CREDIT AGREEMENT
CREDIT AGREEMENT
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS 1
1.1. Defined Terms 1
1.2. Accounting Terms 10
1.3. Exhibits and Schedules 10
1.4. Miscellaneous Terms 10
ARTICLE 2 THE CREDITS 10
2.1. Revolving Loan Facility 10
2.1.1. General 10
2.1.2. Revolving Notes 10
2.2. Term Loan Facility 11
2.2.1. General 11
2.2.2. Term Notes 11
2.3. Interest on Loans 11
2.3.1. General 11
2.3.2. Rate Options 11
2.3.3. Interest on Overdue Payments 12
2.3.4. Computation 12
2.4. Procedure for Loans 12
2.4.1. General 12
2.4.2. Alternate Procedure 12
2.4.3. Extensions and Conversations 13
2.4.4. Minimum Amount of Revolving Loans 13
2.4.5. Minimum Payment of Revolving Loans 13
2.5. Funding of Loans 13
2.6. Non-Receipt of Funds by Agent 14
2.7. Reserve Commitment Amount 14
2.7.1. General 14
2.7.2. Activation of Reserve Commitment Amount 14
2.7.3. Suspension of Reserve Commitment Amount 14
2.8. Adjustment or Termination of the Commitment 14
2.9. Initial Revolving Loan 15
ARTICLE 3 PAYMENTS AND FEES 15
3.1. Revolving Loans 15
3.1.1. Interest 15
3.1.2. Principal 15
3.2. Term Loans 16
3.2.1. Interest 16
3.2.2. Principal 16
3.3. Optional Repayment 16
3.4. Mandatory Prepayments 16
3.5. Payments 16
3.6. Commitment Fee 17
3.7. Agent's Fee 17
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ARTICLE 4 ADDITIONAL PROVISIONS RELATING TO EURODOLLAR
LOANS AND CAPITAL ADEQUACY 17
4.1. Eurodollar Loans 17
4.1.1. Eurodollar Increased Cost 17
4.1.2. Eurodollar Deposits Unavailable
or Interest Rate Unascertainable 18
4.1.3. Changes in Law Affecting Eurodollar Loans 18
4.1.4. Eurodollar Loan Indemnity 19
4.2. Discretion as to Manner of Funding 19
4.3. Capital Adequacy 19
ARTICLE 5 CONDITIONS PRECEDENT 20
5.1. Initial Revolving Loan 20
5.2. Each Loan 21
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF BORROWER 21
6.1. Due organization 21
6.2. Subsidiaries 21
6.3. Requisite Power 21
6.4. Binding Agreement 22
6.5. Other Agreement 22
6.6. Litigation 22
6.7. Consents 22
6.8. Financials 23
6.9. Use of Proceeds 23
6.10. Regulation U 23
6.11. ERISA 23
6.12. Tax Returns 23
6.13. Licenses, Trademarks, etc. 23
6.14. Burdensome Agreement, etc. 23
6.15. Title and Lien 24
6.16. Existing Defaults 24
6.17. Other Contracts 24
6.18. Leases 24
6.19. Fire and Explosion 24
6.20. No Default 24
ARTICLE 7 AFFIRMATIVE COVENANTS 25
7.1. Inspection 25
7.2. Proceeds 25
7.3. Financial Statements 25
7.4. Intentionally Left Blank 27
7.5. Corporate Existence 27
7.6. Compliance and Law 27
7.7. Insurance 27
7.8. Facilities 28
7.9. Taxes and Other Liabilities 28
7.10. Litigation 28
7.11. Change of Location 28
7.12. Financial Tests 28
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ARTICLE 8 NEGATIVE COVENANTS 29
8.1. Mergers/Changes 29
8.2. Sale of Assets 29
8.3. Liens 29
8.4. Indebtedness 30
8.5. Prepayment 30
8.6. Transaction with Affiliates 30
8.7. Misrepresentations 30
8.8. Regulations 30
8.9. Partnerships 30
ARTICLE 9 EVENTS OF DEFAULT 31
9.1. Events of Default 31
9.2. Acceleration 32
ARTICLE 10 AGENT 33
10.1. Appointment; Powers 33
10.2. Agent as Bank 33
10.3. Independent Credit Analysis 33
10.4. General Immunity 34
10.5. Right to Indemnity 34
10.6. Action by Agent 35
10.6.1. Actual Knowledge 35
10.6.2. Agent; Obligations 35
10.6.3. Discretion to Act 35
10.6.4. Action Upon Instructions 35
10.7 Payee of Note Treated as Owner 36
10.8. Agent's Resignation 36
ARTICLE 11 MISCELLANEOUS
36
11.1 Amendments 36
11.2. Preservation of Rights 37
11.3. Setoff 37
11.4. Ratable Payments 37
11.5. Expenses 37
11.6. Indemnity 38
11.7. Survival of Representations 38
11.8. Governmental Regulation 38
11.9. Taxes 38
11.10. Headings 38
11.11. Several Obligations 38
11.12. Numbers of Documents 39
11.13. Severability of Provisions 39
11.14. Nonliability of Banks 39
11.15. Choice of Law 39
11.16 Consent of Jurisdiction 39
11.17. Compliance with Applicable Laws 39
11.18. Confidentiality 40
11.19. Successors and Assigns 41
11.20. Notices 41
11.21. Entire Agreement 41
11.22. Jury Trial 41
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of July 10, 1997 is entered into by and among
▇▇▇▇▇▇▇ RENTCORP, a California corporation, as "Borrower," the banks listed on
the signature pages hereof (individually a "Bank" and collectively "Banks"),
and UNION BANK OF CALIFORNIA, NATIONAL ASSOCIATION, as agent for Banks (in such
capacity, "Agent").
The parties hereto desire to amend and restate the Amended and Restated
Credit Agreement dated June 14, 1994, between and among the Borrower, Banks and
Agent, as agent for Banks, as amended by the First Amendment to Amended and
Restated Credit Agreement dated as of June 16, 1995, Second Amendment to
Amended and Restated Credit Agreement dated as of May 10, 1996, Third
Amendment to Amended and Restated Credit Agreement dated as of June 27, 1996,
and Fourth Amendment to Amended and Restated Credit Agreement dated as of
October 25, 1996 (collectively, the " Prior Agreement").
In consideration of the mutual covenants and agreements contained herein,
the parties hereto covenant and agree and amend and restate the Prior Agreement
as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the following terms shall
have the meanings set forth below:
"ACTIVATED RESERVE COMMITMENT AMOUNT" means, at the time of
determination, the aggregate "activated" portion of the Reserve Commitment
Amount, as determined from time to time. For purposes hereof, the term
"activated" is described in Section 2.7.2.
"ADJUSTED BORROWING BASE" means the excess, if any, of (a) the Borrowing
Base over (b) Outside Debt.
"ADJUSTED NET INCOME" means for any period of four (4) consecutive
quarters, determined as of the last day of such period, the sum of (a) Net
Income, (b) provision for income taxes, (c) interest expense and (d)
depreciation.
"AFFILIATE" means, 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" (and the correlative terms,
"controlled by" and "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).
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"AGREEMENT" means this Credit Agreement as originally executed and as
the same may from time to time be amended, supplemented or restated.
"APPLICABLE LAW" means, with respect to any Bank at any time, the Law of
any jurisdiction applicable to Loans made by such Bank to Borrower hereunder,
including, without limitation, Laws prescribing the maximum rates of interest
on loans and extensions of credit.
"APPLICABLE MARGIN" means the percentage to be added to a Rate Option in
determining the rate of interest applicable to a Loan, as set forth in the
Interest Schedule.
"BANK" means, individually, Union Bank of California, N.A., Fleet Bank,
N.A., Bank of America, National Trust and Savings Association., and their
respective successors, and such other banks as may become party to this
Agreement, collectively referred to herein as "Banks."
"BASE AMOUNT" has the meaning ascribed to it in Section 7.12(a).
"BASIC COMMITMENT AMOUNT" means the amount of Forty Million Dollars
($40,000,000).
"BORROWING BASE" means, at any time and from time to time, an amount
equal to seventy-five percent (75%) of Borrower's Eligible Equipment.
"BUSINESS DAY" means any day other than a Saturday or Sunday on
which national banks are generally open for business in San Francisco,
California and, with respect to Eurodollar Loans, such a day on which dealings
in foreign currencies and exchange may be carried on in the interbank
Eurodollar market.
"CAPITALIZED LEASE OBLIGATIONS" means any and all lease obligations
that, in accordance with GAAP, are required to be capitalized on the books of a
lessee.
"CLOSING DATE" means the date on which the Initial Revolving Loan is
funded.
"COMMERCIAL ACCOUNT" means Borrower's commercial account number 001-
▇▇▇▇▇▇▇ at the office of Agent.
"COMMITMENT" means, subject to the terms and conditions of this
Agreement, and adjusted from time to time in accordance therewith, the
obligation of Banks to make Loans to Borrower in the aggregate principal amount
outstanding at any time not to exceed the lesser of (a) the sum of (i) the
Basic Commitment Amount and (ii) the Activated Reserve Commitment Amount, and
(b) the Adjusted Borrowing Base.
"COMMITMENT FEE" means the commitment fee payable by Borrower pursuant
to and as provided in Section 3.6.
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"COMPLIANCE CERTIFICATE" means a certificate in the form of Exhibit A to
be delivered to Agent in accordance with Section 7.3(d).
"CONVERSION DATE" means June 30, 1999.
"DEBT" means, with respect to Borrower, the aggregate amount of, without
duplication, (a) all obligations for borrowed money, including, without
limitation, the Loans, and the Real Property Debt, (b) all obligations
evidenced by bonds, other than assessment and other special bonds associated
with real property holdings, debentures, notes or other similar instruments,
(c) all Capitalized Lease Obligations, (d) all obligations or liabilities of
others secured by a Lien on any asset of Borrower, whether or not such
obligation or liability is assumed, and (e) all obligations or liabilities of
Borrower, whether direct or indirect, contingent or otherwise, with respect to
the obligations or liability of another, including, without limitation, all
guaranties.
"DEBT SERVICE" means for any period of four (4) consecutive quarters,
determined as of the last day of such period, the sum of (a) all payments of
principal and interest on Debt (excluding any Loans) scheduled to become due or
to be made during the succeeding period of four (4) consecutive quarters, plus
(b) the amount outstanding under all Loans divided by an amount equal to the
number of years or quarterly fractions thereof (rounded to the nearest quarter)
remaining until June 30, 2001. Where any item of interest varies or depends
upon a floating rate, for purposes of calculating Debt Service such rate shall
be computed on the basis of the average interest rate on the applicable item
for the quarter preceding the date of determination.
"DEFAULT" means any event that with the giving of notice or passage of
time, or both, would be an Event of Default.
"DOLLARS AND $" means United States dollars or such coin or currency of
the United States of America as at the time of payment shall be legal tender
for the payment of public and private debts in the United States.
"EBIT" means Adjusted Net Income, excluding item (d) thereof,
depreciation.
"ELIGIBLE EQUIPMENT" means equipment which is an asset of Borrower
designated as "Rental equipment, net" on Borrower's most recent financial
statements, in accordance with GAAP, or any substitute for such designation,
and which:
(a) is owned by Borrower free and clear of all Liens and rights of
others except Permitted Liens;
(b) is permanently located in the United States of America; and
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(c) is not, in the reasonable opinion of Agent, obsolete, unsalable,
unfit for use or otherwise unacceptable to Agent.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
the same may from time to time be amended or supplemented, including any rules
or regulations issued in connection therewith and any successor statute.
"EUROCURRENCY RESERVE PERCENTAGE" means, with respect to each Eurodollar
Period, the percentage, as prescribed by the Federal Reserve Board, for
determining reserve requirements (including any marginal, supplemental or
emergency reserves) applicable to Eurocurrency liabilities pursuant to
Regulation D, or any other then applicable regulation of the Board of Governors
which prescribes reserve requirements applicable to 'Eurocurrency liabilities,'
as presently defined in Regulation D, in each case, as applicable to Agent.
The Interbank Rate (Reserve Adjusted) shall be adjusted automatically on the
effective date of any change in the Eurocurrency Reserve Percentage. For
purposes of this definition, any Eurodollar Loans hereunder shall be deemed to
be Eurocurrency liabilities. The Eurocurrency Reserve Percentage shall be
conclusive and binding, absent manifest error, even if estimated or projected.
"EURODOLLAR LOAN" means any Loan which bears interest at a rate
determined with reference to the Interbank Rate (Reserve Adjusted).
"EURODOLLAR PERIOD" means, with respect to any Eurodollar Loan, the
period commencing on the date specified by Borrower in a Loan Request and
ending 1, 2, 3, 6 or 12 months thereafter, as specified by Borrower in such
Loan Request; provided that
(a) the first day of any Eurodollar Period shall be a Business Day;
(b) no Eurodollar Period for any Eurodollar Loan made prior to the
Conversion Date shall extend beyond the Conversion Date;
(c) no Eurodollar Period shall extend beyond a date when a principal
payment is due if the principal balance of the Loans after such payment will be
less than the aggregate Eurodollar Loans outstanding;
(d) no Eurodollar Period shall extend beyond the Term Loan Maturity
Date; and
(e) any Eurodollar Period which would otherwise end on a day which is
not a Business Day shall be extended to the next succeeding Business Day unless
such next succeeding Business Day falls in another calendar month, in which
case such Eurodollar Period shall end on the next preceding Business Day.
"EVENT OF DEFAULT" means an event set forth in Article 9.
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"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to (a) the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the
preceding Business Day) by the Federal Reserve Bank of New York; or (b) if such
rate is not published for any day which is a Business Day, the average of the
quotations at approximately 10:00 a.m. San Francisco time for such day on such
transactions received by Agent from three (3) federal funds brokers of
recognized standing selected by it.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System or any governmental authority succeeding to its functions.
"FUNDING DATE" means the date of the funding of a Loan, including the
date a Loan is converted from a Revolving Loan to a Term Loan, and from a Loan
with one Rate Option to a Loan with another Rate Option.
"GAAP" means, as of any date of determination, accounting principles (a)
set forth as generally accepted in then currently effective Opinions of the
Accounting Principles Board of the American Institute of Certified Public
Accountants, (b) set forth as generally accepted in then currently effective
Statements of the Financial Accounting Standard Board or (c) that are then
approved by such other entity as may be approved by a significant segment of
the accounting profession in the United States of America, applied on a
consistent basis in all material respects to those applied at prior dates or
for prior periods.
"GOVERNMENTAL AGENCY" means (a) any international, foreign, federal,
state, county or municipal government or political subdivision thereof, or (b)
any governmental or quasi-governmental agency, authority, board, bureau,
commission, department, instrumentality or public body, or (c) any court or
administrative tribunal.
"INITIAL REVOLVING LOAN" has the meaning ascribed to it in Section 2.9.
"INTERBANK RATE" means, with respect to each Eurodollar Period, the rate
per annum at which Dollar deposits in immediately available funds are offered
to Agent two (2) Business Days prior to the beginning of such Eurodollar Period
by major banks in the interbank eurodollar market at or about 10:00 a.m., San
Francisco time, for delivery on the first day of such Eurodollar Period, for
the number of days comprised therein and in an amount equal to the amount of
the Eurodollar Loan to be outstanding during such Eurodollar Period.
"INTERBANK RATE (RESERVE ADJUSTED)" means, with respect to any
Eurodollar Loan for any Eurodollar Period, a rate per annum (rounded upwards,
if necessary, to the nearest one-hundredth of one percent (1/100 of 1%))
determined pursuant to the following formula:
Interbank Rate = Interbank Rate
---------------------------------
(Reserve Adjusted) 1-Eurocurrency Reserve Percentage
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"INTEREST PERIOD" means, with respect to any: (a) Eurodollar Loan, the
Eurodollar Period and (b) Reference Rate Loan, the Reference Rate Period.
"INTEREST SCHEDULE" means the schedule of interest in Section 2.3 which
sets forth the fluctuating rate per annum at which the unpaid principal balance
of the Loans shall bear interest.
"INVESTOR-OWNER SALES PROGRAM" means any particular program whereby
Borrower has sold, from time to time, and may from time to time in the future
sell Eligible Equipment to various persons for cash at their then current
market value and continue thereafter to manage and operate such Eligible
Equipment on behalf of the purchasers under a management contract. Such
purchasers will frequently be limited partnerships sponsored by Borrower and
for which Borrower and/or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ will act as general partner.
"LAW" means collectively all international, foreign, federal, state and
local statutes, treaties, rules, regulations, directives, ordinances, policies,
orders and codes.
"LIABILITIES" means the aggregate amount of all liabilities of Borrower
that would, in accordance with GAAP, be required to be set forth on a balance
sheet as liabilities, excluding deferred taxes.
"LIEN" means any mortgage, deed of trust, pledge, hypothecation,
security interest, encumbrance, lien or charge of any kind, whether voluntarily
incurred or arising by operation of law or otherwise, affecting any asset of
Borrower, including any agreement to give any of the foregoing, any conditional
sale or other title retention agreement, any lease in the nature of a security
interest, and/or the filing of or agreement to give any financing statement
(other than a financing statement which disclaims the existence of a security
interest and states that it is filed only as a precaution) under the Uniform
Commercial Code or comparable Law with respect to any asset of Borrower.
"LOAN" means a Revolving Loan and/or Term Loan or, if the context
requires, the Revolving Loans and/or Term Loans.
"LOAN DOCUMENTS" means, collectively, this Agreement, the Notes, and any
and all other agreements, documents, instruments and certificates of any type
or nature heretofore or hereafter executed or delivered by Borrower to Agent or
Banks in any way relating to or in furtherance of this Agreement, in each case
either as originally executed or as the same may from time to time be
supplemented, modified, amended, restated or extended.
"LOAN REQUEST" means a written request by Borrower for a Loan,
substantially in the form of EXHIBIT B, duly executed on Borrower's behalf and
properly completed to provide all information required to be included therein.
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"MAXIMUM AMOUNT" means, with respect to each Loan by each Bank at any
time, the maximum amount of interest which, under Applicable Law, such Bank
is permitted to charge with respect to such Loan.
"NET INCOME" has the meaning ascribed to it in accordance with GAAP.
"NET LOSS" has the meaning ascribed to it in accordance with GAAP.
"NOTES" means, collectively, the Revolving Credit Notes and the Term
Notes.
"OBLIGATIONS" means all present and future obligations of every kind
or nature of Borrower or at any time and from time to time owed to Agent or
Banks or any one or more of them, under any one or more of the Loan
Documents, whether due or to become due, matured or unmatured, liquidated or
unliquidated, or contingent or noncontingent, INCLUDING obligations of
performance as well as obligations of payment, and INCLUDING interest that
accrues after the commencement of any proceeding under any debtor relief law
by or against Borrower.
"OFFICER'S CERTIFICATE" means a certificate substantially in the form
of EXHIBIT C, completed and duly executed by Borrower.
"OUTSIDE DEBT" means all Debt other than Loans and Real Property Debt.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PERMITTED LIEN" has the meaning ascribed to it in Section 8.3.
"PERSON" means any individual or entity.
"PLAN" means an employee pension or other benefit plan of Borrower
subject to Title IV of ERISA or to which Section 412 of the Internal Revenue
Code of 1954, as amended, applies, other than Borrower's Employee Stock
Ownership Plan as amended in existence as of the date of this Agreement.
"PRIOR AGREEMENT" has the meaning ascribed to it in Section 2.9.
"PRO RATA SHARE" means, with respect to each Bank, the percentage set
forth next to that Bank's name as follows:
Bank Pro Rata Share Commitment
---- -------------- ----------
Union Bank of
California, N.A. 34% $23,800,000
Bank of
America, NT&SA 33% $23,100,000
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Fleet Bank, N.A. 33% $23,100,000
"RATE OPTION" means the interest rate options available to Borrower
for the Loans as provided in Section 2.3.2, which are the Interbank Rate
(Reserve Adjusted), or Reference Rate.
"REAL PROPERTY DEBT" means Debt which is secured by any or all of
Borrower's real property holdings.
"REFERENCE RATE" means, at any time, Agent's floating commercial loan
rate then most recently announced by Agent at San Francisco, California as
its prime or reference rate. Each change in the Reference Rate shall take
effect hereunder on the effective date of the change in such Reference Rate.
The Reference Rate is used as a reference point for pricing certain loans.
Agent may price its loans at, above or below the Reference Rate.
"REFERENCE RATE LOAN" means any Loan which bears interest at a rate
determined by reference to the Reference Rate.
"REFERENCE RATE PERIOD" means, as to each Reference Rate Loan, the
period commencing on the date specified by Borrower pursuant to a Loan
Request and ending on the day prior to (a) the conversion thereof to a
Eurodollar Loan as specified by Borrower in a Loan Request or (b) the date of
repayment thereof.
"REGULATION D" means Regulation D, as at any time amended, of the
Federal Reserve System, or any other regulation in substance substituted
therefor.
"REQUIRED BANKS" means Banks having Pro Rata Shares at least sixty-six
and two-thirds percent (66-2/3%) of the Commitment or, if the Commitment has
been terminated, Banks holding at least sixty-six and two-thirds percent
(66-2/3%) of the aggregate principal amount of outstanding Loans.
"RESERVE COMMITMENT AMOUNT" means the amount of Thirty Million Dollars
($30,000,000).
"REVOLVING CREDIT FACILITY" means the credit accommodation provided to
Borrower as more fully described in Section 2.1.
"REVOLVING LOAN" means an extension of credit under the Revolving
Credit Facility in accordance with Section 2.1.
"REVOLVING LOAN COMMITMENT PERIOD" means the period from and including
the date of this Agreement to, but not including, the Revolving Loan
Termination Date.
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"REVOLVING LOAN TERMINATION DATE" means the earlier of (a) June 30,
1999, or (b) the date Banks may terminate making Loans or accelerate the due
date of the Revolving Loans pursuant to the rights of Banks under Article 9.
"REVOLVING NOTE" means each promissory note payable to a Bank
evidencing the Revolving Loans, substantially in the form set forth in
EXHIBIT D, with appropriate insertions.
"SUBSIDIARY" means any corporation at least the majority of whose
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 Borrower and/or one or more
Subsidiaries.
"SUSPENDED RESERVE COMMITMENT AMOUNT" means, at the time of
determination, the portion of the Reserve Commitment Amount which is not
"activated," as determined from time to time. For purposes hereof, the
meaning of the term "activated" is described in Section 2.7.2.
"TANGIBLE NET WORTH" means, with respect to Borrower, its assets as
determined in accordance with GAAP, minus (a) liabilities and (b) all
intangible assets of Borrower, including, without limitation (i) all assets
which should be classified as intangible assets (such as goodwill, patents,
trademarks, copyrights, franchises, and deferred charges (including
unamortized debt discount and research and development costs)), (ii) treasury
stock, (iii) cash held in a sinking or other similar fund established for the
purpose of redemption or other retirement of capital stock, (iv) to the
extent not already deducted from total assets, reserves for depreciation,
depletion, obsolescence or amortization of properties and other reserves or
appropriations of retained earnings which have been or should be established
in connection with the business conducted by Borrower, and (v) any
revaluation or other write-up in book value of assets subsequent to the
fiscal year of Borrower last ended at the date of this Agreement.
"TERM LOAN FACILITY" means the credit accommodation provided to
Borrower as more fully described in Section 2.2.
"TERM LOAN" means an extension of credit under the Term Loan Facility
in accordance with Section 2.2 of this Agreement.
"TERM LOAN MATURITY DATE" means the earlier of (a) June 30, 2001, or
(b) the date to which the due date of the Term Loan is accelerated pursuant
to the rights of Banks under Article 9.
"TERM NOTE" means each promissory note payable to a Bank evidencing
the Term Loans, substantially in the form set forth in EXHIBIT E, with
appropriate insertions.
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1.2 ACCOUNTING TERMS. All accounting terms not specifically defined in
this Agreement shall be construed, and all financial data required to be
submitted by this Agreement shall be prepared, in conformity with GAAP EXCEPT
as otherwise specifically prescribed herein. In the event that GAAP changes
during the term of this Agreement such that the financial covenants contained
herein would then be calculated in a different manner or with different
components, Borrower and Banks agree to amend this Agreement in such respects
as are necessary to conform those covenants as criteria for evaluating
Borrower's financial condition to substantially the same criteria as were
effective prior to such change in GAAP.
1.3 EXHIBITS AND SCHEDULES. All Exhibits and Schedules to this
Agreement, either as originally existing or as the same may from time to time
be supplemented, modified or amended, are incorporated herein by this
reference.
1.4 MISCELLANEOUS TERMS. All terms defined in this Agreement shall be
applicable to both the singular and plural forms thereof, as the context
requires. The term "or" is disjunctive; the term "and" is conjunctive. The
term "shall" is mandatory; the term "may" is permissive. The term
"including" is by way of example and not limitation. Terms not otherwise
expressly defined herein shall have the meaning ascribed to them in the
California Uniform Commercial Code, if applicable.
ARTICLE 2
THE CREDITS
2.1. REVOLVING LOAN FACILITY.
2.1.1 GENERAL. Subject to the terms and conditions of this
Agreement, at any time and from time to time, during the Revolving Loan
Commitment Period, each Bank severally, and not jointly, according to its Pro
Rata Share, agrees to make Revolving Loans to Borrower in such amounts as
Borrower may request that do not exceed in the aggregate at any one time
outstanding the amount of such Bank's Pro Rata Share of the Commitment.
Subject to the terms and conditions of this Agreement, Borrower may borrow,
repay and reborrow, in whole or in part, under the Revolving Credit Facility
at any time prior to the Revolving Loan Termination Date. The Revolving
Loans and all amounts owing with respect thereto shall be due and payable on
the Revolving Loan Termination Date. No Bank shall be responsible for any
default by any other Bank in such other Bank's obligation to make a Revolving
Loan hereunder, nor shall the Pro Rata Share of any Bank be increased or
decreased as a result of the default by any other Bank in such other Bank's
obligation to make a Revolving Loan hereunder.
2.1.2 REVOLVING NOTES. The Revolving Loans shall be evidenced by a
Revolving Note for each Bank in the principal amount of such Bank's Pro Rata
Share of the Commitment. Each Bank is hereby authorized to record the amount
and type of each Revolving Loan made by such Bank and the date and the amount
of each payment or prepayment of principal thereof on the schedule annexed to
its Revolving Note, or on its books and records, and any such recordation
shall, in the absence of manifest error, constitute prima facie evidence of
the
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accuracy of the information so recorded; provided, however, that failure by a
Bank to make any such recordation on its Revolving Note or on its books and
records shall not affect any of the Obligations of Borrower under such
Revolving Note or this Agreement.
2.2. TERM LOAN FACILITY.
2.2.1. GENERAL. Subject to the terms and conditions of this
Agreement, each Bank severally, and not jointly, agrees to make a Term Loan
to Borrower on the Conversion Date in a principal amount equal to such Bank's
Pro Rata Share of the aggregate principal amount of Revolving Loans
outstanding on the Conversion Date (the "Term Loans"); provided, however,
that the aggregate Term Loans shall not exceed the Commitment. Each Bank
shall apply the proceeds of the Term Loans to the concurrent payment in full
of the principal amount of its Revolving Loans outstanding on the Conversion
Date. No Bank shall be responsible for any default by any other Bank in such
other Bank's obligation to make a Term Loan hereunder, nor shall the Pro Rata
Share of any Bank be increased or decreased as a result of the default by any
other Bank in such other Bank's obligation to make a Term Loan hereunder.
2.2.2. TERM NOTES. The Term Loans shall be evidenced by a Term Note
for each Bank in the principal amount of such Bank's Term Loan. Upon receipt
of its Term Note, each Bank shall deliver to Borrower its Revolving Note,
marked "CANCELLED." Each Bank is hereby authorized to record the amount of
each payment or prepayment of principal thereof on the schedule annexed to
its Term Note, or on its books and records, and any such recordation shall,
in the absence of manifest error, constitute prima facie evidence of the
accuracy of the information so recorded, provided that failure by a Bank to
make any such recordation on its Term Note or on its books and records shall
not affect any of the Obligations of Borrower under such Term Note or this
Agreement.
2.3 INTEREST ON LOANS. The Loans shall bear interest at a rate per annum
equal to the lesser of (a) the sum of (i) the Applicable Margin plus (ii) the
Rate Option(s) specified by Borrower pursuant to a Loan Request, and (b) the
Maximum Amount; provided, however, that interest on overdue payments shall
bear interest in accordance with Section 2.3.3.
2.3.1. GENERAL. Interest on the outstanding principal balance of the
Loans shall accrue daily from the date of each Loan until payment in full.
2.3.2. RATE OPTIONS. The Rate Options and Applicable Margins for
Loans shall be determined by the matrix set forth below.
(a) REVOLVING LOANS. The Rate Options and Applicable Margin
for the Revolving Loans are:
Loan Rate Option Applicable Margin
Reference Rate Loans Reference Rate 0.00%
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Eurodollar Loans Interbank Rate 0.70%
(Reserve Adjusted)
(b) TERM LOANS. The Rate Options and Applicable Margins for
the Term Loans are:
Loan Rate Option Applicable Margin
Reference Rate Loans Reference Rate 0.25%
Eurodollar Loans Interbank Rate 0.95%
(Reserve Adjusted)
2.3.3. INTEREST ON OVERDUE PAYMENTS. Overdue payments of principal
(and of interest to the extent permitted by law) on the Loans shall bear
interest at a fluctuating rate per annum equal to the lesser of (i) the
Reference Rate plus two percent (2%) or (ii) the Maximum Amount until such
unpaid amount has been paid in full (whether before or after judgment). All
interest provided for in this Section 2.3.3 shall be compounded monthly and
payable on demand.
2.3.4. COMPUTATION. Interest shall be computed for the actual number
of days elapsed on the basis of a year consisting of 360 days, calculated as
to each Eurodollar Period from, and including, the first day thereof to, but
excluding, the last day thereof.
2.4 PROCEDURE FOR LOANS.
2.4.1 GENERAL. Borrower shall deliver to Agent an irrevocable Loan
Request no later than 10:00 a.m. San Francisco time (i) on the proposed
Funding Date of any Reference Rate Loan, and (ii) at least three (3) Business
Days prior to the Revolving Loan Termination Date or the proposed Funding
Date of any Eurodollar Loan. Each Loan Request shall specify:
(a) the Funding Date of such Loan, which shall be a Business Day;
(b) the amount of such Loan;
(c) the Rate Option(s) selected for such Loan; and
(d) if applicable, the Interest Period(s) therefor.
If Borrower shall fail to specify a Rate Option, such Loan shall be made as a
Reference Rate Loan. If Borrower shall fail to specify an Interest Period
with respect to a proposed Eurodollar Loan , Borrower shall be deemed to have
elected an Interest Period of one (1) month's duration.
2.4.2. ALTERNATE PROCEDURE. Alternatively, on any Business Day the
President, Vice President of Administration or Treasurer of Borrower (or any
person designated for a specific
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period of time by any one of such officers) may give Agent telephonic notice
of the proposed Loan within the notice periods, and specifying the
information, required in Section 2.4.1, PROVIDED that (a) such designated
person delivers to Agent by telecopy prior to any such telephone notice, a
copy of such person's authorization to make such request, which authorization
must be signed by the President, Vice President of Administration or
Treasurer of Borrower, and (b) such notice shall be confirmed in writing by
delivery to Agent of a Loan Request signed by any one of such three officers
no later than the third day after such telephone request. All such
telephonic notices shall be irrevocable. Neither Agent nor Bank shall incur
any liability to Borrower in acting upon any such telephonic notice that
Agent believes in good faith to have been given by a person duly authorized
to give such notice on behalf of Borrower or for otherwise acting in good
faith under this Section 2.4.2.
2.4.3. EXTENSIONS AND CONVERSIONS. Subject to the terms and
conditions of this Agreement, Borrower may extend any Revolving Loan, or
convert any Loan into a different Rate Option Loan by complying with the
provisions of Section 2.4.1 or 2.4.2 in the same manner as if Borrower were
requesting a new Loan; provided, however, that Eurodollar Loans may be
converted without penalty only on the last day of the applicable Interest
Period.
2.4.4. MINIMUM AMOUNT OF REVOLVING LOANS. Each Loan Request for
Revolving Loans shall be in a minimum amount of One Hundred Twenty-Five
Thousand Dollars ($125,000) and integral multiples of Twenty-Five Thousand
Dollars ($25,000) in excess of that amount.
2.4.5. MINIMUM PAYMENT OF REVOLVING LOANS. The Company shall have
the right to prepay the Revolving Loans in whole or in part in minimum
principal amounts equal to at least Twenty-Five Thousand Dollars ($25,000.00)
and integral multiples thereof.
2.5. FUNDING OF LOANS.
(a) Promptly after receipt of a Loan Request (or telephonic notice
thereof), Agent shall notify each Bank of the amount of the proposed Loan,
the Pro Rata Share of such Bank, and the Rate Option and Interest Period
selected by Borrower therefor.
(b) In the case of Revolving Loans, each Bank shall make the amount of
its Loan available to Agent, in same day funds, at the office of Agent
specified on the signature pages of this Agreement no later than noon San
Francisco time on the Funding Date. Agent shall make the proceeds of such
Loans available to Borrower on such Funding Date by causing an amount of same
day funds equal to the proceeds of all such Loans received by Agent to be
credited to Borrower's Commercial Account no later than 2:00 p.m. San
Francisco time on the Funding Date.
(c) In the case of Term Loans, each Bank shall fund its Term Loan by
applying the proceeds thereof to the payment of the aggregate principal
amount of all Revolving Loans of such Bank outstanding on the Conversion Date.
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2.6. NON-RECEIPT OF FUNDS BY AGENT. Unless the Borrower or a Bank, as
the case may be, notifies Agent prior to the date on which it is scheduled to
make payment to Agent of (a) in the case of a Bank, the proceeds of a Loan or
(b) in the case of the Borrower, a payment of principal, interest or fees to
Agent for the account of Banks, that it does not intend to make such payment,
Agent may assume that such payment has been made. Agent may, but shall not
be obligated to, make the amount of such payment available to the intended
recipient in reliance upon such assumption. If such Bank or the Borrower, as
the case may be, has not in fact made such payment to Agent, the recipient of
such payment shall, on demand by Agent, repay to Agent the amount so made
available together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by Agent
until the date Agent recovers such amount at a rate per annum equal to (a) in
the case of repayment by a Bank, the Federal Funds Effective Rate for such
day or (b) in the case of repayment by the Borrower, the interest rate
applicable to the relevant Loan.
2.7. RESERVE COMMITMENT AMOUNT.
2.7.1. GENERAL. The Reserve Commitment Amount may from time to time
be activated, suspended, and reactivated in increments of Two Million Dollars
($2,000,000), or multiples thereof, in accordance with the provisions of
Sections 2.7.2 and 2.7.3.
2.7.2. ACTIVATION OF RESERVE COMMITMENT AMOUNT. From time to time
the Reserve Commitment Amount shall automatically be activated in increments
of Two Million Dollars ($2,000,000), or multiples thereof, each time the sum
of (a) the principal balance of all Loans outstanding plus (b) the principal
amount of all proposed Loans requested in a Loan Request exceeds the sum of
(a) the Basic Commitment Amount plus (b) the Activated Reserve Commitment
Amount. If the date of activation is not a Business Day, then such activated
status shall commence on the first Business Day thereafter.
2.7.3 SUSPENSION OF RESERVE COMMITMENT AMOUNT. The Activated Reserve
Commitment Amount may be subsequently suspended in whole or in part in
increments of Two Million Dollars ($2,000,000) or multiples thereof, upon
satisfaction by Borrower of both of the following conditions:
(a) The principal balance of all Debt (excluding Real Property
Debt) outstanding does not exceed the sum of (i) the Basic Commitment Amount
and (ii) the Activated Reserve Commitment Amount which would be in effect
after the proposed suspension, and no Loan Requests which would cause such
principal balance to exceed such amount have been delivered to Agent
subsequent thereto;
(b) Borrower shall have given Agent not less than three (3)
Business Days prior notice of the date such suspension is to become effective.
2.8. ADJUSTMENT OR TERMINATION OF THE COMMITMENT. Upon not less than
three Business Days' notice to the Agent at any time, and from time to time,
Borrower may, at any time permanently reduce the amount of any component of the
Commitment in increments of
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One Million Dollars ($1,000,000) or integral multiples thereof; provided,
however, (i) that no adjustment in the Basic Commitment shall occur until the
Reserve Commitment Amount shall have been reduced to zero, and (ii) the
Commitment may not be reduced to an amount less than the amount of the then
outstanding Loans. Except as expressly provided in this Section 2.8, the
Commitment may not be adjusted by Borrower.
2.9. INITIAL REVOLVING LOAN. Assuming satisfaction of all of the
conditions precedent to funding set forth in Article 5, Banks shall be deemed
to have made Revolving Loans to Borrower on the Closing Date (the "Initial
Revolving Loan") in an amount equal to the outstanding principal sum owing by
Borrower pursuant to the Prior Agreement , and Borrower shall, thereupon, be
deemed to have repaid such sum. Upon payment by Borrower of all other
amounts owing under the Prior Agreement, Agent shall collect from the Banks
and thereupon return to Borrower marked "CANCELLED" the promissory notes made
in connection with the Prior Agreement.
ARTICLE 3
PAYMENTS AND FEES
3.1. REVOLVING LOANS.
3.1.1. INTEREST. Interest accrued on each Revolving Loan shall be
payable in arrears (a) monthly on the last day of each consecutive month if a
Reference Rate Loan, or (b) if not a Reference Rate Loan, on the earlier of
(i) the last day of the Interest Period for such Loan, or (ii) quarterly on
the last day of each March, June, September and December; such payments shall
commence on the first such day after the Initial Revolving Loan and continue
through the Revolving Loan Termination Date, on which date all accrued and
unpaid interest shall be due and payable in full.
3.1.2. PRINCIPAL. If not sooner paid, the principal indebtedness
evidenced by the Revolving Notes shall be due and payable as follows:
(a) the principal amount of each Eurodollar Loan shall be
converted, extended or due and payable on the last day of the Interest Period
for such Loan;
(b) the amount, if any, by which the principal indebtedness
evidenced by the Revolving Notes at any time exceeds the Commitment shall be
due and payable immediately; and
(c) in any event, the principal indebtedness evidenced by the
Revolving Notes shall be due and payable on the Revolving Loan Termination
Date.
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3.2. TERM LOANS.
3.2.1. INTEREST. Interest accrued on each Term Loan shall be payable
in arrears (a) monthly on the last day of each consecutive month if a
Reference Rate Loan, (b) if not a Reference Rate Loan on the earlier of (i)
the last day of the Interest Period for such Loan, or (ii) quarterly on the
last day of each March, June, September and December; such payments shall
commence on the first such day after the Conversion Date and continue to and
including June 30, 2001, on which date all accrued and unpaid interest shall
be due and payable in full.
3.2.2. PRINCIPAL. The principal indebtedness evidenced by the Term
Notes shall be due and payable in eight (8) equal consecutive quarterly
installments on the last day of each March, June, September and December,
commencing on September 30, 1999, and continuing through June 30, 2001;
provided, however, that the last such installment shall be an amount
sufficient to repay in full the Term Loans and all other amounts owed under
this Agreement, including, without limitation, accrued but unpaid interest.
3.3. OPTIONAL REPAYMENT. The Term Loans may, at any time and from time
to time, be paid or prepaid in whole or in part without premium or penalty,
EXCEPT that (a) any partial prepayment shall be an integral multiple of Two
Hundred Fifty Thousand Dollars ($250,000), (b) Agent shall have received
written notice of any prepayment at least three (3) Business Days before the
date of prepayment, which notice shall identify the date and amount of the
prepayment and the Loan(s) being prepaid and shall be irrevocable, (c) each
prepayment of principal shall be accompanied by payment of interest accrued
through the date of payment on the amount of principal paid, and (d) with
respect to both Revolving Loans and Term Loans, any prepayment of all or any
part of any Eurodollar Loan on a day other than the last day of the
applicable Interest Period shall be subject to Section 4.1.4, as applicable,
and Borrower shall pay Banks all amounts due as therein provided. All
prepayments shall be applied to principal installments in the inverse order
of their maturities.
3.4. MANDATORY PREPAYMENTS. If at any time the aggregate principal
amount of the Loans outstanding exceeds the Commitment or the Adjusted
Borrowing Base, as then in effect, Borrower shall immediately upon demand by
Agent prepay an amount equal to such excess. All prepayments shall be
applied to principal installments in the inverse order of their maturities.
The provisions of Section 3.3(d) shall also apply to mandatory prepayments
pursuant to this Section 3.4.
3.5. PAYMENTS. All payments hereunder shall be in Dollars and in
immediately available funds and shall be made prior to 10:00 a.m. San
Francisco time on the date of the scheduled payment to Agent at its office
set forth on the signature pages of this Agreement. All payments received
after 10:00 a.m. San Francisco time shall be considered to have been received
the next Business Day. Any payment which falls on a non-Business Day shall
be rescheduled to the next succeeding Business Day and interest shall
continue to accrue to such rescheduled Business Day.
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3.6. COMMITMENT FEE. Borrower shall pay to Agent, for distribution to each
Bank in proportion to that Bank's Pro Rata Share, commitment fees (the
"Commitment Fee") computed for the actual number of days elapsed on the basis
of a year consisting of 365 days for the period from and including the date of
this Agreement to and including the Conversion Date, payable in arrears in
quarterly installments on the last day of each December, March, June and
September, commencing on the first such date to occur after the date hereof,
and on the Conversion Date, as follows:
(a) one-half of one percent (.50%) per annum of the average daily
unused portion of the Basic Commitment Amount;
(b) one-eighth of one percent (.125%) per annum of the average daily
Suspended Reserve Commitment Amount;
(c) upon each activation of the Reserve Commitment Amount (as
described in Section 2.7.2), for the ninety (90) days preceding such activation
an additional three-eighths of one percent (0.375%) per annum on the amount so
activated; and
(d) one-half of one percent (.50%) per annum on the average daily
unused portion of the Activated Reserve Commitment Amount.
3.7 AGENT'S FEE. Borrower shall pay Agent, for Agent's own account, an
agent fee in an amount and on the terms as mutually agreed between Agent and
Borrower.
ARTICLE 4
ADDITIONAL PROVISIONS RELATING TO
EURODOLLAR LOANS AND CAPITAL ADEQUACY
4.1. EURODOLLAR LOANS.
4.1.1. EURODOLLAR INCREASED COST. If, as a result of the adoption or
application of any Law, or any change therein, or in the interpretation,
administration or application thereof, including Regulation D, or compliance by
any Bank with any request or directive (whether or not having the force of law)
from any court or Governmental Agency, central bank or comparable authority or
instrumentality:
(a) the basis of taxation of payments to any Bank of the principal
of or interest on any Eurodollar Loan (other than income, franchise or similar
taxes imposed on the gross or net income of a Bank) is changed;
(b) any reserve, special deposit, minimum capital, capital ratio or
similar requirements against assets of, deposits with or for the account of,
credit extended by, or Commitment of, any Bank is imposed, modified or deemed
applicable; or
17
(c) any other condition affecting this Agreement, the Eurodollar
Loans or Commitment is imposed on any Bank or the interbank eurodollar market;
and any Bank determines that, by reason thereof, the cost to such Bank of
making or maintaining any of the Eurodollar Loans is increased, or the amount
of any sum receivable by such Bank hereunder in respect of any of the
Eurodollar Loans is reduced; then, Borrower shall pay to such Bank within two
(2) Business Days after demand (which demand shall be accompanied by a
statement setting forth the basis for the calculation thereof but only to the
extent not theretofore provided to Borrower, a copy of which shall be delivered
to Agent) such additional amount or amounts as will compensate such Bank for
such additional cost or reduction (provided such amount has not been
compensated for in the calculation of the Eurocurrency Reserve Percentage).
Determinations by a Bank for purposes of this Section 4.1.1 of the additional
amounts required to compensate such Bank in respect of the foregoing
circumstances shall be conclusive, absent manifest error.
4.1.2. EURODOLLAR DEPOSITS UNAVAILABLE OR INTEREST RATE
UNASCERTAINABLE. If any Bank determines (which determination shall be
conclusive and binding on Borrower) that deposits of the necessary amount for
an Interest Period are not available to such Bank in the interbank Eurodollar
market or that, by reason of circumstances affecting such market, adequate and
reasonable means do not exist for ascertaining the Interbank Rate applicable to
such Interest Period, such Bank shall promptly give notice of such
determination to Borrower and, thereupon, any Loan Request with respect to new
Eurodollar Loan(s) previously given by Borrower and not yet borrowed or
converted shall be deemed a Loan Request to make a Reference Rate Loan in the
amount of the requested Eurodollar Loan(s) and Borrower shall be obligated to
convert any outstanding Eurodollar Loan(s) to Reference Rate Loans on the last
day of the then current Interest Period(s) with respect thereto.
4.1.3. CHANGES IN LAW AFFECTING EURODOLLAR LOANS. If at any time after
the date of this Agreement due to any new Law, or any interpretation thereof by
any Governmental Agency or other regulatory authority charged with the
administration thereof, or for any other reason arising subsequent to the date
hereof, it shall become unlawful for any Bank to fund any Eurodollar Loan which
it is committed to make hereunder, the obligation of such Bank to provide
Eurodollar Loans shall, upon the happening of such event, forthwith be
suspended for the duration of such illegality. If any such change shall make
it unlawful for any Bank to continue Eurodollar Loans previously made by it
hereunder, such Bank shall, upon the happening of such event, notify Borrower
stating the reasons therefor, and Borrower shall, on the earlier of (a) the
last day of the then current Interest Period or (b) if required by such Law or
interpretation, on such date as shall be specified in such notice, convert such
unlawful Eurodollar Loans to Reference Rate Loans.
4.1.4. EURODOLLAR LOAN INDEMNITY. Borrower agrees to indemnify each
Bank and shall hold each Bank harmless from any loss, cost, damage or expense
which such Bank may sustain or incur as a consequence of:
18
(a) any failure by Borrower to borrow, continue or convert a
Eurodollar Loan on a date specified in a Loan Request;
(b) failure by Borrower to make any prepayment of a Eurodollar Loan,
after Borrower has given a notice in accordance with Section 3.3(b);
(c) a payment, prepayment or conversion of a Eurodollar Loan on a
day which is not the last day of the Eurodollar Period with respect thereto;
(d) the Revolving Loans not being converted to the Term Loans on the
Conversion Date, to the extent Borrower shall have theretofore delivered a Loan
Request selecting a Eurodollar Loan; and
(e) the acceleration of the obligations pursuant to Section 9.2, in
each case including any such loss, cost, damage or expense arising from
interest, fees or other charges payable by such Bank to lenders of funds
obtained by it in order to make or maintain such Eurodollar Loan hereunder.
Borrower shall pay within two (2) Business Days after demand (which demand
shall be accompanied by a statement setting forth such Bank's calculation
thereof, a copy of which shall be delivered to Agent) the amount due hereunder.
Such statement and calculation shall, in the absence of manifest error, be
conclusive. This covenant shall survive termination of this Agreement and
payment in full of the Notes.
4.2. DISCRETION AS TO MANNER OF FUNDING. Notwithstanding any provision of
this Agreement to the contrary, each Bank shall be entitled to fund and
maintain its funding of all or any part of the Eurodollar Loans in any manner
it may elect, it being understood, however, that for the purposes of this
Agreement all determinations hereunder shall be made as if each Bank had
actually funded and maintained each Eurodollar Loan during the Eurodollar
Interest Period for such Eurodollar Loan through the purchase of deposits
having a maturity corresponding to the last day of such Interest Period and
bearing an interest rate equal to the Interbank Rate for such Interest Period.
Any Bank may, if it so elects, fulfill any commitment to make Eurodollar Loans
by causing a foreign branch or affiliate to make or continue such Eurodollar
Loans at no additional cost to Borrower, provided, however, that in such event
such Loans shall be deemed for the purposes of this Agreement to have been made
by such Bank, and the obligation of Borrower to repay such Loans shall
nevertheless be to such Bank and shall be deemed held by such Bank, to the
extent of such Loans, for the account of such branch or affiliate.
4.3. CAPITAL ADEQUACY. If after the date hereof, the adoption or
application of any Law regarding capital adequacy of general applicability, or
any change therein, or any change in the interpretation or administration
thereof by any Governmental Agency, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Bank
with any request or directive regarding capital adequacy of general
applicability (whether or not having the force of law) of any such Governmental
Agency, central bank or comparable agency, has or would have the effect, of
reducing the rate of return on such Bank's
19
capital to a level below that which such Bank could have achieved but for
such adoption, change or compliance (taking into consideration such Bank's
policies with respect to capital adequacy) by an amount deemed by such Bank
to be material, then such Bank may increase the applicable interest rate(s)
set forth in Section 2.3.2 above for Loans from such Bank to compensate such
Bank for such reduction in its rate of return on capital. Such increase
shall be effective thirty (30) days after written notice thereof to Borrower;
and such notice shall be accompanied by such Bank's statement setting forth
its calculations thereof, which shall, in the absence of manifest error, be
conclusive.
ARTICLE 5
CONDITIONS PRECEDENT
5.1. INITIAL REVOLVING LOAN. This Agreement shall not become effective and
Banks shall not be required to make the Initial Revolving Loan hereunder unless
Borrower has furnished to Agent on or before the Closing Date, with sufficient
copies for Banks each of the following acceptable to Agent, each dated as of
the Closing Date (or such earlier date as shall be acceptable to Agent):
(a) Copies of the Articles of Incorporation and By-laws of Borrower,
together with all amendments thereto, to the extent such Articles or By-laws
have changed, or amendments thereto have been added, since such documents were
delivered to Agent in connection with the Prior Agreement.
(b) Copies, certified by the Secretary or an Assistant Secretary of
Borrower, of its Board of Directors' resolutions (and resolutions of other
bodies, if any are deemed necessary by counsel for Agent) authorizing the
Borrower to execute, deliver and perform this Agreement and the other Loan
Documents executed or to be executed by Borrower and to consummate the
transactions contemplated hereby and thereby.
(c) An incumbency certificate, executed by the Secretary or an Assistant
Secretary of Borrower which shall identify by name and title and bear the
signature of the officers of Borrower authorized on behalf of Borrower to
execute, deliver and perform this Agreement and the other Loan Documents
executed or to be executed by Borrower and to consummate the transactions
contemplated hereby and thereby, to the extent the incumbency any of such
officers or their authority has changed from that reflected on the incumbency
certificate delivered to Agent in connection with the Prior Agreement.
(d) This Agreement duly executed by Borrower, Agent and each of the
Banks.
(e) Revolving Notes, duly executed by Borrower, payable to the order of
each of Banks.
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(f) Evidence satisfactory to Agent that Borrower shall have paid, or
concurrently with such Initial Revolving Loan will pay in full all amounts
owing with respect to the Prior Agreement.
(g) A duly completed Compliance Certificate, except that section 4
thereof need not be completed.
(h) A duly completed Officer's Certificate.
(i) Such other documents as any Bank or its counsel may have reasonably
requested.
5.2. EACH LOAN. Banks shall not be required to make any Loan, or convert
or extend any Loan unless on the applicable Funding Date:
(a) There exists no Default or Event of Default.
(b) The representations and warranties contained in Article 6 are true
and correct as of such Funding Date, except to the extent that changes in the
facts and conditions on which such representations and warranties are based are
required or permitted under this Agreement.
(c) In the case of the Term Loans, Borrower shall have furnished to each
Bank the Term Notes, duly executed by Borrower, payable to the order of each of
the Banks.
(d) Borrower shall have furnished such other documents as Agent may have
reasonably requested.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BORROWER
In order to induce Banks to enter into this Agreement, Borrower makes the
following representations and warranties which shall survive the execution and
delivery of this Agreement and the Notes, and the making of the Loans:
6.1. DUE ORGANIZATION. Borrower is a duly organized and validly existing
corporation in good standing under the laws of the jurisdiction on which it is
incorporated, and is duly qualified to conduct business as a foreign
corporation in all jurisdictions where the failure to do so would have a
material or adverse effect on its business.
6.2. SUBSIDIARIES. Borrower has no Subsidiaries as of the date of this
Agreement, except Enviroplex, Inc.
6.3. REQUISITE POWER. Borrower has all requisite corporate powers and all
governmental licenses, authorizations, consents and approvals necessary to own
and operate its properties and
21
to carry on its business as now conducted and as proposed to be conducted,
other than such governmental licenses, authorizations, consents and approvals
the absence of which will not materially or adversely effect the business,
operations or conditions, financial or otherwise, of Borrower. Borrower has
all requisite corporate powers to borrow the sums provided for in this
Agreement, and to execute and deliver this Agreement and the Notes to which
Borrower is required hereunder to be a party. The execution, delivery and
performance of this Agreement and the Notes to which Borrower is required
hereunder to be a party have been duly authorized by Borrower's Board of
Directors and do not require any consent or approval of the stockholders of
Borrower.
6.4. BINDING AGREEMENT. This Agreement has been duly executed and
delivered by Borrower and constitutes, and each of the Notes when executed and
delivered by Borrower will constitute, a legal, valid and binding obligation of
Borrower, enforceable against it in accordance with its terms, except as the
enforceability thereof may be affected by (a) bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally, (b) the
availability of certain equitable remedies or limitations imposed by certain
equitable principles of general applicability and (c) limitations based on
statutes or on public policy limiting a person's right to waive the benefits of
statutory provisions or common law rights.
6.5. OTHER AGREEMENTS. The execution, delivery and performance of this
Agreement and the Notes will not (a) violate any provision of law or regulation
(including, without limitation, Regulations X and U of the Federal Reserve
Board), or any order of any governmental authority, court, arbitration board or
tribunal or Articles of Incorporation or Bylaws of Borrower, other than such
violations which will not materially and adversely affect the business,
operations or conditions, financial or otherwise, of Borrower or (b) result in
the breach of, constitute a default under, contravene any provisions of, or
result in the creation of any security interest, lien, charge or encumbrance
upon any of the property or assets of Borrower pursuant to any indenture or
agreement to which Borrower or any of its properties is bound.
6.6. LITIGATION. There is no litigation, investigation or proceeding in
any court or before any arbitrator or governmental regulatory commission,
board, administrative agency or other governmental authority pending, or, to
the knowledge of Borrower, threatened against or affecting Borrower or any of
its properties, which (a) may affect the performance by Borrower of this
Agreement or the Notes or any of the transactions contemplated hereby or
thereby and (b) if adversely determined would have a material adverse effect on
the business, operations or condition, financial or otherwise, of Borrower.
6.7. CONSENTS. No consent, license, permit, approval or authorization of,
exemption by, notice or report to, or registration, filing or declaration with,
any governmental authority or agency is required in connection with the
execution, delivery and performance by Borrower of this Agreement or the Notes
or the transactions contemplated hereby or thereby (except for standard
disclosure requirements of federal securities laws and regulations).
22
6.8. FINANCIALS. The audited balance sheet of Borrower as of December 31,
1996, and the related statements of income, retained earnings and changes in
financial position for the fiscal year ended on such date, certified by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, LLC, and the unaudited balance sheet of Borrower as of March 31,
1997, and the related statements of income, retained earnings and change of
financial position for the three (3) months then ended, certified by the chief
financial officer of Borrower, copies of which have been heretofore delivered
to the Banks, are true, complete and correct and fairly present the financial
condition of Borrower as of such dates and the results of its operations for
the periods then ended. All of the aforementioned financial statements have
been prepared in accordance with GAAP applied on a consistent basis. There has
been no material adverse change in the business, operations or condition,
financial or otherwise, of Borrower, since the date of such financial
statements. As of the date thereof, Borrower does not have any material
liabilities, direct or contingent, except as disclosed in the aforementioned
financial statements.
6.9. USE OF PROCEEDS. The proceeds of the Loans shall be used by Borrower
solely (a) to pay all amounts owing with respect to the Prior Agreement; and
(b) for general corporate purposes.
6.10. REGULATION U. Borrower is not engaged principally, or as one of its
principal activities in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulations G, T, U
or X of the Federal Reserve Board). No part of the proceeds of the Loans will
be used by Borrower to purchase or carry any such margin stock or to extend
credit to others for the purpose of purchasing or carrying any such margin
stock.
6.11. ERISA. Borrower is in compliance in all material aspects with all
applicable provisions of ERISA and the regulations and published
interpretations thereunder. If Borrower has a Plan, no Reportable Event (as
defined in ERISA) has occurred with respect to any such Plan nor are there any
unfunded vested liabilities thereunder; Borrower has met its minimum funding
requirements under ERISA with respect to each such Plan and has not incurred
any material liability to the PBGC in connection with any such Plan.
6.12. TAX RETURNS. All tax returns required to be filed by Borrower which
are now due in any jurisdiction have been filed; all taxes, assessments, fees
and other governmental charges upon Borrower, or upon any of its properties,
incomes or franchises, which are due and payable have been paid, or adequate
reserve has been provided, in Borrower's financial statements, for payment
thereof.
6.13. LICENSES, TRADEMARKS, ETC. Borrower has all patents, licenses,
trademarks, trademark rights, trade names, trade name rights, copyrights,
permits and franchises which are required in order for it to conduct its
business and to operate its properties as now or proposed to be conducted
without known conflict with the rights of others.
6.14. BURDENSOME AGREEMENT, ETC. Borrower is not a party to any unusual or
unduly burdensome agreement or undertaking, nor is it subject to any unusual or
unduly burdensome
23
court order, court writ, injunction or decree of any court or
governmental instrumentality, domestic or foreign, which materially and
adversely affects its business or property, assets, operations or condition,
financial or otherwise.
6.15. TITLE AND LIEN. Except for Permitted Liens, the real property and
all other property and assets of Borrower reflected in the audited consolidated
balance sheet (and related notes) of Borrower dated December 31, 1996,
delivered to the Banks pursuant to Section 6.8, are free from all liens,
charges, security interests and encumbrances of any nature whatsoever; and,
except as aforesaid, Borrower has a good and marketable title in fee simple to
all such real property and good and marketable title to all other such property
and assets, except those disposed of in the ordinary course of business.
6.16. EXISTING DEFAULTS. Borrower is not in default under any material
term of any mortgage, indenture, deed of trust or any other material agreement
to which it is a party or by which it or any of its properties may be bound.
Borrower is not in violation of any Law to which it or any of its properties is
subject, other than such Laws the violation of which will not materially and
adversely effect the business, operations or conditions, financial or
otherwise, of Borrower.
6.17. OTHER CONTRACTS. Borrower is not in default in any material respect
under the provision of any contract or commitment with a party which does not
contemplate completion of performance by either party within one year, and to
the best of Borrower's knowledge, there are no facts or conditions which, with
the giving of notice or passage of time (or both), would result in such a
default under any provision of any such contract or commitment which would,
individually or in the aggregate, materially and adversely affect Borrower's
business or financial position.
6.18. LEASES. Borrower enjoys peaceful and undisturbed possession under
all the leases to which it is a party or under which it is a lessee. All such
leases and all leases under which Borrower is lessor are legal, valid and
binding obligations of lessor and lessee and are enforceable in accordance with
their terms, except as the enforceability thereof may be affected by (a)
bankruptcy, insolvency or similar laws affecting the enforcement of creditor's
rights generally, (b) the availability of certain equitable principles of
general applicability, and (c) limitations based on statutes or on public
policy limiting a person's right to waive the benefits of statutory provisions
or common law rights. No default exists under any such leases under which
Borrower is lessee and Borrower is not in default under any such leases under
which it is lessor.
6.19. FIRE AND EXPLOSION. Neither the business nor the properties or
operations of Borrower are affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act
of God or of the public enemy or other casualty (whether or not covered by
insurance), materially and adversely affecting such business or properties or
operations.
6.20. NO DEFAULT. No Default or Event of Default has occurred and is
continuing.
24
ARTICLE 7
AFFIRMATIVE COVENANTS
Borrower covenants that, so long as any Obligations remain unpaid or not
fully performed or any Commitment remains unused in whole or in part, unless
the Required Banks shall otherwise consent in writing:
7.1. INSPECTION. Borrower shall maintain adequate books and accounts
established and admitted in accordance with GAAP and permit Banks by their
representatives and agents at least on an annual basis to inspect any of the
properties, operating procedures, corporate books and financial records of
Borrower, to examine and make copies of the books of account and other
financial records of Borrower, and to discuss the affairs, finances and
accounts of Borrower with, and to be advised of the same by, Borrower's
officers at such reasonable times and intervals as Banks may designate by
reasonable prior notice to Borrower.
7.2. PROCEEDS. Borrower shall use the proceeds of the Loans only (i) to
pay all amounts owing under the Prior Agreement, and (ii) for general corporate
purposes, and will furnish Banks with such evidence as each of them may
reasonably require with respect to such use.
7.3. FINANCIAL STATEMENTS. Borrower will furnish to Agent:
(a) within forty-five (45) days after the close of each December, March,
June and September: (i) income statement of Borrower for such quarter; and
(ii) balance sheet of Borrower as of the end of such quarter, all in reasonable
detail, subject to year-end audit adjustments and certified by Borrower's
President, Vice President of Administration or Treasurer/Vice President to be
complete and correct in all material respects, and to fairly present the
financial condition and income of Borrower as of the dates and for the period
indicated;
(b) Intentionally Left Blank.
(c) within ninety (90) days after the close of each fiscal year a copy
of the annual audit report for such year for Borrower including therein: (i) a
statement of stockholders' equity and a statement of changes in financial
position of Borrower for such fiscal year; (ii) income statement of Borrower
for such fiscal year; and (iii) balance sheet of Borrower as of the end of such
fiscal year; the income statement and balance sheet to be audited by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, LLC or another independent certified public accountant acceptable to
the Bank, and certified by such accountants to have been prepared in accordance
with GAAP consistently applied together with a certificate of such accounting
firm to the Bank, stating that in the course of the regular audit of the
business of Borrower, which audit was conducted by such accounting firm in
accordance with generally accepted auditing standards, such accounting firm has
obtained no knowledge of an Event of Default (insofar as it pertains to
accounting matters), or an event which with notice or the passage of time or
both would constitute an Event of Default (insofar
26
as it pertains to accounting matters), has occurred and is continuing, or if,
in the opinion of such accounting firm, an Event of Default (insofar as it
pertains to accounting matters) has occurred and is continuing, a statement
as to the nature thereof, and a certificate stating that the Borrowing Base
calculated as of December 31, of that fiscal year is accurate and complete;
(d) contemporaneously with each quarterly and year end financial report
required by Sections 7.3(a) and (c) above, a Compliance Certificate of the
President, Vice President of Administration, Chief Financial Officer, or
Treasurer/Vice President of Borrower stating that such officer has individually
reviewed the provisions of this Agreement and has individually reviewed or
supervised the review of the activities of Borrower during such year or
quarterly period, as the case may be, with a view to determining whether
Borrower has fulfilled all its obligations under this Agreement, and that
Borrower has observed and performed each undertaking contained in the Agreement
and is not in Default in the observance or performance of any of the provisions
hereof or, if Borrower shall be so in Default, specifying all such Defaults and
events of which such officer may have knowledge, and otherwise containing the
information and certifications required in the form of Compliance Certificate
shown on Exhibit A;
(e) promptly after sending or making available or filing of the same,
copies of all reports, proxy statements and financial statements that Borrower
sends or makes available to its stockholders and all registration statements
and reports that Borrower files with the Securities and Exchange Commission, or
any other governmental official, agency or authority;
(f) as soon as possible and in any event within five (5) days after
Borrower has knowledge of (i) the occurrence of a Default or an Event of
Default, or (ii) any default or event of default as defined in any evidence of
Debt or under any agreement, indenture or other instrument under which such
Debt has been issued, whether or not such Debt is accelerated or such default
waived and which default or event of default has resulted or may result in a
material adverse change in Borrower's condition (financial or otherwise) or
operations, a statement of the Chief Financial Officer or Treasurer of Borrower
setting forth details thereof, and the action which Borrower proposes to take
with respect thereto;
(g) within forty-five (45) days after the close of each quarter, a
report in form satisfactory to the Agent calculating the required quantitative
covenants set forth in Section 7.12 hereof in form satisfactory to the Agent
and certified as correct by the Chief Financial Officer, Vice President of
Administration or Treasurer/Vice President of Borrower;
(h) as soon as available any written report pertaining to material items
in respect to Borrower's internal control matters submitted to Borrower by
independent accountants in connection with each annual or interim special audit
of the financial conditions of Borrower made by Borrower's independent public
accountants;
(i) prompt written notice of any condition or event which has resulted
or might result in (i) a material adverse change in Borrower's condition
(financial or otherwise) or operations, or (ii) a breach of or noncompliance
with any term, condition or covenant contained
26
herein, or (iii) a material breach of or noncompliance with any term,
condition or covenant of any material contract to which Borrower is a party
or by which it or its property may be bound;
(j) prompt written notice of any claims, proceedings or disputes
(whether or not purportedly on behalf of Borrower) against, or to the
knowledge of Borrower threatened, or affecting, Borrower which, if adversely
determined, would have a material adverse effect on the business, properties
or condition (financial or otherwise) of Borrower (without in any way
limiting the foregoing, claims, proceedings or disputes involving monetary
amounts in excess of Five Hundred Thousand Dollars ($500,000) not fully
covered by insurance shall be deemed to be material), or any material labor
controversy resulting in or threatening to result in a strike against
Borrower, or any proposal by any public authority to acquire any of the
material assets or business of Borrower;
(k) promptly after receipt thereof a copy of any notice Borrower
receives from the Pension Benefit Guaranty Corporation or the Internal
Revenue Service with respect to any Plan; provided, however, that this
Section 7.3(k) shall not apply to notices of general application promulgated
by the Department of Labor, and prompt written notice if Borrower adopts or
becomes liable to contribute to any Plan; and
(l) at least fifteen (15) days prior to incurring any Real Property
Debt, a statement by Borrower to Agent, in form and substance satisfactory to
Agent, which (i) verifies that Borrower is in compliance with Section 8.4(a)
of this Agreement; (ii) details Borrower's calculation of such compliance;
and (iii) includes, without limitation, attachments detailing the appraisal
of Borrower's property which is the subject of such Real Property Debt.
(m) such other financial or other information as Agent may from time to
time reasonably request.
7.4. Intentionally Left Blank.
7.5. CORPORATE EXISTENCE. Borrower shall preserve and maintain its
corporate existence and all of its rights, privileges, and franchises
necessary or desirable in the normal course of its business.
7.6. COMPLIANCE WITH LAW. Borrower shall comply with the requirements of
all applicable Laws (including without limitation, ERISA with respect to each
of Borrower's Plans) and all material agreements to which it is a party,
other than such requirements or agreements with respect to which the
non-compliance of Borrower will not materially and adversely effect the
business, operations or conditions, financial or otherwise, of Borrower.
7.7. INSURANCE. Borrower shall maintain and keep in force insurance of
the types and in amounts customarily carried in its lines of business,
including but not limited to fire, public liability, property damage,
workmen's compensation insurance carried by companies and in amounts
satisfactory to the Bank, and deliver to the Bank from time to time, as the
Bank may
27
request, schedules setting forth all insurance then in effect. Borrower
shall maintain and keep in full force and effect property damage insurance
covering Eligible Equipment.
7.8. FACILITIES. Borrower shall keep those properties useful or necessary
to its business in good repair and condition, and from time to time make
necessary repairs, renewals, and replacements thereto so that its property
shall be fully and efficiently preserved and maintained.
7.9. TAXES AND OTHER LIABILITIES. Borrower shall pay and discharge when
due any and all indebtedness, obligations, assessments, taxes real and
personal, including federal and state income taxes, except such as it may in
good faith contest or as to which a bona fide dispute may arise; provided
provision is made to the satisfaction of the Required Banks for prompt
payment thereof in the event that it is found that the same is its obligation.
7.10. LITIGATION. Borrower shall give immediate notice to Banks of: (a)
any litigation or proceeding in which it is a party if any adverse decision
therein would require Borrower to pay more than Five Hundred Thousand Dollars
($500,000) or require Borrower to deliver assets the value of which exceeds
such sum (whether or not the claim is considered to be covered by insurance);
and (b) the institution of any other suit or proceeding involving it that
might materially and adversely affect Borrower's operations, financial
condition, property or business.
7.11. CHANGE OF LOCATION. Borrower shall notify Banks (30) thirty days in
advance of any change in the location of any of its places of business or of
the establishment of any new, or the discontinuance of any existing, place of
business; provided that, Borrower need not notify Banks of a change, within
six (6) months after the date of this Agreement, of its headquarters to
Livermore, California .
7.12. FINANCIAL TESTS. Borrower will maintain, measured quarterly as of
the last day of each March, June, September and December in accordance with
GAAP:
(a) Tangible Net Worth at all times of at least the sum of (i) Seventy-
Seven Million Eight Hundred Thousand Dollars ($77,800,000) ("Base Amount"),
plus (ii) fifty percent (50%) of Net Income (without reduction for any Net
Loss) generated after June 30, 1997 , plus (iii) ninety percent (90%) of the
proceeds from the issuance of Borrower's capital stock (excluding the first
Three Million Five Hundred Thousand Dollars ($3,500,000) of such proceeds from
the exercise of stock options after the date of this Agreement).
(b) at all times a ratio of Liabilities to Tangible Net Worth for
Borrower (without consolidation with any Affiliate) at all times of not more
than three to one (3 to 1);
(c) a ratio of EBIT to interest expense of at least two to one (2.0 to
1) calculated on a four (4) quarter rolling basis ; and
(d) a ratio of Adjusted Net Income to Debt Service of at least 1.15 to 1
calculated on a four (4) quarter rolling basis .
28
ARTICLE 8
NEGATIVE COVENANTS
So long as any Obligations remain unpaid or not fully performed or any
Commitment remains unused in whole or in part, unless the Required Banks shall
otherwise consent to in writing, Borrower agrees that:
8.1. MERGERS/CHANGES. Borrower shall not change its name, change the
nature of its business, sell (whether in any one transaction or a series of
transactions) all or substantially all of its assets, enter into any merger,
consolidation, reorganization or recapitalization, reclassify its capital
stock, cease to be a publicly held company, or become a subsidiary of any other
company.
8.2. SALE OF ASSETS. Borrower shall not sell, transfer, lease or
otherwise dispose of any of its assets outside the ordinary course of its
business except for cash or a cash equivalent and then only if such sale
occurs after the Conversion Date and all the net proceeds (i.e., gross
proceeds less funds used to discharge liens securing the assets sold)
therefrom are used to reduce the principal outstanding on the Term Loans.
Sale of assets through the Investor-Owner Sales Program are recognized as
sales of assets in the ordinary course of Borrower's business.
8.3. LIENS. Borrower shall not mortgage, pledge, grant or permit to exist
a Lien upon any of its assets of any kind, now owned or hereafter acquired,
except for (collectively the "Permitted Liens"):
(a) existing Liens reflected on the consolidated balance sheet (and
notes thereto) of Borrower dated December 31, 1996 furnished to Banks pursuant
to Section 6.8 hereof, or any Lien which replaces an existing Lien, provided
the principal amount of the debt secured by the replacing Lien does not exceed
the principal amount at the time of replacement of the existing Lien, or cover
property other than the property covered by the existing Lien;
(b) Liens of carriers, warehousemen, mechanics, landlords,
materialmen's, suppliers, tax, assessments, other governmental charges and
other like Liens arising in the ordinary course of business securing
obligations that are not incurred in connection with the obtaining of any
advance or credit and which are not overdue or are being contested in good
faith by appropriate proceedings, provided provision is made to the
satisfaction of Agent for the eventual payment thereof in the event it is found
that such obligation is payable by Borrower;
(c) Liens arising in connection with workmen's compensation,
unemployment insurance, appeal and release bonds and progress payments under
government contracts;
(d) the giving, simultaneously with or within ninety (90) days after the
acquisition or construction of real property or tangible personal property, of
any purchase money Lien (including vendor's rights under purchase contracts
under an agreement whereby title is retained for the purpose of securing the
purchase price thereof) on real property or tangible personal
29
property hereafter acquired or constructed and not heretofore owned by
Borrower, or the acquiring hereafter of real property or personal tangible
property not heretofore owned by Borrower subject to any then existing Lien
(whether or not assumed); provided, however, that in each such case such Lien
is limited to such acquired or constructed real or tangible personal property;
(e) judgment Liens in existence less than thirty (30) days after the
entry thereof or with respect to which execution has been stayed or the
payment of which is covered in full by insurance; and
(f) Liens arising from the Real Property Debt, provided, however, that
Borrower is in compliance with Sections 7.3(l) and 8.4(a) of this Agreement.
8.4. INDEBTEDNESS. Borrower shall not incur, create, assume, or permit to
exist:
(a) Real Property Debt which in the aggregate exceeds Twenty-five
Million Dollars ($25,000,000); and
(b) Outside Debt, which in the aggregate exceeds Twenty-five Million
Dollars ($25,000,000).
8.5. PREPAYMENT. Borrower shall not prepay any Debt (other than Loans),
or enter into or modify any agreement as a result of which the terms of
payment of the Debt are waived or modified unless such prepayment or
modification will have no material adverse affect on the condition (financial
or otherwise) or operations of Borrower.
8.6 TRANSACTION WITH AFFILIATES. Borrower shall not, directly or
indirectly, enter into any transaction with or for the benefit of an
Affiliate on terms more favorable to the Affiliate than would have been
obtainable in arms' length dealings.
8.7. MISREPRESENTATIONS. Borrower shall not furnish any Bank any
certificate or other document that will contain any untrue statement of
material fact or that will omit to state a material fact necessary to make it
not misleading in light of the circumstances under which it was furnished.
8.8. REGULATIONS. Borrower shall not directly or indirectly apply any
part of the proceeds of the Loans to the purchasing or carrying of any
"margin stock" within the meaning of Regulation U of the Federal Reserve
Board, or any regulations, interpretations or rulings thereunder.
8.9. PARTNERSHIPS. Except as to limited partnerships formed by Borrower
in connection with the Investor-Owner Sales Program, Borrower shall not be a
general or limited partner in any partnership or a joint venturer in any
joint venture without the written consent of the Required Banks.
30
ARTICLE 9
EVENTS OF DEFAULT
9.1. EVENTS OF DEFAULT. The occurrence of any of the following events
shall constitute an Event of Default:
(a) Borrower fails to pay any installment of principal (including
without limitation any mandatory prepayment pursuant to Section 3.4) when due,
or any installment of interest or a Commitment Fee within five (5) calendar
days after the date payable hereunder;
(b) Borrower fails to observe or perform any material, term, covenant,
obligation or agreement to be observed or performed by it under this Agreement
or any Loan Documents when required to be observed or performed and (i) such
failure shall continue for ten (10) calendar days after notice to Borrower from
Agent of such failure or (ii) such failure shall continue for fifteen (15)
calendar days after Agent is notified of such failure by Borrower.
(c) a default shall occur as defined in any evidence of Debt by Borrower
or under any indenture, agreement or other instrument under which the same may
be issued, or any event upon any occurrence of which any holder or holders of
the Debt outstanding thereunder may declare the same due and payable before its
stated maturity, and which default (i) shall continue for a period of ten (10)
calendar days after notice thereof and (ii) in the reasonable opinion of the
Required Banks, has resulted or may result in a material adverse change in
Borrower's condition (financial or otherwise) or operations, provided, however,
that such default shall not be considered an Event of Default hereunder when
the amount thereof is being contested in good faith by appropriate proceedings
with adequate reserves therefor being set aside by Borrower;
(d) any certified or audited financial statement, representation,
warranty or certificate made or furnished by Borrower to Agent or any Bank in
connection with this Agreement, or as inducement to Banks to enter into this
Agreement, or in any separate statement or document to be delivered hereunder
to Banks, shall be materially false, incorrect, or incomplete when made;
(e) Borrower shall suffer one or more final judgments for payment of
money aggregating in excess of Five Hundred Thousand Dollars ($500,000) in
any one (1) year period and shall not discharge the same within a period of
thirty (30) days unless, pending further proceedings, execution has not been
commenced or, if commenced, has been effectively stayed;
(f) Borrower shall: (i) have an order for relief entered with respect
to it under the Federal Bankruptcy Code; (ii) not pay, or admit in writing
its inability to pay, its debts generally as they become due; (iii) make an
assignment for the benefit of creditors; (iv) apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian, trustee, examiner,
liquidator or similar official for it or any substantial part of its
property; (v) institute any proceeding seeking an order for relief under the
Federal Bankruptcy Code or seeking to
31
adjudicate it a bankrupt or insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, adjustment or composition of it or
its debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors or fail to file an answer or other pleading denying the
material allegations of any such proceeding filed against it; (vi) take any
corporate action to authorize or affect any of the foregoing actions set
forth in this Section 9.1(f); or (vii) fail to contest in good faith any
appointment or proceeding described in Section 9.1(g);
(g) without the application, approval or consent of Borrower, a
receiver, trustee, examiner, liquidator or similar official shall be appointed
for Borrower or any substantial part of the property of any thereof, or a
proceeding described in Section 9.1(f) shall be instituted against Borrower and
such appointment continues undischarged or such proceeding continues
undismissed or unstayed for a period of thirty (30) consecutive days;
(h) at any time Borrower has a Plan and any Reportable Event occurs, as
defined in ERISA, which creates or results in a liability in excess of Five
Hundred Thousand Dollars ($500,000) for which Borrower is or may become
obligated to pay, and such liability continues to exist for thirty (30)
consecutive days;
(i) the Required Banks shall have reasonably determined in good faith
(which determination, if made reasonably and in good faith, shall be final and
conclusive and shall be binding upon the parties to this Agreement) that one or
more conditions exist or events have occurred which might indicate, or result
in, a material adverse change in the operations, business, property or assets
of, or in the condition (financial or otherwise) of, Borrower or in the ability
of Borrower to meet in the normal course of business its obligations under this
Agreement or the Notes and such conditions of events continue for a period of
ten (10) calendar days following notice.
9.2. ACCELERATION. If any Event of Default described in Section 9.1(f) or
9.1(g) shall occur and be continuing, the obligations of Banks to make Loans
hereunder shall automatically terminate and the Obligations shall immediately
become due and payable without any election or action on the part of Agent or
any Bank. If any other Event of Default shall occur and be continuing, the
Required Banks may (and at the direction of the Required Banks, Agent shall)
terminate or suspend the obligations of Banks to make Loans hereunder, or
declare the obligations to be due and payable, or both, whereupon the
Obligations shall become immediately due and payable, without presentment,
demand, protest or notice of dishonor of any kind, as such terms are defined in
Division 3 of the California Commercial Code, all of which Borrower hereby
expressly waives. Agent shall give Borrower prompt notice of any termination
or suspension of its obligations or acceleration of Borrower's Obligations
hereunder. After any acceleration, Banks shall have, in addition to the rights
and remedies given to them by this Agreement and the Notes, all those allowed
by all Applicable Laws.
32
ARTICLE 10
AGENT
10.1. APPOINTMENT; POWERS. Each Bank hereby irrevocably appoints and
authorizes Agent to act as its agent under the Loan Documents and authorizes
Agent to take such actions on Bank's behalf and to exercise such powers under
the Loan Documents as are specifically delegated to Agent by the terms thereof,
together with such powers as are reasonably incidental thereto. Agent agrees
to act as such upon the express conditions contained in this Article 10. Agent
shall have no duties or responsibilities except those expressly set forth in
the Loan Documents, may perform such duties by or through its agent or
employees and shall not by reason of the Loan Documents have a fiduciary
relationship with any Bank. The provisions of this Article 10 are solely for
the benefit of Agent and Banks; and Borrower shall not have any rights as a
third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement, Agent shall act solely as agent of
Banks, and does not assume and shall not be deemed to have assumed any
obligations towards or relationship of agency or trust with or for Borrower.
10.2. AGENT AS BANK. The agency hereby created shall in no way impair or
affect any of the rights and powers of, or impose any duties or obligations
upon Agent in its individual capacity. With respect to its Commitments and the
Loans made by it, Agent shall have the same rights and powers under the Loan
Documents as any Bank and may exercise the same as though it were not Agent,
and the term "Bank" or "Banks" shall, unless the context otherwise indicates,
include Agent in its capacity as a Bank hereunder. Agent and any Bank and
their respective Affiliates may accept deposits from, lend money to (including
loans which may be repaid by Loans under this Agreement), and generally engage
in any kind of business with Borrower or any of its Affiliates as if it were
not Agent or a Bank and without any duty to account therefor to the other
parties to this Agreement.
10.3. INDEPENDENT CREDIT ANALYSIS. Each Bank represents and warrants that
(a) it has, independently and without reliance upon Agent, any other Bank, or
the directors, officers, agents, or employees of Agent or of any other Bank,
and instead in reliance upon information supplied to it by or on behalf of
Borrower, and upon such other information as it has deemed appropriate, made
its own independent investigation of the financial condition and affairs of
Borrower and its own independent credit analysis and decision to enter into
this Agreement, and (b) it shall independently and without reliance upon
Agent, any other Bank, or the directors, officers, agents or employees of
Agent, or of any other Bank, continue to make its own independent credit
analyses and decisions in acting or not acting under the Loan Documents.
Agent shall not have any duty or responsibility to make any such
investigation or appraisal on behalf of Banks or provide any Bank with any
credit or other information concerning the affairs, financial condition or
business of Borrower which may at any time come into the possession of Agent
or any of its Affiliates, unless such information shall have been delivered
to Agent in writing (i) with directions to deliver the same to Banks or (ii)
in satisfaction of a specific requirement of this Agreement.
33
10.4. GENERAL IMMUNITY. Neither Agent nor any of its directors, officers,
agents or employees shall be liable for any action taken or omitted to be
taken by it or them under any of the Loan Documents or in connection
therewith, unless caused by its or their gross negligence or willful
misconduct. Without limiting the generality of the foregoing, Agent:
(a) shall not be responsible to any Bank for any recitals, statements,
warranties or representations in the Loan Documents or in any written or oral
statement or in any financial or other statements, agreements, instruments,
reports, certificates or other documents relative thereto or for the
financial condition of Borrower;
(b) shall not be responsible for the authenticity, accuracy,
completeness, value, validity, effectiveness, due execution, legality,
genuineness, enforceability or sufficiency of the Loan Documents or any other
agreements or any assignments, certificates, requests, financial statements,
notice schedules or any opinions of counsel executed and delivered pursuant
thereto;
(c) shall not be bound to ascertain or inquire as to the performance or
observance of any of the terms, provisions, agreements, covenants or conditions
contained in the Loan Documents on the part of Borrower, or any of the terms of
any such agreement by any party thereto or as to the use of the proceeds of the
Loans and shall have no duty to inspect the property (including the books and
records) of Borrower;
(d) shall incur no liability under or in respect of the Loan Documents
or any other document by acting upon any notice, consent, certificate or other
instrument or writing believed by Agent in good faith to be genuine and signed
or sent by the proper party;
(e) may consult with legal counsel (including counsel for Borrower),
independent public accountants and other experts selected by Agent and shall
not be liable for any action taken or omitted to be taken in good faith in
accordance with the advice of such counsel, accountants or experts; and
(f) subject to the provisions of Section 10.6.3, (i) Agent may act or
refrain from acting under the Loan Documents in accordance with the
instructions of the Required Banks or Banks, where appropriate in accordance
with the terms of the Loan Documents, (ii) Agent shall be entitled to refrain
from exercising any power, discretion or authority vested in it under any
Loan Document unless and until it has obtained the instructions of Required
Banks, where appropriate in accordance with the terms of the Loan Documents,
or Banks, and (iii) no Bank shall have any right of action against Agent for
acting or refraining from acting in accordance with this Section 10.4(f).
10.5. RIGHT TO INDEMNITY. Agent shall be fully justified in failing or
refusing to take any action under the Loan Documents unless it shall first be
indemnified (upon requesting such indemnification) to its satisfaction by Banks
(in accordance with each Bank's Pro Rata Share) against any and all liability
and expense which it may incur by reason of taking or continuing to take any
such action. Each Bank severally agrees to indemnify Agent (to the extent not
34
reimbursed under Section 11.5), in the amount of its Pro Rata Share for any
and all liabilities, obligations, losses, damages, penalties, actions
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against Agent in
any way relating to or arising out of the Loan Documents or the transactions
contemplated thereby, or the enforcement of any of the terms thereof or of
any other documents, provided no such liability, obligation, loss, damage,
penalty, action, judgment, suit, claim, cost, expense or disbursement results
from Agent's gross negligence or willful misconduct. Each Bank agrees to
reimburse Agent in the amount of its Pro Rata Share of any out-of-pocket
expenses and costs, including, without limitation, attorneys' fees, incurred
for the benefit of Banks and not reimbursed by Borrower pursuant to Section
11.5 of this Agreement. Nothing contained herein shall release Borrower from
any obligations to make payments to Agent pursuant to Section 3.7.
10.6. ACTION BY AGENT
10.6.1. ACTUAL KNOWLEDGE. Agent may assume that no Default or Event
of Default has occurred and is continuing, unless Agent has actual knowledge
of the Default or Event of Default, has received notice from Borrower, its
counsel or its independent certified public accountants stating the nature of
the Default or Event of Default, or has received notice from a Bank stating
the nature of the Default or Event of Default and that Bank considers the
Default or Event of Default to have occurred and be continuing.
10.6.2. AGENT; OBLIGATIONS. Agent has only those obligations under the
Loan Documents that are expressly set forth therein. Without limitation on the
foregoing, Agent shall have no duty to inspect any property of Borrower,
although Agent may in its discretion periodically inspect the property from
time to time.
10.6.3. DISCRETION TO ACT. Except for any obligation expressly set
forth in the Loan Documents and as long as Agent may assume that Default or
Event of Default has occurred and is continuing, Agent may, but shall not be
required to, exercise its discretion to act or not act, except that Agent shall
be required to act or not act upon the instructions of the Required Banks (or
of all Banks in any circumstances governed by the provisions of Section 11.1 of
this Agreement) and those instructions shall be binding upon Agent, all Banks,
and all holders of the Notes; provided, that Agent shall not be required to act
or not act if to do so would be contrary to any Loan Document or to Applicable
Law.
10.6.4. ACTION UPON INSTRUCTIONS. If Agent may not assume that no
Default or Event of Default has occurred and is continuing, Agent shall give
notice thereof to Banks and shall act or not act upon the instructions of the
Required Banks, where appropriate in accordance with the terms of this
Agreement, or Banks; or provided that Agent shall not be required to act or not
act if to do so would be contrary to any Loan Document or to Applicable Law.
If the Required Banks or Banks, as the case may be, entitled to instruct Agent
fail, for fifteen (15) Business Days after the giving of notice by Agent, to
instruct Agent, then Agent in its discretion may act or not act as it deems
advisable for the protection of the interests of Banks.
35
10.7. PAYEE OF NOTE TREATED AS OWNER. Agent may deem and treat the payee
of any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment or transfer thereof shall have been filed with
Agent. Any request, authority or consent of any person or entity who, at the
time of making such request or giving such authority or consent, is the payee
of any Note or the holder of any Note (if Agent has received written notice of
the assignment or transfer thereof) shall be conclusive and binding on any
subsequent holder, transferee or assignee of that Note or of any Note or Notes
issued in exchange therefor.
10.8. AGENT'S RESIGNATION. Agent may resign at any time by giving at least
ninety (90) days' prior written notice of its intention to do so to each Bank
and to Borrower. Such resignation shall become effective upon the appointment
by Borrower, with the consent of the Required Banks, which consent shall not be
unreasonably withheld, of a successor Agent which is a Bank; provided that upon
the occurrence and continuance of an Event of Default, the Required Banks shall
appoint such successor without the consent of Borrower. Upon the acceptance of
any appointment as an Agent hereunder by a successor Agent, that successor
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under this Agreement. After any
resigning Agent's resignation hereunder as Agent, the provisions of this
Article 10 shall continue to inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent hereunder. Upon such appointment,
the term "Agent" shall for all purposes of this Agreement thereafter mean such
successor.
ARTICLE 11
MISCELLANEOUS
11.1. AMENDMENTS. Subject to the provisions of this Article 11 and except
as otherwise provided in any Loan Document, the Required Banks (or the Agent
with the consent in writing of the Required Banks) and the Borrower, may enter
into agreements supplemental hereto or thereto for the purpose of adding to or
modifying any provisions of the Loan Documents or changing in any manner the
rights of the Banks or of the Borrower, as the case may be, hereunder or
thereunder or waiving any Default or Event of Default hereunder or thereunder;
provided, however, that no such supplemental agreement shall, without the
consent of all the Banks:
(a) Extend the maturity of any Loan or Note, reduce the principal amount
thereof, reduce the rate, or extend the time of payment of interest or fees
thereon.
(b) Change the percentage specified in the definition of Required Banks.
(c) Extend the Revolving Loan Termination Date or the Term Loan Maturity
Date, or reduce the amount or extend the payment date for, the mandatory
payments, or increase the Pro Rata Share of any Bank or amount of the
Commitment of any Bank hereunder, or permit the Borrower to assign its rights
under this Agreement.
36
(d) Amend this Section 11.1.
No amendment of any provision of this Agreement relating to the Agent shall
be effective without the written consent of the Agent. The Agent may waive
payment of the fee required under Section 3.7 without obtaining the consent
of any of the Banks.
11.2. PRESERVATION OF RIGHTS. No delay or omission of the Agent or any
Bank to exercise any right under the Loan Documents shall impair such right
or be construed to be a waiver of any Default or Event of Default or an
acquiescence therein, and the making of a Loan notwithstanding the existence
of a Default or Event of default or the inability of the Borrower to satisfy
the conditions precedent to such Loan shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other
right, and no waiver, amendment or other variation of the terms, conditions
or provisions of the Loan Documents whatsoever shall be valid unless in
writing signed by the Banks required pursuant to Section 11.1, and then only
to the extent in such writing specifically set forth. All remedies contained
in the Loan Documents or by law afforded shall be cumulative and all shall be
available to the Banks until the Obligations have been paid in full.
11.3. SETOFF. In addition to, and without limitation of, any rights of
the Banks under applicable Law, if the Borrower becomes insolvent, however
evidenced, or any Default or Event of Default occurs, any indebtedness from
any Bank to the Borrower (including all account balances, whether provisional
or final and whether or not collected or available) may be offset and applied
toward the payment of the Obligations owing to such Bank, whether or not the
Obligations, or any part hereof, shall then be due.
11.4. RATABLE PAYMENTS. If any Bank, whether by setoff or otherwise, has
payment made to it upon its Loans in a greater proportion than that received
by any other Bank, such Bank agrees, promptly upon demand, to purchase a
portion of the Loans held by the other Banks so that after such purchase each
Bank will hold its ratable proportion of Loans.
11.5. EXPENSES. Whether or not the transactions contemplated hereby
shall be consummated, Borrower agrees to promptly pay (a) all the actual and
reasonable costs and expenses of preparation of this Agreement, the Notes and
the other Loan Documents, and of all the costs of furnishing all opinions by
counsel for Borrower (including without limitation any opinions requested by
Agent as to any legal matters arising hereunder or thereunder), and of
Borrower's performance of and compliance with all agreements and conditions
contained herein on its part to be performed or complied with; (b) the
reasonable fees, expenses and disbursements of Agent (including fees,
expenses and disbursements of counsel to Agent) in connection with the
negotiation, preparation, execution (not to exceed Five Thousand Dollars
($5,000), and administration of this Agreement, the Notes, the other Loan
Documents, and the Loans hereunder, and any amendments and waivers hereto;
and (c) after the occurrence of an Event of Default, all costs and expenses
(including reasonable attorneys' fees and costs of settlement) incurred by
Banks in enforcing any Obligations of or in collecting any payments
37
due from Borrower hereunder or under the Notes by reason of such Event of
Default or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or
of any insolvency or bankruptcy proceeding.
11.6. INDEMNITY. In addition to the payment of expenses pursuant to
Section 11.5, whether or not the transactions contemplated hereby shall be
consummated, Borrower agrees to indemnify, pay and hold Banks and any holder of
any Note, and the officers, directors, employees and agents of Banks and such
holders (individually called an "Indemnitee" and collectively called the
"Indemnitees") harmless from and against, any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including,
without limitation, the reasonable fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding, whether or not such Indemnitee shall be designated a party
thereto), which may be imposed on, incurred by, or asserted against such
Indemnitee, in any manner relating to or arising out of the use or intended use
of the proceeds of the Loans hereunder (the "indemnified liabilities");
provided that Borrower shall have no obligation to an Indemnitee hereunder with
respect to indemnified liabilities arising from the gross negligence or willful
misconduct of that Indemnitee. To the extent that the undertaking to
indemnify, pay and hold harmless set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, Borrower
shall contribute the maximum portion which it is permitted to pay and satisfy
under applicable law, to the payment and satisfaction of all indemnified
liabilities incurred by the Indemnitees or any of them.
11.7. SURVIVAL OF REPRESENTATIONS. All representations and warranties
of the Borrower contained in this Agreement shall survive delivery of the
Notes and the making of the Loans herein contemplated.
11.8. GOVERNMENTAL REGULATION. Anything contained in this Agreement to
the contrary notwithstanding, no Bank shall be obligated to extend credit to
the Borrower in violation of any limitation or prohibition provided by any
applicable Law.
11.9. TAXES. Any taxes (excluding income taxes) payable or ruled
payable by Federal or State authority in respect of the Loan Documents shall
be paid by the Borrower, together with interest and penalties, if any.
11.10. HEADINGS. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any
of the provisions of the Loan Documents.
11.11. SEVERAL OBLIGATIONS. The respective obligations of the Banks
hereunder are several and not joint and no Bank shall be the partner or agent
of any other (except to the extent to which the Agent is authorized to act as
such). The failure of any Bank to perform any of its obligations hereunder
shall not relieve any other Bank from any of its obligations hereunder. This
Agreement shall not be construed so as to confer any right or benefit upon
any Person other than the parties to this Agreement and their respective
successors and assigns.
38
11.12. NUMBERS OF DOCUMENTS. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of the
Banks.
11.13 SEVERABILITY OF PROVISIONS. Any provision in any Loan Document
that is held to be inoperative, unenforceable or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability or validity of that provisions in any other
jurisdiction, and to this end the provisions of all Loan Documents are
declared to be severable.
11.14. NONLIABILITY OF BANKS. The relationship between the Borrower
and the Banks and the Agent shall be solely that of borrower and lender.
Neither the Agent nor any Bank shall have any fiduciary responsibilities to
the Borrower. Neither the Agent nor any Bank undertakes any responsibility
to the Borrower to review or inform the Borrower of any matter in connection
with any phase of the Borrower's business or operations.
11.15. CHOICE OF LAW. The Loan Documents (other than those containing
a contrary express choice of law provisions) shall be construed in accordance
with the internal laws (and not the law of conflicts) of the State of
California, but giving effect to federal laws applicable to national banks.
11.16. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
CALIFORNIA STATE COURT SITTING IN SAN FRANCISCO IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY
OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY
BANK TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION.
11.17. COMPLIANCE WITH APPLICABLE LAWS. It is not the intent of the
Borrower, the Agent or the Banks to make an agreement in violation of
Applicable Law. Regardless of any provision contained herein, no Bank shall
be entitled to receive, collect or apply, as interest on the Loans, any
amount in excess of the Maximum Amount. If any Bank ever receives, collects
or applies, as interest, any such excess, such amount which would be
excessive interest shall be deemed a partial repayment of principal and
treated hereunder as such; and if principal is paid in full, any remaining
excess shall be paid to the Borrower. In determining whether or not the
interest paid or payable, under any specific contingency, exceeds the Maximum
Amount, the Borrower and each Bank shall, to the maximum extent permitted
under Applicable Law, (a) characterize any nonprincipal payment as an
expense, fee or premium rather than as interest, (b)
39
exclude voluntary prepayments and the effect thereof, and (c) amortize,
prorate, allocate and spread in equal parts, the total amount of interest
throughout the entire contemplated term of the Obligations so that the
interest rate is uniform throughout the entire term of the Obligations;
provided, however, that if the Loans are paid and performed in full prior to
the end of the full contemplated term of the Obligations, and if the interest
received for the actual period of existence thereof exceeds the Maximum
Amount, each Bank shall refund to the Borrower the amount of such excess or
credit the amount of such excess against the total principal amount of the
Loans owing, and, in such event, each Bank shall not be subject to any
penalties provided by Applicable Law for contracting for, charging or
receiving interest in excess of the Maximum Amount. This Section 11.17 shall
control every other provision of all agreements pertaining to the
transactions contemplated by or contained in the Transaction Documents.
11.18. CONFIDENTIALITY. Agent and each Bank agrees to hold any
information which it may receive from Borrower pursuant to this Agreement in
confidence, and further agrees not to disclose any such information to any
person or to use any such information for any purpose other than in
connection with this Agreement. The restrictions of this Section 11.18 shall
not apply to any information which has been disseminated to the public.
(a) Agent and each Bank agrees that, at any time that it has in its
possession any of Borrower's confidential information and for not less than
seventy-two (72) hours after such information is made available to the
public, it will not buy or sell, or place orders to buy or sell, directly or
indirectly, any securities of Borrower.
(b) Notwithstanding the foregoing, Agent and Banks may disclose
such Borrower's confidential information to other Banks or to other Bank's
employees, attorneys, accountants, or other professional advisors as is
necessary for Agent or such Banks to perform its obligations or protect its
interests under this Agreement. Agent and each Bank shall take such steps to
protect Borrower's confidential information as it does to protect its own
confidential information, including but not limited to, obtaining written
agreements from all persons given access to Borrower's confidential
information to: (i) protect the confidentiality of such information; (ii)
not disclose it to any other person; (iii) not to use it for any purpose
other than to assist Agent or Banks to perform its obligations or protect its
interests under this Agreement; and (iv) not to buy or sell, or place orders
to buy or sell, directly or indirectly, any securities of Borrower at any
time that such person has in his/her possession any of Borrower's
confidential information and not for seventy-two (72) hours after such
information is made available to the public.
(d) Notwithstanding the foregoing, Agent and Banks may disclose
such of Borrower's confidential information as each of them may be required
to do so (i) to regulatory officials, (ii) pursuant to law, regulation or
legal process, or (iii) in connection with any legal proceeding to which
Agent or a Bank may be a party; provided that Agent or such Bank shall have
first given Borrower such written notice of its intention to so disclose
Borrower's confidential information promptly after it receives notice that it
is required to disclose such information.
40
11.19. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and shall inure to the benefit of Agent, Banks and Borrower and their
respective successors and assigns; provided, however, that neither Borrower
nor any Bank may assign or transfer its rights or obligations under this
Agreement (including, without limitation, through participations) without the
prior written consent of each party to this Agreement.
11.20. NOTICES.
(a) Except as otherwise expressly provided in this Agreement:
(i) All notices, requests, demands, directions and other
communications provided for hereunder or under any other Loan
Document must be in writing and must be mailed, telecopied, or
delivered to the appropriate party at the address set forth on the
signature pages of this Agreement or, as to any party to any Loan
Document, at any other address as may be designated by it in a
written notice sent to all other parties to such Loan Document in
accordance with this Section 11.20; and
(ii) Any notice, request, demand, direction or other
communication given by telecopier must be confirmed within 48 hours
by letter mailed or delivered to the appropriate party at its
respective address.
(b) Except as otherwise expressly provided in any Loan Document,
if any notice, request, demand, direction or other communication
required or permitted by any Loan Document is given by mail it will
be effective on the earlier of receipt or the third calendar day
after deposit in the United States mail with first class or airmail
postage prepaid; if given by telecopier, when sent; or if given by
personal delivery, when delivered.
11.21. ENTIRE AGREEMENT. THE LOAN DOCUMENTS REPRESENT THE FINAL AND
ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO AND SUPERSEDE ALL PRIOR AND
CONTEMPORANEOUS AGREEMENTS AND UNDERSTANDINGS RELATING TO THE SUBJECT MATTER
OF THIS AGREEMENT.
11.22. JURY TRIAL. EACH PARTY TO THIS AGREEMENT HEREBY WAIVES ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT
TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF
THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL
BY JURY.
41
IN WITNESS WHEREOF, the Bank and Borrower have caused this Agreement to
be duly executed on the day and year first written at the head of this
Agreement.
BORROWER:
▇▇▇▇▇▇▇ RENTCORP
By:
------------------------------
Its
---------------------------
Notice Address (until Borrower's planned move to
Livermore, California scheduled to occur prior to December 31, 1997):
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Ms. Delight ▇▇▇▇▇▇
Notice Address (after Borrower's planned move to
Livermore, California):
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Ms. Delight ▇▇▇▇▇▇
BANKS:
UNION BANK OF CALIFORNIA,
NATIONAL ASSOCIATION,
individually and as Agent
By:
------------------------------
Its
---------------------------
Notice Address:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment: $23,800,000
Pro Rata Share: 34%
42
FLEET BANK, N.A.
By:
------------------------------
Its
---------------------------
Notice Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment: $23,100,000
Pro Rata Share: 33%
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION
By:
------------------------------
Its
---------------------------
Notice Address:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Vice President
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Commitment: $23,100,000
Pro Rata Share: 33%
43
EXHIBIT A
[COMPLIANCE CERTIFICATE]
COMPLIANCE CERTIFICATE
This Compliance Certificate is furnished pursuant to Section 7.3(d) of that
certain Credit Agreement dated as of _____________, 1997, among the Borrower,
certain Banks parties thereto and Union Bank of California, N.A., as Agent for
the Banks, as from time to time modified, supplemented or amended (the
"Agreement"). Unless otherwise defined, all capitalized terms used in this
Compliance Certificate have the respective meanings ascribed to them in the
Agreement.
Borrower hereby represents and warrants as follows:
1. I am familiar with the Agreement and the business and operations of
Borrower.
2. Except as otherwise specifically indicated, the information contained
in this Certificate is true and accurate on and as of ______________________,
19__ (the "Certification Date").
3. As of the Certification Date and at all times during the quarter
ending on the Certification Date, Borrower has performed all obligations to be
performed by it under (a) the Agreement, (b) any instrument or agreement to
which Borrower is a party or under which Borrower is obligated, and (c) any
judgment, decree, or order of any court or governmental authority binding on
Borrower. No Default or Event of Default has occurred, whether or not the same
was cured, during such quarter.
4. As of the Certification Date, the information set forth below is true,
accurate and complete:
(a) SECTION 7.12(a): TANGIBLE NET WORTH
------------------------------------
Tangible Net Worth $
----------------
Minimum Tangible Net Worth Calculation
Base Amount $77,800,000
----------------
A-1
Plus: Fifty percent of Net
Income (without reduction for
Net Loss) after June 30, 1997 $
----------------
Plus: 90% of the gross
proceeds from stock
issuance (excluding
the first $3,500,000 of
proceeds from the exercise
of stock options after the
date of this Agreement) $
----------------
Minimum Tangible
Net Worth Total $
----------------
(b) SECTION 7.12(b): LIABILITIES TO NET WORTH
------------------------------------------
Liabilities $
----------------
Less Deferred Taxes ($ )
----------------
Total (A) $
----------------
Tangible Net Worth (B) $
----------------
Ratio of A to B
----------------
Maximum permitted: 3:1
(c) SECTION 7.12(c): INTEREST EXPENSE RATIO
----------------------------------------
EBIT (A) $
----------------
Interest (B) $
----------------
Ratio of A to B
------------------
Minimum required: 2 to 1
A-2
(d) SECTION 7.12(d): DEBT SERVICE COVERAGE
---------------------------------------
Adjusted Net Income (A) $
----------------
Debt Service (B) $
----------------
Ratio of A to B
------------------
Minimum required: 1.15 to 1
5. The Borrowing Base and the Adjusted Borrowing Base as of the
Certification Date are as set forth below. Borrower hereby further certifies
the information set forth below is true, accurate and complete and the aggregate
amount of the Loans outstanding under the Agreement, after giving effect to any
new Loan made as of the Certification Date, is not in excess of the Commitment
or the Adjusted Borrowing Base.
(a) BORROWING BASE
--------------
Eligible Equipment
------------------
Less: 25%
------------------
Borrowing Base
------------------
(b) ADJUSTED BORROWING BASE
-----------------------
Borrowing Base
------------------
Less: Outside Debt
------------------
Adjusted Borrowing Base
------------------
(c) EXCESS OF LOANS OUTSTANDING OVER ADJUSTED BORROWING BASE
--------------------------------------------------------
Adjusted Borrowing Base
------------------
Less: Loans outstanding
------------------
Excess of Loans Outstanding
over Adjusted Borrowing Base
------------------
A-3
Executed this _____ day of ______________, 199_.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
A-4
EXHIBIT B
[LOAN REQUEST]
--------------
Union Bank of California, N.A., as Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Vice President
Re: Credit Agreement dated as of ___________________, 1997 among
▇▇▇▇▇▇▇ RentCorp, a California corporation ("Borrower"), certain Banks
parties thereto, and Union Bank of California, N.A., as Agent for the
Banks, as from time to time modified, supplemented or amended (the
"Agreement"). (Terms defined in the Agreement shall have the same
meanings herein)
Dear ▇▇. ▇▇▇▇▇▇▇▇▇▇:
Please be advised that pursuant to the Agreement, Borrower hereby gives
notice that it requests a Loan (the "Proposed Loan") under the Agreement as
follows:
1. The Funding Date of the Proposed Loan is , 199 .
--------------- --
2. The aggregate amount of the Proposed Loan is
Dollars ($ ).
----------------------------------------------- ----------
3. The Proposed Loan is a:
(i) New Loan; or
(ii) Extension or conversion of an existing Loan.
4. The requested type(s) of Loans comprising the Proposed Loan are:
(a) EuroDollar Loan:
B-1
Union Bank of California, N.A.
-----------------------
Page 2
(i) Amount: $
----------------------
(ii) Interest Period:
--------------
(b) Reference Rate Loan:
(i) Amount: $
----------------------
Borrower hereby represents and warrants that each of the conditions
precedent set forth in Section 5.2 of the Agreement will be satisfied on and as
of the Funding Date of such Loan and, specifically:
(a) There exists no Default or Event of Default;
(b) The representations and warranties contained in Article 6 of the
Agreement will be true and correct as of the Funding Date of the Proposed Loan
except to the extent that changes in the facts and conditions on which such
representations and warranties are based are required or permitted under the
Agreement.
Very truly yours,
▇▇▇▇▇▇▇ RENTCORP,
a California corporation
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
B-2
EXHIBIT C
[OFFICERS' CERTIFICATE]
[Borrower's Letterhead]
[Date]
Union Bank of California, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Vice President
Dear ▇▇. ▇▇▇▇▇▇▇▇▇▇:
Terms not otherwise defined herein shall have the meanings ascribed to them in
the Credit Agreement dated as of ________________, 1997 (the "Agreement"). In
connection with the Agreement, the undersigned hereby certify that:
1. The representations and warranties of the Borrower contained in
Article 6 of the Agreement are true and correct on and as of the date of this
certificate with the same effect as though such representations and warranties
had been made on and as of such date.
2. The Borrower has performed and complied with all agreements and
covenants contained in the Agreement required to be performed and complied with
by it prior to or on the date of this certificate.
3. No proceedings looking toward the dissolution or liquidation of the
Borrower have been commenced and no such proceedings are contemplated.
4. Attached is a true and correct copy of certain resolutions, which
comply with the requirements of Section 5.1(b) of the Agreement, duly
adopted by the Board of Directors of the Borrower at a duly authorized
meeting, duly held at the office of the Borrower on _______________ at
which meeting a quorum of directors was present in person throughout
and voted in favor thereof, and such resolutions have not been in any
way modified, amended, rescinded or revoked and remain on the date
hereof in full force and effect.
C-1
Union Bank of California, N.A.
[Date]
Page 2
5. The Borrower is duly incorporated, validly existing and in good
standing under the laws of the State of California and that no provision in the
Articles of Incorporation or Bylaws of the Borrower, or any shareholder
agreement, limits the power of the Board of Directors to pass the foregoing
resolutions, that such resolutions are in conformity with the provisions of said
Articles of Incorporation and Bylaws and that no approval of the shareholders or
of the outstanding shares of the Borrower is required with respect to the
matters which are the subject of the foregoing resolutions.
6. Attached hereto is an incumbency certificate which complies with the
requirements of Section 5.1(c) of the Agreement. [or] [The incumbency
certificate delivered to Agent pursuant to the Prior Agreement remains in full
force and effect and is sufficient, together with the resolution referred to in
Section 4, above, to authorize the officers designated on behalf of Borrower to
execute, deliver and perform this Agreement and the other Loan Documents
executed or to be executed by Borrower and to consummate the transactions
contemplated by such Loan Documents.]
7. The copies of the Articles of Incorporation and Bylaws of the
Borrower delivered to Agent in connection with the Prior Agreement, and pursuant
to Section 5.1(a) of this Agreement, are true, accurate and complete copies of
such Articles and By-laws of Borrower and such documents remain in effect and
have not been modified.
8. Agent is hereby authorized to rely on this Certificate until a new
Certificate certified by the Secretary (or Assistant Secretary) of the Borrower
is received by the Agent, even in the event that one or more of the foregoing
individuals ceases to act in such capacity.
IN WITNESS WHEREOF, we have hereto set our hand this day of
, 1997. -------
------------------------
▇▇▇▇▇▇▇ RentCorp
By:
------------------------
Title:
---------------------
C-2
EXHIBIT D
REVOLVING NOTE
NOT TO EXCEED
$ San Francisco, California
----------------------- , 1997
-------------------
FOR VALUE RECEIVED, the undersigned, ▇▇▇▇▇▇▇ Rentcorp, a California
corporation ("Borrower"), promises to pay to [Name of Bank] (the "Bank"), or
order, on or before June 30, 1999, or as otherwise provided in the Credit
Agreement dated as of ____________________ among the Borrower, certain banks
parties thereto, and Union Bank of California, N.A., formerly known as The Bank
of California, N.A., as Agent for the Banks, as from time to time modified,
supplemented or amended, (the "Agreement), the lesser of (i) the principal sum
of _________________________________________________ Dollars [maximum
Commitment] ($_________________) or (ii) the aggregate unpaid principal amount
of all Revolving Loans made by the Bank to Borrower pursuant to the Agreement.
Terms defined in the Agreement have the same meanings herein.
Borrower further promises to pay to the Bank, or order, interest on
the unpaid principal amount hereunder from time to time outstanding from the
date hereof until such amount shall have become due and payable (whether at the
stated maturity, by acceleration, or otherwise) at the rate(s) of interest and
at the times provided in the Agreement. Borrower further promises to pay
interest on any overdue payment of principal and (to the extent permitted by
law) interest as set forth in the Agreement.
Bank is authorized, but not required, to record the date, amount,
type, interest rate and Interest Period (if applicable) of each Loan made by the
Bank to Borrower, and each payment made on account thereof, on its books and
records or on the schedule annexed hereto, and, in the absence of manifest
error, such recordation shall constitute prima facie evidence of the accuracy of
the information so recorded; provided, however, that failure by the Bank to make
any such recordation shall not affect any of the Obligations of Borrower.
All payments of principal, interest, fees, or other amounts due from
Borrower hereunder, shall be in Dollars and in immediately available funds,
without setoff, counterclaim or other deduction of any nature, and shall be made
to Agent, at its address set forth on the signature pages of the Agreement,
prior to 10:00 a.m., San Francisco time, on the last date permitted therefor.
Except as otherwise provided in the Agreement, if any payment of
principal or interest hereunder shall become due on a day which is not a
Business Day, such payment shall be
D-1
made on the next following Business Day and such extension of time shall be
included in computing interest in connection with such payment.
This Revolving Note is one of the "Revolving Notes" referred to in,
evidences obligations of Borrower under, and is entitled to the benefits of, the
Agreement, which, among other things, provides for the acceleration of the
maturity hereof upon the occurrence of certain circumstances and upon certain
terms and conditions. This Revolving Note supersedes and replaces that certain
Revolving Note dated October 25, 1996, as amended from time to time, in the
principal amount not to exceed __________________________________ Dollars
($__________), executed by Borrower in favor of Bank (the "Previous Note"). As
of the effective date of the Agreement, all unpaid principal, interest and other
amounts accrued and outstanding under the Previous Note shall for all purposes
be and constitute unpaid amounts outstanding under and evidenced by this
Revolving Note.
Borrower hereby expressly waives presentment, demand, notice of
dishonor, protest, as such terms are defined in Division 3 of the California
Commercial Code, and all other demands and notices in connection with the
delivery, acceptance, performance, default or enforcement of this Revolving Note
and the Agreement.
This Revolving Note shall be governed by, construed and enforced in
accordance with the laws of the State of California.
▇▇▇▇▇▇▇ RENTCORP
By:
---------------------------
Name:
-------------------------
Title:
------------------------
D-2
SCHEDULE OF LOANS
This Revolving Note evidences Loans made, continued or converted
under the Agreement to Borrower, on the dates, in the principal amounts, of
the types, bearing interest at the rates and having Interest Periods (if
applicable) set forth below, subject to the payments, prepayments,
continuations and conversions of principal set forth below:
Amount
Date Paid
Made, Principal Duration Prepaid
Continued Amount Type of Continued Unpaid
or of of Interest Interest or Principal Notation
Converted Loan Loan Rate Period Converted Amount Made By
--------- --------- ----- -------- -------- --------- --------- --------
D-3
EXHIBIT E
TERM NOTE
---------
$ San Francisco, California
----------------------- , 199
------------------- -
FOR VALUE RECEIVED, the undersigned, ▇▇▇▇▇▇▇ Rentcorp, a California
corporation ("Borrower"), promises to pay to [Name of Bank] (the "Bank"), or
order, the principal sum of __________________________________________
Dollars ($__________________), payable in installments on the dates and in
the amounts provided for in the Credit Agreement dated as of ________________
among the Borrower, certain banks parties thereto, and Union Bank of
California, National Association, as Agent for the Banks, as from time to
time modified, supplemented or amended, (the "Agreement"), with the remaining
unpaid balance of principal hereof payable on June 30, 2001. Terms defined
in the Agreement have the same meanings herein.
Borrower further promises to pay to the Bank, or order, interest on
the unpaid principal amount hereunder from time to time outstanding from the
date hereof until such amount shall have become due and payable (whether at
the stated maturity, by acceleration or otherwise) at the rate(s) of interest
and at the times provided in the Agreement. Borrower further promises to pay
interest on any overdue payment of principal and (to the extent permitted by
law) interest as set forth in the Agreement.
Bank is authorized, but not required, to record the date, amount,
type, interest rate and Interest Period (if applicable) of each Loan made by
the Bank to Borrower, and each payment made on account thereof, on its books
and records or on the schedule annexed hereto, and, in the absence of
manifest error, such recordation shall constitute prima facie evidence of the
information so recorded; provided, however, that failure by the Bank to make
any such recordation shall not affect any of the Obligations of Borrower.
All payments of principal, interest, fees, or other amounts due
from Borrower hereunder, shall be in Dollars and in immediately available
funds, without setoff, counterclaim or other deduction of any nature, and
shall be made to Agent, at its address set forth on the signature pages of
the Agreement, prior to 10:00 a.m., San Francisco time, on the last date
permitted therefor.
Except as otherwise provided in the Agreement, if any payment of
principal or interest hereunder shall become due on a day which is not a
Business Day, such payment shall be made on the next following Business Day
and such extension of time shall be included in computing interest in
connection with such payment.
E-1
This Term Note is one of the "Term Notes" referred to in, evidences
obligations of Borrower under, and is entitled to the benefits of the
Agreement, which among other things provides for the acceleration of the
maturity hereof upon the occurrence of certain circumstances and upon certain
terms and conditions. This Term Note may be prepaid only in accordance with
the terms and conditions of the Agreement.
Borrower hereby expressly waives presentment, demand, notice of
dishonor, protest, as such terms are defined in the California Commercial
Code, and all other demands and notices in connection with the delivery,
acceptance, performance, default or enforcement of this Term Note and the
Agreement.
This Term Note shall be governed by, construed and enforced in
accordance with the laws of the State of California.
▇▇▇▇▇▇▇ RENTCORP
By:
---------------------------
Name:
-------------------------
Title:
------------------------
E-2
SCHEDULE OF LOANS
This Note evidences Loans made, continued or converted under the
Agreement on the dates, in the principal amounts, of the types, bearing interest
at the rates and having Interest Periods (if applicable) set forth below,
subject to the payments, prepayments, continuations and conversions of principal
set forth below:
Amount
Date Paid
Made, Principal Duration Prepaid
Continued Amount Type of Continued Unpaid
or of of Interest Interest or Principal Notation
Converted Loan Loan Rate Period Converted Amount Made By
--------- --------- ----- -------- -------- --------- --------- --------
E-3
REVOLVING NOTE
--------------
NOT TO EXCEED
$23,800,000.00 San Francisco, California
, 1997
-------------------
FOR VALUE RECEIVED, the undersigned, ▇▇▇▇▇▇▇ RENTCORP, a California
corporation ("Borrower"), promises to pay to UNION BANK OF CALIFORNIA, N.A.,
formerly known as The Bank of California, N.A. (the "Bank"), or order, on or
before June 30, 1999, or as otherwise provided in the Credit Agreement dated
as of July 10, 1997, among the Borrower, certain banks parties thereto, and
Union Bank of California, N.A., formerly known as The Bank of California,
N.A., as Agent for the Banks, as from time to time modified, supplemented or
amended, (the "Agreement), the lesser of (i) the principal sum of
Twenty-Three Million Eight Hundred Thousand Dollars ($23,800,000.00) or (ii)
the aggregate unpaid principal amount of all Revolving Loans made by the Bank
to Borrower pursuant to the Agreement. Terms defined in the Agreement have
the same meanings herein.
Borrower further promises to pay to the Bank, or order, interest on
the unpaid principal amount hereunder from time to time outstanding from the
date hereof until such amount shall have become due and payable (whether at
the stated maturity, by acceleration, or otherwise) at the rate(s) of
interest and at the times provided in the Agreement. Borrower further
promises to pay interest on any overdue payment of principal and (to the
extent permitted by law) interest as set forth in the Agreement.
Bank is authorized, but not required, to record the date, amount,
type, interest rate and Interest Period (if applicable) of each Loan made by
the Bank to Borrower, and each payment made on account thereof, on its books
and records or on the schedule annexed hereto, and, in the absence of
manifest error, such recordation shall constitute prima facie evidence of the
accuracy of the information so recorded; provided, however, that failure by
the Bank to make any such recordation shall not affect any of the Obligations
of Borrower.
All payments of principal, interest, fees, or other amounts due
from Borrower hereunder, shall be in Dollars and in immediately available
funds, without setoff, counterclaim or other deduction of any nature, and
shall be made to Agent, at its address set forth on the signature pages of
the Agreement, prior to 10:00 a.m., San Francisco time, on the last date
permitted therefor.
Except as otherwise provided in the Agreement, if any payment of
principal or interest hereunder shall become due on a day which is not a
Business Day, such payment shall be made on the next following Business Day
and such extension of time shall be included in computing interest in
connection with such payment.
1
This Revolving Note is one of the "Revolving Notes" referred to in,
evidences obligations of Borrower under, and is entitled to the benefits of, the
Agreement, which, among other things, provides for the acceleration of the
maturity hereof upon the occurrence of certain circumstances and upon certain
terms and conditions. This Revolving Note supersedes and replaces that certain
Revolving Note dated October 25, 1996, as amended from time to time, in the
principal amount not to exceed Twenty-Seven Million Dollars ($27,000,000.00),
executed by Borrower in favor of Bank (the "Previous Note") as of the effective
date of the Agreement, all unpaid principal, interest and other amounts accrued
and outstanding under the Previous Note shall for all purposes be and constitute
unpaid amounts outstanding under and evidenced by this Revolving Note.
Borrower hereby expressly waives presentment, demand, notice of
dishonor, protest, as such terms are defined in Division 3 of the California
Commercial Code, and all other demands and notices in connection with the
delivery, acceptance, performance, default or enforcement of this Revolving Note
and the Agreement.
This Revolving Note shall be governed by, construed and enforced in
accordance with the laws of the State of California.
▇▇▇▇▇▇▇ RENTCORP
By:
---------------------------
Name:
-------------------------
Title:
------------------------
2
REVOLVING NOTE
--------------
NOT TO EXCEED
$23,100,000.00 San Francisco, California
, 1997
-------------------
FOR VALUE RECEIVED, the undersigned, ▇▇▇▇▇▇▇ RENTCORP, a California
corporation ("Borrower"), promises to pay to FLEET BANK, N.A., formerly known as
National Westminister Bank, USA (the "Bank"), or order, on or before June 30,
1999, or as otherwise provided in the Credit Agreement dated as of July 10,
1997, among the Borrower, certain banks parties thereto, and Union Bank of
California, N.A., formerly known as The Bank of California, N.A., as Agent for
the Banks, as from time to time modified, supplemented or amended, (the
"Agreement), the lesser of (i) the principal sum of Twenty-Three Million One
Hundred Thousand Dollars ($23,100,000.00) or (ii) the aggregate unpaid principal
amount of all Revolving Loans made by the Bank to Borrower pursuant to the
Agreement. Terms defined in the Agreement have the same meanings herein.
Borrower further promises to pay to the Bank, or order, interest on
the unpaid principal amount hereunder from time to time outstanding from the
date hereof until such amount shall have become due and payable (whether at the
stated maturity, by acceleration, or otherwise) at the rate(s) of interest and
at the times provided in the Agreement. Borrower further promises to pay
interest on any overdue payment of principal and (to the extent permitted by
law) interest as set forth in the Agreement.
Bank is authorized, but not required, to record the date, amount,
type, interest rate and Interest Period (if applicable) of each Loan made by the
Bank to Borrower, and each payment made on account thereof, on its books and
records or on the schedule annexed hereto, and, in the absence of manifest
error, such recordation shall constitute prima facie evidence of the accuracy of
the information so recorded; provided, however, that failure by the Bank to make
any such recordation shall not affect any of the Obligations of Borrower.
All payments of principal, interest, fees, or other amounts due from
Borrower hereunder, shall be in Dollars and in immediately available funds,
without setoff, counterclaim or other deduction of any nature, and shall be made
to Agent, at its address set forth on the signature pages of the Agreement,
prior to 10:00 a.m., San Francisco time, on the last date permitted therefor.
Except as otherwise provided in the Agreement, if any payment of
principal or interest hereunder shall become due on a day which is not a
Business Day, such payment shall be made on the next following Business Day and
such extension of time shall be included in computing interest in connection
with such payment.
1
This Revolving Note is one of the "Revolving Notes" referred to in,
evidences obligations of Borrower under, and is entitled to the benefits of, the
Agreement, which, among other things, provides for the acceleration of the
maturity hereof upon the occurrence of certain circumstances and upon certain
terms and conditions. This Revolving Note supersedes and replaces that certain
Revolving Note dated October 25, 1996, as amended from time to time, in the
principal amount not to exceed Sixteen Million Five Hundred Thousand Dollars
($16,500,000.00), executed by Borrower in favor of Bank (the "Previous Note") as
of the effective date of the Agreement, all unpaid principal, interest and other
amounts accrued and outstanding under the Previous Note shall for all purposes
be and constitute unpaid amounts outstanding under and evidenced by this
Revolving Note.
Borrower hereby expressly waives presentment, demand, notice of
dishonor, protest, as such terms are defined in Division 3 of the California
Commercial Code, and all other demands and notices in connection with the
delivery, acceptance, performance, default or enforcement of this Revolving Note
and the Agreement.
This Revolving Note shall be governed by, construed and enforced in
accordance with the laws of the State of California.
▇▇▇▇▇▇▇ RENTCORP
By:
---------------------------
Name:
-------------------------
Title:
------------------------
2
REVOLVING NOTE
--------------
NOT TO EXCEED
$23,100,000.00 San Francisco, California
, 1997
-------------------
FOR VALUE RECEIVED, the undersigned, ▇▇▇▇▇▇▇ RENTCORP, a California
corporation ("Borrower"), promises to pay to BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION (the "Bank"), or order, on or before June 30, 1999, or as
otherwise provided in the Credit Agreement dated as of July 10, 1997, among the
Borrower, certain banks parties thereto, and Union Bank of California, N.A.,
formerly known as The Bank of California, N.A., as Agent for the Banks, as from
time to time modified, supplemented or amended, (the "Agreement), the lesser of
(i) the principal sum of Twenty-Three Million One Hundred Thousand Dollars
($23,100,000.00) or (ii) the aggregate unpaid principal amount of all Revolving
Loans made by the Bank to Borrower pursuant to the Agreement. Terms defined in
the Agreement have the same meanings herein.
Borrower further promises to pay to the Bank, or order, interest on
the unpaid principal amount hereunder from time to time outstanding from the
date hereof until such amount shall have become due and payable (whether at the
stated maturity, by acceleration, or otherwise) at the rate(s) of interest and
at the times provided in the Agreement. Borrower further promises to pay
interest on any overdue payment of principal and (to the extent permitted by
law) interest as set forth in the Agreement.
Bank is authorized, but not required, to record the date, amount,
type, interest rate and Interest Period (if applicable) of each Loan made by the
Bank to Borrower, and each payment made on account thereof, on its books and
records or on the schedule annexed hereto, and, in the absence of manifest
error, such recordation shall constitute prima facie evidence of the accuracy of
the information so recorded; provided, however, that failure by the Bank to make
any such recordation shall not affect any of the Obligations of Borrower.
All payments of principal, interest, fees, or other amounts due from
Borrower hereunder, shall be in Dollars and in immediately available funds,
without setoff, counterclaim or other deduction of any nature, and shall be made
to Agent, at its address set forth on the signature pages of the Agreement,
prior to 10:00 a.m., San Francisco time, on the last date permitted therefor.
Except as otherwise provided in the Agreement, if any payment of
principal or interest hereunder shall become due on a day which is not a
Business Day, such payment shall be made on the next following Business Day and
such extension of time shall be included in computing interest in connection
with such payment.
1
This Revolving Note is one of the "Revolving Notes" referred to in,
evidences obligations of Borrower under, and is entitled to the benefits of, the
Agreement, which, among other things, provides for the acceleration of the
maturity hereof upon the occurrence of certain circumstances and upon certain
terms and conditions. This Revolving Note supersedes and replaces that certain
Revolving Note dated October 25, 1996, as amended from time to time, in the
principal amount not to exceed Sixteen Million Five Hundred Thousand Dollars
($16,500,000.00), executed by Borrower in favor of Bank (the "Previous Note") as
of the effective date of the Agreement, all unpaid principal, interest and other
amounts accrued and outstanding under the Previous Note shall for all purposes
be and constitute unpaid amounts outstanding under and evidenced by this
Revolving Note.
Borrower hereby expressly waives presentment, demand, notice of
dishonor, protest, as such terms are defined in Division 3 of the California
Commercial Code, and all other demands and notices in connection with the
delivery, acceptance, performance, default or enforcement of this Revolving Note
and the Agreement.
This Revolving Note shall be governed by, construed and enforced in
accordance with the laws of the State of California.
▇▇▇▇▇▇▇ RENTCORP
By:
---------------------------
Name:
-------------------------
Title:
------------------------
2
SCHEDULE OF LOANS
This Revolving Note evidences Loans made, continued or converted under
the Agreement to Borrower, on the dates, in the principal amounts, of the types,
bearing interest at the rates and having Interest Periods (if applicable) set
forth below, subject to the payments, prepayments, continuations and conversions
of principal set forth below:
Amount
Date Paid
Made, Principal Duration Prepaid
Continued Amount Type of Continued Unpaid
or of of Interest Interest or Principal Notation
Converted Loan Loan Rate Period Converted Amount Made By
--------- --------- ----- -------- -------- --------- --------- --------
1