the date for such prepayment or
conversion as specified in the relevant Notice, (d) the occurrence of any
default hereunder with respect to the
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Loan, (e) the receipt or recovery by any Lender of all or any part of the Loan
(whether by voluntary prepayment, acceleration or otherwise) other than on the
final maturity thereof, or (f) any failure of the Borrower to borrow once the
Borrower has given Notice to the Agent of a borrowing. Such losses and expenses
shall include, but shall not be limited to, any loss or expense sustained or
incurred in liquidating or employing deposits from third parties acquired to
effect or maintain any Loan or any part thereof and any loss of margin on
reemployment of the funds so received or recovered. For the purpose of this
Section 2.19, the determination by the Lenders of such losses and reasonable
expenses shall be conclusive if made reasonably and in good faith absent
manifest error.
SECTION 2.20 PROPORTIONATE TREATMENT.
(a) Each borrowing hereunder shall be made from the Lenders, and
each payment of fees under Sections 2.5 hereof shall be made for the account of
the Lenders, in each case in proportion to their respective Commitment
Percentages.
(b) Each payment and prepayment by the Borrower of principal of or
interest on the Loans shall be made to the Agent for account of the Lenders in
proportion to the respective unpaid principal amounts thereof.
(c) The Commitment and other obligations of the Lenders under this
Agreement are several and not joint nor joint and several.
SECTION 2.21 AGENT'S OBLIGATION TO EXPEND FUNDS; NON-RECEIPT OF
FUNDS BY AGENT.
The Agent shall not be required to expend any of its own money to
make up the full amount of any Loan requested by the Borrower hereunder, or
otherwise incur any expense as a consequence of the failure of any Lender to
make available to the Agent amounts in respect of its Commitment which the
Lenders have become obliged to make available hereunder. Should such a failure
occur and the Agent shall nevertheless have advanced money of its own or
incurred expense in order to make up the full amount of any such Loan, it shall
be deemed to have done so at the request of any Lender which is in default of
its obligations to make amounts available to the Agent, unless such Lender shall
have previously notified the Agent that it would not make such an advance or
incur such an expense to make good such failure, and in the absence of such
prior notice, such Lender shall be in default hereunder and shall be obligated
to pay to the Agent on demand the amount expended by the Agent out of its own
funds plus any costs incurred by the Agent to carry such funds while such Lender
is in default to the Agent hereunder, all of which shall constitute a loan by
the Agent to such Lender which shall bear interest from the date of the advance
by the Agent at the Federal Funds Rate from day to day on the Loan with respect
to which the advance or expenditure was made. During the continuance of any such
default as between the Agent and such Lender, and notwithstanding anything
elsewhere herein to the contrary expressed or implied, (a) the principal amount
of Indebtedness in respect of Loans made by such Lender in default shall be
deemed to be reduced, so long as the default continues, by the amount not
remitted by it to the Agent as described in the preceding sentence and such
principal amount and interest thereon shall be deemed assigned to and
collectible by the Agent for its own
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account for application against the amount of its claim under the preceding
sentence and (b) such Lender shall not be entitled to vote on any matters
related to this Agreement and the other Loan Documents, such Lender's Commitment
and Commitment Percentage shall be deemed to be zero for purposes of determining
the "Majority Lenders" and the obligations of the Borrower to such Lender shall
be paid after payment in full of all Obligations of the Borrower to the other
Lenders. Notwithstanding the foregoing, in the event the Agent shall have made
an advance on behalf of a Lender without prior notice not to do so, the Borrower
shall, on demand from the Agent, repay to the Agent the amount so made available
with interest thereon, in respect of each day during the period commencing on
and including the date such advance was so made by the Agent until the date the
Agent recovers such amount at a rate per annum equal to (i) the Prime Rate plus
.75% if such advance was made by the Agent to the Borrower as a Revolving Credit
Loan, (ii) the Prime Rate plus 2.50%, if such advance was made by the Agent to
the Borrower as a Prime Rate Term Loan, or (iii) Libor plus 2.75%, if such
advance was made by the Agent to the Borrower as a Libor Term Loan. If a Lender
remits funds to the Agent in respect of a requested Loan and, pursuant to the
provisions of this Agreement, such Loan is not made, the Agent shall promptly
remit to such Lender an amount equal to the funds so remitted together with any
interest received by the Agent from the Borrower with respect. thereto pursuant
to Section 2.9(a) hereof, but if the Agent does not receive any interest from
the Borrower pursuant to Section 2.9(a) hereof, the Agent shall pay to such
Lender interest calculated using the Federal Funds Rate on the amount of funds
so remitted by such Lender from the date following the date on which the Agent
received such funds until the date the Agent remits the funds to such Lender.
SECTION 2.22 SECURITY-AND GUARANTIES.
(a) In order to secure the due payment and performance by the Loan
Parties of all of the Indebtedness, liabilities and Obligations of the Borrower
to the Agent and the Lenders, whether now existing or hereafter arising under
this Agreement, the Notes or any of the other Loan Documents (all such
Indebtedness, liabilities and obligations are hereinafter referred to,
collectively, as the "OBLIGATIONS") including, without limitation, the due and
punctual payment of the principal of and the interest on the Notes according to
their terms and effect:
(i) the Borrower shall grant to the Agent, as agent for the
Lenders, subject to Section 4.2(e) hereof, a duly perfected first
priority Lien on all of Borrower's right, title and interest in the
Collateral subject to no other Liens other than Liens permitted under
Section 7.2(b) hereof, as applicable, by the execution and delivery
to the Agent, of a security agreement in the form of EXHIBIT D-1 to
the original Loan Agreement (the "SECURITY AGREEMENT") and an
assignment of leases, in the form of EXHIBIT E-1 to the Original Loan
Agreement (the "ASSIGNMENT OF LEASES"), and by the execution and
delivery from time to time of supplements to the Security Agreement,
in the form of EXHIBIT D-2 to the Original Loan Agreement (the
"Security Agreement Supplements"), and supplements to the Assignment
of Leases, in the form of EXHIBIT E-2 to the Original Loan Agreement
(the "ASSIGNMENT OF LEASES SUPPLEMENTS");
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(ii) the Borrower shall deliver to the Agent all executed
copies of the Leases in connection with the perfection of the Agent's
first priority Lien in such Leases in accordance with Section 4.2(f)
hereof;
(iii) in accordance with Section 4.2(e) hereof, the Borrower
shall execute and deliver to the Agent all UCC financing statements
or such other documentation, including copies of such documents
acknowledging the filings of such documentation with the appropriate
governmental authorities, as may be reasonably required by the Agent
to perfect the interest of the Borrower and the Agent in the
Collateral; and
(iv) execute and deliver or cause to be executed and
delivered such other agreements, instruments and documents as the
Agent may reasonably require in order to effect the purposes of the
Security Agreement, the Assignment of Leases, the Security Agreement
Supplements, the Assignment of Leases Supplements and this Agreement
(the Security Agreement, the Assignment of Leases, the Security
Agreement Supplements, the Assignment of Leases Supplements and such
other agreements, instruments and documents are referred to
collectively as the "SECURITY DOCUMENTS").
(b) The Guarantor shall execute and deliver to the Agent a guaranty
in the form of EXHIBIT F to the Original Loan Agreement (the "GUARANTY"),
pursuant to which the Guarantor shall guarantee the payment and performance of
the Loans, all interest thereon, all fees hereunder and all other obligations to
the extent provided therein.
ARTICLE 3
---------
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to the Agent and each
Lender that:
SECTION 3.1 ORGANIZATION.
(a) Each of the Borrower and Guarantor (collectively the "LOAN
PARTIES") is duly organized and validly existing under the laws of the state of
its incorporation and has the power to own its assets and to transact the
business in which it is presently engaged and in which it proposes to be
engaged. Schedule 3.1 annexed to the Original Loan Agreement accurately and
completely lists the state of incorporation of each of the Loan Parties, the
authorized and outstanding shares of capital stock of the Loan Parties and the
ownership of such stock. All of the shares of the Borrower owned by the
Guarantor are validly outstanding and fully paid and nonassessable, and are
owned free and clear of any Lien. Except as set forth on Schedule 3.1 with
respect to the Guarantor, there are not outstanding any warrants, options,
contracts or commitments of any kind entitling any Person to purchase or
otherwise acquire any shares of capital stock of either of the Loan Parties nor
are there outstanding any securities which are convertible into or exchangeable
for any shares of capital stock of either of the Loan Parties.
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Except as set forth on Schedule 3.1, the Borrower has no Subsidiaries and the
Guarantor has no Subsidiaries other than the Borrower.
(b) Each Loan Party is in good standing in its state of
incorporation and in each state in which it is qualified to do business. There
are no jurisdictions other than as set forth on Schedule 3.1 to the Original
Loan Agreement in which the character of the properties owned or proposed to be
owned by any Loan Party or in which the transaction of its business as now
conducted or as proposed to be conducted requires or will require such Loan
Party to qualify to do business and as to which failure to so qualify could have
a material adverse effect on its business, operations, financial condition or
properties.
SECTION 3.2 POWER, AUTHORITY, CONSENTS.
Each of the Loan Parties has the power to execute, deliver and
perform the Loan Documents to be executed by it, the Borrower has taken all
necessary action (corporate or otherwise) to authorize the borrowing hereunder
on the terms and conditions of this Agreement and each of the Loan Parties has
taken all necessary action (corporate or otherwise) to authorize the execution,
delivery and performance of the Loan Documents. No consent or approval of any
Person (including, without limitation, any stockholder of either of the Loan
Parties), no consent or approval of any landlord or mortgagee, no waiver of any
Lien or right of distraint or other similar right and no consent, license,
approval, authorization or declaration of any governmental authority, bureau or
agency, is or will be required in connection with the execution, delivery or
performance by either of the Loan Parties, or the validity, enforcement or
priority, of the Loan Documents (or any Lien created and granted thereunder),
except as set forth on Schedule 3.2 annexed to the Original Loan Agreement each
of which either has been duly and validly obtained on or prior to the date of
the original Loan Agreement and is now in full force and effect, or is
designated on Schedule 3.2 as waived by the Lender.
SECTION 3.3 NO VIOLATION OF LAW OR AGREEMENTS.
The execution and delivery by the Loan Parties of each Loan Document
to be executed and delivered by it will not (i) violate or conflict with any
provision of law or any rule or regulation, (ii) violate or conflict with any
provision of the respective Certificates of Incorporation or by-laws of the Loan
Parties, (iii) violate or conflict with or result in a breach of any order,
writ, injunction, ordinance, resolution, decree, or other similar document or
instrument of any court or governmental authority, bureau or agency, domestic or
foreign, or create (with or without the giving of notice or lapse of time, or
both) a default under or breach of any agreement, bond, note or indenture to
which either Loan Party is a party, or by which it is bound or any of its
properties or assets is affected, or (iv) result in the imposition of any Lien
of any nature whatsoever upon any of the properties or assets owned by or used
in connection with the business of the Borrower, except for the Liens created
and granted pursuant to the Security Documents.
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SECTION 3.4 DUE EXECUTION, VALIDITY, ENFORCEABILITY.
This Agreement and each of the other Loan Documents has been duly
executed and delivered by each of the Loan Parties, as applicable, and each
constitutes a valid and legally binding obligation of such Loan Party,
enforceable against it in accordance with its terms.
SECTION 3.5 PROPERTIES, PRIORITY OF LIENS.
All of the properties and assets owned by the Borrower are owned by
it free and clear of any Lien of any nature whatsoever, except as provided for
in the Security Documents to be executed and delivered pursuant hereto, the
Liens listed on Schedule 3.5 to the Original Loan Agreement and Permitted Liens.
The Liens which have, simultaneously with the execution and delivery of this
Agreement and the consummation of the initial Loans, been created and granted by
the Security Documents constitute valid perfected first priority Liens on the
properties and assets covered by the Security Documents, subject to no prior or
equal Lien except as permitted by Section 7.2 hereof and except as provided in
section 4.2(e) hereof.
SECTION 3.6 JUDGMENTS, ACTIONS, PROCEEDS.
There are no outstanding judgments, actions or proceedings pending
before any court or governmental authority, bureau or agency, with respect to
or, to the best of the Borrower's knowledge, threatened against or affecting the
Loan Parties involving, in the case of any judgment, action or proceeding, an
amount in excess of $100,000 individually, and, in the case of all judgments,
actions or proceedings, amounts in excess of $300,000 in the aggregate nor, to
the best of the Borrower's knowledge, is there any reasonable basis for the
institution of any such action or proceeding which is probable of assertion, nor
are there any such actions or proceedings in which any Loan Party is a plaintiff
or complainant.
SECTION 3.7 NO DEFAULTS, COMPLIANCE WITH LAWS.
Neither Loan Party is in material default under any agreement,
ordinance, resolution, decree, bond, note, indenture, order or judgment to which
it is a party or by which it is bound, or any other agreement or other
instrument by which any of the properties or assets owned by it or used in the
conduct of its business is affected and each Loan Party has complied and is in
compliance in all respects with all applicable laws, ordinances and regulations,
including, without limitation, the Truth-in-Lending Act, the Equal Credit
Opportunity Act, the Federal Trade Commission Act, the Fair Credit Reporting
Act, the Fair Debt Collection Practices Act, Federal Reserve Board Regulations
B, M and Z and any applicable state consumer protection statutes, non-compliance
with which could have a material adverse effect on the business, operations,
financial condition or properties of either of the Loan Parties or on the
ability of the Loan Parties to perform their respective obligations under the
Loan Documents.
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SECTION 3.8 BURDENSOME DOCUMENTS.
Neither Loan Party is a party to or bound by, nor are any of the
properties or assets owned by any Loan Party or used in the conduct of its
business affected by any agreement, ordinance, resolution, decree, bond, note,
indenture, order or judgment which materially and adversely affects its
business, assets or condition, financial or otherwise.
SECTION 3.9 FINANCIAL STATEMENTS.
Each of the Financial Statements is correct and complete and presents
fairly the consolidated financial position of the Loan Parties as at its date,
and has been prepared in accordance with GAAP. The Loan Parties have no material
obligations, liabilities or commitments, direct or contingent, which are not
reflected in the Financial Statements. There has been no material adverse change
in the financial position or operations of the Loan Parties since the date of
the latest balance sheet included in the Financial Statements (the "LATEST
BALANCE SHEET"). The fiscal year of the Loan Parties is the twelve-month period
ending on December 31 of each year.
SECTION 3.10 TAX RETURNS.
The Loan Parties have filed all federal, state and local tax returns
required to be filed by them and have not failed to pay any taxes, or interest
and penalties relating thereto, on or before the due dates thereof. Except to
the extent that reserves therefor are reflected in the Financial Statements, (a)
there are no material federal, state or local tax liabilities of the Loan
Parties due or to become due for any tax year ended on or prior to the date of
the Latest Balance Sheet, whether incurred in respect of or measured by income,
which are not properly reflected in the Latest Balance Sheet, and (b) there are
no material claims pending or, to the knowledge of the Borrower, proposed or
threatened against the Loan Parties for past federal, state or local taxes,
except those, if any, as to which proper reserves are reflected in the Financial
Statements.
SECTION 3.11 INTELLECTUAL PROPERTY.
The Borrower possesses all necessary patents, trademarks, trademark
rights, service marks, service ▇▇▇▇ rights, trade names, trade name rights and
copyrights to conduct its business as now conducted and as proposed to be
conducted, without any conflict with the patents, trademarks, trademark rights,
trade names, trade name rights, service marks, service ▇▇▇▇ rights and
copyrights of others.
SECTION 3.12 REGULATIONS G AND U.
No part of the proceeds received by the Borrower from the Loans will
be used directly or indirectly for the purpose of purchasing or carrying, or for
payment in full or in part of Indebtedness which was incurred for the purposes
of purchasing or carrying, any margin stock as such term is defined in
Regulation G of the Board of Governors of the Federal Reserve System, as the
same may be amended or supplemented from time to time, or Regulation U of the
Board
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of Governors of the Federal Reserve System, as the same may be amended or
supplemented from time to time.
SECTION 3.13 NAME CHANGES.
The Borrower has never changed its name, been the surviving entity of
a merger or consolidation, or acquired all or substantially all of the assets of
any Person, except that the Borrower was the surviving entity of the merger of
LeaseComm Corporation, a Delaware corporation, with the Borrower pursuant to an
Agreement of Merger dated December 22, 1989.
SECTION 3.14 FULL DISCLOSURE.
None of the Financial Statements nor any certificate, opinion, or any
other statement made or furnished in writing to the Lenders by or on behalf of
any of the Loan Parties in connection with this Agreement or the transactions
contemplated herein, contains any untrue statement of a material fact, or omits
to state a material fact necessary in order to make the statements contained
therein or herein not misleading. There is no fact known to any Loan Party which
has, or would in the now foreseeable future have, a material adverse effect on
the business, prospects or condition, financial or otherwise, of any Loan Party
which fact has not been set forth herein, in the Financial Statements, or any
certificate, opinion, or other written statement so made or furnished to the
Lenders.
SECTION 3.15 CONDITION OF ASSETS.
All of the assets and properties of the Borrower which are reasonably
necessary for the operation of its business are in good working condition,
ordinary wear and tear excepted, and are able to serve the function for which
they are currently being used.
SECTION 3.16 ERISA.
(a) Except as set forth on Schedule 3.16 to the Original Loan
Agreement, the Loan Parties do not have and have never had any Plan in
connection with which there could arise a direct or contingent liability of the
Loan Parties to the Pension Benefit Guaranty Corporation ("PGBC"), the
Department of Labor or the IRS. The Loan Parties are not participating employers
(i) in any Plan under which more than one employer makes contributions as
described in Sections 4063 and 4064 of ERISA, or (ii) in a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
(b) All references to the Loan Parties in this Section 3.16 or in
any other Section of this Agreement relating to ERISA, shall be deemed to refer
to the Borrower and all other entities which are, together with the Borrower,
part of a Controlled Group.
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SECTION 3.17 PRINCIPAL PLACE OF BUSINESS.
The principal place of business of the Borrower and the records
relating to the Leases covering the Equipment, invoices, claims, accounts
receivable and contract rights of the Borrower are located at the address
indicated for the Borrower in the introduction to this Agreement.
SECTION 3.18 ABSENCE OF DEFAULT.
No Default or Event of Default exists.
SECTION 3.19 REGULATED COMPANY.
Neither the Guarantor nor any of its Subsidiaries, including the
Borrower, is (i) an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, (ii) a "holding company" or a "Subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "Subsidiary company"
of a "holding company, within the meaning of the Public Utility Holding Company
Act of 1935, as amended, or (iii) subject to any other law which purports to
regulate or restrict its ability to borrow money or to consummate the
transactions contemplated by this Agreement or the other Loan Documents or to
perform its obligations hereunder or thereunder. The Borrower represents to the
Agent and each Lender that it has not, either directly or through any agent,
offered any interest in the Notes for sale to, or solicited any offers to buy an
interest therein from, or otherwise approached or negotiated in respect of any
interest therein with, any person or person other than the Lenders. The Borrower
agrees that it will not, directly or indirectly, sell or offer, or attempt to
offer to dispose of, any interest in the Notes or any substantially similar
instruments of the Borrower, or solicit any offers to buy any interest therein
from, or otherwise approach or negotiate with respect thereto with, any person
whatsoever so as to bring the execution and delivery of this Agreement or the
Notes within the provisions of Section 5 of the Federal Securities Act of 1933,
as now in effect or as later amended.
SECTION 3.20 SUBORDINATED DEBT.
Schedule 3.20 annexed to the Original Loan Agreement is a true and
complete list of all existing Indebtedness of the Guarantor and its
Subsidiaries, including, without limitation, the Borrower, which is subordinate
in payment to the Obligations and the Guaranteed Obligations (as defined in the
Guaranty). Except as set forth on Schedule 3.20 to the Original Loan Agreement
and except with respect to the amount of principal, the rate of interest payable
thereon, the required amortization thereof and the maturity date thereof, all of
such Indebtedness is evidenced by notes that are on terms and conditions
identical to the terms and conditions of either (a) the $34,000 11% Capital
Note, Subordinated, Due July 14, 1997, of the Guarantor to Bay Resource Corp.
Money Purchase Pension Plan F.B.O. P.G.R. ▇▇▇▇▇ ▇▇▇ R.0, (b) the $50,000 13.25%
Amortizing Capital Note, Subordinated, Due March 1, 1994, of the Guarantor to
▇▇▇▇▇▇▇ ▇▇▇▇ Booth Trust, (c) the $50,000 Capital Note, Subordinated, Due
September 1, 1996,
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of the Guarantor to ▇▇▇▇ ▇. ▇▇▇▇▇, or (d) the $7,500,000 12% Senior Subordinated
Notes of the Guarantor due 2001.
SECTION 3.21 SOLVENCY.
Each Loan Party is Solvent prior to and will be Solvent after giving
effect to the transactions contemplated by this Agreement and the other Loan
Documents and the making of the Loans to be made hereunder.
ARTICLE 4
---------
THE CLOSING; CONDITIONS TO THE LOANS
SECTION 4.1 CONDITIONS TO EFFECTIVENESS OF AMENDED AGREEMENT.
As a condition precedent to the effectiveness of this Amended
Agreement:
(a) (i) The Borrower shall have executed and delivered to the
Agent, with sufficient original counterparts for each Lender, this Amended
Agreement, the Confirmation of Guaranty (the "Confirmation") of the Guarantor in
form and substance satisfactory to the Agent and (ii) the Borrower shall have
executed and delivered to the Agent a Revolving Credit Note and Credit Period
Term Note payable to the order of the Bank and each Lender, which in the case of
each Lender (other than PNC Bank, National Association) shall be in substitution
for the Revolving Credit Notes and Credit Period Term Notes heretofore executed
and delivered by the Borrower to the Bank and each such Lender. Upon receipt by
the Agent from each of the Lenders of the Revolving Credit Notes and Credit
Period Term Notes of such Lenders referred to in clause (ii) of the next
preceding sentence, the Agent shall return to the Borrower the Revolving Credit
Notes and Credit Period Term Notes heretofore issued by the Borrower to the Bank
and each such Lender with the notation "Replaced by Substitution" thereon.
(b) The Borrower and the Guarantor shall have executed and
delivered to the Agent, with sufficient original counterparts for each Lender,
amendments to the Security Agreement and the Assignment of Leases in the form
attached hereto as Exhibit D-3, and to such other Security Documents as the
Agent shall in its discretion reasonably require.
(c) The Borrower shall have executed and delivered to the Agent
amendments to all such UCC-1 financing statements as the Agent shall require to
continue to perfect and preserve its security interest created under the
Security Documents and shall have delivered to the Agent, and the Agent shall
deliver to each Lender upon request by such Lender, copies of acknowledgment
stamped copies of all such UCC-1 financing statements evidencing the filing
thereof.
(d) The Agent shall have received an officer's certificate in form
and substance satisfactory to the Agent from each of the Borrower and the
Guarantor, with sufficient original counterparts for the Bank and each Lender,
confirming the following:
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(i) All corporate action required to be taken by the Borrower
or Guarantor to authorize the execution, delivery and performance of
this Amended Agreement, the agreements, documents and instruments
referred to herein and the transactions contemplated hereby and
thereby;
(ii) None of its organizational documents have been amended
since the date(s) as of which copies of said organizational documents
were certified to the Agent;
(iii) Specimen signature(s) of the person(s) authorized to
execute this Amended Agreement, the Confirmation and any of the Loan
Documents to which it is a party (including any amendments thereto);
(iv) The execution, delivery and performance of this Amended
Agreement, the Confirmation and the Loan Documents to which it is a
party (including any amendments thereto) have been authorized by
resolutions of the Board of Directors of the Borrower and the
Guarantor, copies of which shall be attached to such officer's
certificate; and;
(v) Each of the Borrower and the Guarantor remains in good
standing in its respective jurisdiction of incorporation and in each
jurisdiction in which it is qualified to do business.
(e) An opinion of counsel to each of the Loan Parties addressed to
the Agent and the Lenders.
(f) The Agent shall have received for itself and for the accounts
of each of the Lenders, all fees, costs and expenses payable by the Borrower,
including, without limitation, the fees and expenses of ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel
to the Agent, to the extent payable on or prior to the date of this Amended
Agreement.
(g) All proceedings in connection with the transactions
contemplated by this Amended Agreement and all documents incident thereto shall
be reasonably satisfactory in form and substance to the Agent, and the Agent and
each Lender upon its request, shall have received all information and such
counterpart originals or certified or other copies of such documents as it may
reasonably request prior to the date of this Amended Agreement.
(h) The Borrower shall have complied and shall then be in
compliance with all of the terms, covenants and conditions of this Amended
Agreement and the Security Documents.
(i) The representations and warranties contained in Article 3
hereof shall be true and correct on the date of this Amended Agreement.
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(j) No Default or Event of Default shall have occurred, and the
Agent and each Lender shall have received a compliance certificate (a
"COMPLIANCE CERTIFICATE") in the form of EXHIBIT G hereto dated the date of the
Amended Agreement certifying, INTER ALIA, that the conditions set forth in
Sections 4.1(h), (i) and (j) hereof are satisfied on such date.
(k) The Agent shall have received any and all further information
and documents which the Agent, the Lenders or their respective counsel may
reasonably request.
(1) All legal matters incident to the effectiveness of this Amended
Agreement shall be satisfactory to counsel to the Agent.
SECTION 4.2 CONDITIONS TO LOANS.
The obligation of the Lenders to make each Loan shall be subject to
the fulfillment (to the reasonable satisfaction of the Agent) of the following
conditions precedent which, in the case of the initial Loans shall be in
addition to the other conditions set forth in Section 4.1:
(a) The Agent shall have received a Notice relating to such Loan,
together with the Borrowing Computation certified by the president, chief
financial officer or vice president-finance of the Borrower, which shall
establish to the reasonable satisfaction of the Agent that the Borrowing Base is
equal to or greater than the outstanding principal amount of the Loans after
giving effect to the Loan proposed to be made.
(b) If the requested Loan is a Conversion Term Loan, each Lender
shall have received an executed Conversion Term Note.
(c) Upon request of the Agent or when the Original Cost of Eligible
Equipment for each Eligible Lease or Eligible Rental Contract relating thereto
on the basis of which such Loan is being made exceeds $10,000, the Agent shall
have received the original bills of sale issued by the seller or the
manufacturer of the Eligible Equipment to which such Loan pertains showing the
initial invoiced cost of all such Eligible Equipment and the Eligible Leases and
Eligible Rental Contracts with respect thereto.
(d) The Borrower shall have executed and delivered to the Agent and
the Agent shall forward to each Lender a Security Agreement Supplement and
Assignment of Leases Supplement in form and substance satisfactory to the Agent
and the Lenders covering the Equipment and Leases to which such Loan pertains.
(e) The Borrower shall have perfected its interest in the Equipment
against each lessee of Equipment in each case where such lessee is leasing
Equipment with an aggregate Original Cost of $10,000 or more by the filing of a
precautionary UCC financing statement naming the Borrower as secured
party/lessor and the lessee of such Equipment as debtor/lessee and shall have
delivered to the Agent acknowledgment stamped copies of all such UCC financing
statements, assignment of all such UCC financing statements naming the Agent as
assignee of the Borrower and acknowledgment stamped copies of all such UCC-1
financing statements evidencing the filing thereof in such jurisdictions. The
Borrower shall have executed and delivered to the Agent all such UCC-1 financing
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statements for filing in such jurisdictions as the Agent shall require to
perfect its security interest in the Collateral and acknowledgment stamped
copies of all such UCC-1 financing statements evidencing the filing thereof in
such jurisdictions and the payment of all applicable recordation taxes. Upon the
occurrence of a Default or Event of Default, the Agent shall, pursuant to the
power of attorney granted to it pursuant to the Security Agreement, be entitled
to execute all such UCC-1 financing statements, on behalf of the Borrower, as
the Agent deems necessary to perfect its security interest in the Collateral in
all jurisdictions in which any Collateral is located and the Borrower shall
reimburse the Agent for all costs and expenses, including recordation taxes, if
any, incurred by the Agent in connection therewith.
(f) The Borrower shall have delivered to the Agent all executed
original counterparts of each Lease (s) included in the Collateral for such
Loan, certified as such by the Borrower.
(g) The Borrower shall have fully complied with all the terms and
conditions of the Security Documents including but not limited to, delivering to
the Agent all executed copies of the Eligible Leases and Eligible Rental
Contracts included in the Collateral for such Loan, certified as such by the
Borrower.
(h) The Borrower shall have complied and shall then be in
compliance with all of the terms, covenants and conditions of this Agreement.
(i) The representations and warranties contained in Article 3
hereof shall be true and correct on the date thereof.
(j) No Default or Event of Default shall have occurred, and the
Agent and each Lender shall have received a Compliance Certificate dated the
date such Loan is made certifying, INTER ALIA, that the conditions set forth in
Sections 4.2(g), (h), (i) and (j) hereof are satisfied on such date.
(k) All legal matters incident to the Loan shall be satisfactory to
counsel for Agent and the Lenders.
(1) All proceedings in connection with the transactions
contemplated by this Agreement and all documents incident thereto shall be
reasonably satisfactory in form and substance to the Agent and the Agent, and
each Lender upon request by such Lender, shall have received all information and
such counterpart originals or certified or other copies of such documents as the
Agent may reasonably request prior to the making of such Loan.
(m) The Agent shall have received any and all further information
and documents which the Agent, the Lenders and their special counsel may
reasonably request in connection with making such Loan.
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ARTICLE 5
---------
DELIVERY OF FINANCIAL REPORTS, DOCUMENTS
AND OTHER INFORMATION
While the Commitment is outstanding, and, in the event any Loan
remains outstanding, so long as the Borrower is indebted to the Agent or any
Lender and until payment in full of the Notes and full and complete performance
of all of its other obligations arising hereunder, the Borrower shall deliver to
the Agent:
SECTION 5.1 ANNUAL FINANCIAL STATEMENTS.
Annually, as soon as available, but in any event within 90 days after
the last day of each of its fiscal years, (a) a consolidated balance sheet of
the Guarantor and its Subsidiaries, including the Borrower, as at such last day
of the fiscal year and consolidated statements of income and retained earnings
and of cash flows for such fiscal year, each prepared in accordance with GAAP
consistently applied, in reasonable detail, and certified without qualification
by a recognized firm of independent certified public accountants reasonably
acceptable to the Agent as fairly presenting the financial position and the
results of operations of the Guarantor and its Subsidiaries, including the
Borrower, as at and for the year ending on its date and as having been prepared
in accordance with GAAP and (b) consolidating balance sheets, statements of
income and retained earnings and of cash flows for the Guarantor and each of its
Subsidiaries, including the Borrower, certified by the president or chief
financial officer of the Borrower as fairly presenting the financial position
and the results of operations of the Guarantor and its Subsidiaries, including
the Borrower, as at its date and for such month and as having been prepared in
accordance with GAAP consistently applied.
SECTION 5.2 QUARTERLY FINANCIAL STATEMENTS.
As soon as available, but in any event within 45 days after the end
of each fiscal quarter, unaudited consolidated and consolidating balance sheets
of each of the Guarantor and its Subsidiaries, including the Borrower, as of the
last day of such quarter and consolidated and consolidating statements of income
and retained earnings and of cash flows for such quarter, each such statement to
be certified by the president or chief financial officer of the Borrower as
fairly presenting the financial position and the results of operations of the
Guarantor and its Subsidiaries, including the Borrower, as at its date and for
such quarter and as having been prepared in accordance with GAAP consistently
applied (subject to year-end audit adjustments).
SECTION 5.3 MONTHLY FINANCIAL STATEMENTS.
As soon as available, but in any event within 30 days after the end
of its first eleven fiscal monthly periods, a consolidated balance sheet of the
Guarantor and its Subsidiaries, including the Borrower, as of the last day of
each such month and consolidated statements of income and retained earnings and
of cash flows for such month, each such statement to be certified by the
president or chief financial officer of the Borrower as fairly presenting the
financial position and
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the results of operations of the Guarantor and its Subsidiaries, including the
Borrower, as at its date and for such month and as having been prepared in
accordance with GAAP consistently applied (subject to year-end audit
adjustments).
SECTION 5.4 OTHER INFORMATION.
Promptly after a written request therefor, such other financial data
or information evidencing compliance with the requirements of this Agreement,
the Notes and the other Loan Documents, and such other data and information of
any nature as the Lenders may reasonably request from time to time, including,
without limitation, Updated Experience Tables tracking aging and delinquencies
for all types of invoices on an invoice-by-invoice basis, how such invoices have
been paid and the collection rates with respect thereto, prepared in conjunction
with the annual audit of the Borrower.
SECTION 5.5 NO DEFAULT CERTIFICATE.
At the same time as it delivers the financial statements required
under the provisions of Sections 5.1, 5.2 and 5.3, a certificate of the
president or chief financial officer of each of the Loan Parties, in the form of
Schedule 5.5 hereto, to the effect that no Event of Default hereunder and that
no default under any other agreement to which either of the Loan Parties is a
party or by which it is bound, or by which, to the best of the knowledge of the
Borrower, any of its properties or assets, taken as a whole, may be materially
affected, and no Default or Event of Default exists or, if such cannot be so
certified, specifying in reasonable detail the exceptions, if any, to such
statement. Such certificate shall be accompanied by a detailed calculation
indicating compliance with the covenants contained in Section 6.9 hereof.
SECTION 5.6 CERTIFICATE OF ACCOUNTANTS.
At the same time as it delivers the financial statements required
under the provisions of Section 5.1, a certificate of a recognized firm of
independent certified public accountants reasonably acceptable to the Agent
addressed to the Guarantor to the effect that (i) during the course of their
audit of the operations of the Loan Parties and their condition as of the end of
the fiscal year, nothing has come to their attention which would indicate that
there was any violation of the covenants contained in Section 6.9 or Article 7
of this Agreement, or, if such cannot be so certified, specifying in reasonable
detail the exceptions, if any, to such statement and (ii) that the Borrower is
in compliance with the Borrowing Base limitation hereunder.
SECTION 5.7 COPIES OF DOCUMENTS.
Promptly upon their becoming available, copies of any (a)
correspondence or notices received by the Borrower from any federal, state or
local governmental authority which regulates the operations of the Borrower,
including as to environmental matters and hazardous waste, relating to an actual
or threatened change or development which would be materially adverse to the
Borrower; (b) written reports submitted by either of the Loan Parties by its
independent accountants in connection with any annual or interim audit of the
books of the Loan Parties made
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by such accountants; and (c) any appraisals received by either of the Loan
Parties with respect to the properties or assets of the Borrower.
SECTION 5.8 NOTICES OF DEFAULTS.
Promptly, notice of the occurrence of any Default or an Event of
Default hereunder, or event which would constitute or cause a materially adverse
change in the condition, financial or otherwise, or the operations of the
Borrower.
SECTION 5.9 ERISA NOTICES.
(a) Concurrently with such filing, a copy of each form 5500 which
is filed with respect to each plan with the IRS; and
(b) Promptly, upon their becoming available, copies of (i) all
correspondence with the PBGC, the Secretary of Labor or any representative of
the IRS with respect to any Plan, relating to an actual or threatened change or
development which would be materially adverse to the Loan Parties (ii) copies of
all actuarial valuations received by either of the Loan Parties with respect to
any Plan; and (iii) copies of any notices of Plan termination filed by any Plan
Administrator (as those terms are used in ERISA) with the PBGC and of any
notices from PBGC to either of the Loan Parties with respect to the intent of
the PBGC to institute involuntary termination proceedings.
SECTION 5.10 BORROWING BASE REPORT AND COMPLIANCE REPORT.
Monthly, as soon as available, but it any event within 15 days after
the end of the immediately preceding month, a report evidencing the compliance
by the Borrower with the Borrowing Base limitation set forth in Section 2.1(a)
hereunder in the form of EXHIBIT H annexed hereto (the "BORROWING BASE REPORT"),
dated as at the end of such month, certified by the president, chief financial
officer, vice president-funding operations or chief operating officer of the
Borrower. The Borrower shall also deliver a copy of such Borrowing Base Report
to each of the Lenders contemporaneously with the delivery of such report to the
Agent.
SECTION 5.11 ACCOUNTS RECEIVABLE AGING SUMMARY.
(a) Monthly, as soon as available, but in any event within 30 days
after the end of the immediately preceding month, an accounts receivable aging
summary of the Guarantor and its Subsidiaries, including the Borrower, as of the
last day of each such month, each such summary to include separately Finance
Leases, Operating Leases which are not Rental Contracts, Rental Contracts and
Other Miscellaneous Equipment (as defined in the definition of Equipment
hereto), and shall be certified by the president, chief financial officer, vice
president-funding operations or chief operating officer of the Borrower as true
and correct and as having been prepared in accordance with GAAP consistently
applied (subject to year-end audit adjustments). Such summary shall reconcile on
a monthly basis with the corresponding general ledger reports delivered under
Section 5.3 hereof for such month.
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(b) Semi-annually, as soon as available, but in any event within 30
days after the end of (i) the first six fiscal monthly periods and (ii) the
second six fiscal monthly periods, an accounts receivable aging summary of the
Guarantor and its Subsidiaries, including the Borrower, as of the end of each
such period, each such summary to include separately Finance Leases, Operating
Leases which are not Rental Contracts, Rental Contracts and Other Miscellaneous
Equipment, and shall be certified by the president, chief financial officer,
vice president-funding operations or chief operating officer of the Borrower as
true and correct and as having been prepared on a contractual basis in
accordance with GAAP consistently applied.
SECTION 5.12 CONCENTRATION OF EQUIPMENT.
Semi-annually, as soon as available, but in any event within 30 days
after the end of (i) the first six fiscal monthly periods and (ii) the second
six fiscal monthly periods, a report detailing the aggregate value of all
Eligible Equipment located in each state of the United States.
SECTION 5.13 BAD DEBT REPORTS.
Quarterly, as soon as available, but in any event within 30 days
after the end of each of its fiscal quarters, reports concerning a formula
provision for bad debt and reserve for bad debt rollforward, and shall be in the
respective forms as provided in Schedule 5.13 hereto.
SECTION 5.14 RESIDUAL REALIZATION REPORTS.
Quarterly, as soon as available, but in any event within 30 days
after the end of each of its fiscal quarters, residual realization reports
pertaining to Operating Leases in form and substance satisfactory to the Agent.
ARTICLE 6
---------
AFFIRMATIVE COVENANTS
While the Commitment is outstanding, and, until payment in full and
performance of all Obligations, the Borrower shall, and shall cause Guarantor
to:
SECTION 6.1 BOOKS AND RECORDS.
Keep proper books of record and account in a manner reasonably
satisfactory to the Agent in which full, true and correct entries shall be made
of all dealings or transactions in relation to its business and activities and
not change its principal place of business without the consent of the Majority
Lenders.
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SECTION 6.2 INSPECTIONS AND AUDITS.
Permit the Agent and the Lenders to make or cause to be made
inspections and audits of any books, records and papers of the Borrower and to
make extracts therefrom and copies thereof, or to make inspections and
examinations of any properties and facilities of the Borrower, on reasonable
notice, at all such reasonable times and as often as the Agent or any Lender may
reasonably require, in order to assure that the Borrower is and will be in
compliance with its obligations under the Loan Documents or to evaluate such
Lender's investment in the Notes.
SECTION 6.3 MAINTENANCE AND REPAIRS.
Maintain in good repair, working order and condition, subject to
normal wear and tear, all material properties and assets from time to time owned
by it and used in or necessary for the operation of its business, and make all
reasonable repairs, replacements, additions and improvements thereto.
SECTION 6.4 CONTINUANCE OF BUSINESS.
Do, or cause to be done, all things reasonably necessary to preserve
and keep in full force and effect its corporate existence and all permits,
rights and privileges necessary for the proper conduct of its business and
continue to engage in the same line of business.
SECTION 6.5 COPIES OF CORPORATE DOCUMENTS.
Subject to the prohibitions set forth in Section 7.12 hereof,
promptly deliver to the Agent and the Lenders copies of any amendments or
modifications to its Certificate of Incorporation and by-laws, certified with
respect to the Certificate of Incorporation by the Secretary of State of its
state of incorporation and, with respect to the by-laws, by the secretary of
such Loan Party.
SECTION 6.6 PERFORM OBLIGATIONS.
(a) Pay and discharge all of its obligations and liabilities,
including, without limitation, all taxes, assessments and governmental charges
upon its income and properties, when due, unless and to the extent only that
such obligations, liabilities, taxes, assessments and governmental charges shall
be contested in good faith and by appropriate proceedings and that, to the
extent required by GAAP then in effect, proper and adequate book reserves
relating thereto are established by the Borrower, and then only to the extent
that a bond is filed in cases where the filing of a bond is necessary to avoid
the creation of a Lien against any of its properties.
(b) Solely with respect to the Borrower, perform all its
obligations under each of the Leases.
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SECTION 6.7 NOTICE OF LITIGATION.
Promptly notify the Agent and the Lenders in writing of any
litigation, legal proceeding or dispute, other than disputes in the ordinary
course of business or, whether or not in the ordinary course of business,
involving amounts in excess of $250,000 per occurrence and $500,000 in the
aggregate, affecting the Borrower whether or not fully covered by insurance, And
regardless of the subject matter thereof (excluding, however, any actions
relating to worker's compensation claims or negligence claims relating to use of
motor vehicles, if fully covered by insurance, subject to deductibles).
SECTION 6.8 INSURANCE.
(a) (i) Solely with respect to the Borrower, maintain, or cause its
lessees to maintain, with responsible insurance companies such insurance on such
of its properties, in such amounts and against such risks as is customarily
maintained by similar businesses; PROVIDED, that the Borrower may continue to
self-insure Equipment in the manner in which it is currently conducting its
business until the Agent notifies the Borrower otherwise; and PROVIDED, FURTHER,
that the Borrower shall (x) not materially change the manner in which it
self-insures Equipment without the prior written consent of the Majority
Lenders; (y) file with the Agent and the Lenders upon the request of the Agent a
detailed list of the insurance then in effect, stating, as applicable, the names
of the insurance companies, the amounts and rates of the insurance, dates of
expiration thereof and the properties and risks covered thereby; and (z) within
10 days after notice in writing from the Agent, obtain such additional insurance
as the Agent may reasonably request.
(b) any private insurance companies covering its obligations to the
PBGC.
SECTION 6.9 FINANCIAL COVENANTS.
(a) Maintain at all times:
(i) a ratio of Consolidated Indebtedness to Consolidated
Tangible Capital Funds of not more than 6:1;
(ii) a Consolidated Tangible Net Worth of not less than the
sum of (i) $5,500,000 and (ii) 50% of the aggregate amount of
Consolidated Net Income of the Guarantor and its Subsidiaries,
including the Borrower, for each of the fiscal quarters ending after
December 31, 1994 but without deducting therefrom any amount of
Consolidated Net Deficit for any of such fiscal quarters;
(iii) an allowance for bad debt of the Guarantor and its
Subsidiaries, including the Borrower, of at least 5% of Gross Lease
Installments;
(b) Have as of the end of each fiscal quarter a Fixed Charge Ratio
of the Guarantor and its Subsidiaries, including the Borrower, of not less than
1.25:1.
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SECTION 6.10 REPORTABLE EVENTS.
Promptly notify the Agent and the Lenders in writing of the
occurrence of any "Reportable Event" as defined in Section 4043 of ERISA, if a
notice of such Reportable Event is required under ERISA to be delivered to the
PBGC within 30 days after the occurrence thereof, together with a description of
such Reportable Event and a statement of the action the Borrower intends to take
with respect thereto, together with a copy of the notice thereof given to the
PBGC.
SECTION 6.11 COMPLIANCE WITH LAWS, ETC.
Comply with all applicable laws, rules, regulations and orders,
including, without limitation, the Truth-in-Lending Act, the Equal Credit
Opportunity Act, the Federal Trade Commission Act, the Fair Credit Reporting
Act, the Fair Debt Collection Practices Act, Federal Reserve Board Regulations
B, M and Z and any applicable state consumer protection statutes, and duly
observe all valid requirements of governmental authorities, and all applicable
statutes, rules, regulations, and orders relating to environmental protection
and to public and employee health and safety, except where the failure to do so
would not have a materially adverse effect on the operations, properties taken
as a whole, business or financial condition of the Loan Parties.
SECTION 6.12 BORROWING BASE.
Make such prepayments or pledge such additional security, from time
to time, as required by Section 2.6 hereof so that the outstanding principal
amount of all Loans hereunder shall, at no time, exceed the Borrowing Base.
SECTION 6.13 EXISTING INDEBTEDNESS.
(a) On or before September 30, 1993, (i) pay in full all of the
Indebtedness of the Borrower to Commerzbank, and terminate the commitments and
agreements pursuant to which such Indebtedness was incurred and provide evidence
thereof to the Agent in form and substance satisfactory to the Agent or (ii)
enter into, and cause Commerzbank to enter into an intercreditor agreement with
the Agent and the Lenders, on terms and conditions satisfactory to the Agent and
the Lenders.
(b) From and after the date of the Original Loan Agreement arrange
all of the Indebtedness of the Borrower to American Commercial Credit Corp.,
Raybar Credit Corporation, Manufacturer's Lease Company and Maytag Financial
Services Corp. (the "Other Existing Secured Creditors") to be strictly on a term
basis, not borrow or obtain an advance of any amounts from any of the Other
Existing Secured Creditors and not grant, assign or pledge any collateral to any
of the Other Existing Secured Creditors other than the specific collateral which
has been heretofore granted, assigned or pledged to the Other Existing Secured
Creditors.
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SECTION 6.14 NOTICES CONCERNING SUBORDINATED DEBT.
Deliver to the Agent, concurrently with the earlier of the delivery
thereof or the required date of delivery thereof pursuant to any document
evidencing or relating to any Subordinated Debt, the issuance of which for any
single class exceeds $500,000, a copy of each notice, demand, request, waiver,
authorization, consent, opinion, certificate and other communication delivered
or required to be delivered by the Borrower or Guarantor or received by the
Borrower or Guarantor under or in connection with such Subordinated Debt,
including, without limitation, a copy of any notice of redemption or offer to
purchase, whether optional or mandatory, whole or partial, any board
resolutions, any notice of acceleration or rescission of acceleration and any
reports and other information required to be delivered under any such document.
ARTICLE 7
---------
NEGATIVE COVENANTS
While the Commitment is outstanding, and, until payment in full and
performance of all of the obligations, the Borrower shall not, and shall cause
the Guarantor not to, do, agree to do, or permit to be done, any of the
following:
SECTION 7.1 INDEBTEDNESS.
Create, incur, permit to exist or have outstanding any Indebtedness,
except:
(a) Indebtedness of the Borrower and the Guarantor to the
Lenders under this Agreement and the Notes;
(b) Taxes, assessments and governmental charges, non-interest
bearing accounts payable and accrued liabilities, in any case not
more than 90 days past due from the original due date thereof, and
non-interest bearing deferred liabilities other than for borrowed
money (e.g. deferred compensation and deferred taxes) in each case
incurred and continuing in the ordinary course of business;
(c) Indebtedness secured by the security interests referred
to in subsection 7.2(c) hereof;
(d) Subordinated Debt;
(e) Indebtedness for borrowed money which is secured by Liens
on specific assets (other than the Collateral) as to which the
lenders are to be repaid out of such assets or proceeds thereof;
provided, however, that if the aggregate of such Indebtedness
incurred or proposed to be incurred to any lender exceeds $500,000,
the Borrower and such lender shall, prior to the incurrence of such
Indebtedness, enter into an intercreditor agreement with the Agent
and the Lenders in form and substance satisfactory to the Agent and
the Lenders;
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(f) Indebtedness of the Borrower to The First National Bank
of Boston pursuant to the Bank of Boston Facility; and
(g) unsecured Indebtedness.
SECTION 7.2 LIENS.
Create, or assume or permit to exist, any Lien on any of the
properties or assets of the Borrower, whether now owned or hereafter acquired,
except:
(a) Those created and granted by the Security Documents;
(b) Permitted Liens;
(c) Purchase money mortgages or security interests,
conditional sale arrangements and other similar security interests,
on motor vehicles and equipment acquired by the Borrower (hereinafter
referred to individually as a "PURCHASE MONEY SECURITY INTEREST")
with the proceeds of the Indebtedness referred to in subsection
7.1(c) hereof; PROVIDED, HOWEVER, that:
(i) The transaction in which any Purchase Money
Security Interest is proposed to be created is not then
prohibited by this Agreement;
(ii) Any Purchase Money Security Interest shall attach
only to the property or asset acquired in such transaction and
shall not extend to or cover any other assets or properties of
the Borrower; and
(iii) The Indebtedness secured or covered by any
Purchase Money Security Interest shall not exceed the lesser of
the cost or fair market value of the property or asset acquired
and shall not be renewed, extended or prepaid from the proceeds
of any borrowing by the Borrower; and
(d) Liens arising under the Bank of Boston Facility, provided
such Liens shall attach solely to Equipment held for sale or lease in
the ordinary course of business and the Leases relating thereto which
are financed or refinanced with the proceeds of borrowings under such
facility.
SECTION 7.3 GUARANTIES.
Assume, endorse, be or become liable for, or guarantee, the
obligations of any person, except (i) the Guaranty, (ii) by the endorsement of
negotiable instruments for deposit or collection in the ordinary course of
business and (iii) for other guaranties given in the ordinary course of
business, consistent with past practice, PROVIDED the Majority Lenders have
consented
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thereto, which consent shall not be unreasonably withheld. For the purposes
hereof, the term guarantee shall include any agreement, whether such agreement
is on a contingency or otherwise, to purchase, repurchase or otherwise acquire
Indebtedness of any other Person, or to purchase, sell or lease, as lessee or
lessor, property or services, in any such case primarily for the purpose of
enabling another person to make payment of Indebtedness, or to make any payment
(whether as an advance, capital contribution, purchase of an equity interest or
otherwise) to assure a minimum equity, asset base, working capital or other
balance sheet or financial condition, in connection with the Indebtedness of
another person, or to supply funds to or in any manner invest in another Person
in connection with such Person's Indebtedness.
SECTION 7.4 MERGERS, ACQUISITIONS.
Merge or consolidate with any Person (whether or not the Borrower is
the surviving entity) or acquire all or substantially all of the assets or any
of the capital stock of any Person or sell all or any substantial part of its
assets or create any Subsidiaries, whether wholly or partially owned.
SECTION 7.5 DIVIDENDS.
Declare or pay any cash dividends or make any cash distribution of
any kind on the outstanding stock of any Loan Party in excess of 50% of
Consolidated Net Income for the immediately preceding fiscal year, or set aside
any sum for any such purpose except upon the express prior written consent of
the Majority Lenders, which consent shall not be unreasonably withheld.
SECTION 7.6 STOCK ISSUANCE.
Issue any additional shares or any right or option to acquire any
shares, or any security convertible into any shares, of the capital stock of the
Borrower or the Guarantor if, after giving effect thereto, the Guarantor owns
less than 100% in the aggregate of all the issued and outstanding shares of
capital stock of the Borrower or the Principals own in the aggregate less than
45%, or own and/or Control in the aggregate less than 80%, of the issued and
outstanding shares of capital stock, on a fully diluted basis (assuming the
exercise of all outstanding stock options), of the Guarantor having ordinary
voting rights for the election of directors.
SECTION 7.7 CHANGES IN BUSINESS; SALE OF ASSETS.
(a) Make any material change in its business, or in the nature of
its operation, or liquidate or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease, assign, transfer or otherwise dispose of
any of its property, assets or business except in the ordinary course of
business and for a fair consideration or dispose of any shares of stock or any
Indebtedness, whether now owned or hereafter acquired, or discount, sell,
pledge, hypothecate or otherwise dispose of accounts receivable.
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(b) Sell, transfer, assign or dispose of any Eligible Leases, or
Eligible Rental Contracts or Eligible Equipment with respect to which a Loan has
been made unless the net proceeds thereof are sufficient to prepay the related
Loan in accordance with Section 2.6.
SECTION 7.8 PREPAYMENTS.
Make any voluntary or optional prepayment of any Indebtedness for
borrowed money incurred or permitted to exist under the terms of this Agreement,
other than Indebtedness evidenced by the Notes; PROVIDED, HOWEVER, that so long
as no Default or Event of Default hereunder has occurred and is continuing or
may result from such prepayment, the Loan Parties shall be entitled to make such
prepayments with respect to any Indebtedness other than Subordinated Debt.
SECTION 7.9 INVESTMENTS.
Make, or suffer to exist, any Investment in any Person, except
Investments in:
(A) (i) obligations issued or guaranteed by the United
States of America;
(ii) certificates of deposit, bankers acceptances and other
"money market instruments" issued by any bank or trust company
organized under the laws of the United States of America or any State
thereof and having capital and surplus in an aggregate amount of not
less than $100,000,000;
(iii) open market commercial paper bearing the highest credit
rating issued by Standard & Poor's Corp. or by another nationally
recognized credit rating firm;
(iv) repurchase agreements entered into with any bank or
trust company organized under the laws of the United States of
America or any State thereof and having capital and surplus in an
aggregate amount of not less than $100,000,000 relating to United
States of America government obligations;
(v) shares of "money market funds", each having net assets
of not less than $100,000,000;
in each case of (i) through (v) above, maturing or being due or payable in full
not more than 180 days after the Borrower's acquisition thereof.
(B) any other Investments, provided that (x) all Investments
permitted pursuant to this Section 7.9(B), including all Investments made since
January 1, 1995, in the aggregate and on a cumulative basis, do not exceed, at
the end of any fiscal quarter, an amount equal to 50% of Consolidated Tangible
Net Worth, without the prior written consent of the Majority Lenders, such
consent not to be unreasonably withheld, (y) no Default or Event of Default
exists at the
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time of, or would result from, any such Investment, and (z) such Person is an
entity engaged in related business activities to that of the Borrower;
With respect to Investments permitted pursuant to subsection (B) of
this Section 7.9, the Borrower shall (x) not less than five (5) Business Days
prior to making any such Investment, deliver to the Agent a certificate signed
by the president, chief financial officer, vice president-funding operations or
chief operating officer of the Borrower describing in detail the nature of such
Investment and (y) upon request of the Agent from time to time, deliver to the
Agent a current schedule of all such Investments, each of such certificates and
schedules to be in form and substance satisfactory to the Majority Lenders.
SECTION 7.10 FISCAL YEAR.
Change its fiscal year.
SECTION 7.11 ERISA OBLIGATIONS.
(a) Be or become obligated to the PBGC other than in respect of
annual premium payments not in excess of $50,000.
(b) Be or become obligated to the IRS with respect to excise or
other penalty taxes provided for in those provisions of Section 4975 the Code,
as in effect or hereafter amended or supplemented, in excess of $50,000.
SECTION 7.12 AMENDMENT OF DOCUMENTS.
(a) Modify, amend, supplement or terminate, or agree to modify,
amend, supplement or terminate its Certificate of Incorporation or by-laws
without the express prior written consent of the Majority Lenders, which consent
shall not be unreasonably withheld PROVIDED, that such amendment does not
adversely affect the Lenders' rights hereunder or under any of the other Loan
Documents; PROVIDED, FURTHER, that if any Lender does not notify the applicable
Loan Party of its decision with respect to such consent within fifteen (15)
Business Days of such Lender's actual receipt of a notice of request for
consent, such consent shall be deemed to have been given by such Lender for
purposes of this Agreement.
(b) Modify, amend or supplement, agree to modify, amend or
supplement, or consent to the modification, amendment or supplement of any of
the Securitization Documents or any documents evidencing or relating to any
Subordinated Debt, without the express prior written consent of the Majority
Lenders, which consent shall not be unreasonably withheld, provided that such
modification, amendment or supplement does not adversely affect the Lenders'
rights thereunder, hereunder or under any of the other Loan Documents.
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SECTION 7.13 CAPITAL EXPENDITURES.
Make or be or become obligated to make Capital Expenditures in any
year in excess of 20% of Consolidated Tangible Net Worth as of the end of the
immediately preceding fiscal year.
SECTION 7.14 TRANSACTIONS WITH AFFILIATES.
Except as expressly permitted by this Agreement, directly or
indirectly: (i) make any Investment in an Affiliate; (ii) transfer, sell, lease,
assign or otherwise dispose of any assets to an Affiliate; (iii) merge into or
consolidate with or purchase or acquire assets from an Affiliate; or (iv) enter
into any other transaction directly or indirectly with or for the benefit of any
Affiliate (including, without limitation, guarantees and assumptions of
obligations of an Affiliate); PROVIDED, HOWEVER, that (x) any Affiliate who is
an individual may serve as an employee or director of a Loan Party and receive
reasonable compensation for his or her services in such capacity, and (y) a Loan
Party may enter into any transaction with an Affiliate providing for the leasing
of property, the rendering or receipt of services, the purchase or sale of
product, inventory and other assets or the incurrence of Indebtedness permitted
under Section 7.1 in the ordinary course of business if the monetary or business
consideration arising therefrom would be substantially as advantageous to such
Loan Party as the monetary or business consideration which would obtain in a
comparable arm's length transaction with a Person not an Affiliate.
ARTICLE 8
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EVENTS OF DEFAULT
If any one or more of the following events (an "EVENT OF DEFAULT",
individually or "EVENTS OF DEFAULT", if more than one) shall occur and be
continuing, the Majority Lenders in their sole discretion may terminate the
Commitment, or the Agent, at the written direction of the Majority Lenders,
shall terminate the Commitment and the entire unpaid balance of the principal of
and interest on the Notes outstanding and all other obligations and Indebtedness
of the Borrower to the Lenders arising hereunder and under the other Loan
Documents shall immediately become due and payable upon written notice to that
effect from the Agent, at the direction of the Majority Lenders, to the Borrower
(except that in the case of the occurrence of any Event of Default described in
Section 8.6 no such notice shall be required), without presentment or demand for
payment, notice of nonpayment, protest or further notice or demand of any kind,
all of which are expressly waived by the Borrower, and the Agent may, it its
discretion, and shall, at the direction of the Majority Lenders, exercise such
other rights and remedies that shall be available to it, including, without
limitation, the rights of a secured party under the UCC:
SECTION 8.1 PAYMENTS.
Failure to make any payment or mandatory prepayment of principal or
interest upon any Note or make any payment of any fee when due.
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SECTION 8.2 COVENANTS.
Failure to perform or observe any of the agreements and covenants of
the Borrower contained in Section 6.13 or 6.14 hereof or Article 7 hereof.
SECTION 8.3 OTHER COVENANTS.
(a) Failure to be in compliance with the covenants contained in
Section 6.9 hereof.
(b) Failure by any Loan Party to perform or observe any other term,
condition or covenant of this Agreement or of any of the other Loan Documents to
which such party is a party, including, without limitation, the Notes or
Security Documents, which shall remain unremedied for a period of 30 days after
such Loan Party had knowledge or, in the exercise of reasonable due diligence,
should have had knowledge thereof, or notice thereof shall have been given to
the Borrower by the Agent.
SECTION 8.4 OTHER DEFAULTS.
(a) Failure of any Loan Party to perform or observe any term,
condition or covenant of any bond, note, debenture, loan agreement, indenture,
guaranty, trust agreement, mortgage or similar instrument to which it is a party
or by which it is bound, or by which any of its properties or assets may be
affected (a "DEBT INSTRUMENT"), so that, as a result of any such failure to
perform, the Indebtedness included therein or secured or covered thereby may be
declared due and payable prior to the date on which such Indebtedness would
otherwise become due and payable.
(b) Any event or condition referred to in any Debt Instrument shall
occur or fail to occur, so that, as a result thereof, the Indebtedness included
therein or secured or covered thereby may be declared due and payable prior to
the date on which such Indebtedness would otherwise become due and payable.
(c) Failure to pay any Indebtedness for borrowed money due at final
maturity or pursuant to demand under any Debt Instrument.
SECTION 8.5 REPRESENTATIONS AND WARRANTIES.
Any representation or warranty made in writing to the Lenders in any
of the Loan Documents or in connection with the making of the Loans, or any
certificate, statement or report made or delivered in compliance with this
Agreement, shall have been false or misleading in any material respect when made
or delivered or deemed made or delivered.
SECTION 8.6 BANKRUPTCY.
(a) The Borrower or the Guarantor shall make an assignment for the
benefit of creditors, file a petition in bankruptcy, be adjudicated insolvent,
petition or apply to any tribunal
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for the appointment of a receiver, custodian, or any trustee for it or a
substantial part of its assets, or shall commence any proceeding under any
bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction whether now or hereafter in
effect, or the Borrower or the Guarantor shall take any corporate action to
authorize any of the foregoing actions; or there shall have been filed any such
petition or application, or any such proceeding shall have been commenced
against it, which remains undismissed for a period of 30 days or more; or any
order for relief shall be entered in any such proceeding; or the Borrower or the
Guarantor by any act or omission shall indicate its consent to, approval of or
acquiescence in any such petition, application or proceeding or the appointment
of a custodian, receiver or any trustee for it or any substantial part of any of
its properties, or shall suffer any custodianship, receivership or trusteeship
to continue undischarged for a period of 30 days or more.
(b) The Borrower or the Guarantor shall generally not pay its debts
as such debts become due.
(c) The Borrower or the Guarantor shall have concealed, removed, or
permitted to be concealed or removed, any part of its property, with intent to
hinder, delay or defraud its creditors or any of them or made or suffered a
transfer of any of its property which may be fraudulent under any bankruptcy,
fraudulent conveyance or similar law; or shall have made any transfer of its
property to or for the benefit of a creditor at a time when other creditors
similarly situated have not been paid; or shall have suffered or permitted,
while insolvent, any creditor to obtain a Lien upon any of its property through
legal proceedings or distraint which is not vacated within 30 days from the date
thereof.
SECTION 8.7 JUDGMENTS.
Any judgment against the Borrower or Guarantor or any attachment,
levy or execution against any of its properties for any amount in excess of
$100,000 shall remain unpaid, unstayed on appeal, undischarged, unbonded or
undismissed for a period of 60 days or more.
SECTION 8.8 ERISA.
(a) The termination of any Plan or the institution by the PBGC of
proceedings for the involuntary termination of any Plan, in either case, by
reason of, or which results or could result in, a "material accumulated funding
deficiency" under Section 412 of the Code.
(b) Failure by the Borrower or Guarantor to make required
contributions, in accordance with the applicable provisions Of ERISA, to each of
the Plans hereafter established or assumed by it.
SECTION 8.9 OWNERSHIP OF STOCK AND CONTROL OF BORROWER.
The Guarantor shall at any time own, beneficially and of record, less
than 100% in the aggregate of all of the issued and outstanding shares of
capital stock of the Borrower, or the
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Principals shall own in the aggregate less than 45%, or own and/or Control in
the aggregate less than 80%, of the issued and outstanding shares of capital
stock, on a fully diluted basis (assuming the exercise of all outstanding stock
options), of the Guarantor having ordinary voting rights for the election of
directors.
SECTION 8.10 LIENS.
Any of the Liens created and granted to the Agent under the Security
Documents shall fail to be valid, first, perfected Liens, subject to no prior or
equal Lien, except as permitted by Section 7.2 hereof.
ARTICLE 9
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CONCERNING THE AGENT
SECTION 9.1 APPOINTMENT AND AUTHORITY OF THE AGENT.
Each Lender hereby appoints NatWest Bank N.A. to serve as the Agent
for such Person under this Agreement and the Security Documents, and hereby
irrevocably authorizes such Person, as Agent, to take such action on its behalf
under this Agreement and the Security Documents and to exercise such powers and
to perform such duties hereunder and thereunder as are specifically delegated to
or required of the Agent by the terms hereof or thereof, together with such
other powers as are reasonably incidental thereto, including, without
limitation, the right to release Collateral in accordance with Section 2.6(b)
hereof.
SECTION 9.2 DELEGATION OF DUTIES.
The Agent may exercise its powers and execute its duties by or
through employees or agents.
SECTION 9.3 STANDARD OF CARE.
In performing its duties and functions hereunder, the Agent will
endeavor to exercise the same degree of care which it normally exercises in
making and handling loans in which it alone is interested, but it does not
assume further responsibility. Any Lender will have the right, upon reasonable
notice and during customary banking hours, to visit the Agent, review and make
abstracts from the Agent's statements of account with respect to the Loans, all
at the sole expense of such Lender.
SECTION 9.4 INDEPENDENT CREDIT EVALUATIONS.
(a) Each Lender expressly acknowledges to the Agent that the Agent
has not made any representations or warranties to it regarding this Agreement,
the Security Documents, any of the other documents mentioned herein or therein
or the transactions contemplated hereby or thereby or regarding the Guarantor or
any of its Subsidiaries, including the Borrower.
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(b) Each Lender acknowledges to the Agent and to each other Person
that it has independently and without reliance on the Agent or any other Person,
and based upon such documents and inquiries as it has deemed appropriate, made
its own credit analyses of the Guarantor and its Subsidiaries, including the
Borrower, and its own decision to enter into this Agreement and the Security
Documents.
(c) Each Lender agrees that it will, independently and without
reliance on the Agent or any other Person, and based upon such documents and
inquiries as it shall deem appropriate at the time, continue to make its own
credit analyses and decisions in taking or not taking actions under this
Agreement and the Security Documents and to make such investigations as it deems
necessary to keep current its information relating to the affairs, financial
position and credit-worthiness of the Guarantor and its Subsidiaries, including
the Borrower.
SECTION 9.5 LIMITED SCOPE OF DUTIES.
(a) Nothing in this Agreement, expressed or implied, is intended
to, or shall be construed as to, impose upon the Agent any duties or
responsibilities in respect of this Agreement except as expressly set forth
herein. The relationship between the Agent and each of the Lenders is that of
agent and principal only and the duties and obligations of the Agent are of an
administrative and mechanical nature only. Nothing in this Agreement shall be
construed so as to constitute the Agent as a trustee for any Lender or to impose
upon the Agent any duties or responsibilities other than those for which express
provision is made herein. Except where otherwise expressed or implied, the
Agent, in performing its duties and functions hereunder and under the Security
Documents, does not assume, and shall not be deemed to have assumed, any
obligations toward, or relationship of agency or trust with or for, the
Borrower, the Guarantor or any of their Subsidiaries.
(b) The Agent agrees to provide to each Lender upon request a copy
of each notice, report and other document received by the Agent from the
Borrower hereunder. Except as provided in the immediately preceding sentence and
except for any other notices or documents expressly required to be furnished to
the Lenders by the Agent pursuant to the provisions of this Agreement or the
Security Documents, the Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or
other information concerning the business or financial condition of the
Guarantor or any of its Subsidiaries, including the Borrower, which may come
into the possession of the Agent or any of its Affiliates, whether before or
after the making of any Loan hereunder, nor shall the Agent have any duty to
inspect the properties or books of the Borrower, the Guarantor or any of their
Subsidiaries.
(c) The Agent shall be entitled to assume that no Event of Default
or Default has occurred and is continuing, unless the Agent has actual knowledge
of such fact or has received notice from a Lender or the Borrower, as the case
may be, that such Lender or the Borrower, as the case may be, considers that an
Event of Default or Default has occurred and is continuing and specifying the
nature thereof. The Agent shall promptly notify the Lenders of any Event of
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Default or Default of which it has actual knowledge or which it receives notice
of from any Lender and shall provide each of the Lenders with copies of all
notices of Defaults or Events of Defaults sent to the Borrower by the Agent.
(d) Except at the direction of the Majority Lenders, the Agent
shall be entitled to use its discretion with respect to exercising or refraining
from exercising any rights which may be vested in it by, or with respect to
taking or refraining from taking any action or actions which it may be able to
take under or in respect of, this Agreement and the Security Documents, and such
exercise of discretion shall be binding on all the Lenders.
SECTION 9.6 RELIANCE BY THE AGENT.
(a) The Agent shall be entitled to rely on any notice, consent,
certificate, affidavit, letter, telegram, teletype message, statement, order or
other document received by it and believed by it to be genuine and correct and
to have been signed and sent or delivered by a proper Person or Persons and, in
respect of legal matters, upon the advice and statements of lawyers, independent
accountants and other experts selected by the Agent. The Agent and each Lender
may rely conclusively on each incumbency certificate furnished to it pursuant to
Article 4 hereof until it receives such a certificate amending or rescinding the
prior certificate.
(b) As to any matter not expressly provided for in this Agreement,
the Agent shall be fully protected in acting in accordance with instructions
signed by the Majority Lenders and such instructions of the Majority Lenders and
action taken or inaction pursuant thereto shall be binding on all the Lenders,
including, but not limited to, any which has not signed such instructions or
which has dissented from the actions or inactions specified in such
instructions, provided that the Agent shall not be required to act or not to act
if to do so, in its sole judgment, would expose the Agent to liability or would
be contrary to this Agreement, any Security Document or applicable law, except
that the Agent shall so act or not act if doing so would expose it to liability
if and only if it shall have received from the Lenders such indemnities against
all such liabilities and any and all expenses, including fees and expenses of
its counsel satisfactory to it in its sole judgment.
SECTION 9.7 EXCULPATORY PROVISIONS.
(a) Neither the Agent nor any of its shareholders, directors,
officers, employees or agents shall be liable in any manner to any of the
Lenders for any action taken, or omitted to be taken, in good faith by it or
them hereunder or in connection herewith, or be responsible for the consequences
of any oversight or error of judgment, except for losses due to its gross
negligence or willful misconduct.
(b) The Agent shall not be responsible in any manner to any of the
Lenders for the due execution, effectiveness, genuineness, validity or
enforceability of any of this Agreement, the Notes, the Security Documents or
the Loans or for the truth, accuracy or completeness of any recital, statement
or warranty contained herein or in any Security Document or in any certificate,
report or other document furnished to it by or on behalf of any Person in
connection with this
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Agreement or any Security Document; nor shall the Agent be under any obligation
to any of the Lenders to ascertain or inquire as to the performance or
observance by the Borrower or any other Person of any of the agreements or
conditions set forth herein or in any Security Document or as to the use of any
moneys loaned hereunder.
SECTION 9.8 REIMBURSEMENT OF THE AGENT.
(a) The Lenders, severally, agree to indemnify the Agent (to the
extent not reimbursed by the Borrower or from the income or proceeds of the sale
of any of the Collateral), ratably according to the respective unpaid principal
amounts of the Obligations at the time owing to each of them, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
suits, judgments, court costs and other out-of-pocket costs and expenses of any
kind or nature whatsoever (hereinafter called, collectively, "EXPENSES") which
may be imposed on, incurred by or asserted against the Agent, as such, in any
way relating to or arising out of this Agreement or any Security Document or any
action taken or omitted by the Agent under this Agreement or any Security
Document, provided that no Lender shall be liable for any portion of such
Expenses resulting from the gross negligence or willful misconduct of the Agent
hereunder.
(b) The Agent, as such, shall not be required to expend any of its
own money to make up the full amount of any Loan requested by the Borrower
hereunder, or otherwise or incur any expense as a consequence of the failure of
any Lender to make available to the Agent its Commitment Percentage of any Loan
which the Lenders have become obliged to make hereunder. Should such a failure
occur and the Agent shall nevertheless have advanced money of its own or
incurred expense in order to make up the full amount of any such Loan, it shall
be deemed to have done so at the request of any Lender which is in default,
unless such Lender shall have notified the Agent not less than one (1) Business
Day prior to the proposed date of the related advance that it should not make
such an advance or incur such an expense to make good such failure, and in the
absence of such prior notice, such Lender shall be obligated to pay to the Agent
on demand the amount expended by the Agent out of its own funds plus any costs
incurred by the Agent to carry such funds while such Lender is in default to the
Agent hereunder, all of which shall constitute a loan by the Agent to such
Lender which shall bear interest from the date of the advance by the Agent at
the "Federal Funds" rate from day to day on the Loan with respect to which the
advance or expenditure was made. During the continuance of any such default as
between the Agent and such Lender, and notwithstanding anything elsewhere herein
to the contrary expressed or implied, the principal amount of Indebtedness in
respect of Loans made by such Lender in default shall be deemed to be reduced,
so long as the default continues by the amount not remitted by it to the Agent
as described in the preceding sentence and such principal amount and interest
thereon shall be deemed assigned to and collectible by the Agent for its own
account for application against the amount of its claim under the preceding
sentence.
(c) In the event that the Agent does not receive from any Lender a
payment which such Lender is required by the terms hereof to make to the Agent
and the Agent has made the amount thereof available to the Borrower, as the
intended recipient thereof, if the Borrower repays the Agent the amount made
available to it, the Borrower shall be subrogated to the
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Agent's right to recover such amount from any Lender which failed to make such
required payment.
SECTION 9.9 THE AGENT INDIVIDUALLY.
With respect to its obligation as a Lender to lend under this
Agreement and the advances made pursuant hereto, the Agent shall have the same
obligations and the same rights, powers and privileges as it would have were it
not the Agent. The Agent may accept deposits from, lend money to and, generally,
engage in any kind of banking, trust or other business with the Guarantor and
its subsidiaries, including the Borrower, or any of their respective Affiliates,
in all respects as if such Person were not acting as the Agent hereunder.
SECTION 9.10 DEALING WITH THE LENDERS.
(a) The Agent may at all times deal solely with the several Lenders
for all purposes of this Agreement and the protection, enforcement and
collection of the obligations, including the acceptance and reliance upon any
certificate, consent or other document of such Lenders and the division of
payments pursuant to Section 2.11, notwithstanding possession by the Agent of
actual knowledge that any Lender has sold a participation in Loans made or to be
made hereunder to another Person. The Agent may deem and treat the payees of the
Notes as the owners thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof has been filed with the Agent. Any
request, authority or consent of any holder of any Note shall be conclusive and
binding on any subsequent holder, transferee or assignee of such Note.
(b) If any payment by or on behalf of the Borrower received by the
Agent with respect to any Loan and distributed by the Agent to the Lenders on
account of their ratable share therein is thereafter set aside, avoided or
recovered from the Agent in connection with any receivership, liquidation or
bankruptcy proceeding, the Lenders shall, upon demand by the Agent, pay to the
Agent, for its account, their ratable shares of such amount set aside, avoided
or recovered together with interest at the rate required to be paid by the Agent
upon the amount required to be repaid by it.
SECTION 9.11 DUTIES NOT TO BE INCREASED.
The duties and liabilities of the Agent shall not be increased
without the written consent of the Agent.
SECTION 9.12 SUCCESSOR AGENT.
(a) The Agent may resign at any time by giving written notice to
the Lenders and the Borrower, and the Agent may be removed at any time with or
without cause by notice from two thirds of the Lenders, such resignation or
removal to become effective only upon the appointment of a successor Agent as
hereinafter provided.
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(b) Within thirty (30) days after receipt of written notice of any
such resignation of the Agent or removal of the Agent by the Lenders in
accordance with Section 9.12 (a), two thirds of the Lenders shall have the right
(upon five days, prior written notice to the Borrower from the Lenders) to
appoint a successor Agent, which shall be one of the Lenders, unless none of
them is willing to act as successor Agent hereunder, in which event two thirds
of the Lenders shall appoint as successor Agent any financial institution of
international standing having an office in the United States of America,
chartered by the State of New York, or another of the States of the United
States of America or authorized as a national banking association organized
under the laws of the United States of America, and who is willing to act in
that capacity.
(c) If no successor Agent shall have been appointed by two-thirds
of the Lenders within thirty (30) days after the removal or resignation of the
Agent, then the retiring Agent may on behalf of the Lenders appoint a successor
Agent which shall be a financial institution of international standing having an
office in the United States of America, chartered by the State of New York, or
another of the States of the United States of America or authorized as a
national banking association organized under the laws of the United States of
America. Upon the acceptance of its appointment as Agent hereunder by any such
successor Agent, the latter shall thereupon succeed to and become vested with
the duties, rights, powers and privileges of the retiring Agent under this
Agreement and the retiring Agent shall be discharged from all duties and
liabilities under this Agreement.
(d) After the resignation or removal of the Agent hereunder, the
provisions of this Article 9 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent hereunder and it shall also
continue to be entitled to the indemnities provided hereunder insofar as they
relate to events which occurred while it was Agent hereunder.
ARTICLE 10
----------
ADDITIONAL LENDERS; PARTICIPATIONS
SECTION 10.1 ASSIGNMENTS.
Except as provided herein, each Lender may, with the prior written
consent of the Agent (such consent not to be unreasonably withheld) , assign to
one or more banks or other financial institutions all or a portion of its
interests, rights and obligations under this Agreement (including, without
limitation, all or a portion of its commitment hereunder and the Note or Notes
held by it) ; PROVIDED, HOWEVER, that (i) each such assignment shall be of a
fixed, and not a varying, percentage of all the assigning Lender' s rights and
obligations under this Agreement, (ii) the amount of the assigning Lender' s
portion of the Commitment or the aggregate principal amount of the Loans, as the
case may be, subject to each such assignment (determined as of the date of the
assignment with respect to such assignment) shall in no event be less than $3,
000,000 and shall be in some greater integral multiple of $1, 000, 000 unless
such Lender assigns all of its interest, rights and obligations under this
Agreement, and (iii) the parties. to such assignment shall execute and deliver
to the Agent, for recording in the books of the Agent, an Assignment and
Acceptance, substantially in the form of EXHIBIT I to the Original Loan
Agreement or in such
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other form as may be consented to by the Majority Lenders and the Agent (the
"ASSIGNMENT"), together with any Note or Notes subject to such assignment and
together with payment by the assigning bank to the Agent, for the account of the
Agent, an assignment administration fee in the amount of $2,500. Upon such
execution, delivery, acceptance and recording, from and after the date of each
Assignment, the assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment, have the rights and obligations of a Lender hereby.
SECTION 10.2 PARTICIPATIONS.
(a) Each Lender shall have the right, subject to the further
provisions of this Article 10, to grant or sell a participation in all or any
part of its Loans, Notes and Commitment (a "PARTICIPATION") to any commercial
lender, other financial institution or other entity (a "PARTICIPANT") without
the consent of the Borrower, the Agent or any other party hereto, although
notice thereof shall be given to the Borrower and the Agent by each selling
Lender promptly after any Participation.
(b) Notwithstanding anything in the foregoing to the contrary, (i)
no Participant shall have any direct rights hereunder, (ii) the Borrower, the
Agent and the Lenders other than the selling Lender shall deal solely with the
selling Lender and shall not be obligated to extend any rights or make any
payment to, or seek any consent of, the Participant, and (iii) no Participation
shall relieve the selling Lender from its Commitment to make Loans hereunder or
any of its other obligations hereunder and such Lender shall remain solely
responsible for the performance thereof.
(c) Each Lender may furnish any public or non-public information
concerning the Borrower, including notices, certificates and documents delivered
hereunder, which are in the possession of such Lender from time to time to
Participants and potential Participants, PROVIDED that no such non-public
information, certificates, notices or documents shall be furnished without the
written undertaking of the recipient, a copy of which shall be furnished to the
Borrower promptly upon receipt thereof, to keep all such non-public information
confidential, except as may be required by law.
SECTION 10.3 PURCHASE OPTION.
With respect to any action requiring the approval or authorization
hereunder of the Majority Lenders, if the Bank shall desire that such approval
or authorization be granted, and any other Lender shall refuse to grant such
approval or authorization, then the Bank shall have the right, and each Lender,
by its execution and delivery of this Agreement or an Assignment hereby
irrevocably grants to the Bank the right, to acquire, on such date as shall be
specified by the Bank in writing, all of such Lender's interests, rights and
obligations under this Agreement and the other Loan Documents, including such
Lender's Commitment, upon the payment by the Bank to such Lender in immediately
available funds of the principal of, and all interest accrued on, such Lender's
Loans on such date and any other amounts payable hereunder to such Lender. Upon
the request of the Bank and the surrender by such Lender of all its Notes to the
Borrower, the Borrower shall issue to the Bank Notes payable to the Bank in
substitution therefor.
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ARTICLE 11
----------
MISCELLANEOUS PROVISIONS
SECTION 11.1 FEES AND EXPENSES; INDEMNITY.
(a) Borrower will promptly pay (i) all costs and expenses of the
Agent in preparing the Loan Documents and all costs and expenses of the issue of
the Notes including, but not limited to, the reasonable fees and expenses and
disbursements of ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel to the Agent, in connection with the
preparation, execution and delivery of this Agreement, the Notes, the Security
Documents, the other Loan Documents and all other agreements, instruments and
documents relating to this transaction and the consummation of the transactions
contemplated by all such documents, including the exercise by the Lenders of
their rights and remedies hereunder (including an annual audit of the Borrowing
Base) and (ii) all costs and expense of the Agent's administration of the
transactions contemplated by this Agreement, all costs and expenses of the
Agent's and the Lenders' enforcement of their rights and remedies hereunder and
under the other Loan Documents, including, without limitation, the payment of
the obligations, performance of and compliance with all agreements and
conditions contained herein on the part of the Borrower to be performed or
complied with (including, without limitation, all costs of filing or recording
any assignments, mortgages, financing statements and other documents), the
negotiation, preparation and execution and delivery of any amendment,
modification or supplement of or to, or any consent or waiver under, any such
document (or any such instrument which is proposed but not executed and
delivered), the termination of this Agreement and the other Loan Documents and
with any claim or action threatened, made or brought against the Agent or the
Lenders arising out of or relating to any extent to this Agreement, the Security
Documents, the other Loan Documents or the transactions contemplated hereby or
thereby. In addition, the Borrower will promptly pay all reasonable fees and
expenses incurred by the Agent with respect to an annual audit of the books and
records of the Loan Parties relating to the Collateral, the Borrowing Base and
the Loan Parties methods and procedures with respect thereto conducted by
consultants, accountants or other professionals selected by the Agent in its
sole discretion to perform such functions.
(b) The Borrower shall indemnify the Agent and the Lenders against,
and hold each of them harmless from, any loss, liabilities, damages, claims,
costs and expenses (including reasonable attorneys' fees and disbursements)
suffered or incurred by them arising out of, resulting from or in any manner
connected with, the execution, delivery and performance of each of the Loan
Documents, the Loans and any and all transactions related to or consummated in
connection with the Loans, including, without limitation, losses, liabilities,
damages, claims costs and expenses suffered or by the Agent or any Lender in
investigating, preparing for, defending against, or providing evidence,
producing documents or taking any other action in respect of any commenced or
threatened litigation, administrative proceeding or investigation under any
federal securities law or any other statute of any jurisdiction, or any
regulation, or at common law or otherwise, which is alleged to arise out of or
is based upon (i) any untrue statement or alleged untrue statement of any
material fact of the Borrower and its Affiliates in
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any document or schedule filed with any governmental body; (ii) any omissions or
alleged omission to state any material fact required to be stated in such
document or schedule, or necessary to make the statements made therein, in light
of the circumstances under which made, not misleading; (iii) any acts, practices
or omission or alleged acts, practices or omissions of the Borrower or its
agents or representatives related to the making of any acquisition, purchase of
shares or assets pursuant thereto, financing of such purchases or the
consummation of any other transactions contemplated by any such acquisitions
which are alleged to be in violation of any federal securities law or of any
other statute, regulation or other law of any jurisdiction applicable to the
making of any such acquisition, the purchase of shares or assets pursuant
thereto, the financing of such purchases or the consummation of the other
transactions contemplated by any such acquisition; or (iv) any withdrawal,
termination or cancellation of any such proposed acquisition for any reason
whatsoever. The indemnity set forth herein shall be in addition to any other
obligations or liabilities of the Borrower to the Agent and the Lenders
hereunder or at common law or otherwise. The provisions of this Section 11.1
shall survive the payment of the Notes and the termination of this Agreement.
SECTION 11.2 TAXES.
If, under any law in effect on the date of the closing of any Loan
hereunder, or under any retroactive provision of any law subsequently enacted,
it shall be determined that any federal, state or local tax is payable in
respect of the issuance of any Note, or in connection with the filing or
recording of any assignments, mortgages, financing statements, or other
documents (whether measured by the amount of indebtedness secured or otherwise)
as contemplated by this Agreement, then the Borrower will pay any such tax and
all interest and penalties, if any, and will indemnify the Agent and the Lenders
against and hold each of them harmless from any loss or damage resulting from or
arising out of the nonpayment or delay in payment of any such tax. If any such
tax or taxes shall be assessed or levied against any Lender or any other holder
of a Note, such Lender, or such other holder, as the case may be, may notify the
Borrower and make immediate payment thereof, together with interest or penalties
in connection therewith, and shall thereupon be entitled to and shall receive
immediate reimbursement therefor from the Borrower. Notwithstanding any other
provision contained in this Agreement, the covenants and agreements of the
Borrower in this Section 11.2 shall survive payment of the Notes and the
termination of this Agreement.
SECTION 11.3 PAYMENTS.
All payments by the Borrower hereunder shall be made to the Agent as
provided in Section 2.11 hereof. Any such payment made on such date but after
such time shall, if the amount paid bears interest, be deemed to have been made
on and interest shall continue to accrue and be payable thereon until the next
succeeding Business Day. If any payment of principal or interest becomes due on
a day other than a Business Day, such payment may be made on the next succeeding
Business Day and such extension shall be included in computing interest in
connection with such payment. All payments hereunder and under the Notes shall
be made without setoff or counterclaim and in such amounts as may be necessary
in order that all such payments shall not be less than the amounts otherwise
specified to be paid under this Agreement
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and the Notes (after withholding for or on account of (i) any present or future
taxes, levies, imposts, duties or other similar charges of whatever nature
imposed by any government or any political subdivision or taxing authority
thereof, other than any tax (except those referred to in clause (ii) below) on
or measured by the net income of the Lenders pursuant to applicable federal,
state and local income tax laws, and (ii) deduction of amounts equal to the
taxes on or measured by the net income of the Lenders payable by the Lenders
with respect to the amount by which the payments required to be made under this
sentence exceed the amounts otherwise specified to be paid in this Agreement and
the Notes). Upon payment in full of each Note, the Agent shall ▇▇▇▇ such Note
"Paid" and return it to the Borrower.
SECTION 11.4 SURVIVAL OF AGREEMENTS AND REPRESENTATIONS.
All agreements, representations and warranties made herein shall
survive the delivery of this Agreement and the Notes.
SECTION 11.5 LIEN ON AND SET-OFF OF DEPOSITS.
As security for the due payment and performance of all the
Obligations, the Borrower hereby grants to the Agent for the ratable benefit of
the Lenders a Lien on any and all deposits or other sums at any time credited by
or due from the Bank to the Borrower, whether in regular or special depository
accounts or otherwise, and any and all monies, securities and other property of
the Borrower, and the proceeds thereof, now or hereinafter held or received by
or in transit to the Bank from or for the Borrower, whether for safekeeping,
custody, pledge, transmission, collection or otherwise, and any such deposits,
sums, monies, securities and other property, may at any time after the
occurrence and during the continuance of any Event of Default be set-off,
appropriated and applied by the Bank against any of the Obligations, whether or
not any of such Obligations is then due or is secured by any Collateral, or, if
it is so secured, whether or not the Collateral held by the Agent is considered
to be adequate.
SECTION 11.6 MODIFICATIONS, CONSENTS AND WAIVERS; ENTIRE AGREEMENT.
(a) No modification, amendment or waiver of or with respect to any
provision of this Agreement, the Notes, the Security Documents or any of the
other Loan Documents nor consent to any departure by the Borrower from any of
the terms or conditions hereof or thereof, shall in any event be effective
unless it shall be in writing and signed by the Majority Lenders; PROVIDED,
HOWEVER, that no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, do any of the following: (i) waive any of the
conditions specified in Article 4, (ii) increase the amounts, renew the Lenders'
Commitment or extend the Commitment Termination Date or subject the Lenders to
any additional obligations, (iii) reduce the principal of or interest on, the
Notes or any fees hereunder, (iv) postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees hereunder, (v) modify or
amend the definition of Borrowing Base in Section 1.1 hereof if the effect of
such modification or amendment is to increase the applicable percentage used in
the determination thereof, (vi) change the percentage in interest of the Lenders
which shall be required to take action hereunder, (vii) release any Collateral,
except as provided in Section 2.6 (b) hereof, or (viii) change any provision of
this Section 11.6,
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pROVIDED, FURTHER, that no amendment, waiver or consent with respect to any
provisions of Article 11 shall be effective unless signed by the Agent. No
consent to or demand on the Borrower in any case shall, of itself, entitle it to
any other or further notice or demand in similar or other circumstances.
(b) This Agreement embodies the entire agreement and understanding
between the Agent, the Lenders and the Borrower and supersedes all prior
agreements and understandings relating to the subject matter hereof.
SECTION 11.7 REMEDIES CUMULATIVE.
Each and every right granted to the Agent and the Lenders hereunder
or under any other document delivered hereunder or in connection herewith, or
allowed them by law or equity, shall be cumulative and may be exercised from
time to time. No failure on the part of the Agent or the Lenders to exercise,
and no delay in exercising, any right shall operate as a waiver thereof, nor
shall any single or partial exercise of any right preclude any other or future
exercise thereof or the exercise of any other right.
SECTION 11.8 FURTHER ASSURANCES.
At any time and from time to time, upon the request of the Agent, the
Borrower shall execute, deliver and acknowledge or cause to be executed,
delivered and acknowledged, such further documents and instruments and do such
other acts and things as the Agent may reasonably request in order to fully
effect the purposes of this Agreement, the Notes, the Security Documents and the
other Loan Documents.
SECTION 11.9 NOTICES.
Except as otherwise provided for herein, all notices, requests,
reports and other communications pursuant to this Agreement shall be in writing,
either by letter (delivered by hand or commercial messenger service or sent by
certified mail, return receipt requested, except for routine reports delivered
in compliance with Article 5 hereof which may be sent by ordinary first-class
mail), telecopier (followed by a hard copy) or telegram, addressed as follows:
If to the Borrower:
Leasecomm Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇▇▇▇, President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Agent or, in its capacity as a Lender, the Bank:
NatWest Bank N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: NatWest Financial Services Division
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (other than in the case of Notices and reports and
other documents delivered in compliance with Article 5 hereof)
to:
▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to any other Lender, at the address set forth below such
Lender's signature hereto.
Any notice, request or communication hereunder shall be deemed to have been
given on the day on which it is delivered by hand, commercial messenger service
or telegraph service to such party at its address specified above, or, if sent
by mail, on the third Business Day after the day deposited in the mail, postage
prepaid, or, if sent by telecopier, when electronically or verbally confirmed.
Any party may change the person or address to whom such notices are to be given
hereunder, by notice duly given hereunder; PROVIDED, HOWEVER, that any such
notice shall be deemed to have been given hereunder only when actually received
by the party to which it is addressed.
SECTION 11.10 CONSTRUCTION; GOVERNING LAW; CONSENT TO JURISDICTION;
WAIVER OF JURY TRIAL.
(a) The headings used in this Agreement are for convenience of
reference only and shall not in any way be deemed to limit, define or describe
the scope and intent of this Agreement or any provision hereof.
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(b) All uses herein of the masculine gender or of singular or
plural terms shall be deemed to include uses of the feminine or neuter gender or
plural or singular terms, as the context may require.
(c) This Agreement, the Notes, the Security Documents and the other
Loan Documents shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New York without reference to its principles of
conflict of laws.
(d) THE BORROWER HEREBY IRREVOCABLY CONSENTS THAT ANY LEGAL ACTION
OR PROCEEDING AGAINST IT UNDER, ARISING OUT OF OR IN ANY MANNER RELATING TO THIS
AGREEMENT, THE NOTES, OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN ANY COURT OF
THE STATE OF NEW YORK SITTING IN THE COUNTY OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. THE BORROWER, BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, EXPRESSLY AND IRREVOCABLY ASSENTS AND
SUBMITS TO THE PERSONAL JURISDICTION OF ANY OF SUCH COURTS IN ANY SUCH ACTION OR
PROCEEDING. THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF ANY
COMPLAINT, SUMMONS, NOTICE OR OTHER PROCESS RELATING TO ANY SUCH ACTION OR
PROCEEDING BY DELIVERY THEREOF TO IT BY HAND OR BY MAIL IN THE MANNER PROVIDED
FOR IN SECTION 11.9 HEREOF. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES
ANY CLAIM OR DEFENSE IN ANY SUCH ACTION OR PROCEEDING BASED ON ANY ALLEGED LACK
OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS OR ANY SIMILAR
BASIS. THE BORROWER SHALL NOT BE ENTITLED IN ANY SUCH ACTION OR PROCEEDING TO
ASSERT ANY DEFENSE GIVEN OR ALLOWED UNDER THE LAWS OF ANY STATE OTHER THAN THE
STATE OF NEW YORK UNLESS SUCH DEFENSE IS ALSO GIVEN OR ALLOWED BY THE LAWS OF
THE STATE OF NEW YORK. NOTHING IN THIS SECTION 11.10 SHALL AFFECT, OR IMPAIR IN
ANY MANNER OR TO ANY EXTENT THE RIGHT OF THE LENDERS TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY JURISDICTION OR TO
SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.
(e) THE BORROWER WAIVES TRIAL BY JURY IN ANY LITIGATION IN ANY
COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF, THIS AGREEMENT,
THE NOTES, THE SECURITY DOCUMENTS OR ANY OF THE OTHER LOAN DOCUMENTS, OR THE
VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF.
SECTION 11.11 SEVERABILITY.
The provisions of this Agreement are severable, and if any clause or
provision hereof shall be held invalid or unenforceable in whole or in part in
any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction and shall not in
any manner affect such clause or provision in any other jurisdiction, or any
other
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clause or provision of this Agreement in any jurisdiction. Each of the
covenants, agreements and conditions contained in this Agreement is independent
and compliance by the Borrower with any of them shall not excuse noncompliance
by the Borrower with any other covenant, agreement or condition. The Borrower
shall not take any action the effect of which shall constitute a breach or
violation of any provision of this Agreement.
SECTION 11.12 BINDING EFFECT; NO ASSIGNMENT OR DELEGATION.
This Agreement shall be binding upon and inure to the benefit of the
Borrower and its successors and to the benefit of the Agent, the Lenders and
their respective successors and assigns. The rights and obligations of the
Borrower under this Agreement shall not be assigned or delegated without the
prior written consent of the Majority Lenders, and any purported assignment or
delegation without such consent shall be void.
SECTION 11.13 COUNTERPARTS.
This Agreement may be executed in as many counterparts as may be
deemed necessary or convenient, each of which, when so executed, shall be deemed
an original, but all such counterparts shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Amended
Agreement to be duly executed as of the date first above written.
LEASECOMM CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
_____________________________________________
Name:
Title:
NATWEST BANK N.A., in its individual corporate
capacity
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_____________________________________________
Name:
Title:
Address:
NatWest Bank N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Assistant Vice President
NatWest Financial Services Division
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
FLEET BANK OF MASSACHUSETTS, N.A.
By: /s/ [Signature Illegible]
_____________________________________________
Name:
Title:
Address:
Fleet Bank of Massachusetts
Fleet Center
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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