WAREHOUSING CREDIT AGREEMENT
AMONG
AMERICAN FINANCE GROUP, INC.
and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
and Such Other Financial Institutions
as Shall Become LENDERS Hereunder
and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
as Agent
May 31, 1996
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS.............................................1
1.1 Defined Terms...........................................1
1.2 Accounting Terms........................................18
1.3 Other Terms.............................................18
1.4 Schedules and Exhibits..................................18
SECTION 2. AMOUNT AND TERMS OF CREDIT..............................18
2.1 Commitment to Lend......................................18
2.1.1 Revolving Facility............................18
(a) Facility Commitments..................19
(b) Each Loan.............................20
2.1.2 Funding.......................................20
2.1.3 Utilization of the Loans......................20
2.2 Repayment and Prepayment................................20
2.2.1 Repayment.....................................20
2.2.2 Voluntary Prepayment..........................21
2.3 Calculation of Interest; Post-Maturity Interest.........21
2.4 Manner of Payments......................................21
2.5 Payment on Non-Business Days............................21
2.6 Application of Payments.................................22
2.7 Procedure for the Borrowing of Loans....................22
2.7.1 Notice of Borrowing...........................22
2.7.2 Unavailability of LIBOR Loans.................22
2.8 Conversion and Continuation Elections...................22
2.8.1 Election......................................22
2.8.2 Notice of Conversion..........................23
2.8.3 Interest Period...............................23
2.8.4 Unavailability of LIBOR Loans.................23
2.9 Discretion of Lenders as to Manner of Funding...........23
2.10 Distribution of Payments................................24
2.11 Agent's Right to Assume Funds Available for Advances....24
2.12 Agent's Right to Assume Payments Will be Made by Borrower.24
2.13 Capital Requirements....................................25
2.14 Taxes...................................................25
2.14.1 No Deductions.................................25
2.14.2 Miscellaneous Taxes...........................25
2.14.3 Indemnity.....................................25
2.14.4 Required Deductions...........................26
2.14.5 Evidence of Payment...........................26
2.14.6 Foreign Persons...............................26
2.14.7 Income Taxes..................................27
2.14.8 Reimbursement of Costs........................27
2.14.9 Jurisdiction..................................27
2.15 Illegality..............................................28
2.15.1 LIBOR Loans...................................28
2.15.2 Prepayment....................................28
2.15.3 Prime Rate Borrowing..........................28
2.16 Increased Costs.........................................28
2.17 Inability to Determine Rates............................28
2.18 Prepayment of LIBOR Loans...............................29
SECTION 3. CONDITIONS PRECEDENT....................................29
3.1 Effectiveness of this Agreement.........................29
3.1.1 Corporate Documents...........................29
3.1.2 Note..........................................30
3.1.3 Security Documents............................30
3.1.4 Opinion of Counsel............................30
3.1.5 Guaranty......................................30
3.1.6 Growth Fund Agreement.........................30
3.1.7 TEC AcquiSub Amendment........................30
3.1.8 Bringdown Certificate.........................30
3.1.9 Lockbox Agreement.............................30
3.1.10 Fees..........................................30
3.1.11 Insurance.....................................30
3.1.12 Other Documents...............................31
3.2 All Loans...............................................31
3.2.1 Notice of Borrowing...........................31
3.2.2 No Event of Default...........................31
3.2.3 Officer's Certificate.........................31
3.2.4 Officer's Certificate - Leases................31
3.2.5 Insurance.....................................32
3.2.6 Other Instruments.............................32
SECTION 4. BORROWER'S REPRESENTATIONS AND WARRANTIES...............32
4.1 Existence and Power.....................................32
4.2 Loan Documents and Note Authorized; Binding Obligations.33
4.3 No Conflict; Legal Compliance...........................33
4.4 Financial Condition.....................................33
4.5 Executive Offices.......................................33
4.6 Litigation..............................................34
4.7 Consents and Approvals..................................34
4.8 Other Agreements........................................34
4.9 ERISA...................................................34
4.10 Labor Matters...........................................34
4.11 Margin Regulations......................................34
4.12 Taxes...................................................35
4.13 Environmental Quality...................................35
4.14 Trademarks, Patents, Copyrights, Franchises and Licenses.36
4.15 Full Disclosure.........................................36
4.16 Other Regulations.......................................36
4.17 Solvency................................................36
4.18 Survival of Representations and Warranties..............36
4.19 Eligible Leases.........................................36
SECTION 5. BORROWER'S AFFIRMATIVE COVENANTS........................37
5.1 Records and Reports.....................................37
5.1.1 Quarterly Statements..........................37
5.1.2 Annual Statements.............................38
5.1.3 Borrowing Base Certificate....................38
5.1.4 Compliance Certificate........................38
5.1.5 Reports.......................................38
5.1.6 Insurance Reports.............................38
5.1.7 Certificate of Responsible Officer............38
5.1.8 Employee Benefit Plans........................39
5.1.9 ERISA Notices.................................39
5.1.10 Pension Plans.................................39
5.1.11 SEC Reports...................................39
5.1.12 Tax Returns...................................39
5.1.13 Additional Information........................39
5.2 Existence; Compliance with Law..........................40
5.3 Insurance...............................................40
5.4 Taxes and Other Liabilities.............................40
5.5 Inspection Rights; Assistance...........................41
5.6 Maintenance of Facilities; Modifications; Performance of
Leases............................... 41
5.6.1 Maintenance of Facilities.....................41
5.6.2 Performance of Leases.........................41
5.7 Supplemental Disclosure.................................41
5.8 Further Assurances......................................41
5.9 Lockbox.................................................41
5.10 Environmental Laws......................................42
SECTION 6. BORROWER'S NEGATIVE COVENANTS...........................42
6.1 Liens; Negative Pledges; and Encumbrances...............42
6.2 Limitations on Indebtedness.............................42
6.3 Disposition of Assets...................................43
6.4 Restricted Payments.....................................43
6.5 Restriction on Fundamental Changes......................43
6.6 Transactions with Affiliates............................43
6.7 No Loans to Affiliates..................................43
6.8 No Investment...........................................43
6.9 Maintenance of Business.................................43
6.10 No Subsidiaries.........................................44
6.11 Events of Default.......................................44
6.12 ERISA...................................................44
6.13 No Use of Any Lender's Name.............................44
6.14 Certain Accounting Changes..............................44
SECTION 7. FINANCIAL COVENANT OF BORROWER..........................44
7.1 Minimum Consolidated Tangible Net Worth.................45
SECTION 8. EVENTS OF DEFAULT AND REMEDIES..........................45
8.1 Events of Default.......................................45
8.1.1 Failure to Make Payments......................45
8.1.2 Other Agreements..............................45
8.1.3 Breach of Covenants...........................46
8.1.4 Breach of Representations or Warranties.......46
8.1.5 Failure to Cure...............................46
8.1.6 Insolvency....................................46
8.1.7 Bankruptcy Proceedings........................46
8.1.8 Material Adverse Effect.......................46
8.1.9 Judgments, Writs and Attachments..............46
8.1.10 Legal Obligations...............................47
8.1.11 Growth Fund Agreement...........................47
8.1.12 TEC AcquiSub Agreement........................47
8.1.13 Criminal Proceedings............................47
8.1.14 Action by Governmental Authority................47
8.1.15 Governmental Decrees............................47
8.2 Waiver of Default.......................................48
8.3 Remedies................................................48
8.4 Set-Off.................................................48
8.5 Rights and Remedies Cumulative..........................49
SECTION 9. AGENT...................................................49
9.1 Appointment.............................................49
9.2 Delegation of Duties....................................50
9.3 Exculpatory Provisions..................................50
9.4 Reliance by Agent.......................................50
9.5 Notice of Default.......................................51
9.6 Non-Reliance on Agent and Other Lenders.................51
9.7 Indemnification.........................................51
9.8 Agent in Its Individual Capacity........................52
9.9 Resignation and Appointment of Successor Agent..........52
SECTION 10. EXPENSES AND INDEMNITIES................................52
10.1 Expenses................................................52
10.2 Indemnification.........................................53
10.2.1 General Indemnity.............................53
10.2.2 Environmental Indemnity.......................53
10.2.3 Survival; Defense.............................54
SECTION 11. MISCELLANEOUS...........................................54
11.1 Survival................................................54
11.2 No Waiver by Agent or Lenders...........................54
11.3 Notices.................................................54
11.4 Headings................................................55
11.5 Severability............................................55
11.6 Entire Agreement; Construction; Amendments and Waivers..55
11.7 Reliance by Lenders.....................................56
11.8 Marshalling; Payments Set Aside.........................56
11.9 No Set-Offs by Borrower.................................56
11.10 Binding Effect, Assignment..............................56
11.11 Counterparts............................................57
11.12 Equitable Relief........................................58
11.13 Written Notice of Claims; Claims Bar....................58
11.14 Waiver of Punitive Damages..............................58
11.15 Governing Law...........................................58
11.16 Consent to Jurisdiction.................................58
11.17 Waiver of Jury Trial....................................59
WAREHOUSING CREDIT AGREEMENT
THIS WAREHOUSING CREDIT AGREEMENT is entered into as of May 31, 1996,
by and between AMERICAN FINANCE GROUP, INC., a Delaware corporation
("Borrower"), and FIRST UNION NATIONAL BANK OF NORTH CAROLINA ("FUNB") and each
other financial institution which may hereafter execute and deliver an
instrument of assignment with respect to this Agreement pursuant to Section
11.10 (any one individually, a "Lender," and collectively, "Lenders"), and FUNB,
as agent on behalf of Lenders (not in its individual capacity, but solely as
agent, "Agent").
RECITALS
A. Borrower desires to obtain from Lenders a revolving credit facility
with an aggregate principal availability up to but not to exceed the maximum
amount set forth on Schedule A for the purpose of financing the purchase of
finance leases for periods up to one hundred eighty (180) days, all as more
particularly described below; and
B. Lenders have agreed to make such credit available to Borrower, but
only upon the terms and subject to the conditions hereinafter set forth and in
reliance on the representations and warranties set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants hereinafter set forth, and intending to be legally bound, the
parties hereto agree as follows:
. 1. DEFINITIONS
. As used herein, the following terms have the following meanings:
"Acquisition" means any transaction, or any series of related
transactions, by which Borrower directly or indirectly (a) acquires any ongoing
business or all or substantially all of the assets of any Person or any division
thereof, whether through a purchase of assets, merger or otherwise, or (b)
acquires (in one transaction or as the most recent transaction in a series of
transactions) control of at least a majority of the stock of a corporation
having ordinary voting power for the election of directors, or (c) acquires
control of at least a majority of the ownership interests in any partnership,
limited liability company or joint venture.
"Adjustable LIBOR" means, for each Interest Period in respect of LIBOR
Loans, an interest rate per annum (rounded upward to the nearest 1/16th of one
percent (0.0625%)) determined pursuant to the following formula:
Adjusted LIBOR = LIBOR divided by 1.00 - Eurodollar Reserve Percentage
1The Adjusted LIBOR shall be adjusted automatically as of the effective date of
any change in the Eurodollar Reserve Percentage.
"Administrative Lease" means any Investment Grade Lease which would
otherwise constitute an Eligible Lease but for the fact that payments thereunder
are more than ninety (90) days delinquent, but no more than one hundred eighty
(180) days delinquent, for reasons determined by Borrower to be unrelated to the
lessee's financial ability to make scheduled lease payments. For purposes of
this Agreement, Administrative Leases shall be considered Eligible Leases.
"Advance" means any Advance made or to be made by any Lender to
Borrower as set forth in Section 2.1.1.
"Affiliate" means, with respect to any Person, (a) each Person that,
directly or indirectly, through one or more intermediaries, owns or controls,
whether beneficially or as a trustee, guardian or other fiduciary, five percent
(5.0%) or more of the stock having ordinary voting power in the election of
directors of such Person or of the ownership interests in any partnership or
joint venture, (b) each Person that controls, is controlled by or is under
common control with such Person or any Affiliate of such Person, or (c) each of
such Person's officers, directors, joint venturers and partners; provided,
however, that in no case shall any Lender or Agent be deemed to be an Affiliate
of Borrower for purposes of this Agreement. For the purpose of this definition,
"control" of a Person shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of its management or policies, whether
through the ownership of voting securities, by contract or otherwise.
"AFG Master Trust Program" means the program for the sale of Leases
under the Pooling and Servicing Agreement and Indenture of Trust dated as of
July 1, 1995, by and among AFG Credit Corporation, as transferor, Borrower, as
servicer, and Bankers Trust Company, as trustee and collateral trustee on behalf
of the AFG Master Trust.
"Agent" means FUNB solely when acting in its capacity as the Agent
under this Agreement or any of the other Loan Documents, and any successor
Agent.
"Agent's Side Letter" means the side letter agreement dated as of the
date hereof, by and among Borrower, TEC AcquiSub, each of the Growth Funds and
Agent.
"Agreement" means this Warehousing Credit Agreement dated as of May 31,
1996, including all amendments, modifications and supplements hereto, renewals,
extensions or restatements hereof, and all appendices, exhibits and schedules to
any of the foregoing, and shall refer to the Agreement as the same may be in
effect from time to time.
"Applicable Margin" means:
(a) with respect to Prime Rate Loans, zero percent
(0.00%); and
(b) with respect to LIBOR Loans, two percent (2.00%).
"Assignment and Acceptance" has the meaning set forth in Section
11.11.2.
"Bank Affiliate" means a Person engaged primarily in the business of
commercial banking and that is an Affiliate of a Lender or of a Person of which
a Lender is an Affiliate.
"Bankruptcy Code" means the Bankruptcy Code of 1978, as amended, as
codified under Title 11 of the United States Code, and the Bankruptcy Rules
promulgated thereunder, as the same may be in effect from time to time.
"Borrowing Base" means, as at and for any date of determination, an
amount not to exceed the lesser of:
(c) an amount equal to one hundred percent (100.0%)
of the aggregate Discounted Present Value of all Eligible Leases then owned of
record by Borrower, computed (i) with respect to any requested Loan, as of the
requested Funding Date (and shall include the aggregate Discounted Present Value
of all Eligible Leases to be acquired with the proceeds of the requested Loan),
and (ii) with respect to the delivery of any monthly Borrowing Base Certificate
to be furnished pursuant to Section 5.1.3, as of the last day of the calendar
month for which such Borrowing Base Certificate is furnished; provided, however,
that there shall be excluded from the calculation under this clause (a), (x) the
aggregate Discounted Present Value in excess of $2,000,000 of otherwise Eligible
Leases that are not Investment Grade Leases, (y) the aggregate Discounted
Present Value in excess of $1,000,000 of Administrative Leases; or
(d) an amount equal to eighty-five percent (85.0%) of
the aggregate Invoice Price of all Eligible Equipment subject to an Eligible
Lease then owned of record by Borrower computed (i) with respect to any
requested Loan, as of the requested Funding Date (and shall include the item(s)
of Eligible Equipment leased pursuant to all Eligible Leases to be acquired with
the proceeds of the requested Loan), and (ii) with respect to the delivery of
any monthly Borrowing Base Certificate to be furnished pursuant to Section
5.1.3, as of the last day of the calendar month for which such Borrowing Base
Certificate is furnished.
"Borrowing Base Certificate" means a certificate with appropriate
insertions setting forth the components of the Borrowing Base as of the last day
of the month for which such certificate is submitted or as of a requested
Funding Date, as the case may be, which certificate shall be substantially in
the form set forth in Exhibit B and certified by a Responsible Officer of
Borrower.
"Business Day" means any day which is not a Saturday, Sunday or a legal
holiday under the laws of the States of California or North Carolina or is not a
day on which banking institutions located in the States of California or North
Carolina are authorized or permitted by law or other governmental action to
close and, with respect to LIBOR Loans, means any day on which dealings in
foreign currencies and exchanges may be carried on by Agent and Lenders in the
London interbank market.
"Cash Equivalents" means:
(e) securities issued or unconditionally guaranteed
or insured by the United States Government or any agency or any State thereof
and backed by the full faith and credit of the United States or such State
having maturities of not more than six (6) months from the date of acquisition;
(f) certificates of deposit, time deposits,
Eurodollar time deposits, repurchase agreements, reverse repurchase agreements,
or bankers' acceptances, having in each case a tenor of not more than six (6)
months, issued by any Lender, or by any nationally or state chartered commercial
bank or any branch or agency of a foreign bank licensed to conduct business in
the United States having combined capital and surplus of not less than
$100,000,000 whose short-term securities are rated at least A-1 by Standard &
Poor's Corporation and P-1 by Moody's Investors Service, Inc.; and
(g) commercial paper of an issuer rated at least A-1
by Standard & Poor's Corporation or P-1 by Moody's Investor Service, Inc., and
in either case having a tenor of not more than six (6) months.
"Casualty Loss" means any of the following events with respect to any
item of Equipment: (a) the actual total loss or compromised total loss of such
item of Equipment; (b) such item of Equipment shall become lost, stolen,
destroyed, damaged beyond repair or permanently rendered unfit for use for any
reason whatsoever; (c) the seizure of such item of Equipment for a period
exceeding sixty (60) days or the condemnation or confiscation of such item of
Equipment; or (d) such item of Equipment shall be deemed under its Lease to have
suffered a casualty loss as to the entire item of Equipment.
"Charges" means all federal, state, county, city, municipal, local,
foreign or other governmental taxes, levies, assessments, charges or claims, in
each case then due and payable, upon or relating to (a) the Loans hereunder, (b)
Borrower's employees, payroll, income or gross receipts, (c) Borrower's
ownership or use of any of its Properties or assets, or (d) any other aspect of
Borrower's business.
"Closing" means the time at which each of the conditions precedent set
forth in Section 3 to the making of the first Loan hereunder shall have been
duly fulfilled or satisfied by Borrower.
"Closing Date" means the date on which Closing occurs.
"Code" means the Internal Revenue Code of 1986, as amended, the
Treasury Regulations adopted thereunder and the Treasury Regulations proposed
thereunder (to the extent Requisite Lenders, in their sole discretion,
reasonably determine that such proposed regulations set forth the regulations
that apply in the circumstances), as the same may be in effect from time to
time.
"Collateral" means the Collateral described in the Security Agreement.
"Commitment" means with respect to each Lender the amounts set forth on
Schedule A and "Commitments" means all such amounts collectively, as each may be
amended from time to time upon the execution and delivery of an instrument of
assignment pursuant to Section 11.10, which amendments shall be evidenced on
Schedule 1.1.
"Commitment Termination Date" means May 23, 1997.
"Compliance Certificate" means a certificate signed by a Responsible
Officer of Borrower, substantially in the form set forth in Exhibit C, with such
changes therein as the Required Lenders may from time to time reasonably request
for the purpose of having such certificate disclose the matters certified
therein and the method of computation thereof.
"Consolidated Intangible Assets" means, for any Person, as measured at
any date of determination on a consolidated basis, all intangible assets of such
Person.
"Consolidated Net Worth" means, for any Person, as measured at any date
of determination, the difference between Consolidated Total Assets and
Consolidated Total Liabilities.
"Consolidated Tangible Net Worth" means, for any Person, as measured at
any date of determination, the difference between Consolidated Net Worth and
Consolidated Intangible Assets.
"Consolidated Total Assets" means, for any Person, as measured at any
date of determination on a consolidated basis, all assets of such Person.
"Consolidated Total Liabilities" means, for any Person, as measured at
any date of determination on a consolidated basis, all liabilities of such
Person.
"Contingent Obligation" means, as to any Person, (a) any Guaranty
Obligation of that Person and (b) any direct or indirect obligation or
liability, contingent or otherwise, of that Person, (i) in respect of any letter
of credit or similar instrument issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of drawings, (ii) with
respect to the Indebtedness of any partnership or joint venture of which such
Person is a partner or a joint venturer, (iii) to purchase any materials,
supplies or other property from, or to obtain the services of, another Person if
the relevant contract or other related document or obligation requires that
payment for such materials, supplies or other property, or for such services,
shall be made regardless of whether delivery of such materials, supplies or
other property is ever made or tendered, or such services are ever performed or
tendered, or (iv) in respect of any interest rate protection contract that is
not entered into in connection with a bona fide hedging operation that provides
offsetting benefits to such Person. The amount of any Contingent Obligation
shall (subject, in the case of Guaranty Obligations, to the last sentence of the
definition of "Guaranty Obligation") be deemed equal to the maximum reasonably
anticipated liability in respect thereof, and shall, with respect to clause
(b)(iv) of this definition, be marked to market on a current basis.
"Default Rate" has the meaning set forth in Section 2.3.
"Designated Deposit Account" means a demand deposit account maintained
by Borrower with FUNB designated by written notice from Borrower to Agent.
"Discounted Present Value" means, with respect to a Lease, the present
value of the unpaid balance of the total rent for the remaining Lease term,
discounted at the then effective two-year U.S. Treasury Bill rate plus 2.45%.
"Dollars" and the sign "$" means lawful money of the United States of
America.
"EGF" means PLM Equipment Growth Fund, a California limited
partnership.
"EGF II" means PLM Equipment Growth Fund II, a California limited
partnership.
"EGF III" means PLM Equipment Growth Fund III, a California limited
partnership.
"EGF IV" means PLM Equipment Growth Fund IV, a California limited
partnership.
"EGF V" means PLM Equipment Growth Fund V, a California limited
partnership.
"EGF VI" means PLM Equipment Growth Fund VI, a California limited
partnership.
"EGF VII" means PLM Equipment Growth Fund VII, a California limited
partnership.
"Eligible Assignee" means (a) a commercial bank organized under the
laws of the United States, or any state thereof, and having a combined capital
and surplus of at least $100,000,000, (b) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development, or a political subdivision of any such country, and
having a combined capital and surplus of at least $100,000,000, provided that
such bank is acting through a branch or agency located in the United States, and
(c) any Bank Affiliate.
"Eligible Equipment" means any item of Equipment other than commercial
jet aircraft designed to carry more than fifty (50) passengers or self-powered
ocean-going vessels.
"Eligible Lease" means any Lease in respect of which the lessee and
Lease terms (including, without limitation, as to credit quality, rental rate,
maturity and insurance coverage) are acceptable to Agent, in its sole
discretion, and otherwise comply with the following requirements:
(h) the original term shall be less than or equal to
eighty-four (84) months;
(i) the lessee shall not be a Governmental Authority;
(j) Lease payments shall be due in United States
Dollars;
(k) the lessee shall not be in default under the
Lease (except as permitted by clause (f), below) or subject to bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings for
relief under any bankruptcy or similar insolvency law;
(l) neither the Lease nor the Equipment leased
thereunder shall be subject to any Lien of any nature other than the Lien
granted in favor of Agent on behalf of Lenders under the Security Agreement and
the other Security Documents;
(m) amounts due under the Lease shall be less than
sixty (60) days delinquent at the time of the Funding Date related to the Lease
and remain at all times less than ninety (90) days delinquent, unless such Lease
is an Administrative Lease;
(n) the Lease shall contain a "hell or highwater"
provision which unconditionally obligates the lessee to maintain the Equipment
in good working order, bear all costs of operating such Equipment and make
periodic Lease payments, including, without limitation, taxes, notwithstanding
damage to or destruction of the Equipment leased thereunder or any other event;
(o) the Lease shall not be subject to cancellation by
the lessee and shall not permit early termination unless the lessee pays an
amount not less than the Discounted Present Value of the Lease;
(p) payments under the Lease shall be absolute,
unconditional obligations of the lessee without the right to offset for any
reason;
(q) the Lease shall require the lessee to maintain
the Equipment in good working order and to bear the costs of operating and
maintaining the Equipment, including, without limitation, taxes and insurance;
(r) the Lease shall permit the lessor to accelerate
all Lease payments in the event of the lessee's default;
(s) payments under the Lease shall be made no less
frequently than quarterly;
( (t) ( the Lease shall provide that in the event of
a Casualty Loss, the lessor shall have the option, at the lessee's sole cost and
expense, to
(i) repair the Equipment to good condition
and working order,
(ii) replace the Equipment with like
Equipment of the same or later model in good repair, condition and working
order, or
(iii) require the lessee to pay to the
lessor the Stipulated Loss Value of the Equipment; and
(u) the Equipment subject to the Lease shall be
Eligible Equipment. Any Lease which is an Eligible Lease will cease to be an
Eligible Lease at any time it no longer meets all of the foregoing requirements.
"Employee Benefit Plan" means any Pension Plan and any employee welfare
benefit plan, as defined in Section 3(1) of ERISA, that is maintained for the
employees of Borrower or any ERISA Affiliate of Borrower.
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law or for release or injury
to the environment or threat to public health, personal injury (including
sickness, disease or death), property damage, natural resources damage, or
otherwise alleging liability or responsibility for damages (punitive or
otherwise), cleanup, removal, remedial or response costs, restitution, civil or
criminal penalties, injunctive relief, or other type of relief, resulting from
or based upon (a) the presence, placement, discharge, emission or release
(including intentional and unintentional, negligent and non-negligent, sudden or
non-sudden, accidental or non-accidental placement, spills, leaks, discharges,
emissions or releases) of any Hazardous Material at, in, or from Property,
whether or not owned by Borrower, or (b) any other circumstances forming the
basis of any violation, or alleged violation, of any Environmental Law.
"Environmental Laws" means all foreign, federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental, health, safety and land use
matters, including the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Clean Air Act, the Federal Water Pollution Control
Act of 1972, the Solid Waste Disposal Act, the Federal Resource Conservation and
Recovery Act, the Toxic Substances Control Act and the Emergency Planning and
Community Right-to-Know Act.
"Environmental Permit" has the meaning set forth in Section 4.15.2.
"Equipment" means the assets (including office or other equipment)
leased to a lessee pursuant to a Lease.
"Equipment Growth Funds" means any and all of EGF, EGF II, EGF III, EGF
IV, EGF V, EGF VI, EGF VII and Income Fund I.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, as the same may be in effect from time to time, and any successor
statute.
"ERISA Affiliate" means, as applied to any Person, any trade or
business (whether or not incorporated) which is a member of a group of which
that Person is a member and which is under common control within the meaning of
the regulations promulgated under Section 414 of the Code.
"Eurodollar Reserve Percentage" means the maximum reserve percentage
(expressed as a decimal, rounded upward to the nearest 1/100th of one percent
(0.01%)) in effect from time to time (whether or not applicable to any Lender)
under regulations issued by the Federal Reserve Board for determining the
maximum reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to Eurocurrency liabilities having a
term comparable to such Interest Period.
"Event of Default" means any of the events set forth in Section 8.1.
"Facility" means the total Commitments described in Schedule A, as such
Schedule A may be amended from time to time as set forth on Schedule 1.1, for
the revolving credit facility described in Section 2.1.1 to be provided by
Lenders to Borrower according to each Lender's Pro Rata Share.
"Federal Funds Rate" means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)". If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the "Composite 3:30 p.m.
Quotation") for such day under the caption "Federal Funds Effective Rate". If on
any relevant day the appropriate rate for such previous day is not yet published
in either H.15(519) or the Composite 3:30 p.m. Quotation, the rate for such day
will be the arithmetic mean of the rates for the last transaction in overnight
Federal funds arranged prior to 9:00 a.m. (New York time) on that day by each of
three leading brokers of Federal funds transactions in New York City selected by
Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System and any successor thereto.
"Fee Letter" means the fee letter agreement dated as of the date
hereof, by and among Borrower, TEC AcquiSub, each of the Growth Funds and Agent,
on behalf and for the benefit of Lenders, in form and substance satisfactory to
Lenders.
"Form 1001" has the meaning set forth in Section 2.14.6.
"Form 4224" has the meaning set forth in Section 2.14.6.
"FSI" means PLM Financial Services, Inc., a Delaware corporation.
"Funding Date" means with respect to any proposed borrowing hereunder,
the date funds are advanced to Borrower for any Loan.
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar function of comparable stature and authority within the accounting
profession), or in such other statements by such other entity as may be in
general use by significant segments of the U.S. accounting profession, which are
applicable to the circumstances as of the date of determination.
"Governmental Authority" means (a) any federal, state, county,
municipal or foreign government, or political subdivision thereof, (b) any
governmental or quasi-governmental agency, authority, board, bureau, commission,
department, instrumentality or public body, (c) any court or administrative
tribunal or (d) with respect to any Person, any arbitration tribunal or other
non-governmental authority to whose jurisdiction that Person has consented.
"Growth Funds" means any and all of EGF III, EGF IV, EGF V, EGF VI, EGF
VII and Income Fund I.
"Growth Fund Agreement" means the Second Amended and Restated
Warehousing Credit Agreement dated as of the date hereof by and among each of
the Growth Funds, Lenders and Agent, as the same may from time to time be
amended, modified, supplemented, renewed, extended or restated.
"Guarantor" means any Person who executes a written guaranty of the
Obligations, including, without limitation, FSI under the Guaranty.
"Guaranty" means that certain Guaranty dated as of the date hereof,
substantially in the form of Exhibit E hereto, executed by FSI in favor of
Lenders and Agent.
"Guaranty Obligation" means, as applied to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease for
capital equipment other than Equipment under an Eligible Lease, dividend, letter
of credit or other obligation (the "primary obligations") of another Person (the
"primary obligor"), including any obligation of that Person, whether or not
contingent, (a) to purchase, repurchase or otherwise acquire such primary
obligations or any property constituting direct or indirect security therefor,
or (b) to advance or provide funds (i) for the payment or discharge of any such
primary obligation, or (ii) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet item, level of income or financial condition of the primary
obligor, or (c) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation, or (d) otherwise
to assure or hold harmless the holder of any such primary obligation against
loss in respect thereof. The amount of any Guaranty Obligation shall be deemed
equal to the stated or determinable amount of the primary obligation in respect
of which such Guaranty Obligation is made or, if not stated or if
indeterminable, the maximum reasonably anticipated liability in respect thereof.
"Hazardous Materials" means all those substances which are regulated
by, or which may form the basis of liability under, any Environmental Law,
including all substances identified under any Environmental Law as a pollutant,
contaminant, hazardous waste, hazardous constituent, special waste, hazardous
substance, hazardous material, or toxic substance, or petroleum or petroleum
derived substance or waste.
"Income Fund I" means Professional Lease Management Income Fund I,
L.L.C., a Delaware limited liability company.
"Indebtedness" means, as to any Person, (a) all indebtedness of such
Person for borrowed money, (b) all leases of equipment of such Person as lessee,
(c) to the extent not included in clause (b), above, all capital leases of such
Person as lessee, (d) any obligation of such Person for the deferred purchase
price of Property or services (other than trade or other accounts payable in the
ordinary course of business and not more than ninety (90) days past due), (e)
any obligation of such Person that is secured by a Lien on assets of such
Person, whether or not that Person has assumed such obligation or whether or not
such obligation is non-recourse to the credit of such Person, (f) obligations of
such Person arising under acceptance facilities or under facilities for the
discount of accounts receivable of such Person and (g) any obligation of such
Person to reimburse the issuer of any letter of credit issued for the account of
such Person upon which a draw has been made.
"Indemnified Liability" has the meaning set forth in Section 10.2.1.
"Indemnified Person" has the meaning set forth in Section 10.2.1.
"Interest Differential" means, with respect to any prepayment of a
LIBOR Loan on a day other than an Interest Payment Date on which such LIBOR Loan
matures, the difference between (a) the per annum interest rate payable with
respect to such LIBOR Loan as of the date of the prepayment and (b) the Adjusted
LIBOR on, or as near as practicable to, the date of the prepayment for a LIBOR
Loan commencing on such date and ending on the last day of the applicable
Interest Period. The determination of the Interest Differential by Agent shall
be conclusive in the absence of manifest error.
"Interest Payment Date" means, with respect to any LIBOR Loan, the last
day of each Interest Period applicable to such Loan and, with respect to Prime
Rate Loans, the first Business Day of each calendar month following the Funding
Date of such Prime Rate Loan.
"Interest Period" means, with respect to any LIBOR Loan, the one-month,
two-month or three-month period selected by the Borrower pursuant to Section 2,
in each instance commencing on the applicable Funding Date of the Loan;
provided, however, that any Interest Period which would otherwise end on a day
that is not a Business Day shall end on the next succeeding Business Day except
that in the instance of any LIBOR Loan, if such next succeeding Business Day
falls in the next calendar month, the Interest Period shall end on the next
preceding Business Day.
"Investment" means, when used in connection with any Person, any
investment by or of that Person, whether by means of purchase or other
acquisition of stock or other securities of any other Person or by means of loan
or advance (other than advances to employees for moving or travel expenses,
drawing accounts and similar expenditures in the ordinary course of business),
capital contribution, guaranty or other debt or equity participation or
interest, or otherwise, in any other Person, including any partnership and joint
venture interests of such Person in any other Person or in any item of
transportation-related equipment, owned by a Person unaffiliated with Borrower
and on lease to another third party, in which Borrower acquires a right to
share, directly or indirectly.
"Investment Company Act" means the Investment Company Act of 1940, as
amended (15 U.S.C. ss. 80a-1 et seq.), as the same may be in effect from time to
time, or any successor statute thereto.
"Investment Grade Lease" means an Eligible Lease under which the lessee
has a minimum investment grade rating by Moody's Investors Service, Inc. of
Baa-, Standard & Poor's Corporation of BBB- or the equivalent under the Alcar
Debt Rater System.
"Invoice Price" means the sum of the purchase price (including
modifications, as applicable), delivery charges, third party brokerage fees and
other reasonable closing costs, if any (provided that delivery charges, third
party brokerage fees and closing costs shall be included in the computation of
the "Invoice Price" only to the extent that they do not, in the aggregate,
exceed five percent (5.0%) of the total purchase price), and all applicable
taxes, paid by Borrower for or with respect to any item of Equipment.
"IRS" means the Internal Revenue Service and any successor thereto.
"Lease" means each and every item of chattel paper, installment sales
agreement, equipment lease or rental agreement (including progress payment
authorizations) relating to an item of Equipment of which Borrower is the
lessor. The term "Lease" includes (a) all payments to be made thereunder, (b)
all rights of Borrower therein, and (c) any and all amendments, renewals,
extensions or guaranties thereof.
"Lease Sale Program" means any lease sale program established by a
Subsidiary of Borrower, so long as any debt incurred by such Subsidiary is
non-recourse to Borrower, including, without limitation, the AFG Master Trust
Program and the United Bank of Kuwait Program.
"Lending Office" means, with respect to any Lender, the office or
offices of the Lender specified as its lending office opposite its name on the
applicable signature page hereto, or such other office or offices of the Lender
as it may from time to time notify Borrower and Agent.
"LIBOR" means, with respect to any Loan to be made, continued as or
converted into a LIBOR Loan, the London Inter-Bank Offered Rate (determined
solely by Agent), rounded upward to the nearest 1/16th of one percent (0.0625%),
at which Dollar deposits are offered to Agent by major banks in the London
interbank market at or about 11:00 a.m., London time, on the second Business Day
prior to the first day of the related Interest Period with respect to such Loan
in an aggregate amount approximately equal to the amount of such Loan and for a
period of time comparable to the number of days in the applicable Interest
Period. The determination of LIBOR by Agent shall be conclusive in the absence
of manifest error.
"LIBOR Loan" means a Loan that bears interest based on Adjusted LIBOR.
"Lien" means any mortgage, pledge, hypothecation, assignment for
security, security interest, encumbrance, levy, lien or charge of any kind,
whether voluntarily incurred or arising by operation of law or otherwise,
affecting any Property, including any agreement to grant any of the foregoing,
any conditional sale or other title retention agreement, any lease in the nature
of a security interest, and the filing of or agreement to file or deliver any
financing statement (other than a precautionary financing statement with respect
to a lease that is not in the nature of a security interest) under the UCC or
comparable law of any jurisdiction.
"Loan" has the meaning set forth in Section 2.1.1(a)(i).
"Loan Document" when used in the singular and "Loan Documents" when
used in the plural means any and all of this Agreement, the Note, the Security
Agreement, the Lockbox Agreement and the Guaranty and any and all other
agreements, documents and instruments executed and delivered by or on behalf or
support of Borrower to Agent or any Lender or any of their respective authorized
designees evidencing or otherwise relating to the Advances and the Liens granted
to Agent, on behalf of Lenders, with respect to the Advances, as the same may
from time to time be amended, modified, supplemented or renewed.
"Lockbox" has the meaning set forth in Section 5.9.
"Lockbox Agreement" means the Agreement of even date herewith between
Borrower, FUNB and Agent on behalf of Lenders, substantially in the form of
Exhibit G, relating to the Lockbox.
"Material Adverse Effect" means any set of circumstances or events
which (a) has or could reasonably be expected to have any material adverse
effect whatsoever upon the validity or enforceability of any Loan Document, (b)
is or could reasonably be expected to be material and adverse to the condition
(financial or otherwise) or business operations of Borrower or Guarantor, (c)
materially impairs or could reasonably be expected to materially impair the
ability of Borrower or Guarantor to perform its Obligations, or (d) materially
impairs or could reasonably be expected to materially impair the ability of
Agent or any Lender to enforce any of its or their legal remedies pursuant to
the Loan Documents.
"Maximum Availability" has the meaning set forth in Section 2.1.1.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA, and to which Borrower or any ERISA Affiliate of Borrower is
making, or is obligated to make, contributions or has made, or been obligated to
make, contributions within the preceding five (5) years.
"Note" has the meaning set forth in Section 2.1.1(a)(i), and any and
all replacements, extensions, substitutions and renewals thereof.
"Notice of Borrowing" means a notice given by Borrower to Agent in
accordance with Section 2.7, substantially in the form of Exhibit H, with
appropriate insertions.
"Notice of Conversion/Continuation" means a notice given by Borrower to
Agent in accordance with Section 2.8, substantially in the form of Exhibit I,
with appropriate insertions.
"Obligations" means all loans, advances, liabilities and obligations
for monetary amounts owing by Borrower to any Lender or Agent, whether due or to
become due, matured or unmatured, liquidated or unliquidated, contingent or
non-contingent, and all covenants and duties regarding such amounts, of any kind
or nature, arising under any of the Loan Documents. This term includes, without
limitation, all principal, interest (including interest that accrues after the
commencement of a case or proceeding against Borrower under the Bankruptcy
Code), fees, including, without limitation, any and all prepayment fees,
facility fees, commitment fees, arrangement fees, agent fees and attorneys' fees
and any and all other fees, expenses, costs or other sums chargeable to Borrower
under any of the Loan Documents.
"Opinion of Counsel" means the favorable written legal opinion of
Stephen Peary, general counsel of Borrower and Guarantor substantially in the
form of Exhibit F, together with copies of any officer's certificate or legal
opinion of another counsel or law firm specifically identified and expressly
relied upon by such counsel in its opinion.
"Other Taxes" has the meaning set forth in Section 2.14.2.
"Overadvance" has the meaning set forth in Section 2.1.1(a)(iii).
"PBGC" means the Pension Benefit Guaranty Corporation and any successor
thereto.
"Pension Plan" means any employee pension benefit plan, as defined in
Section 3(2) of ERISA, that is maintained for the employees of Borrower or any
ERISA Affiliate of Borrower, other than a Multiemployer Plan.
"Permitted Liens" has the meaning set forth in Section 6.1.
"Permitted Rights of Others" means, as to any Property in which a
Person has an interest, (a) an option or right to acquire a Lien that would be a
Permitted Lien, (b) the reversionary interest of a lessor under a lease of such
Property, and (c) an option or right of the lessee under a lease of such
Property to purchase such Property at fair market value.
"Person" means any individual, sole proprietorship, partnership, joint
venture, limited liability company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or Governmental Authority.
"PLMI" means PLM International, Inc., a Delaware corporation, of which
Borrower is a wholly owned subsidiary.
"Potential Event of Default" means a condition or event which, after
notice or lapse of time or both, will constitute an Event of Default.
"Prepayment Date" has the meaning set forth in Section 2.2.2.
"Prime Rate" means, at any time, the rate of interest per annum
publicly announced from time to time by FUNB as its prime rate. Each change in
the Prime Rate shall be effective as of the opening of business on the day such
change in the Prime Rate occurs. The parties hereto acknowledge that the rate
announced publicly by FUNB as its Prime Rate is an index or base rate and shall
not necessarily be its lowest rate charged to FUNB's customers or other banks.
"Prime Rate Loan" means any borrowing which bears interest at a rate
determined with reference to the Prime Rate.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, whether tangible or intangible.
"Pro Rata Share" means, for any Lender, the proportion such Lender's
Commitment with respect to the Facility has to the aggregate of all Commitments
with respect to the Facility.
"Public Utility Holding Company Act" means the Public Utility Holding
Company Act of 1935, as amended (15 U.S.C. ss. 79 et seq.) as the same shall be
in effect from time to time, and any successor statute thereto.
"Regulations G, T, U and X" means, collectively, Regulations G, T, U
and X adopted by the Federal Reserve Board (12 C.F.R. Parts 207, 220, 221 and
224, respectively) and any other regulation in substance substituted therefor.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule, regulation, guideline or determination of an arbitrator
or of a Governmental Authority, in each case applicable to or binding upon the
Person or any of its property or to which the Person or any of its property is
subject.
"Requisite Lenders" means any combination of Lenders whose combined Pro
Rata Share (and voting interest with respect thereto) of all amounts outstanding
under this Agreement, or, in the event there are no amounts outstanding, the
Commitments, is greater than sixty-six and two-thirds percent (66_%) of all such
amounts outstanding or the total Commitments, as the case may be.
"Responsible Officer" means any of the President, Executive Vice
President, Chief Financial Officer, Secretary or Corporate Controller of
Borrower having authority to request Loans or perform other duties required
hereunder.
"SEC" means the Securities and Exchange Commission and any successor
thereto.
"Security Agreement" means that certain Security Agreement dated as of
the date hereof, between Borrower and Agent, on behalf of Lenders, substantially
in the form of Exhibit D hereto, including all amendments, modifications and
supplements thereto and all appendices, exhibits and schedules to any of the
foregoing, and shall refer to the Security Agreement as the same may be in
effect from time to time.
"Security Documents" means the Security Agreement, each chattel
mortgage, ship mortgage or similar security agreement, mortgage or other
agreement or document entered into with respect to this Agreement, each UCC-1
financing statement delivered pursuant hereto and any and all other related
documents.
"Solvent" means, as to any Person at any time, that (a) the fair value
of the Property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code; (b) the present fair saleable value of the
Property in an orderly liquidation of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its debts
as they become absolute and matured; (c) such Person is able to realize upon its
Property and pay its debts and other liabilities (including disputed, contingent
and unliquidated liabilities) as they mature in the normal course of business;
(d) such Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature; and (e) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person's property would constitute unreasonably small capital.
"Stipulated Loss Value" means, with respect to any Lease, the amount
payable by the lessee after a Casualty Loss with respect to the Equipment
subject thereto.
"Subsidiary" means, with respect to any Person, any corporation,
association, partnership, limited liability company (other than Equipment Growth
Funds) or other business entity of which an aggregate of fifty percent (50.0%)
or more of the beneficial interest (in the case of a partnership) or fifty
percent (50.0%) or more of the outstanding stock, units, or other voting
interest having ordinary voting power to elect a majority of the directors,
managers or trustees of such Person (irrespective of whether, at the time, the
stock, units or other voting interest of any other class or classes of such
Person shall have or might have voting power by reason of the happening of any
contingency) is at the time, directly or indirectly, owned legally or
beneficially by such Person and/or one or more Subsidiaries of such Person.
"Taxes" has the meaning set forth in Section 2.14.1.
"TEC" means PLM Transportation Equipment Corporation, a California
corporation and a wholly-owned Subsidiary of FSI and of which TEC AcquiSub is a
special purpose Subsidiary.
"TEC AcquiSub" means TEC AcquiSub, Inc., a California special purpose
corporation and a wholly-owned Subsidiary of TEC.
"TEC AcquiSub Agreement" means the Amended and Restated Warehousing
Credit Agreement dated as of September 27, 1995, by and among TEC AcquiSub and
Lenders and Agent, as amended by the TEC AcquiSub Amendment, and as the same
from time to time may be further amended, modified, supplemented, renewed,
extended or restated.
"TEC AcquiSub Amendment" means the Amendment No.1 to Amended and
Restated Warehousing Credit Agreement dated as of the date hereof, by and among
TEC AcquiSub and Lenders and Agent.
"Termination Event" means (a) a "reportable event" described in Section
4043 of ERISA and the regulations issued thereunder (other than a reportable
event not subject to the provision for 30-day notice to the PBGC under such
regulations), or (b) the withdrawal of Borrower, FSI or any of FSI's other
Subsidiaries or any of their ERISA Affiliates from a Pension Plan during a plan
year in which any of them was a "substantial employer" as defined in Section
4001(a)(2) of ERISA, or (c) the filing of a notice of intent to terminate a
Pension Plan or the treatment of a Pension Plan amendment as a termination under
Section 4041 of ERISA, or (d) the institution of proceedings to terminate a
Pension Plan by the PBGC, or (e) any other event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan.
"UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of North Carolina; provided, however, in the
event that, by reason of mandatory provisions of law, any and all of the
attachment, perfection or priority of the Lien of Agent, on behalf of Lenders,
in and to the Collateral is governed by the Uniform Commercial Code as in effect
in a jurisdiction other than the State of North Carolina, the term "UCC" shall
mean the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such attachment, perfection or
priority and for purposes of definitions related to such provisions.
"United Bank of Kuwait Program" means the program for the sale of
Leases under the Master Purchase Agreement dated as of January 30, 1996, by and
between Borrower and AFG/Eireann Limited Partnership II, a limited partnership
organized under the laws of the Commonwealth of Massachusetts.
. Any accounting term used in this Agreement shall have, unless
otherwise specifically provided herein, the meaning customarily given such term
in accordance with GAAP, and all financial data required to be submitted by this
Agreement shall be prepared and computed, unless otherwise specifically provided
herein, in accordance with GAAP. That certain terms or computations are
explicitly modified by the phrase "in accordance with GAAP" shall in no way be
construed to limit the foregoing.
. All other undefined terms contained in this Agreement shall, unless
the context indicates otherwise, have the meanings provided for by the UCC to
the extent the same are used or defined therein. The words "herein," "hereof"
and "hereunder" and other words of similar import refer to this Agreement as a
whole, including the Exhibits and Schedules hereto, all of which are by this
reference incorporated into this Agreement, as the same may from time to time be
amended, modified or supplemented, and not to any particular section, subsection
or clause contained in this Agreement. The term "including" shall not be
limiting or exclusive, unless specifically indicated to the contrary. The term
"or" is disjunctive; the term "and" is conjunctive. The term "shall" is
mandatory; the term "may" is permissive. Wherever from the context it appears
appropriate, each term stated in either the singular or plural shall include the
singular and plural, and pronouns stated in the masculine, feminine or neuter
gender shall include the masculine, feminine and the neuter.
. Any reference to a "Sections," "Subsection," "Exhibit," or "Schedule"
shall refer to the relevant Section or Subsection of or Exhibit or Schedule to
this Agreement, unless specifically indicated to the contrary.
. 2. AMOUNT AND TERMS OF CREDIT
. 1 Commitment to Lend
. Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Borrower set forth herein,
Lenders hereby agree to make Advances (as defined below) of immediately
available funds to Borrower, on a revolving basis, from the Closing Date until
the Business Day immediately preceding the Commitment Termination Date, in the
aggregate principal amount outstanding at any time not to exceed the lesser of
(a) the total Commitments for the Facility less the aggregate principal amount
then outstanding under the Growth Fund Agreement and the TEC AcquiSub Agreement
or (b) the Borrowing Base (such lesser amount being the "Maximum Availability"),
as more fully set forth in this Section 2.1.1.
. (a) Facility Commitments
(i) On the Funding Date requested by Borrower,
after Borrower shall have satisfied all applicable conditions precedent set
forth in Section 3, each Lender shall advance immediately available funds to
Agent (each such advance being an "Advance") evidencing such Lender's Pro Rata
Share of a loan ("Loan"). Agent shall immediately advance such immediately
available funds to Borrower at the Designated Deposit Account (or such other
deposit account at FUNB or such other financial institution as to which Borrower
and Agent shall agree at least three (3) Business Days prior to the requested
Funding Date) on the Funding Date with respect to such Loan. Borrower shall pay
interest accrued on the Loan at the rates and in the manner set forth in Section
2.1.1(b). Subject to the terms and conditions of this Agreement, the unpaid
principal amount of each Loan and all unpaid interest accrued thereon, together
with all other fees, expenses, costs and other sums chargeable to Borrower
incurred in connection therewith shall be due and payable no later than the
Commitment Termination Date. Each Loan advanced hereunder shall be evidenced by
Borrower's revolving promissory note, substantially in the form of Exhibit A
(the "Note").
(ii) The obligation of Lenders to make any Loan
from time to time hereunder shall be limited to the then applicable Maximum
Availability. For the purpose of determining the amount of the Borrowing Base
available at any one time, the amount available shall be the total amount of the
Borrowing Base as set forth in the Borrowing Base Certificate delivered to Agent
pursuant to Section 3.2.1 with respect to each requested Loan. Nothing contained
in this Agreement shall under any circumstance be deemed to require any Lender
to make any Advance under the Facility which, in the aggregate principal amount,
either (1), taking into account such Lender's Pro Rata Share of the principal
amounts outstanding under this Agreement and the making of such Advance, exceeds
the lesser of (A) such Lender's Commitment for the Facility and (B) such
Lender's Pro Rata Share of the Borrowing Base, or (2), taking into account such
Lender's Pro Rata Share of the principal amounts outstanding under this
Agreement, under the Growth Fund Agreement and under the TEC AcquiSub Agreement
and the making of such Advance, exceeds such Lender's Commitment for the
Facility.
(iii) If at any time and for any reason the
aggregate principal amount of the Loan(s) then outstanding shall exceed the
Maximum Availability (the amount of such excess, if any, being an
"Overadvance"), Borrower shall immediately, and in no event more than two (2)
Business Days thereafter, repay the full amount of such Overadvance, together
with all interest accrued thereon.
(iv) Amounts borrowed by Borrower under this
Facility may be repaid and, prior to the Commitment Termination Date and subject
to the applicable terms and conditions precedent to borrowings hereunder,
reborrowed; provided, however, that no Loan shall mature later than the
Commitment Termination Date.
(v) Each request for a Loan hereunder shall
constitute a reaffirmation by Borrower and the Responsible Officer requesting
the same that the representations and warranties contained in this Agreement are
true, correct and complete in all material respects to the same extent as though
made on and as of the date of the request, except to the extent such
representations and warranties specifically relate to an earlier date, in which
event they shall be true, correct and complete in all material respects as of
such earlier date.
. Each Loan made by Lenders hereunder shall, at
Borrower's option in accordance with the terms of this Agreement, be either in
the form of a Prime Rate Loan or a LIBOR Loan. Subject to the terms and
conditions of this Agreement, each Loan shall bear interest on the sum of the
unpaid principal balance thereof outstanding on each day from the date when
made, continued or converted until such Loan shall have been fully repaid at a
rate per annum equal to the Prime Rate, as the same may fluctuate on a daily
basis, or the Adjusted LIBOR, plus, in each case, the Applicable Margin.
Interest on each Loan funded hereunder shall be due and payable in arrears on
each Interest Payment Date, with all accrued but unpaid interest on such Loan
being due and payable on the date such Loan is repaid, whether by prepayment or
at maturity, and with all accrued but unpaid interest being due and payable on
the Commitment Termination Date.
Each Advance made by a Lender as part of a Loan hereunder and all
repayments of principal with respect to such Advance shall be evidenced by
notations made by such Lender on the books and records of such Lender; provided,
however, that the failure by such Lender to make such notations shall not limit
or otherwise affect the obligations of Borrower with respect to the repayments
of principal or payments of interest on any Advance or Loan. The aggregate
unpaid amount of each Advance set forth on the books and records of a Lender
shall be presumptive evidence of such Lender's portion of the principal amount
owing and unpaid under the Note.
. Promptly following the receipt of such documents required
pursuant to Section 3.2.1 and approval of a Loan by the Agent, Agent shall
notify by telephone, telecopier, facsimile or telex each Lender of the principal
amount (including Lender's Pro Rata Share thereof) and Funding Date of the Loan
requested by Borrower. Not later than 1:00 p.m., North Carolina time, on the
Funding Date for any Loan, each Lender shall make an Advance to Agent for the
account of Borrower in the amount of its Pro Rata Share of the Loan being
requested by Borrower. Upon satisfaction of the applicable conditions precedent
set forth in Section 3, all Advances shall be credited in immediately available
funds to the Designated Deposit Account.
. The Loans made under the Facility may be used solely for the
purpose of acquiring the specific Eligible Leases pending the sale of such
Leases under a Lease Sale Program.
. 2 Repayment and Prepayment
. Unless prepaid pursuant to Section 2.1.1.(a)(iii) or Section
2.2.2, the principal amount of each Loan hereunder shall be repaid by Borrower
to Lenders not later than the Commitment Termination Date.
. Subject to Section 2.18, Borrower may in the ordinary course
of Borrower's business, upon at least three (3) Business Days' written notice,
or telephonic notice promptly confirmed in writing to Agent, which notice shall
be irrevocable, prepay any Loan in whole or in part. Such notice of prepayment
shall specify the date and amount of such prepayment and whether such prepayment
is of Prime Rate Loans or LIBOR Loans, or any combination thereof. Such
prepayment of Loans, together with any amounts required pursuant to Section
2.18, shall be in immediately available funds and delivered to Agent not later
than 1:00 p.m., North Carolina time, on the date for prepayment stated in such
notice (the "Prepayment Date"). With respect to any prepayment under this
Section 2.2.2, all interest on the amount prepaid accrued up to but excluding
the date of such prepayment shall be due and payable on the Prepayment Date.
. Interest on the Loans shall be computed on the basis of a 365/366-day
year for all Prime Rate Loans and a 360-day year for all LIBOR Loans and the
actual number of days elapsed in the period during which such interest accrues.
In computing interest on any Loan, the date of the making of such Loan shall be
included and the date of payment shall be excluded. Each change in the interest
rate of the Prime Rate Loans based on changes in the Prime Rate and each change
in the Adjusted LIBOR based on changes in the Eurodollar Reserve Percentage
shall be effective on the effective date of such change and to the extent of
such change. Agent shall give Borrower notice of any such change in the Prime
Rate; provided, however, that any failure by Agent to provide Borrower with
notice hereunder shall not affect Agent's right to make changes in the interest
rate of any Loan based on changes in the Prime Rate. Upon the occurrence and
during the continuation of any Event of Default under this Agreement, Advances
under this Agreement will at the option of Requisite Lenders bear interest at a
rate per annum which is determined by adding two percent (2.0%) to the
Applicable Margin for such Loan (the "Default Rate"). This may result in the
compounding of interest. The imposition of a Default Rate will not constitute a
waiver of any Event of Default.
. All repayments or prepayments of principal and all payments of
interest, fees, costs, expenses and other sums chargeable to Borrower under this
Agreement, the Note or any of the other Loan Documents shall be in lawful money
of the United States of America in immediately available funds and delivered to
Agent, for the account of Lenders, not later than 1:00 p.m., North Carolina
time, on the date due at First Union National Bank of North Carolina, One First
Union Center, 301 South College Street, Charlotte, North Carolina 28288,
Attention: Elisha Sabido or such other place as shall have been designated in
writing by Agent.
. Whenever any payment to be made under this Agreement, the Note or any
of the other Loan Documents shall be stated to be due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day and
such extension of time shall in such case be included in the computation of the
payment of interest thereon; provided, however, that no Loan shall have remained
outstanding after the Commitment Termination Date.
. All payments to or for the benefit of Lenders hereunder shall be
applied in the following order: (a) at the direction of Borrower or upon prior
notice given to Borrower by Agent, then due and payable fees, expenses and
costs; (b) then due and payable interest payments and mandatory prepayments; and
(c) then due and payable principal payments and optional prepayments; provided
that if an Event of Default shall have occurred and be continuing, Lenders shall
have the exclusive right to apply any and all such payments against the then due
and owing Obligations of Borrower as Lenders may deem advisable. To the extent
Borrower fails to make payment required hereunder or under any of the other Loan
Documents, each Lender is authorized to, and at its sole option may, make such
payments on behalf of Borrower. To the extent permitted by law, all amounts
advanced by any Lender hereunder or under other provisions of the Loan Documents
shall accrue interest at the same rate as Loans hereunder.
. 7 Procedure for the Borrowing of Loans
. Each borrowing of Loans shall be made upon Borrower's
irrevocable written notice delivered to Agent in the form of a Notice of
Borrowing, executed by a Responsible Person of Borrower, with appropriate
insertions (which Notice of Borrowing must be received by Lender prior to 12:00
noon, Charlotte, North Carolina time, three (3) Business Days prior to the
requested Funding Date) specifying:
(a) the amount of the requested borrowing,
which, if a LIBOR Loan is requested, shall be not less than One Million Dollars
($1,000,000);
(b) the requested Funding Date, which shall
be a Business Day;
(c) whether the borrowing is to be comprised
of one or more LIBOR Loans or Prime Rate Loans; and
(d) the duration of the Interest Period
applicable to any such LIBOR Loans included in such Notice of Borrowing. If the
Notice of Borrowing shall fail to specify the duration of the Interest Period
for any borrowing comprised of LIBOR Loans, such Interest Period shall be one
(1) month.
. Unless Agent shall otherwise consent, during the existence
of an Event of Default or Potential Event of Default, Borrower may not elect to
have a Loan made as a LIBOR Loan.
. 8 Conversion and Continuation Elections
. Borrower may, upon irrevocable written notice to Agent:
(a) elect to convert on any Business Day,
any Prime Rate Loan (or any portion thereof in an amount equal to at least One
Million Dollars ($1,000,000) into a LIBOR Loan; or
(b) elect to convert on any Interest Payment
Date any LIBOR Loan maturing on such Interest Payment Date (or any portion
thereof) into a Prime Rate Loan; or
(c) elect to continue on any Interest
Payment Date any LIBOR Loan maturing on such Interest Payment Date (or any
portion thereof in an amount equal to at least One Million Dollars ($1,000,000);
provided, that if the aggregate amount of LIBOR Loans outstanding to Borrower
shall have been reduced, by payment, prepayment, or conversion of portion
thereof, to be less than $1,000,000, such LIBOR Loans shall automatically
convert into Prime Rate Loans, and on and after such date the right of Borrower
to continue such Loans as, and convert such Loans into, LIBOR Loans shall
terminate.
. Each conversion or continuation of Loans shall be made upon
Borrower's irrevocable written notice delivered to Agent in the form of a Notice
of Conversion/Continuation, executed by a Responsible Person of Borrower, with
appropriate insertions (which Notice of Conversion/Continuation must be received
by Lender prior to 12:00 noon, Charlotte, North Carolina time, at least three
(3) Business Days in advance of the proposed conversion date or continuation
date specifying:
(a) the proposed conversion date or
continuation date;
(b) the aggregate amount of Loans to be
converted or continued;
(c) the nature of the proposed conversion or
continuation; and
(d) the duration of the requested Interest
Period.
. If upon the expiration of any Interest Period applicable to
any LIBOR Loan, Borrower has failed to select a new Interest Period to be
applicable to such LIBOR Loan, Borrower shall be deemed to have elected to
convert such LIBOR Loan into a Prime Rate Loan effective as of the last day of
such current Interest Period.
. Unless Agent shall otherwise consent, during the existence
of an Event of Default or Potential Event of Default, Borrower may not elect to
have a Loan converted into or continued as a LIBOR Loan.
. Notwithstanding any provision of this Agreement to the contrary, each
Lender shall be entitled to fund and maintain its funding of all or any part of
its LIBOR Loans in any manner it elects, it being understood, however, that for
the purposes of this Agreement all determinations hereunder shall be made as if
such Lender actually funded and maintained each LIBOR Loan through the purchase
of deposits having a maturity corresponding to the maturity of the LIBOR Loan
and bearing an interest rate equal to the LIBOR rate (whether or not, in any
instance, Lender shall have granted any participations in such Loan). Each
Lender may, if it so elects, fulfill any commitment to make LIBOR Loans by
causing a foreign branch or affiliate to make or continue such LIBOR Loans;
provided, however, that in such event such Loans shall be deemed for the
purposes of this Agreement to have been made by such Lender, and the obligation
of Borrower to repay such Loans shall nevertheless be to such Lender and shall
be deemed held by such Lender, to the extent of such Loans, for the account of
such branch or affiliate.
. Agent shall immediately distribute to each Lender, at such address as
each Lender shall designate, its respective interest in all repayments and
prepayments of principal and all payments of interest and all fees, expenses and
costs received by Agent on the same day and in the same type of funds as payment
was received. In the event Agent does not distribute such payments on the same
day received, if such payments are received by Agent by 1:00 p.m., North
Carolina time, or if received after such time, on the next succeeding Business
Day, such payment shall accrue interest at the Federal Funds Rate.
. Unless Agent shall have been notified by any Lender no later than the
Business Day prior to the respective Funding Date of a Loan that such Lender
does not intend to make available to Agent an Advance in immediately available
funds equal to such Lender's Pro Rata Share of the total principal amount of
such Loan, Agent may assume that such Lender has made such Advance to Agent on
the date of the Loan and Agent may, in reliance upon such assumption, make
available to Borrower a corresponding Advance. If Agent has made funds available
to Borrower based on such assumption and such Advance is not in fact made to
Agent by such Lender, Agent shall be entitled to recover the corresponding
amount of such Advance on demand from such Lender. If such Lender does not
promptly pay such corresponding amount upon Agent's demand, Agent shall notify
Borrower and Borrower shall repay such Advance to Agent. Agent also shall be
entitled to recover from such Lender interest on such Advance in respect of each
day from the date such Advance was made by Agent to Borrower to the date such
corresponding amount is recovered by Agent at the Federal Funds Rate. Nothing in
this Section 2.11 shall be deemed to relieve any Lender from its obligation to
fulfill its Commitment or to prejudice any rights which Agent or Borrower may
have against such Lender as a result of any default by such Lender under this
Agreement.
. Unless Agent shall have been notified by Borrower prior to the date
on which any payment to be made by Borrower hereunder is due that Borrower does
not intend to remit such payment, Agent may, in its sole discretion, assume that
Borrower has remitted such payment when so due and Agent may, in its sole
discretion and in reliance upon such assumption, make available to each Lender
on such payment date an amount equal to such Lender's Pro Rata Share of such
assumed payment. If Borrower has not in fact remitted such payment to Agent,
each Lender shall forthwith on demand repay to Agent the amount of such assumed
payment made available to such Lender, together with interest thereon in respect
of each date from and including the date such amount was made available by Agent
to such Lender to the date such amount is repaid to Agent at the Federal Funds
Rate.
. If any Lender determines that compliance with any law or regulation
or with any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law) has or would have the effect
of reducing the rate of return on the capital of such Lender or any corporation
controlling such Lender as a consequence of, or with reference to, such Lender's
Commitment or its making or maintaining its Pro Rata Share of the Loans below
the rate which such Lender or such other corporation could have achieved but for
such compliance (taking into account the policies of such Lender or corporation
with regard to capital), then Borrower shall from time to time, upon written
demand by such Lender (with a copy of such demand to Agent), immediately pay to
such Lender such additional amounts as shall be sufficient to compensate such
Lender or other corporation for such reduction. A certificate submitted by such
Lender to Borrower, stating that the amounts set forth as payable to such Lender
are true and correct, shall be conclusive and binding for all purposes, absent
manifest error. Each Lender agrees promptly to notify Borrower and Agent of any
circumstances that would cause Borrower to pay additional amounts pursuant to
this section, provided that the failure to give such notice shall not affect
Borrower's obligation to pay any such additional amounts.
. 14 Taxes
. Subject to Subsection 2.14.7, any and all payments by
Borrower to each Lender or Agent under this Agreement shall be made free and
clear of, and without deduction or withholding for, any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender and
Agent, such taxes (including income taxes or franchise taxes) as are imposed on
or measured by each Lender's net income (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as "Taxes").
. In addition, Borrower shall pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Documents (hereinafter referred to as "Other Taxes").
. Subject to Subsection 2.14.7, Borrower shall indemnify and
hold harmless each Lender and Agent for the full amount of Taxes or Other Taxes
(including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.14) paid by such Lender or Agent and any liability
(including penalties, interest, additions to tax and expenses) arising therefrom
or with respect thereto, whether or not such Taxes or Other Taxes were correctly
or legally asserted. Payment under this indemnification shall be made within
thirty (30) days from the date any Lender or Agent makes written demand
therefor.
. If Borrower shall be required by law to deduct or withhold
any Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Lender or Agent, then, subject to Subsection 2.14.7:
(a) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.14) such Lender or
Agent, as the case may be, receives an amount equal to the sum it would have
received had no such deductions been made;
(b) Borrower shall make such deductions, and
(c) Borrower shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law.
. Within thirty (30) days after the date of any payment by
Borrower of Taxes or Other Taxes, Borrower shall furnish to Agent the original
or a certified copy of a receipt evidencing payment thereof, or other evidence
of payment satisfactory to Agent.
. Each Lender which is a foreign person (i.e., a person other
than a United States person for United States Federal income tax purposes)
shall:
(a) No later than the date upon which such
Lender becomes a party hereto deliver to Borrower through Agent two (2) accurate
and complete signed originals of IRS Form 4224 or any successor thereto ("Form
4224"), or two accurate and complete signed originals of IRS Form 1001 or any
successor thereto ("Form 1001"), as appropriate, in each case indicating that
such Lender is on the date of delivery thereof entitled to receive payments of
principal, interest and fees under this Agreement free from withholding of
United States Federal income tax;
(b) If at any time such Lender makes any
changes necessitating a new Form 4224 or Form 1001, with reasonable promptness
deliver to Borrower through Agent in replacement for, or in addition to, the
forms previously delivered by it hereunder, two accurate and complete signed
originals of Form 4224; or two accurate and complete signed originals of Form
1001, as appropriate, in each case indicating that the Lender is on the date of
delivery thereof entitled to receive payments of principal, interest and fees
under this Agreement free from withholding of United States Federal income tax;
(c) Before or promptly after the occurrence
of any event (including the passing of time but excluding any event mentioned in
(ii) above) requiring a change in or renewal of the most recent Form 4224 or
Form 1001 previously delivered by such Lender, deliver to Borrower through Agent
two accurate and complete original signed copies of Form 4224 or Form 1001 in
replacement for the forms previously delivered by the Lender; and
(d) Promptly upon Borrower's or Agent's
reasonable request to that effect, deliver to Borrower or Agent (as the case may
be) such other forms or similar documentation as may be required from time to
time by any applicable law, treaty, rule or regulation in order to establish
such Lender's tax status for withholding purposes.
. Borrower will not be required to pay any additional amounts
in respect of United States Federal income tax pursuant to Subsection 2.14.4 to
Lender for the account of any Lending Office of such Lender:
(a) If the obligation to pay such additional
amounts would not have arisen but for a failure by such Lender to comply with
its obligations under Subsection 2.14.6 in respect of such Lending Office;
(b) If such Lender shall have delivered to
Borrower a Form 4224 in respect of such Lending Office pursuant to Subsection
2.14.6 and such Lender shall not at any time be entitled to exemption from
deduction or withholding of United States Federal income tax in respect of
payments by Borrower hereunder for the account of such Lending Office for any
reason other than a change in United States law or regulations or in the
official interpretation of such law or regulations by any Governmental Authority
charged with the interpretation or administration thereof (whether or not having
the force of law) after the date of delivery of such Form 4224; or
(c) If such Lender shall have delivered to
Borrower a Form 1001 in respect of such Lending Office pursuant to Subsection
2.14.6, and such Lender shall not at any time be entitled to exemption from
deduction or withholding of United States Federal income tax in respect of
payments by Borrower hereunder for the account of such Lending Office for any
reason other than a change in United States law or regulations or any applicable
tax treaty or regulations or in the official interpretation of any such law,
treaty or regulations by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) after the date of delivery of such Form 1001.
. If, at any time, Borrower requests any Lender to deliver any
forms or other documentation pursuant to Subsection 2.14.6(d), then Borrower
shall, on demand of such Lender through Agent, reimburse such Lender for any
costs and expenses (including reasonable attorney fees) reasonably incurred by
such Lender in the preparation or delivery of such forms or other documentation.
. If Borrower is required to pay additional amounts to any
Lender or Agent pursuant to Subsection 2.14.4, then such Lender shall use its
reasonable good faith efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its Lending Office so as to
eliminate any such additional payment by Borrower which may thereafter accrue if
such change in the judgment of such Lender is not otherwise disadvantageous to
such Lender.
. 15 Illegality
. If any Lender shall determine that the introduction of any
Requirement of Law, or any change in any Requirement of Law or in the
interpretation or administration thereof, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for such Lender or its Lending Office to make LIBOR Loans, then, on notice
thereof by Lender to Borrower, the obligation of such Lender to make LIBOR Loans
shall be suspended until such Lender shall have notified Borrower that the
circumstances giving rise to such determination no longer exists.
. If a Lender shall determine that it is unlawful to maintain
any LIBOR Loan, Borrower shall prepay in full all LIBOR Loans of such Lender
then outstanding, together with interest accrued thereon, either on the last day
of the Interest Period thereof if such Lender may lawfully continue to maintain
such LIBOR Loans to such day, or immediately, if such Lender may not lawfully
continue to maintain such LIBOR Loans, together with any amounts required to be
paid in connection therewith pursuant to Section 2.18.
. If Borrower is required to prepay any LIBOR Loan immediately
as provided in Section 2.2.3, then concurrently with such prepayment, Borrower
shall borrow, in the amount of such prepayment, a Prime Rate Loan.
. If any Lender shall determine that, due to either (a) the
introduction of or any change (other than any change by way of imposition of or
increase in reserve requirements included in the calculation of the LIBOR) in or
in the interpretation of any Requirement of Law or (b) the compliance with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
cost to such Lender of agreeing to make or making, funding or maintaining any
LIBOR Loans, then Borrower shall be liable, and shall from time to time, upon
demand therefor by such Lender, pay to such Lender such additional amounts as
are sufficient to compensate such Lender for such increased costs.
. If Agent shall have determined that for any reason adequate and
reasonable means do not exist for ascertaining the LIBOR for any requested
Interest Period with respect to a proposed LIBOR Loan or that the LIBOR
applicable for any requested Interest Period with respect to a proposed LIBOR
Loan does not adequately and fairly reflect the cost to Lenders of funding such
Loan, Agent will forthwith give notice of such determination to Borrower and
each Lender. Thereafter, the obligation of Lenders to make or maintain LIBOR
Loans, as the case may be, hereunder shall be suspended until Agent, upon
instruction from the Requisite Lenders, revokes such notice in writing. Upon
receipt of such notice, Borrower may revoke any Notice of Borrowing or Notice of
Conversion/Continuation then submitted. If Borrower does not revoke such notice,
Lenders shall make, convert or continue the Loans, as proposed by Borrower, in
the amount specified in the applicable notice submitted by Borrower, but such
Loans shall be made, converted or continued as Prime Rate Loans instead of LIBOR
Loans, as the case may be.
. Borrower agrees that in the event that Borrower prepays or is
required to prepay any LIBOR Loan by acceleration or otherwise or fails to draw
down or convert to a LIBOR Loan after giving notice thereof, it shall reimburse
each Lender for its funding losses due to such prepayment or failure to draw.
Borrower and Lenders hereby agree that such funding losses shall consist of the
sum of the discounted monthly differences for each month during the applicable
or requested Interest Period, calculated as follows for each such month:
.1 Principal amount of such LIBOR Loan times (number
of days between the date of prepayment and the last day in the applicable
Interest Period divided by 360), times the applicable Interest Differential,
plus
.2 all actual out-of-pocket expenses (other than
those taken into account in the calculation of the Interest Differential)
incurred by Lenders and Agent (excluding allocation of any expense internal to
Lenders and Agent) and reasonably attributable to such payment, prepayment or
failure to draw down or convert as described above; provided that no prepayment
fee shall be payable (and no credit or rebate shall be required) if the product
of the foregoing formula is not a positive number.
. 3. CONDITIONS PRECEDENT
. The effectiveness of this amended and restated Agreement is subject
to the satisfaction of the following conditions precedent:
. Agent shall have received, in form and substance
satisfactory to Lenders and their respective counsel, the following:
(a) A certified copy of the records of all
actions taken by each of Borrower and Guarantor, including all corporate
resolutions of each of Borrower and Guarantor authorizing or relating to the
execution, delivery and performance of the Loan Documents and the consummation
of the transactions contemplated hereby and thereby;
(b) A certificate of a Responsible Officer
each of Borrower and Guarantor, respectively, stating that (i) the certified
copies of the Certificate of Incorporation and Bylaws of Borrower or Guarantor,
as the case may be, attached as Exhibits A and B to the Certificate of American
Finance Group, Inc. and the Certificate of PLM Financial Services, Inc., as the
case may be, each dated as of even date herewith, are true and accurate, remain
in full force and effect and have not been amended since the date thereof, and
(ii) each of Borrower and Guarantor are in good standing under the laws of the
state of its formation and each other jurisdiction where its ownership of
Property and assets or conduct of its business requires such qualification.
(c) Certificates of incumbency and
signatures with respect to the authorized representatives of Borrower and
Guarantor executing the Loan Documents and requesting Loans; and
(d) Such other documents relating to
Borrower or Guarantor as Lenders reasonably may request.
. Agent shall have received the Note, in form and substance
satisfactory to Lenders, duly executed and delivered by Borrower.
. Agent shall have received the Security Documents in form and
substance satisfactory to Lenders, duly executed and delivered by Borrower.
. Agent shall have received an originally executed legal
opinion of Stephen Peary, general counsel of Borrower and Guarantor, on behalf
of Borrower and Guarantor, in form and substance satisfactory to Lenders, dated
as of the Closing Date and addressed to Lenders, together with copies of any
officer's certificate or legal opinion of other counsel or law firm specifically
identified and expressly relied upon by such counsel.
. Agent shall have received the Guaranty, in form and
substance satisfactory to Lenders, duly executed and delivered by Guarantor.
. Agent shall have received the Growth Fund Agreement, duly
executed and delivered by each of the Growth Funds and all conditions precedent
to the effectiveness of the Growth Fund Agreement shall have been satisfied.
. Agent shall have received the TEC AcquiSub Amendment,
executed and delivered by TEC AcquiSub and all conditions precedent to the
effectiveness of the TEC AcquiSub Amendment shall have been satisfied.
. A certificate or certificates, dated as of the Closing Date,
of the Chief Financial Officer or Corporate Controller of Borrower to the effect
that (i) the representations and warranties of Borrower contained in Section 4
are true, accurate and complete in all material respects as of the Closing Date
as though made on such date and (ii) no Event of Default or Potential Event of
Default under this Agreement has occurred.
. Agent shall have received the Lockbox Agreement in form and
substance satisfactory to Lenders, duly executed by Borrower.
. Agent shall have received the Fee Letter and the Agent's
Side Letter, duly executed by Borrower, Guarantor, each of the Growth Funds and
TEC AcquiSub, and the arrangement fee and the Agent's fee described in the Fee
Letter and the Agent's Side Letter, respectively.
. Agent shall have received the certificates, binders and
other instruments or documents evidencing the insurance coverages and limits
maintained by Borrower in compliance with the insurance requirements of Section
5.3.
. Agent shall have received such other documents, information
and items from Borrower and Guarantor as reasonably requested by Agent.
. Unless waived in writing by Requisite Lenders, the obligation of any
Lender to make any Advance is subject to the satisfaction of the following
further conditions precedent:
. At least three (3) Business Days before each Loan hereunder
with respect to any acquisition of Leases by Borrower, Agent shall have received
(a) a Notice of Borrowing; (b) a Borrowing Base Certificate; and (c) other
information as may be requested by the Agent to confirm that such Lease
satisfies the criteria for Eligible Leases.
. No event shall have occurred and be continuing or would
result from the making of any Loan on such Funding Date which constitutes an
Event of Default or Potential Event of Default under this Agreement or under
(and as separately defined in) the Growth Fund Agreement or under (and as
separately defined in) the TEC AcquiSub Agreement, or which with notice or lapse
of time or both would constitute an Event of Default or Potential Event of
Default under this Agreement or under the Growth Fund Agreement or under the TEC
AcquiSub Agreement.
. Agent shall have received a certificate, dated as of the
Funding Date, of the Chief Financial Officer or Corporate Controller of Borrower
to the effect that all representations and warranties contained in the Loan
Documents are true, accurate and complete in all material respects with the same
effect as though such representations and warranties had been made on and as of
such Funding Date (except to the extent such representations and warranties
specifically relate to an earlier date, in which case they shall be true,
accurate and complete in all material respects as of such earlier date).
. Agent shall have received a certificate, dated as of the
Funding Date of the Chief Financial Officer or Corporate Controller of Borrower
with respect to each Eligible Lease being financed with such Loan to the effect
that:
(a) Borrower has in its possession each of
the following: (i) valid lease documentation, including, without limitation, the
original master lease agreement, or a copy thereof and original lease schedules,
including all amendments, modifications, supplements or addenda made thereto;
(ii) the purchase agreement and assignment of lease, or bill of sale, as
applicable; (iii) invoices with respect to the Equipment subject to the Lease
against which the Loan is to be made, together with evidence of payment to the
vendor or supplier of the Equipment; (iv) the original equipment acceptance
executed by the obligor under the Lease; and (v) certificates of title for the
Equipment subject to the Lease, if applicable;
(b) The Lease constitutes the entire
agreement of the parties thereto and no party thereto shall be bound except in
accordance therewith, and no amendments, modifications, supplements or addenda
have been made to, or schedules attached to, the Lease except as disclosed in
such certificate;
(c) No material default exists under the
Lease as of the date of the Loan; provided that a payment delinquency under the
Lease of less than sixty (60) days shall not constitute a material default;
(d) The Lease constitutes the valid contract
of Borrower and each lessee that is a party to the Lease, and shall at all times
be enforceable against each such lessee in accordance with its terms, subject to
the limitations on enforceability imposed by bankruptcy and creditors' rights
laws and the general principles of equity, and each party thereto has executed
the Lease with full power, authority and capacity to contract;
(e) Upon delivery of the purchase price and
the executed bill of sale or similar instrument of title, a true and correct
copy of which is to be attached, Borrower shall acquire good title to the
Equipment subject to the Eligible Lease against which the Loan is to be made,
free and clear of all Liens and other encumbrances on title (other than
Permitted Liens);
(f) The lessee is responsible for the
payment of all taxes, insurance and similar charges so that all Lease payments
will be net to Borrower; and
(g) No rentals, fees, costs, expenses or
charges paid or payable by any lessee under the Lease violate any known statute,
rule, regulation, court ruling or other regulation or limitation relating to the
maximum fees, costs, expenses or charges permitted in any state in which the
Equipment is located or in which the lessee is located, resides or is domiciled,
or in which the transaction was consummated, or in any other state which has
jurisdiction of the Equipment, Lease or lessee.
. The insurance required to be maintained by Borrower pursuant
to the Loan Documents shall be in full force and effect.
. Agent shall have received such other instruments and
documents as it may have reasonably requested from Borrower in connection with
the Loans to be made on such date.
. 4. BORROWER'S REPRESENTATIONS AND WARRANTIES
Borrower hereby warrants and represents to Agent and each Lender as
follows, and agrees that each of said warranties and representations shall be
deemed to continue until full, complete and indefeasible payment and performance
of the Obligations and shall apply anew to each borrowing hereunder:
. Borrower is a corporation, duly organized, validly existing and in
good standing under the laws of the State of Delaware and is duly qualified and
licensed as a foreign corporation and authorized to do business in each
jurisdiction within the United States where its ownership of Property and assets
or conduct of business requires such qualification. Borrower has the corporate
power and authority, rights and franchises to own its Property and assets and to
carry on its business as now conducted. Borrower has the corporate power and
authority to execute, deliver and perform the terms of the Loan Documents (to
the extent either is a party thereto) and all other instruments and documents
contemplated hereby or thereby.
. The execution, delivery and performance of this Agreement and each of
the other Loan Documents to which Borrower is a party and payment of the Note
have been duly authorized by all necessary and proper corporate action on the
part of Borrower. The Loan Documents constitute legally valid and binding
obligations of Borrower, enforceable against Borrower, to the extent Borrower is
a party thereto, in accordance with their respective terms, except as
enforcement thereof may be limited by bankruptcy, insolvency or other laws
affecting the enforcement of creditors' rights generally.
. The execution, delivery and performance of this Agreement, and each
of the other Loan Documents and the execution, delivery and payment of the Note
will not: (a) contravene any provision of Borrower's certificate of
incorporation or bylaws; (b) contravene, conflict with or violate any applicable
law or regulation, or any order, writ, judgment, injunction, decree,
determination or award of any Governmental Authority, which contravention,
conflict or violation, in the aggregate, may have a Material Adverse Effect; or
(c) violate or result in the breach of, or constitute a default under any
indenture or other loan or credit agreement, or other agreement or instrument to
which Borrower is a party or by which Borrower, or its Property and assets may
be bound or affected. Borrower is not in violation or breach of or default under
any law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or any contract, agreement, lease, license, indenture or
other instrument to which it is a party, the non-compliance with, the violation
or breach of or the default under which would, with reasonable likelihood, have
a Material Adverse Effect.
. Borrower's and Guarantor's audited consolidated financial statements
as of December 31, 1995, and Borrower's and Guarantor's unaudited consolidated
financial statements as of March 31, 1996, copies of which heretofore have been
delivered to Agent by Borrower, and all other financial statements and other
data submitted in writing by Borrower to Agent or any Lender in connection with
the request for credit granted by this Agreement, are true, accurate and
complete in all material respects, and said financial statements and other data
fairly present the consolidated financial condition of Guarantor, as of the date
thereof, and have been prepared in accordance with GAAP, subject to fiscal
year-end audit adjustments. There has been no material adverse change in the
business, properties or assets, operations, prospects, profitability or
financial or other condition of Borrower or Guarantor since December 31, 1995.
. The current location of Borrower's chief executive offices and
principal places of business is set forth on Schedule 4.5.
. Except as set forth in Schedule 4.6, there are no claims, actions,
suits, proceedings or other litigation pending or, to the best of Borrower's
knowledge, after due inquiry, threatened against Borrower, at law or in equity
before any Governmental Authority or, to the best of Borrower's knowledge, after
due inquiry, any investigation by any Governmental Authority of Borrower's
Properties or assets. Borrower has no Contingent Obligations.
. No approval, authorization or consent of any trustee or holder of any
indebtedness or obligation of Borrower or of any other Person under any such
material agreement, contract, lease or license or similar document or instrument
to which Borrower is a party or by which Borrower is bound, is required to be
obtained by Borrower in order to make or consummate the transactions
contemplated under the Loan Documents. Except as set forth in Schedule 4.7, all
consents and approvals of, filings and registrations with, and other actions in
respect of, all Governmental Authorities required to be obtained by Borrower in
order to make or consummate the transactions contemplated under the Loan
Documents have been, or prior to the time when required will have been,
obtained, given, filed or taken and are or will be in full force and effect.
. Borrower is not a party to and is not bound by any agreement,
contract, lease, license or instrument, and is not subject to any restriction
under its respective charter or formation documents, which has, or is likely in
the foreseeable future to have, a Material Adverse Effect. Borrower has not
entered into and, as of the Closing Date does not contemplate entering into, any
material agreement or contract with any Affiliate of Borrower on terms that are
less favorable to Borrower than those that might be obtained at the time from
Persons who are not such Affiliates.
. All Employee Benefit Plans of Borrower are listed on Schedule 4.9.
All Pension Plans of Borrower, including terminated Pension Plans, that are
intended to be qualified under Section 401(a) of the Code have been determined
by the IRS to be qualified. All Pension Plans existing as of the date hereof
continue to be so qualified. No "reportable event" (as defined in Section 4043
of ERISA) has occurred and is continuing with respect to any Pension Plan for
which the thirty-day notice requirement may not be waived other than those of
which the appropriate Governmental Authority has been notified. All Employee
Benefit Plans of the Borrower have been operated in all material respects in
accordance with their terms and applicable law, including ERISA, and no
"prohibited transaction" (as defined in ERISA and the Code) that would result in
any material liability to the Borrower has occurred with respect to any such
Employee Benefit Plan.
. There are no strikes or other labor disputes against or threatened
against Borrower. All payments due from Borrower on account of employee health
and welfare insurance which would, with reasonable likelihood, have a Material
Adverse Effect if not paid have been paid or, if not due, accrued as a liability
on the books of Borrower.
. Borrower does not own any "margin security", as that term is defined
in Regulations G and U of the Federal Reserve Board, and the proceeds of the
Loans under this Agreement will be used only for the purposes contemplated
hereunder. None of the Loans will be used, directly or indirectly, for the
purpose of purchasing or carrying any margin security, for the purpose of
reducing or retiring any indebtedness which was originally incurred to purchase
or carry any margin security or for any other purpose which might cause any of
the Loans under this Agreement to be considered a "purpose credit" within the
meaning of Regulations G, T, U and X. Borrower will not take or permit any agent
acting on its behalf to take any action which might cause this Agreement or any
document or instrument delivered pursuant hereto to violate any regulation of
the Federal Reserve Board.
. All federal, state, local and foreign tax returns, reports and
statements required to be filed by Borrower have been filed with the appropriate
Governmental Authorities where failure to file would, with reasonable
likelihood, have a Material Adverse Effect, and all material Charges and other
impositions shown thereon to be due and payable by Borrower have been paid prior
to the date on which any fine, penalty, interest or late charge may be added
thereto for nonpayment thereof, or any such fine, penalty, interest, late charge
or loss has been paid, or Borrower is contesting its liability therefore in good
faith and has fully reserved all such amounts according to GAAP in the financial
statements provided to Agent pursuant to Section 5.1. Borrower has paid when due
and payable all material Charges upon the books of Borrower and no Government
Authority has asserted any Lien against Borrower with respect to unpaid Charges.
Proper and accurate amounts have been withheld by Borrower from its employees
for all periods in full and complete compliance with the tax, social security
and unemployment withholding provisions of applicable federal, state, local and
foreign law and such withholdings have been timely paid to the respective
Governmental Authorities.
. 13 Environmental Quality
.1 Except as specifically disclosed in Schedule 4.13,
the on-going operations of Borrower comply in all material respects with all
Environmental Laws.
.2 Except as specifically disclosed in Schedule 4.13,
Borrower has obtained all licenses, permits, authorizations and registrations
required under any Environmental Law ("Environmental Permits") and necessary for
its ordinary course operations, all such Environmental Permits are in good
standing, and Borrower is in compliance with all material terms and conditions
of such Environmental Permits.
.3 Except as specifically disclosed in Schedule 4.13,
neither Borrower nor any of its present Property or operations is subject to any
outstanding written order from or agreement with any Governmental Authority nor
subject to any judicial or docketed administrative proceeding, respecting any
Environmental Law, Environmental Claim or Hazardous Material.
.4 There are no Hazardous Materials or other
conditions or circumstances existing with respect to any Property, or arising
from operations prior to the Closing Date, of Borrower that would reasonably be
expected to give rise to any Environmental Claim with a potential liability of
Borrower in excess of $100,000 in the aggregate from any such condition,
circumstance or Property.
. Borrower possesses and owns all necessary trademarks, trade names,
copyrights, patents, patent rights, franchises and licenses which are material
to the conduct of its business as now operated.
. As of the Closing Date, no information contained in this Agreement,
the other Loan Documents or any other documents or written materials furnished
by or on behalf of Borrower to Agent or any Lender pursuant to the terms of this
Agreement or any of the other Loan Documents contains any untrue or inaccurate
statement of a material fact or omits to state a material fact necessary to make
the statement contained herein or therein not misleading in light of the
circumstances under which made.
. Borrower is not: (a) a "public utility company" or a "holding
company," or an "affiliate" or a "subsidiary company" of a "holding company," or
an "affiliate" of such a "subsidiary company," as such terms are defined in the
Public Utility Holding Company Act or (b) an "investment company," or an
"affiliated person" of, or a "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act.
The making of the Loans hereunder and the application of the proceeds and
repayment thereof by Borrower and the performance of the transactions
contemplated by this Agreement and the other Loan Documents will not violate any
provision of the Investment Company Act or the Public Utility Holding Company
Act, or any rule, regulation or order issued by the SEC thereunder.
Borrower is Solvent.vency.
. So long as any of the Commitments shall be available and until
payment and performance in full of the Obligations, the representations and
warranties contained herein shall have a continuing effect as having been true
when made.
. With respect to each Eligible Lease financed by a Loan:
.1 Borrower maintains in its possession each of the
following: (a) valid lease documentation, including, without limitation, the
original master lease agreement, or a copy thereof and original lease schedules,
together with all amendments, modifications, supplements or addenda made, or
schedules attached, thereto; (b) the purchase agreement and assignment of lease,
or bill of sale, as applicable; (c) invoices with respect to Equipment subject
to the Lease, together with evidence of payment to the vendor or supplier of the
Equipment; (d) the original equipment acceptance executed by the obligor under
the Lease; and (e) certificates of title for the Equipment subject to the Lease,
if applicable;
.2 No material default exists under the Lease;
provided that a payment delinquency under the Lease of less than sixty (60) days
shall not constitute a material default;
.3 The Lease constitutes the valid contract of
Borrower and each lessee that is a party to the Lease, and shall at all times be
enforceable against each such lessee in accordance with its terms, subject to
the limitations on enforceability imposed by bankruptcy and creditors' rights
laws and the general principles of equity, and each party thereto has executed
the Lease with full power, authority and capacity to contract;
.4 Borrower has good title to the Equipment subject
to the Eligible Lease, free and clear of all Liens and other encumbrances on
title (other than Permitted Liens);
.5 The lessee is responsible for the payment of all
taxes, insurance and similar charges so that all Lease payments will be net to
Borrower; and
.6 No rentals, fees, costs, expenses or charges paid
or payable by any lessee under the Lease violate any known statute, rule,
regulation, court ruling or other regulation or limitation relating to the
maximum fees, costs, expenses or charges permitted in any state in which the
Equipment is located or in which the lessee is located, resides or is domiciled,
or in which the transaction was consummated, or in any other state which has
jurisdiction of the Equipment, Lease or lessee.
. 5. BORROWER'S AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, so long as any of the Commitments
shall be available and until full, complete and indefeasible payment and
performance of the Obligations, unless Requisite Lenders shall otherwise consent
in writing, Borrower shall do or cause to have done all of the following:
. Maintain a system of accounting administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP, and deliver to Agent or caused to be delivered to Agent:
. As soon as practicable and in any event within sixty (60)
days after the end of each quarterly accounting period of Borrower, Guarantor
and PLMI, except with respect to the final fiscal quarter of each fiscal year,
in which case as soon as practicable and in any event within one hundred twenty
(120) days after the end of such fiscal quarter, consolidating balance sheets of
Guarantor and Borrower as at the end of such period and the related consolidated
statements of income, stockholders' equity and cash flows of PLMI (and, as to
statements of income only, consolidating) for such quarterly accounting period,
setting forth in each case in comparative form the consolidated figures for the
corresponding periods of the previous year, all in reasonable detail and
certified by the Chief Financial Officer or Corporate Controller of Borrower,
Guarantor and PLMI that they (i) are complete and fairly present the financial
condition of Borrower, Guarantor and PLMI as at the dates indicated and the
results of their operations and changes in their cash flow for the periods
indicated, (ii) disclose all liabilities of Borrower, Guarantor and PLMI that
are required to be reflected or reserved against under GAAP, whether liquidated
or unliquidated, fixed or contingent, and (iii) have been prepared in accordance
with GAAP, subject to changes resulting from audit and normal year-end
adjustment;
. As soon as practicable and in any event within one hundred
twenty (120) days after the end of each fiscal year of Guarantor and PLMI,
consolidated and consolidating balance sheets of Guarantor and PLMI and the
related consolidated (and, as to statements of income only for Guarantor and
PLMI, consolidating) statements of income, stockholders' equity and cash flows
of Guarantor and PLMI for such fiscal year, setting forth in each case, in
comparative form the consolidated figures for the previous year, all in
reasonable detail and (i) in the case of such consolidated financial statements,
accompanied by a report thereon of an independent public accountant of
recognized national standing selected by Guarantor and PLMI and satisfactory to
Agent, which report shall contain an opinion which is not qualified in any
manner or which otherwise is satisfactory to Requisite Lenders, in their sole
discretion, and (ii) in the case of such consolidating financial statements,
certified by the Chief Financial Officer or Corporate Controller of Guarantor
and PLMI;
. As soon as practicable, and in any event not later than
fifteen (15) days after the end of each calendar month in which a Loan has been,
or is outstanding, a Borrowing Base Certificate dated as of the last day of such
month, duly executed by a Chief Financial Officer or Corporate Controller of
Borrower, with appropriate insertions;
. As soon as practicable, and in any event not later than
sixty (60) days after the end of each fiscal quarter of Borrower, a Compliance
Certificate dated as of the last day of such fiscal quarter, duly executed by
the Chief Financial Officer or Corporate Controller of Borrower, with
appropriate insertions;
. At Agent's request, promptly upon receipt thereof, copies of
all reports submitted to Borrower, Guarantor or PLMI by independent public
accountants in connection with each annual, interim or special audit of the
financial statements of Borrower, Guarantor or PLMI made by such accountants;
. (i) On the date six (6) months after the Closing Date and
thereafter upon Agent's reasonable request, which request shall not be made more
than once during any calendar year (unless an Event of Default shall have
occurred and be continuing, in which event such limitation shall not apply), a
report from Borrower's insurance broker, in such detail as Agent may reasonably
request, as to the insurance maintained or caused to be maintained by Borrower
pursuant to this Agreement, demonstrating compliance with the requirements
hereof and thereof, and (ii) as soon as possible and in no event later than
fifteen (15) days prior to the expiration date of any insurance policy of
Borrower, a written confirmation that such policy is in process of renewal and
is not terminated or subject to a notice of non-renewal from such Borrower's
insurance broker; provided, however, that Borrower shall give Agent prompt
written notice if changes affecting risk coverage will be made to such policy or
if the policy will be canceled;
. Promptly upon any officer of Borrower obtaining knowledge
(i) of any condition or event which constitutes an Event of Default or Potential
Event of Default under this Agreement, (ii) that any Person has given any notice
to Borrower, Guarantor or PLMI or taken any other action with respect to a
claimed default or event or condition of the type referred to in Section 8.1.2,
(iii) of the institution of any litigation or of the receipt of written notice
from any Governmental Authority as to the commencement of any formal
investigation involving an alleged or asserted liability of Borrower of any
amount and of Guarantor or PLMI equal to or greater than $500,000 or any adverse
judgment in any litigation involving a potential liability of Borrower of any
amount and of Guarantor or PLMI equal to or greater than $500,000, or (iv) of a
material adverse change in the business, operations, properties, assets or
condition (financial or otherwise) of Borrower, Guarantor or PLMI, a certificate
of a Responsible Officer of Borrower, specifying the notice given or action
taken by such Person and the nature of such claimed default, Event of Default,
Potential Event of Default, event or condition and what action Borrower,
Guarantor or PLMI has taken, is taking and proposes to take with respect
thereto;
. Promptly upon becoming aware of the occurrence of any (i)
Termination Event in connection with any Pension Plan or (ii) "prohibited
transaction" (as such term is defined in ERISA and the Code) in connection with
any Employee Benefit Plan or any trust created thereunder, a written notice
specifying the nature thereof, what action Borrower or any of its ERISA
Affiliates has taken, is taking or proposes to take with respect thereto, and,
when known, any action taken or threatened by the IRS or the PBGC with respect
thereto;
. With reasonable promptness, copies of (i) all notices
received by Borrower or any of its ERISA Affiliates of the PBGC's intent to
terminate any Pension Plan or to have a trustee appointed to administer any
Pension Plan, (ii) each Schedule B (Actuarial Information) to the annual report
(Form 5500 Series) filed by Borrower or any of its ERISA Affiliates with the IRS
with respect to each Pension Plan covering employees of Borrower, and (iii) all
notices received by Borrower or any of its ERISA Affiliates from a Multiemployer
Plan sponsor concerning the imposition or amount of withdrawal liability
pursuant to Section 4202 of ERISA;
. Promptly upon receipt by Borrower any challenge by the IRS
to the qualification under Section 401 or 501 of the Code of any Pension Plan;
. As soon as available and in no event later than five (5)
days after the same shall have been filed with the SEC, a copy of each Form 8-K
Current Report, Form 10-K Annual Report, Form 10-Q Quarterly Report, Annual
Report to Shareholders, Proxy Statement and Registration Statement of PLMI;
. Upon the request of Agent, copies of all federal, state,
local and foreign tax returns and reports in respect of income, franchise or
other taxes on or measured by income (excluding sales, use or like taxes) filed
by or on behalf of Borrower, Guarantor and PLMI; and
. Such other information respecting the condition or
operations, financial or otherwise, of Borrower and PLMI and its Subsidiaries as
Agent or any Lender may from time to time reasonably request, and such
information regarding the lessees under Leases as Borrower from time to time
receives or Agent or any Lender reasonably requests.
All financial statements of Borrower, Guarantor and PLMI to be
delivered by Borrower, Guarantor and PLMI to Agent pursuant to this Section 5.1
will be complete and correct and present fairly the financial condition of
Borrower, Guarantor and PLMI as of the date thereof; will disclose all
liabilities of Borrower, Guarantor and PLMI that are required to be reflected or
reserved against under GAAP, whether liquidated or unliquidated, fixed or
contingent; and will have been prepared in accordance with GAAP. All tax returns
submitted to Agent by Borrower, Guarantor and PLMI will, to the best of
Borrower's, Guarantor's and PLMI's knowledge, after due inquiry, be true and
correct. Borrower, Guarantor and PLMI hereby agree that each time either submits
a financial statement or tax return to Agent, Borrower, Guarantor and PLMI shall
be deemed to represent and warrant to Lenders that such financial statement or
tax return complies with all of the preceding requirements set forth in this
paragraph.
. Borrower shall preserve and maintain its existence and all of its
licenses, permits, governmental approvals, rights, privileges and franchises
necessary or desirable in the normal conduct of its business as now conducted or
presently proposed to be conducted (including, without limitation, its
qualification to do business in each jurisdiction in which such qualification is
necessary or desirable in view of its business); to conduct its business in an
orderly and regular manner; and comply with (a) the provisions of its articles
of incorporation and bylaws and (b) the requirements of all applicable laws,
rules, regulations or orders of any Governmental Authority and requirements for
the maintenance of Borrower's insurance, licenses, permits, governmental
approvals, rights, privileges and franchises, except, in either case, to the
extent that the failure to comply therewith would not, in the aggregate, with
reasonable likelihood, have a Material Adverse Effect.
. Borrower shall maintain and keep in force insurance of the types and
in amounts then customarily carried in lines of business similar to that of
Borrower including, but not limited to, property insurance coverage for Borrower
under the existing blanket policies of insurance for PLMI and its Subsidiaries,
and all such policies of property insurance shall carry endorsements naming
Agent as principal loss payee as to any property owned by Borrower; and public
liability insurance, which shall carry endorsements naming Agent and each Lender
as an additional insured, and in each case indicating that (i) any loss
thereunder shall be payable to Agent or Lenders, as the case may be,
notwithstanding any action, inaction or breach of representation or warranty by
Borrower; (ii) there shall be no recourse against any Lender for payment of
premiums or other amounts with respect thereto, and (iii) at least fifteen (15)
days' prior written notice of cancellation, lapse or material change in coverage
shall be given to Agent by the insurer. In addition, Borrower shall require each
lessee under each Eligible Lease that is not an Investment Grade Lease to
maintain and keep in force property insurance covering the Equipment subject to
such Eligible Lease.
. Promptly pay and discharge all material Charges when due and payable,
except (a) such as may be paid thereafter without penalty or (b) such as may be
contested in good faith by appropriate proceedings and for which an adequate
reserve has been established and is maintained in accordance with GAAP. Borrower
shall promptly notify Agent of any material challenge, contest or proceeding
pending by or against Borrower or against PLMI or any of its other Subsidiaries
before any taxing authority.
. At any reasonable time and from time to time during normal business
hours, permit Agent or any Lender or any agent, representative or employee
thereof, to examine and make copies of and abstracts from the financial records
and books of account of Borrower and other documents in the possession or under
the control of Borrower relating to any obligation of Borrower arising under or
contemplated by this Agreement, and to visit the offices of Borrower to discuss
the affairs, finances and accounts of Borrower with any of the officers of
Borrower, and, upon reasonable notice and during normal business hours (unless
an Event of Default or Potential Event of Default shall have occurred and be
continuing, in which event no notice is required) to conduct audits of and
appraise the Equipment. Such audits and appraisals shall be subject to the
lessee's right to quiet enjoyment as set forth in the respective Lease.
. 6 Maintenance of Facilities; Modifications; Performance of Leases
. Borrower shall keep its Properties which are useful or
necessary to Borrower in good repair and condition, normal wear and tear
excepted, and from time to time make necessary repairs thereto, and renewals and
replacements thereof so that Borrower's Properties shall be fully and
efficiently preserved and maintained.
. Borrower shall timely perform in all material respects each
of its covenants and obligations under the Eligible Leases to which it is a
party.
. From time to time as may be necessary (in the event that such
information is not otherwise delivered by Borrower to Agent or Lenders pursuant
to this Agreement), so long as there are Obligations outstanding hereunder,
disclose to Agent in writing any material matter hereafter arising which, if
existing or occurring at the date of this Agreement, would have been required to
be set forth or described by Borrower in this Agreement or any of the other Loan
Documents (including all Schedules and Exhibits hereto or thereto) or which is
necessary to correct any information set forth or described by Borrower
hereunder or thereunder or in connection herewith which has been rendered
inaccurate thereby.
. In addition to the obligations and documents which this Agreement
expressly requires Borrower to execute, deliver and perform, Borrower shall
execute, deliver and perform any and all further acts or documents which Agent
or Lenders may reasonably require to effectuate the purposes of this Agreement
or any of the other Loan Documents.
. Borrower shall unless otherwise directed in writing by Agent, cause
all remittances made by the obligor under any Lease to be made to a lock box
(the "Lockbox") maintained with FUNB pursuant to the Lockbox Agreement. Unless
otherwise directed by Agent in writing, all invoices and other instructions
submitted by Borrower to the obligor relating to Lease payments shall designate
the Lockbox as the place to which such payments shall be made.
. Borrower shall conduct its operations and keep and maintain its
Property in material compliance with all Environmental Laws.
. 6. BORROWER'S NEGATIVE COVENANTS
So long as any of the Commitments shall be available and until full,
complete and indefeasible payment and performance of the Obligations, unless
Requisite Lenders shall otherwise consent in writing, Borrower covenants and
agrees as follows:
. Borrower shall not create, incur, assume or suffer to exist any Lien
of any nature upon or with respect to any of their respective Property, whether
now or hereafter owned, leased or acquired, except (collectively, the "Permitted
Liens"):
.1 Liens granted in favor of Agent on behalf of
Lenders under the Security Agreement and the other Security Documents;
.2 Liens for Charges if payment shall not at the time
be required to be made in accordance with Section 5.4;
.3 Liens in respect of pledges, obligations or
deposits (i) under workers' compensation laws, unemployment insurance and other
types of social security or similar legislation, (ii) in connection with surety,
appeal and similar bonds incidental to the conduct of litigation, (iii) in
connection with bid, performance or similar bonds and mechanics', laborers' and
materialmen's and similar statutory Liens not then delinquent, or (iv)
incidental to the conduct of the business of Borrower and which were not
incurred in connection with the borrowing of money or the obtaining of advances
or credit; provided that the Liens permitted by this Section 6.1.3 do not in the
aggregate materially detract from the value of any assets or property of or
materially impair the use thereof in the operation of the business of Borrower;
and provided further that the adverse determination of any claim or liability,
contingent or otherwise, secured by any of such Liens would not either
individually or in the aggregate, with reasonable likelihood, have a Material
Adverse Effect; and
.4 Permitted Rights of Others.
. Borrower shall not create, incur, assume or suffer to exist, any
Indebtedness or Contingent Obligation; provided, however, that this Section 6.2
shall not be deemed to prohibit the Obligations to Lenders and Agent arising
under this Agreement and the other Loan Documents.
. Borrower shall not sell, assign or otherwise dispose of any of its
assets, except for full, fair and reasonable consideration, or enter into any
sale and leaseback agreement covering any of its fixed or capital assets.
. Borrower shall not make any dividend payment or other distribution of
assets, properties, cash, rights, obligations or securities on account of any
shares of any class of its capital stock, or purchase, redeem or otherwise
acquire for value any shares of its capital stock or any warrants, rights or
options to acquire such shares, now or hereafter outstanding, if such payment
would cause an Event of Default or a prospective Event of Default to occur.
. Borrower shall not enter into any transaction of Acquisition, merger,
consolidation or recapitalization, directly or indirectly, whether by operation
of law or otherwise, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, assign, transfer or
otherwise dispose of, in one transaction or a series of transactions, all or any
part of its business, Property or assets, whether now owned or hereafter
acquired, or acquire by purchase or otherwise all or substantially all the
business, Property or assets of, or stock or other evidence of beneficial
ownership of, any Person, except for the acquisition or resale of Leases and
Equipment in the ordinary course of business and as contemplated by this
Agreement.
. Borrower shall not directly or indirectly, enter into or permit to
exist any transaction (including, without limitation, the purchase, sale, lease
or exchange of any property or the rendering of any service) with any of its
Affiliates on terms that are less favorable to Borrower than those that might be
obtained at the time from Persons who are not such Affiliates.
. Borrower shall not make any loans to any of its Affiliates.
. Borrower shall not make or suffer to exist any Investments, except
for:
(a) Investments in Cash Equivalents;
(b) subject to Section 6.10, Investments in
new Subsidiaries for the purpose of capitalizing Lease Sale Programs; and
(c) extensions of credit in the nature of
accounts receivable or notes receivable arising form the sale or lease of goods
or services in the ordinary course of Borrower's business.
. Borrower shall not engage in any business other than the originating
and purchase of leases of equipment and the operation, remarketing and resale of
such leases and equipment.
. Except for such existing Subsidiaries listed in Schedule 6.10, and
such future Subsidiaries as Borrower may create after providing the Agent with
prior written notice of its intention to do so and so long as any Indebtedness
or other obligations or liabilities of any Subsidiary shall be non-recourse to
Borrower, Borrower shall not create any Subsidiaries.
. Borrower shall not take or omit to take any action, which act or
omission would, with the lapse of time, or otherwise constitute (a) a default,
event of default or Event of Default under any of the Loan Documents or (b) a
default or an event of default under any other material agreement, contract,
lease, license, mortgage, deed of trust or instrument to which it is a party or
by which it or any of its Properties or assets is bound, which default or event
of default would, with reasonable likelihood, have a Material Adverse Effect.
. 12 ERISA
.1 Borrower shall not incur any obligation to
contribute to a Pension Plan required by a collective bargaining agreement or as
a consequence of the acquisition of an ERISA Affiliate, unless (i) Borrower
shall notify Agent in writing that it intends to incur such obligation and (ii)
after Agent's receipt of such notice, Requisite Lenders consent to the
establishment or maintenance of, or Borrower's incurring an obligation to
contribute to, the Pension Plan, which consent may not unreasonably be withheld
but may be subject to such reasonable conditions as Requisite Lenders may
require.
.2 If Borrower or any ERISA Affiliate of Borrower
incurs any obligation to contribute to any Pension Plan, then Borrower shall not
(i) terminate, or permit such ERISA Affiliate to terminate, any Pension Plan so
as to result in any liability that would, with reasonable likelihood, have a
Material Adverse Effect or (ii) make or permit such ERISA Affiliate to make a
complete or partial withdrawal (within the meaning of Section 4201 of ERISA)
from any Multiemployer Plan so as to result in any liability that would, with
reasonable likelihood, have a Material Adverse Effect.
. Borrower shall not use or authorize others to use any Lender's name
or marks in any publication or medium, including, without limitation, any
prospectus, without such Lender's advance written authorization.
. Borrower shall not change its fiscal year end from December 31, nor
make any change in its accounting treatment and reporting practices except as
permitted by GAAP.
. 7. FINANCIAL COVENANT OF BORROWER
Borrower covenants and agrees that, so long as the Commitment hereunder
shall be available, and until full, complete and indefeasible payment and
performance of the Obligations, including, without limitation, all Loans
evidenced by the Note, unless Requisite Lenders shall otherwise consent in
writing, Borrower shall perform the following financial covenant. Borrower
agrees and understands that (except as expressly provided herein) the covenant
under this Section 7 shall be subject to quarterly compliance or compliance as
of the date of any request for a Loan pursuant to Section 3.2.1 (as measured on
the last day of each fiscal quarter of Borrower or as of the date of any request
for a Loan pursuant to Section 3.2.1), and in each case review by Lenders of the
respective fiscal quarter's consolidated financial statements delivered to Agent
by Borrower pursuant to Section 5.1.
. Borrower shall maintain a Consolidated Tangible Net Worth of not less
than $6,000,000.
. 8. EVENTS OF DEFAULT AND REMEDIES
. The occurrence of any one or more of the following shall constitute
an Event of Default:
. Borrower or Guarantor fails to pay any sum due to Lenders or
Agent arising under this Agreement, the Note or any of the other Loan Documents
when and as the same shall become due and payable, whether by acceleration or
otherwise and such failure shall not have been cured to Lenders' satisfaction
within five (5) calendar days; or
. (a) Borrower defaults in the repayment of any principal of
or the payment of any interest on any Indebtedness of Borrower, or breaches any
term of any evidence of such Indebtedness or defaults in any payment in respect
of any Contingent Obligation, (b) Guarantor defaults in the repayment of any
principal of or the payment of any interest on any Indebtedness of Guarantor, or
breaches any term of any evidence of such Indebtedness or defaults in any
payment in respect of any Contingent Obligations (excluding, as to Guarantor,
any Contingent Obligations of Guarantor arising solely as a result of
Guarantor's status as a general partner of any Person), in each case exceeding,
in the aggregate outstanding principal amount, $2,000,000, (c) Borrower or
Guarantor breaches or violates any term or provision of any evidence of such
Indebtedness or Contingent Obligation or of any such loan agreement, mortgage,
indenture, guaranty or other agreement relating thereto if the effect of such
breach is to permit acceleration under the applicable instrument, loan
agreement, mortgage, indenture, guaranty or other agreement and such failure
shall not have been cured within the applicable cure period, or there is an
acceleration under the applicable instrument, loan agreement, mortgage,
indenture, guaranty or other agreement, or (d) PLMI defaults in the repayment of
any principal of or the payment of any interest on any Indebtedness or defaults
in any payment in respect of any Contingent Obligation, in each case exceeding,
in the aggregate outstanding principal amount, $2,000,000, or PLMI breaches or
violates any term or provision of any evidence of such Indebtedness or
Contingent Obligation or of any such loan agreement, mortgage, indenture,
guaranty or other agreement relating thereto with the result that such
Indebtedness or Contingent Obligation becomes or is caused to become then due
and payable in its entirety, whether by acceleration of otherwise; or
. Borrower fails or neglects to perform, keep or observe any
of the covenants contained in Sections 2.1.3, 5.2, 5.3, 5.9, 6.2, 6.3, 6.4, 6.5,
6.6, 6.7, 6.8, 6.9, 6.10 and 7.1 of this Agreement; or
. Any representation or warranty made by or on behalf of
Borrower or Guarantor in this Agreement or any statement or certificate at any
time given in writing pursuant hereto or in connection herewith shall be false,
misleading or incomplete in any material respect when made; or
. Except as provided in Sections 8.1.1 and 8.1.3, Borrower or
Guarantor fails or neglects to perform, keep or observe any covenant or
provision of this Agreement or of any of the other Loan Documents or any other
document or agreement executed by Borrower or Guarantor in connection therewith
and the same has not been cured to Requisite Lenders' satisfaction within thirty
(30) calendar days after Borrower or Guarantor shall become aware thereof,
whether by written notice from Agent or any Lender or otherwise; or
. Borrower, Guarantor, PLMI or any other guarantor of any of
Borrower's or Guarantor's obligations to Lenders shall (i) cease to be Solvent,
(ii) admit in writing its inability to pay its debts as they mature, (iii) make
an assignment for the benefit of creditors, or (iv) apply for or consent to the
appointment of a receiver, liquidator, custodian or trustee for it or for a
substantial part of its Properties or business, or such a receiver, liquidator,
custodian or trustee otherwise shall be appointed and shall not be discharged
within sixty (60) days after such appointment; or
. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against Borrower, Guarantor,
PLMI or any other guarantor of any of Borrower's or Guarantor's obligations to
Lenders or any order, judgment or decree shall be entered against Borrower,
Guarantor, PLMI or any other guarantor of any of Borrower's or Guarantor's
obligations to Lenders decreeing its dissolution or division; provided, however,
with respect to an involuntary petition in bankruptcy, such petition shall not
have been dismissed within sixty (60) days after the filing of such petition; or
. There shall have been a change in the assets, liabilities,
financial condition, operations, affairs or prospects of Borrower, Guarantor,
PLMI or any other guarantor of any of Borrower's or Guarantor's obligations to
Lenders which, in the reasonable determination of Requisite Lenders has, either
individually or in the aggregate, had a Material Adverse Effect; or
. There shall be a money judgment, writ or warrant of
attachment or similar process entered or filed against Borrower or Guarantor
which (net of insurance coverage) remains unvacated, unbonded, unstayed or
unpaid or undischarged for more than sixty (60) days (whether or not
consecutive) or in any event later than five (5) calendar days prior to the date
of any proposed sale thereunder, which, together with all such other unvacated,
unbonded, unstayed, unpaid and undischarged judgments or attachments against
Borrower in any amount; against Guarantor exceeds in the aggregate $500,000; or
against any combination of the foregoing Persons exceeds in the aggregate
$1,000,000; or
. Any of the Loan Documents shall for any reason other than
the full, complete and indefeasible satisfaction of the Obligations thereunder
cease to be, or be asserted by Borrower or Guarantor, not to be, a legal, valid
and binding obligation of Borrower or Guarantor, respectively, enforceable
against such Person in accordance with its terms; or
. Without limiting the generality of, and in addition to the
events described in this Section 8.1, the occurrence of any "Event of Default"
as defined under the Growth Fund Agreement or any other loan or security
document related to the Growth Fund Agreement; or
. Without limiting the generality of, and in addition to the
events described in this Section 8.1, the occurrence of any "Event of Default"
as defined in the TEC AcquiSub Agreement or any other loan or security document
related to the TEC AcquiSub Agreement; or
. A criminal proceeding shall have been filed in any court
naming Borrower as a defendant for which forfeiture is a potential penalty under
applicable federal or state law which, in the reasonable determination of
Requisite Lenders, may have a Material Adverse Effect; or
. Any Governmental Authority enters a decree, order or ruling
("Government Action") which will materially and adversely affect Borrower's,
Guarantor's or PLMI's financial condition, operations or ability to perform or
pay such party's obligations arising under this Agreement or any instrument or
agreement executed pursuant to the terms of this Agreement. Borrower or
Guarantor shall have thirty (30) days from the earlier of the date (a) Borrower
or Guarantor, as applicable, first discovers it is the subject of Government
Action or (b) a Lender or any agency gives notice of Government Action to take
such steps as are necessary to obtain relief from the Government Action. For the
purpose of this paragraph, "relief from Government Action" means to discharge or
to obtain a dismissal of or release or relief from (i) any Government Action so
that the affected party or parties do not incur (v) any monetary liability in
the case of Borrower, (x) monetary liability of more than $500,000 in the case
of Guarantor, (y) monetary liability of more than $250,000 in the case of TEC
AcquiSub, (y) monetary liability of more than $1,000,000 in the case of PLMI, or
(z) monetary liability of more than $1,000,000, in the aggregate, in the case of
any combination of the foregoing Persons, or (ii) any disqualification of or
other limitation on the operation of Borrower, Guarantor and PLMI, or any of
them, which in the reasonable determination of the Requisite Lenders may have a
Material Adverse Effect; or
. Any Governmental Authority, including, without limitation,
the SEC, shall enter a decree, order or ruling prohibiting the Equipment Growth
Funds from releasing or paying to Guarantor any funds in the form of management
fees, profits or otherwise which, in the reasonable determination of Requisite
Lenders, may have a Material Adverse Effect.
. An Event of Default may be waived only with the written consent of
Requisite Lenders, or if expressly provided, of all Lenders. Any Event of
Default so waived shall be deemed to have been cured and not to be continuing;
but no such waiver shall be deemed a continuing waiver or shall extend to or
affect any subsequent like default or impair any rights arising therefrom.
. Upon the occurrence and continuance of any Event of Default or
Potential Event of Default, Lenders shall have no further obligation to advance
money or extend credit to or for the benefit of Borrower.
In addition, upon the occurrence and during the continuance of an Event
of Default, Lenders or Agent, on behalf of Lenders, may, at the option of
Requisite Lenders, do any one or more of the following, all of which are hereby
authorized by Borrower:
.1 Declare all or any of the Obligations of Borrower
under this Agreement, the Note, the other Loan Documents and any other
instrument executed by Borrower pursuant to the Loan Documents to be immediately
due and payable, and upon such declaration such obligations so declared due and
payable shall immediately become due and payable; provided that if such Event of
Default is under Section 8.1.6 or 8.1.7, then all of the Obligations shall
become immediately due and payable forthwith without the requirement of any
notice or other action by Lenders or Agent;
.2 Terminate this Agreement as to any future
liability or obligation of Agent or Lenders; and
.3 Exercise in addition to all other rights and
remedies granted hereunder, any and all rights and remedies granted under the
Loan Documents or otherwise available at law or in equity.
. 4 Set-Off
.1 During the continuance of an Event of Default, any
deposits or other sums credited by or due from any Lender to Borrower or
Guarantor (exclusive of deposits in accounts expressly held in the name of third
parties or held in trust for benefit of third parties) may be set-off against
the Obligations and any and all other liabilities, direct or indirect, absolute
or contingent, due or to become due, now existing or hereafter arising, of
Borrower or Guarantor to Lenders. Each Lender agrees to notify promptly Borrower
or Guarantor and Agent of any such set-off; provided, that the failure to give
such notice shall not affect the validity of any such set-off.
.2 Each Lender agrees that if it shall, whether by
right of set-off, banker's lien or similar remedy pursuant to Section 8.4.1,
obtain any payment as a result of which the outstanding and unpaid principal
portion of the Commitments of such Lender shall be less than such Lender's Pro
Rata Share of the outstanding and unpaid principal portion of the aggregate of
all Commitments, such Lender receiving such payment shall simultaneously
purchase from each other Lender a participation in the Commitments held by such
Lenders so that the outstanding and unpaid principal amount of the Commitments
and participations in Commitments of such Lender shall be in the same proportion
to the unpaid principal amount of the aggregate of all Commitments then
outstanding as the unpaid principal amount under the Commitments of such Lender
outstanding immediately prior to receipt of such payment was to the unpaid
principal amount of the aggregate of all Commitments outstanding immediately
prior to such Lender's receipt of such payment; provided, however, that if any
such purchase shall be made pursuant to this Section 8.4.2 and the payment
giving rise thereto shall thereafter be recovered, such purchase shall be
rescinded to the extent of such recovery and the purchase price restored without
interest. Borrower expressly consents to the foregoing arrangements and agrees
that any Lender holding a participation in a Commitment deemed to have been so
purchased may exercise any and all rights of set-off, banker's lien or similar
remedy with respect to any and all moneys owing by Borrower to such Lender as
fully as if such Lender held a Commitment in the amount of such participation.
. The enumeration of the rights and remedies of Agent and Lenders set
forth in this Agreement is not intended to be exhaustive and the exercise by
Agent and Lenders of any right or remedy shall not preclude the exercise of any
other rights or remedies, all of which shall be cumulative, and shall be in
addition to any other right or remedy given hereunder or under the Loan
Documents or that may now or hereafter exist in law or in equity or by suit or
otherwise. No delay or failure to take action on the part of Agent and Lenders
in exercising any right, power or privilege shall operate as a waiver hereof,
nor shall any single or partial exercise of any such right, power or privilege
preclude other or further exercise thereof or the exercise of any other right,
power or privilege or shall be construed to be a waiver of any Event of Default
or Potential Event of Default. No course of dealing between Borrower, Agent or
any Lender or their respective agents or employees shall be effective to change,
modify or discharge any provision of this Agreement or any of the Loan Documents
or to constitute a waiver of any Event of Default or Potential Event of Default.
. 9. AGENT
. Each of the Lenders hereby irrevocably designates and appoints First
Union National Bank of North Carolina as the Agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes First Union National Bank of North Carolina as the Agent for such
Lender to take such action on its behalf under the provisions of this Agreement
and the other Loan Documents and to exercise such powers and perform such duties
as are expressly delegated to the Agent by the terms of this Agreement and such
other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement or such other Loan Documents, the Agent shall not have any duties
or responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or the other Loan Documents or otherwise exist against Agent. To the
extent any provision of this Agreement permits action by Agent, Agent shall,
subject to the provisions of this Section 9, take such action if directed in
writing to do so by the Requisite Lenders.
. Agent may execute any of its duties under this Agreement and the
other Loan Documents by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
. Neither Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates shall be (a) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection with
this Agreement or the other Loan Documents (except for its or such Person's own
gross negligence or willful misconduct), or (b) responsible in any manner to any
Lender for any recitals, statements, representations or warranties made by
Borrower or any officer thereof contained in this Agreement or the other Loan
Documents or in any certificate, report, statement or other document referred to
or provided for in, or received by Agent under or in connection with, this
Agreement or the other Loan Documents or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or the other Loan
Documents or for any failure of Borrower to perform its obligations hereunder or
thereunder. Agent shall not be under any obligation to any Lender to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement, or to inspect the Properties,
books or records of Borrower.
. Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to Borrower), independent accountants and other experts
selected by Agent. Agent may deem and treat the payee of any promissory note
issued pursuant to this Agreement as the owner thereof for all purposes unless
such promissory note shall have been transferred in accordance with Section
11.10 hereof. Agent shall be fully justified in failing or refusing to take any
action under this Agreement and the other Loan Documents unless it shall first
receive such advice or concurrence of the Requisite Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action except for its own gross
negligence or willful misconduct. Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement in accordance with a
request of the Requisite Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all Lenders.
. Agent shall not be deemed to have knowledge or notice of the
occurrence of any Event of Default or Potential Event of Default hereunder
unless Agent has received notice from a Lender or Borrower referring to this
Agreement, describing such Event of Default or Potential Event of Default and
stating that such notice is a "notice of default". In the event that Agent
receives such a notice, Agent shall promptly give notice thereof to Lenders. The
Agent shall take such action with respect to such Event of Default or Potential
Event of Default as shall be reasonably directed by the Requisite Lenders;
provided that unless and until Agent shall have received such directions, Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Event of Default or Potential Event of Default
as it shall deem advisable in the best interests of Lenders.
. Each Lender expressly acknowledges that neither Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates has made
any representations or warranties to it and that no act by Agent hereinafter
taken, including any review of the affairs of Borrower, shall be deemed to
constitute any representation or warranty by Agent to any Lender. Each Lender
represents to Agent that it has, independently and without reliance upon Agent
or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of Borrower and Guarantor and made its own decision to make its
Loans hereunder and enter into this Agreement. Each Lender also represents that
it will, independently and without reliance upon Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of Borrower and Guarantor. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by Agent
hereunder or by the other Loan Documents, Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of Borrower and Guarantor which may come into the possession of
Agent or any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
. Each Lender agrees to indemnify Agent in its capacity as such (to the
extent not reimbursed by Borrower and without limiting the obligation of
Borrower to do so), ratably according to the respective amounts of their Pro
Rata Share of the Commitments, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against Agent in any way relating to or
arising out of this Agreement or the other Loan Documents, or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by Agent under or
in connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from Agent's bad faith, gross negligence or willful misconduct.
The agreements in this Section 9.7 shall survive the repayment of the Loans and
all other amounts payable hereunder.
. Agent and its Affiliates may make loans to, accept deposits from and
generally engage in any kind of business with Borrower or Guarantor as though
Agent were not Agent hereunder. With respect to Advances made or renewed by it,
Agent shall have the same rights and powers under this Agreement and the other
Loan Documents as any Lender and may exercise the same as though it were not
Agent, and the terms "Lender" and "Lenders" shall include Agent in its
individual capacity.
. Agent may resign at any time by giving thirty (30) days' prior
written notice thereof to Lenders and Borrower; provided, however, that the
retiring Agent shall continue to serve until a successor Agent shall have been
selected and approved pursuant to this Section 9.9. Upon any such notice, Agent
shall have the right to appoint a successor Agent; provided, however, that if
such successor shall not be a signatory to this Agreement, such appointment
shall be subject to the consent of Requisite Lenders. Agent may be replaced by
the Requisite Lenders, with or without cause; provided, however, that any
successor agent shall be subject to Borrower's consent, which consent shall not
be unreasonably withheld. Upon the acceptance of any appointment as an Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Section 9 shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Agent under
this Agreement.
. 10. EXPENSES AND INDEMNITIES
. Borrower agrees to pay promptly on demand, and, in any event, within
thirty (30) days of the invoice date therefor, (a) all costs, expenses, charges
and other disbursements (including, without limitation, all reasonable
attorneys' fees and allocated expenses of outside counsel and in-house legal
staff) incurred by or on behalf of Agent or any Lender in connection with the
preparation of the Loan Documents and all amendments and modifications thereof,
extensions thereto or substitutions therefor, and all costs, expenses, charges
or other disbursements incurred by or on behalf of Agent or any Lender
(including, without limitation all reasonable attorney's fees and allocated
expenses of outside counsel and in-house legal staff) in connection with the
furnishing of opinions of counsel (including, without limitation, any opinions
requested by Lenders as to any legal matters arising hereunder) and of
Borrower's performance of and compliance with all agreements and conditions
contained herein or in any of the other Loan Documents on its part to be
performed or complied with; (b) all other costs, expenses, charges and other
disbursements incurred by or on behalf of Agent or any Lender in connection with
the negotiation, preparation, execution, administration, continuation and
enforcement of the Loan Documents, and the making of the Loans hereunder; (c)
all costs, expenses, charges and other disbursements (including, without
limitation, all reasonable attorney's fees and allocated expenses of outside
counsel and in-house legal staff) incurred by or on behalf of Agent or FUNB in
connection with the assignment or attempted assignment to any other Person of
all or any portion of any Lender's interest under this Agreement pursuant to
Section 11.10; and (d) regardless of the existence of an Event of Default or
Potential Event of Default, all legal, appraisal, audit, accounting, consulting
or other fees, costs, expenses, charges or other disbursements incurred by or on
behalf of Agent or any Lender in connection with any litigation, contest,
dispute, suit, proceeding or action (whether instituted by Lenders, Agent,
Borrower or any other Person) seeking to enforce any Obligations of, or
collecting any payments due from, Borrower under this Agreement and the Note,
all of which amounts shall be deemed to be part of the Obligations.
Notwithstanding anything to the contrary contained in this Section 10.1, so long
as no Event of Default or Potential Event of Default shall have occurred and be
continuing, all appraisals of the Eligible Leases shall be at the expense of
Lenders. If an Event of Default or Potential Event of Default shall have
occurred and be continuing, such appraisals shall be at the expense of Borrower.
. Whether or not the transactions contemplated hereby shall be
consummated:
. Borrower shall pay, indemnify, and hold each Lender, Agent
and each of their respective officers, directors, employees, counsel, agents and
attorneys-in-fact (each, an "Indemnified Person") harmless from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses or disbursements (including
reasonable attorney's fees and the allocated cost of in-house counsel) of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement and any other Loan Documents,
or the transactions contemplated hereby and thereby, and with respect to any
investigation, litigation or proceeding (including any case, action or
proceeding before any court or other Governmental Authority relating to
bankruptcy, reorganization, insolvency, liquidation, dissolution or relief of
debtors or any appellate proceeding) related to this Agreement or the Loans or
the use of the proceeds thereof, whether or not any Indemnified Person is a
party thereto (all the foregoing, collectively, the "Indemnified Liabilities");
provided, that Borrower shall have no obligation hereunder to any Indemnified
Person with respect to Indemnified Liabilities arising from the gross negligence
or willful misconduct of such Indemnified Person.
. .2 Environmental Indemnity
(a) Borrower hereby agrees to indemnify,
defend and hold harmless each Indemnified Person, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, charges, expenses or disbursements (including reasonable attorneys' fees
and the allocated cost of in-house counsel and internal environmental audit or
review services), which may be incurred by or asserted against such Indemnified
Person in connection with or arising out of any pending or threatened
investigation, litigation or proceeding, or any action taken by any Person, with
respect to any Environmental Claim arising out of or related to any Property
owned, leased or operated by Borrower. No action taken by legal counsel chosen
by Agent or any Lender in defending against any such investigation, litigation
or proceeding or requested remedial, removal or response action (except for
actions which constitute fraud, willful misconduct, gross negligence or material
violations of law) shall vitiate or in any way impair Borrower's obligation and
duty hereunder to indemnify and hold harmless Agent and each Lender. Agent and
Lenders agree to use reasonable efforts to cooperate with Borrower respecting
the defense of any matter indemnified hereunder, except insofar as and to the
extent that their respective interests may be adverse to Borrower's, in Agent's
and each Lenders' sole discretion.
(b) In no event shall any site visit,
observation, or testing by Agent or any Lender be deemed a representation or
warranty that Hazardous Materials are or are not present in, on, or under the
site, or that there has been or shall be compliance with any Environmental Law.
Neither Borrower nor any other Person is entitled to rely on any site visit,
observation, or testing by Agent or any Lender. Except as otherwise provided by
law, neither Agent nor any Lender owes any duty of care to protect Borrower or
any other Person against, or to inform Borrower or any other party of, any
Hazardous Materials or any other adverse condition affecting any site or
Property. Neither Agent nor any Lender shall be obligated to disclose to
Borrower or any other Person any report or findings made as a result of, or in
connection with, any site visit, observation, or testing by Agent or any Lender.
. The obligations in this Section 10.2 shall survive payment
of all other Obligations. At the election of any Indemnified Person, Borrower
shall defend such Indemnified Person using legal counsel satisfactory to such
Indemnified Person in such Person's sole discretion, at the sole cost and
expense of Borrower. All amounts owing under this Section 10.2 shall be paid
within thirty (30) days after written demand.
. 11. MISCELLANEOUS
. All covenants, agreements, representations and warranties made herein
shall survive the execution and delivery of the Loan Documents and the making of
the Loans hereunder.
. No failure or delay on the part of Agent or any Lender in the
exercise of any power, right or privilege under this Agreement, the Note or any
of the other Loan Documents shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege.
. Except as otherwise provided in this Agreement, any notice or other
communication herein required or permitted to be given shall be in writing and
may be delivered in person, with receipt acknowledged, or sent by telex,
facsimile, telecopy, computer transmission or by United States mail, registered
or certified, return receipt requested, or by Federal Express or other
nationally recognized overnight courier service, postage prepaid and
confirmation of receipt requested, and addressed as set forth on the signature
pages to this Agreement or at such other address as may be substituted by notice
given as herein provided. The giving of any notice required hereunder may be
waived in writing by the party entitled to receive such notice. Every notice,
demand, request, consent, approval, declaration or other communication hereunder
shall be deemed to have been duly given or served on the date on which the same
shall have been personally delivered, with receipt acknowledged, or sent by
telex, facsimile, telecopy or computer transmission (with appropriate
answerback), three (3) Business Days after the same shall have been deposited in
the United States mail or on the next succeeding Business Day if the same has
been sent by Federal Express or other nationally recognized overnight courier
service. Failure or delay in delivering copies of any notice, demand, request,
consent, approval, declaration or other communication to the persons designated
above to receive copies shall in no way adversely affect the effectiveness of
such notice, demand, request, consent, approval, declaration or other
communication.
. Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
. Whenever possible, each provision of this Agreement, the Note and
each of the other Loan Documents shall be interpreted in such a manner as to be
valid, legal and enforceable under the applicable law of any jurisdiction.
Without limiting the generality of the foregoing sentence, in case any provision
of this Agreement, the Note or any of the other Loan Documents shall be invalid,
illegal or unenforceable under the applicable law of any jurisdiction, the
validity, legality and enforceability of the remaining provisions, or of such
provision in any other jurisdiction, shall not in any way be affected or
impaired thereby.
. 6 Entire Agreement; Construction; Amendments and Waivers
.1 This Agreement, the Note and each of the other
Loan Documents dated as of the date hereof, taken together, constitute and
contain the entire agreement among Borrower, Lenders and Agent and supersede any
and all prior agreements, negotiations, correspondence, understandings and
communications between the parties, whether written or oral, respecting the
subject matter hereof.
.2 This Agreement is the result of negotiations
between and has been reviewed by each of Borrower, the Lenders executing this
Agreement as of the Closing Date and Agent and their respective counsel;
accordingly, this Agreement shall be deemed to be the product of the parties
hereto, and no ambiguity shall be construed in favor of or against Borrower,
Lenders or Agent. Borrower, Lenders and Agent agree that they intend the literal
words of this Agreement and the other Loan Documents and that no parol evidence
shall be necessary or appropriate to establish Borrower's, any Lender's or
Agent's actual intentions.
.3 No amendment, modification, discharge or waiver of
or consent to any departure by Borrower or Guarantor from, any provision in this
Agreement or any of the other Loan Documents relating to (i) the definition of
"Borrowing Base" or "Requisite Lenders," (ii) any increase of the amount of any
Commitment, (iii) any reduction of principal, interest or fees payable
hereunder, (iv) any postponement of any date fixed for any payment or prepayment
of principal or interest hereunder or (v) this Section 11.6.3 shall be effective
without the written consent of all Lenders. Any and all other amendments,
modifications, discharges or waivers of, or consents to any departures from any
provision of this Agreement or of any of the other Loan Documents shall not be
effective without the written consent of the Requisite Lenders. Any waiver or
consent with respect to any provision of the Loan Documents shall be effective
only in the specific instance and for the specific purpose for which it was
given. No notice to or demand on Borrower in any case shall entitle Borrower to
any other or further notice or demand in similar or other circumstances. Any
amendment, modification, waiver or consent effected in accordance with this
Section 11.6 shall be binding upon each Lender then party hereto and each
subsequent Lender, and on Borrower.
. All covenants, agreements, representations and warranties made herein
by Borrower shall, notwithstanding any investigation by Lenders or Agent be
deemed to be material to and to have been relied upon by Lenders.
. Lenders shall be under no obligation to marshall any assets in favor
of Borrower or any other person or against or in payment of any or all of the
Obligations. To the extent that Borrower makes a payment or payments to Lenders
or Agent, or Lenders or Agent, on behalf of Lenders, enforce their or its Liens
or exercises their or its rights of set-off, and such payment or payments or the
proceeds of such enforcement or set-off or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, receiver or any other party under Title 11 of the United
States Code or under any other similar federal or state law, common law or
equitable cause, then to the extent of such recovery the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such enforcement
or set-off had not occurred.
. All sums payable by Borrower pursuant to this Agreement, the Note or
any of the other Loan Documents shall be payable without notice or demand and
shall be payable in United States Dollars without set-off or reduction of any
manner whatsoever.
. 10 Binding Effect, Assignment
.1 This Agreement, the Note and the other Loan
Documents shall be binding upon and shall inure to the benefit of the parties
hereto and thereto and their respective successors and assigns, except that
neither Borrower nor Guarantor may assign its rights hereunder or thereunder or
any interest herein or therein without the prior written consent of each Lender.
Each Lender shall (i) have the right in accordance with this Section 11.10 to
sell and assign to any Eligible Assignee all or any portion of its interest
(provided that any such partial assignment shall not be for a principal amount
of less than Five Million Dollars ($5,000,000)) under this Agreement, the Note
and the other Loan Documents (as separately described and defined in those
agreements), subject to the prior written consent of Borrower, which consent
shall not be unreasonably withheld, and (ii) to grant any participation or other
interest herein or therein, except that each potential participant to which a
Lender intends to grant any rights under Sections 2.9, 2.10, 5.1 or 10.2 shall
be subject to the prior written consent of Borrower, which consent shall not be
unreasonably withheld; provided, however, that no such sale, assignment or
participation grant shall result in requiring registration under the Securities
Act of 1933, as amended, or qualification under any state securities law.
.2 Subject to the limitations of this Section
11.10.2, each Lender may sell and assign, from time to time, all or any portion
of its Pro Rata Share of the Commitments to any of its Affiliates or, with the
approval of Borrower (which approval shall not be unreasonably withheld), to any
other financial institution acceptable to Agent, subject to the assumption by
such assignee of the share of the Commitments so assigned. The assignment to
such Affiliate or other financial institution shall be evidenced by an
instrument of Assignment and Assumption in the form of Exhibit J (the
"Assignment and Acceptance") executed by the assignor Lender (hereinafter from
time to time referred to as the "Assignor Lender") and such Affiliate or other
financial institution (which, upon such assignment shall become a Lender
hereunder (hereinafter from time to time referred to as the "Assignee Lender")).
The Assignment and Assumption need not include any of the economic or financial
terms upon which such Assignee Lender receives the assignment from the Assignor
Lender, and such terms need not be disclosed to or approved by Borrower;
provided only that such terms do not diminish the obligations undertaken by such
Assignee Lender in the Assignment and Assumption or increase the obligations of
Borrower under this Agreement. Upon execution of an Assignment and Assumption,
(i) the definition of "Commitments" in Section 1 hereof and the Pro Rata Shares
set forth therein shall be deemed to be amended to reflect each Lender's share
of the Commitments, giving effect to the assignment and (ii) the Assignee Lender
shall, from the effective date of the Assignment and Assumption, be subject to
all of the obligations, and entitled to all of the rights, of a Lender
hereunder, except as may be expressly provided to the contrary in the Assignment
and Assumption. To the extent the obligations hereunder of the Assignor Lender
are assumed by the Assignee Lender, the Assignor Lender shall be relieved of
such obligations. Upon the assignment of any interest by any Assignor Lender
pursuant to this Section 11.10.2, such Assignor Lender agrees to supplement
Schedule 1.1 to show the date of such assignment, the Assignor Lender, the
Assignee Lender, the Assignee Lender's address for notice purposes and the
amount of the Commitments so assigned.
.3 Subject to the limitations of this Section
11.10.3, any Lender may also grant, from time to time, participation interests
in the interests of such Lender under this Agreement, the Note and the other
Loan Documents to any other financial institution without notice to, or approval
of, Borrower. The grant of such a participation interest shall be on such terms
as the granting Lender determines are appropriate, provided only that (i) the
holder of such participation interest shall not have any of the rights of a
Lender under this Agreement except, if the participation agreement expressly
provides, rights under Sections 2.9, 2.10, 5.1 and 10.2, and (ii) the consent of
the holder of such a participation interest shall not be required for amendments
or waivers of provisions of the Loan Documents other than, if the participation
agreement expressly provides, those which (A) increase the monetary amount of
any Commitment, (B) decrease any fee or any other monetary amount payable to
Lenders, or (C) extend the date upon which any monetary amount is payable to
Lenders.
. This Agreement and any amendments, waivers, consents or supplements
hereto may be executed in any number of counterparts, and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed an original, but all such counterparts together shall constitute
but one and the same instrument. Each such agreement shall become effective upon
the execution of a counterpart hereof or thereof by each of the parties hereto
or thereto, delivery of each such counterpart to Agent.
. Borrower recognize that, in the event Borrower fails to perform,
observe or discharge any of its obligations or liabilities under this Agreement,
the Note or any of the other Loan Agreements, any remedy at law may prove to be
inadequate relief to Lenders or Agent; therefore, Borrower agrees that Lenders
or Agent, if Lenders or Agents so request, shall be entitled to temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages.
. BORROWER HEREBY AGREES THAT IT SHALL GIVE PROMPT WRITTEN NOTICE OF
ANY CLAIM OR CAUSE OF ACTION IT BELIEVES IT HAS, OR MAY SEEK TO ASSERT OR ALLEGE
AGAINST ANY LENDER OR AGENT, WHETHER SUCH CLAIM IS BASED IN LAW OR EQUITY,
ARISING UNDER OR RELATED TO THIS AGREEMENT, THE NOTE OR ANY OF THE OTHER LOAN
DOCUMENTS OR TO THE LOANS CONTEMPLATED HEREBY OR THEREBY OR ANY ACT OR OMISSION
TO ACT BY ANY LENDER OR AGENT WITH RESPECT HERETO OR THERETO, AND THAT IF IT
SHALL FAIL TO GIVE SUCH PROMPT NOTICE TO AGENT WITH REGARD TO ANY SUCH CLAIM OR
CAUSE OF ACTION, IT SHALL BE DEEMED TO HAVE WAIVED, AND SHALL BE FOREVER BARRED
FROM BRINGING OR ASSERTING SUCH CLAIM OR CAUSE OF ACTION IN ANY SUIT, ACTION OR
PROCEEDING IN ANY COURT OR BEFORE ANY GOVERNMENTAL AUTHORITY.
. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT,
BORROWER HEREBY AGREES THAT IT SHALL NOT SEEK FROM LENDERS OR AGENT, UNDER ANY
THEORY OF LIABILITY, INCLUDING, WITHOUT LIMITATION, ANY THEORY IN TORTS, ANY
PUNITIVE DAMAGES.
. Except as otherwise expressly provided in any of the Loan Documents,
in all respects, including all matters of construction, validity and
performance, this Agreement and the Obligations arising hereunder shall be
governed by, and construed and enforced in accordance with, the laws of the
State of North Carolina applicable to contracts made and performed in such
state, without regard to the principles thereof regarding conflict of laws, and
any applicable laws of the United States of America.
. Borrower hereby irrevocably consents to the personal jurisdiction of
the state and federal courts located in Mecklenburg County, North Carolina, in
any action, claim or other proceeding arising out of any dispute in connection
with this Agreement, the Note and the other Loan Documents, any rights or
obligations hereunder or thereunder, or the performance of such rights and
obligations. Borrower hereby irrevocably consents to the service of a summons
and complaint and other process in any action, claim or proceeding brought by
Agent or any Lender in connection with this Agreement or the other Loan
Documents, any rights or obligations hereunder or thereunder, or the performance
of such rights and obligations, on behalf of itself or its Property, in the
manner specified in Section 11.3. Nothing in this Section 11.16 shall affect the
right of the Agent or any Lender to serve legal process in any other manner
permitted by applicable law or affect the right of Agent or any Lender to bring
any action or proceeding against Borrower or its properties in the courts of any
other jurisdictions.
. TO THE EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND GUARANTOR, BY
EXECUTION HEREOF, AND THE AGENT AND EACH LENDER, BY ACCEPTANCE HEREOF,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS AGREEMENT, OR ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY AGREEMENT CONTEMPLATED
TO BE EXECUTED IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTY WITH RESPECT HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE AGENT
AND EACH LENDER TO ACCEPT THIS AGREEMENT AND THE NOTES EXECUTED AND DELIVERED BY
BORROWER PURSUANT TO THIS AGREEMENT.
WITNESS the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
BORROWER AMERICAN FINANCE GROUP, INC.
By:
J. Michael Allgood
Chief Financial Officer
Notice to be sent to:
AMERICAN FINANCE GROUP, INC.
One Market
Steuart Street Tower, Suite 900
San Francisco, CA 94105
Attention: J. Michael Allgood,
Chief Financial Officer
Telephone: (415) 905-7228
Facsimile: (415) 905-7256
AGENT FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
By:
Bill A. Shirley
Vice President
Notice to be sent to:
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
One First Union Center
301 South College Street
Charlotte, NC 28288
Attention: Milton Anderson,
Director
Telephone: (704) 383-5164
Facsimile: (704) 374-4092
LENDERS FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
By:
Bill A. Shirley
Vice President
Notice to be sent to:
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
One First Union Center
301 South College Street
Charlotte, NC 28288
Attention: Milton Anderson,
Director
Telephone: (704) 383-5164
Facsimile: (704) 374-4092
SCHEDULE A
(COMMITMENTS)
Pro
Rate
Lender Commitment Share
First Union National Bank $35,000,000 100.0%
of North Carolina
ix.
INDEX OF EXHIBITS
Exhibit A Form of Revolving Promissory Note
Exhibit B Form of Borrowing Base Certificate
Exhibit C Form of Compliance Certificate
Exhibit D Form of Security Agreement
Exhibit E Form of Guaranty
Exhibit F Form of Opinion of Counsel (Stephen Peary)
Exhibit G Form of Lockbox Agreement
Exhibit H Form of Notice of Borrowing
Exhibit I Form of Notice of Conversion/Continuation
Exhibit J Form of Assignment and Acceptance
INDEX OF SCHEDULES
Schedule A Commitments
Schedule 1.1 Amendments to Schedule A
Schedule 4.5 Executive Offices and Principal Places of Business
Schedule 4.6 Litigation
Schedule 4.7 Material Contracts
Schedule 4.8 Consent and Approvals
Schedule 4.10 Employment and Labor Agreements
Schedule 4.11 Employee Benefit Plans
Schedule 4.15 Environmental Disclosures
Schedule 6.1 Existing Liens
Schedule 6.11 Subsidiaries