THIRD AMENDED AND RESTATED
WAREHOUSING CREDIT AGREEMENT
AMONG
TEC ACQUISUB, INC.
And
THE LENDERS LISTED HEREIN,
and
FIRST UNION NATIONAL BANK,
as Agent
December 15, 1998
SECTION 1. DEFINITIONS.................................1
1.1 .......................................Defined Terms 1
1.2 ...................................Accounting Terms 17
1.3 .................................... Other Terms 17
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 18
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 20
2.2.3 .....................Mandatory Prepayments 20
2.3 ....Calculation of Interest; Post-Maturity Interest 21
2.4 .................................Manner of Payments 22
2.5 .......................Payment on Non-Business Days 22
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 23
2.8 ..............Conversion and Continuation Elections 23
2.8.1 ..................................Election 23
2.8.2 ......................Notice of Conversion 23
2.8.3 ...........................Interest Period 23
2.8.4 .............Unavailability of LIBOR Loans 24
2.9 ......Discretion of Lenders as to Manner of Funding 24
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 27
2.15.1 ..........................LIBOR Loans 27
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 28
SECTION 3. CONDITIONS PRECEDENT......29
3.1 ...................... Effectiveness of this Agreement 29
3.1.1 ................Corporate Documents 29
3.1.2 ................Notes 29
3.1.3 ................Security Documents 29
3.1.4 ................Opinion of Counsel 29
3.1.5 ................Reaffirmation of Guaranty 30
3.1.6 ................Growth Fund Agreement 30
3.1.7 ................Bringdown Certificate 30
3.1.8 ................Fees 30
3.1.9 ................Other Documents 30
3.2 .........................All Loans 30
3.2.1 ................Notice of Borrowing 30
3.2.2 ................Invoices 30
3.2.3 ................Title to Equipment 30
3.2.4 ................Approval of Loan 31
3.2.5 ................Leases 31
3.2.6 ................No Event of Default 31
3.2.7 ................Officer's Certificate 31
3.2.8 ................Officer's Certificate - Leases 31
3.2.9 ................Insurance 32
3.2.10 ................Warranty of TEC AcquiSub 32
3.2.11 ................Other Instruments 32
3.3 .........................Further Conditions to All Loans 33
3.3.1 ................General Partner or Manager 33
3.3.2 ............Removal of General Partner or Manager 33
3.3.3 ................Cash Balances 33
3.3.4 ................Purchaser 33
SECTION 4. BORROWER'S REPRESENTATIONS AND WARRANTIES..........33
4.1 .........................Existence and Power 33
4.2 ...Loan Documents and Note Authorized; Binding Obligations 33
4.3 .........................No Conflict; Legal Compliance 34
4.4 .........................Financial Condition 34
4.5 .........................Executive Offices 34
4.6 .........................Litigation 34
4.7 .........................Material Contracts 34
4.8 .........................Consents and Approvals 34
4.9 .........................Other Agreements 35
4.10 .........................Employment and Labor Agreements 35
4.11 .........................ERISA 35
4.12 .........................Labor Matters 35
4.13 .........................Margin Regulations 35
4.14 .........................Taxes 35
4.15 .........................Environmental Quality 36
4.16 Trademarks, Patents, Copyrights, Franchises and Licenses 36
4.17 .........................Full Disclosure 36
4.18 .........................Other Regulations 36
4.19 .........................Solvency. 37
4.20 .........................Year 2000 37
4.21 ..........Survival of Representations and Warranties 37
SECTION 5. BORROWER'S AFFIRMATIVE COVENANTS......37
5.1 .........................Records and Reports 37
5.1.1 ................Quarterly Statements 37
5.1.2 ................Annual Statements 37
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 ...........Certain Modifications to the Equipment 41
5.6.3 ................Performance of Leases 41
5.7 .........................Supplemental Disclosure 41
5.8 .........................Further Assurances 41
5.9 .........................Lockbox 42
5.10 .........................Environmental Laws 42
5.11 .........................Equipment Purchase Agreement 42
SECTION 6. BORROWER'S NEGATIVE COVENANTS.........42
6.1 ................Liens; Negative Pledges; and Encumbrances 42
6.2 .........................Acquisitions 43
6.3 .........................Limitations on Indebtedness 43
6.4 .........................Use of Proceeds 43
6.5 .........................Disposition of Assets 43
6.6 .........................Restricted Payments 43
6.7 .........................Restriction on Fundamental Changes 44
6.8 .........................Transactions with Affiliates 44
6.9 .........................No Loans to Affiliates 44
6.10 .........................No Investment 44
6.11 .........................Maintenance of Business 44
6.12 .........................No Modification to Leases 44
6.13 .........................No Subsidiaries 44
6.14 .........................Amendments of Charter Documents 44
6.15 .........................Events of Default 44
6.16 .........................ERISA 45
6.17 .........................No Use of Any Lender's Name 45
6.18 .........................Certain Accounting Changes 45
SECTION 7. FINANCIAL COVENANTS OF BORROWER.......45
7.1 ..................Minimum Consolidated Tangible Net Worth 46
SECTION 8. EVENTS OF DEFAULT AND REMEDIES........46
8.1 .........................Events of Default 46
8.1.1 ................Failure to Make Payments 46
8.1.2 ................Other Agreements 46
8.1.3 ................Breach of Covenants 46
8.1.4 ..........Breach of Representations or Warranties 46
8.1.5 ................Failure to Cure 47
8.1.6 ................Insolvency 47
8.1.7 ................Bankruptcy Proceedings 47
8.1.8 ................Material Adverse Effect 47
8.1.9 ................Judgments, Writs and Attachments 47
8.1.10 ................Legal Obligations 48
8.1.11 ................Growth Fund Agreement 48
8.1.12 ................Board of Directors 48
8.1.13 ................Criminal Proceedings 48
8.1.14 ................Action by Governmental Authority 48
8.1.15 ................Governmental Decrees 48
8.2 .........................Waiver of Default 49
8.3 .........................Remedies 49
8.4 .........................Set-Off 49
8.5 .........................Rights and Remedies Cumulative 50
SECTION 9. AGENT...........50
9.1 .........................Appointment 50
9.2 .........................Delegation of Duties 51
9.3 .........................Exculpatory Provisions 51
9.4 .........................Reliance by Agent 51
9.5 .........................Notice of Default 51
9.6 .................Non-Reliance on Agent and Other Lenders 52
9.7 .........................Indemnification 52
9.8 .........................Agent in Its Individual Capacity 52
9.9 ...........Resignation and Appointment of Successor Agent 53
SECTION 10. EXPENSES AND INDEMNITIES..........53
10.1 .........................Expenses 53
10.2 .........................Indemnification 54
10.2.1 ................General Indemnity 54
10.2.2 ................Environmental Indemnity 54
10.2.3 ................Survival; Defense 55
SECTION 11. MISCELLANEOUS...55
11.1 .........................Survival 55
11.2 .........................No Waiver by Agent or Lenders 55
11.3 .........................Notices 55
11.4 .........................Headings 55
11.5 .........................Severability 55
11.6 .....Entire Agreement; Construction;
Amendments and Waivers 56
11.7 .........................Reliance by Lenders 56
11.8 .........................Marshaling; Payments Set Aside 56
11.9 .........................No Set-Offs by Borrower 57
11.10 .........................Binding Effect, Assignment 57
11.11 .........................Counterparts 58
11.12 .........................Equitable Relief 58
11.13 .....Written Notice of Claims; Claims Bar 58
11.14 .........................Waiver of Punitive Damages 59
11.15 .........................Governing Law 59
11.16 .........................Waiver of Jury Trial 59
THIRD AMENDED AND RESTATED
WAREHOUSING CREDIT AGREEMENT
THIS THIRD AMENDED AND RESTATED WAREHOUSING CREDIT AGREEMENT is entered
into as of December 15, 1998, by and between TEC ACQUISUB, INC., a California
special purpose corporation ("Borrower"), the banks, financial institutions,
institutional lenders from time to time party hereto and defined as Lenders
herein and FIRST UNION NATIONAL BANK ("FUNB"), not in its individual capacity,
but solely as Agent. This Agreement amends, restates and supersedes the TEC
AcquiSub Agreement (as defined below).
RECITALS
A. Borrower, Lenders and Agent, entered into that Second Amended and
Restated Warehousing Credit Agreement dated as of December 2, 1997, as amended
(as so amended, the "TEC AcquiSub Agreement"), pursuant to which Lenders have
agreed to extend and make available to Borrower certain advances of credit.
B. Borrower and the Lenders desire to amend and restate the TEC
AcquiSub Agreement as set forth herein.
C. 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:
SECTION 1. DEFINITIONS.
1.1 Defined Terms. 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 or
joint venture.
"Adjusted LIBOR" means, for each Interest Period in respect of LIBOR
Loans, an interest rate per annum (rounded upward to the nearest 1/16th of one
percent (0.0625%)) determined pursuant to the following formula:
[GRAPHIC OMITTED]The Adjusted LIBOR shall be adjusted automatically as of the
effective date of any change in the Eurodollar Reserve Percentage.
"Advance" means any Advance made or to be made by any Lender to
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.
"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 December
15, 1998, by and among Borrower, AFG, each of the Growth Funds and Agent.
"Agreement" means this Third Amended and Restated Warehousing Credit
Agreement dated as of December 15, 1998, including all amendments, modifications
and supplements hereto, renewals, extensions or restatements hereof, and all
appendices, exhibits and schedules to any of the foregoing, and shall refer to
the Agreement as the same may be in effect from time to time.
"Aircraft" means any corporate, commuter, or commercial aircraft or
helicopters, with modifications (as applicable) and replacement or spare parts
used in connection therewith, including, without limitation, engines, rotables
and propellers, and any engines, rotables or propellers used on a stand-alone
basis.
"Applicable Margin" means:
(a) with respect to Prime Rate Loans, zero percent (0.00%);
and
(b) with respect to LIBOR Loans, one and five-eighths percent
(1.625%).
"Assignment And Acceptance" has the meaning set forth in Section
11.10.2.
"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.
"Borrower" has the meaning set forth in the Preamble.
"Borrowing Base" means, as at and for any date of determination, an
amount not to exceed the lesser of:
(a) an amount equal to eighty percent (80.0%) of the aggregate
Invoice Price of all Eligible Inventory then owned of record by Borrower or any
Marine Subsidiary or of record by an Owner Trustee for the beneficial interest
of Borrower or any Marine Subsidiary (provided, however, that there shall be
excluded from this clause (a) the aggregate Invoice Price of all items of
Eligible Inventory subject to a Lease under which any applicable lease or rental
payment is more than ninety (90) days past due), computed (1) with respect to
any requested Loan, as of the requested Funding Date (and shall include the
item(s) of Eligible Inventory to be acquired with the proceeds of the requested
Loan), and (2) with respect to the delivery of any monthly Borrowing Base
Certificate to be furnished pursuant to Section 5.1.3, as of the last day of the
calendar month for which such Borrowing Base Certificate is furnished (provided
that if any portion of Borrower's, such Marine Subsidiary's or such Owner
Trustee's ownership interest in any such item of Eligible Inventory is sold or
assigned to one or more of the Equipment Growth Funds such that Borrower, such
Marine Subsidiary or such Owner Trustee continues to retain less than the entire
record or beneficial ownership interest therein, then for the purpose of
computing the Borrowing Base under this clause (a), the Invoice Price of such
item of Eligible Inventory shall be deemed to be equal to Borrower's or such
Marine Subsidiary's ratable portion of the Invoice Price of such item of
Eligible Inventory); or
(b) an amount equal to one hundred percent (100.0%) of the
unrestricted cash available for purchase of Equipment by Equipment Growth Funds,
computed (x) with respect to any requested Loan, as of the requested Funding
Date (and shall include the aggregate Invoice Price of all item(s) of Eligible
Inventory to be acquired with the proceeds of the requested Loan), and (y) with
respect to the delivery of any monthly Borrowing Base Certificate to be
furnished pursuant to Section 5.1.3, as of the last day of the calendar month
for which such Borrowing Base Certificate is furnished (provided, that for the
purpose of computing the Borrowing Base, in the event that Borrower, any Marine
Subsidiary or any Owner Trustee shall own less than one hundred percent (100.0%)
of the record or beneficial interests in any item of Equipment, with one or more
of the other Equipment Growth Funds owning of record or beneficially the
remaining interests, there shall be included only Borrower's, such Marine
Subsidiary's or such Owner Trustee's, as the case may be, ratable interest in
such item of Equipment).
"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.
"Casualty Loss" means any of the following events with respect to any
item of Eligible Inventory: (a) the actual total loss or compromised total loss
of such item of Eligible Inventory; (b) such item of Eligible Inventory shall
become lost, stolen, destroyed, damaged beyond repair or permanently rendered
unfit for use for any reason whatsoever; (c) the seizure of such item of
Eligible Inventory for a period exceeding sixty (60) days or the condemnation or
confiscation of such item of Eligible Inventory; or (d) such item of Eligible
Inventory shall be deemed under its lease to have suffered a casualty loss as to
the entire item of Eligible Inventory.
"Charges" means 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 December 14, 1999.
"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 Requisite 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 Funded Debt" means for any Person, as measured at any
date of determination on a consolidated basis, the total amount of all interest
bearing obligations (including Indebtedness for borrowed money), capital lease
obligations as a lessee and the stated amount of all issued and undrawn letters
of credit.
"Consolidated Intangible Assets" means for any Person, on a
consolidated basis, as at any date of determination, all intangible assets of
such Person, as determined and computed in accordance with GAAP.
"Consolidated Net Worth" means, on a consolidated basis, as at any date
of determination, the difference between Consolidated Total Assets and
Consolidated Total Liabilities.
"Consolidated Tangible Net Worth" means, as at any date of
determination, the difference between Consolidated Net Worth and Consolidated
Intangible Assets.
"Consolidated Total Assets" means for any Person, on a consolidated
basis, as at any date of determination, all assets of such Person, as determined
and computed in accordance with GAAP.
"Consolidated Total Liabilities" means for any Person, on a
consolidated basis, as at any date of determination, all liabilities of such
Person, as determined and computed in accordance with GAAP.
"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.
"Dollars" and the sign "$" means lawful money of the United States of
America.
"Effective Amount" means with respect to any Loans on any date, the
aggregate outstanding principal amount thereof after giving effect to any
borrowing and prepayments or repayments thereof occurring on such date.
"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 & Income 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, (b) a commercial bank organized
under the laws of any other country which is a member of the Organization for
Economic Cooperation and Development ("OECD"), or a political subdivision of any
such country; provided, however, that such bank is acting through a branch or
agency located in the country in which it is organized or another country which
is also a member of the OECD or the Cayman Islands; (c) the central bank of any
country which is a member of the OECD; (d) an insurance company organized under
the laws of the United States; (e) a commercial finance company, mutual or other
investment fund, lease financing company or other institutional investor
(whether a corporation, partnership, trust or other entity) that is engaged in
making, purchasing or otherwise investing in commercial loans in the ordinary
course of its business, provided that such Person is an "accredited investo
(as defined in Regulation D under the Securities Act of 1933, as amended); (f)
any Lender party to this Agreement; (g) any Lender Affiliate and (h) any other
Person approved be Agent and Borrower, such approval not to be unreasonably
withheld; provided, however, that (i) Borrower's approval shall not be required
so long as an Event of Default has occurred and is continuing and (ii) an
Affiliate of Borrower shall not qualify as an Eligible Assignee.
"Eligible Inventory" means all Trailers (less than ten 10 years old),
Aircraft and Aircraft engines (complying with (a) Stage III noise reduction
requirements or (b) with Stage II noise reduction requirements if the present
value of the Lease payments with respect to such Aircraft, discounted at a rate
equal to the Prime Rate, exceeds seventy percent (70.0%) of the purchase price
for such Aircraft paid by Borrower); and Railcars (less than twenty (20) years
old), cargo containers (less than ten (10) years old), marine vessels (less than
fifteen (15) years old) and, if approved by the Requisite Lenders, other related
Equipment, in each case that (a) is owned of record by Borrower or a Marine
Subsidiary or, subject to the approval of Agent, any owner trust of which
Borrower is the sole beneficiary or owner, as applicable, or solely with respect
to any marine vessel registered in Liberia, the Bahamas, Hong Kong, Singapore or
other registry acceptable to Agent in its sole discretion, any nominee entity of
which Borrower or a Marine Subsidiary is the sole beneficiary or direct or
indirect owner; (b) is purchased in whole or in part by Borrower or such owner
trust of which Borrower is the sole beneficiary (or nominee entity of which
Borrower is the sole beneficiary or direct or indirect owner) with Loans from
Lenders under this Agreement; (c) is subject to a Lease acceptable to Agent in
its sole discretion (as reviewed in full in connection with each requested
borrowing hereunder), which Lease shall, at a minimum, (A) be non-cancelable,
(B) be with a lessee of acceptable credit quality as determined by Agent, and
(C) be of a firm term in excess of one (1) year, except that cargo-containers
and Trailers may be on Utilization Leases; (d) has a value and marketability
reasonably satisfactory to the Agent; (e) was not previously financed with the
proceeds of a Loan under this Agreement; (f) would, except for the fact such
item of Equipment is not owned of record or beneficially by any Growth Fund,
qualify as "Eligible Inventory" under and as defined in the Growth Fund
Agreement; and (g) is free and clear of all Liens, except (i) any interest of a
lessee thereof pursuant to a Lease entered into with Borrower or a Marine
Subsidiary or Borrower's or such Marine Subsidiary's predecessor in interest or
such owner trust or nominee entity, as lessor, or (ii) as otherwise permitted by
Section 6.1, provided that any Liens of the type permitted under clause (ii)
encumbering any item of Equipment shall not secure obligations in amounts which
materially impair the equity value in such item of Equipment. Requisite Lenders
in their sole discretion, on a case by case basis, may approve other items or
types of Equipment for credit under "Eligible Inventory" from time to time.
"Eligible Inventory" shall include only Equipment purchased by Borrower or such
owner trust (or nominee entity) of which Borrower is sole beneficiary, whether
by sale or assignment or otherwise, from independent third-parties not related
to PLMI or its Affiliates. Borrower may sell or assign a partial ownership
interest in any item of Eligible Inventory to one or more of the Equipment
Growth Funds in consideration of a purchase price, paid in cash, equal to the
ratable portion of the Invoice Price paid by Borrower for such item of Eligible
Inventory so sold or assigned without causing the underlying item of Equipment
to lose its status as Eligible Inventory by virtue of such sale on the condition
that, and only on the condition that, (x) a portion of the cash purchase price,
ratably related to the percentage of the Invoice Price of such item of Eligible
Inventory financed by a Loan advanced by Lenders hereunder, shall be used to
prepay such Loan in accordance with Section 2.2.3(c) and (y) Agent shall
continue to retain possession of the Lease in respect of such item of Equipment.
Subject to the immediately preceding sentence, Equipment which is Eligible
Inventory will cease to be Eligible Inventory at any time it no longer continues
to meet all of the above requirements. Eligible Inventory shall not include any
Equipment that was included in the borrowing base against which loans shall have
previously been made to Growth Funds under the Growth Fund Agreement.
"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 all items of transportation-related equipment owned
directly or beneficially by Borrower, by any Marine Subsidiary or by any Growth
Fund and held for lease or rental, and shall include items of equipment legal or
record title to which is held by any owner trust or nominee entity in which
Borrower, any Marine Subsidiary or Growth Funds holds the sole beneficial
interest.
"Equipment Growth Funds" means any and all of EGF, EGF II, EGF III, EGF
IV, EGF V, EGF VI, EGF VII and Income Fund I.
"Equipment Purchase Agreement" means an equipment purchase agreement,
in form and substance satisfactory to Agent, between Borrower and any Growth
Fund, entered into for the benefit of Lenders, providing for the purchase by
such Growth Fund of the Equipment upon which a Loan has been made.
"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.
"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 of
which Borrower is an indirect Subsidiary.
"FUNB" has the meaning set forth in the Preamble.
"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 VI, EGF VII and Income Fund I.
"Growth Fund Agreement" means the Fourth Amended and Restated
Warehousing Credit Agreement dated as of December 15, 1998, by among each of the
Growth Funds, FSI, Lenders and Agent, as the same may from time to time be
amended, modified, supplemented, renewed, extended or restated.
"Guaranty" means that certain Guaranty dated as of November 5, 1996,
executed by PLMI 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 Eligible Inventory, 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.
"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 Eligible Inventory.
"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 or any Growth
Fund is the lessor and in respect of which the lessee and lease terms
(including, without limitation, as to rental rate, maturity and insurance
coverage) are acceptable to Agent, in its reasonable discretion. The term
"Lease" includes (a) all payments to be made thereunder, (b) all rights of
Borrower therein, and (c) any and all amendments, renewals, extensions or
guaranties thereof.
"Lender Affiliate" means a Person engaged primarily in the business of
commercial banking and that is an Affiliate or Lender or of a Person of which a
Lender is an Affiliate.
"Lenders" means the banks, financial institutions or other financial
institutional lenders which have executed signature pages to this Agreement and
such other Assignees, banks, financial institutions or other institutional
lenders as shall hereafter execute and deliver an Assignment and Acceptance with
respect to all or any portion of the Commitments and the Loans advanced and
maintained pursuant to the Commitments, in each case pursuant to and in
accordance with Section 11.10.
"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 Notes, the Security
Agreement, the Lockbox Agreement and the Guaranties 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 Lockbox Agreement dated December 15,
1998, among Borrower, FUNB and Agent on behalf and for the benefit of Lenders,
relating to the Lockbox.
"Marine Subsidiary" means a wholly-owned Subsidiary of Borrower
organized for the purpose of holding record or beneficial title to one or more
marine vessels or aircraft rotables and spare parts; provided that such
Subsidiary shall continue to be deemed a Marine Subsidiary if Borrower shall
thereafter sell and transfer partial, but not the entire, record or beneficial
ownership interest therein to one or more Equipment Growth Funds (but for
purposes of computing the Borrowing Base, such Marine Subsidiary's record or
beneficial title to its owned Equipment shall be deemed to be limited to
Borrower's continuing ratable ownership interest in such Marine Subsidiary).
"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, FSI or TEC (c)
materially impairs or could reasonably be expected to materially impair the
ability of Borrower, FSI or TEC to perform its Obligations, or (d) materially
impairs or could reasonably be expected to materially impair the ability of
Agent or any Lender to enforce any of its or their legal remedies pursuant to
the Loan Documents.
"Maturity Date" means, with respect to each Loan advanced by Lenders
hereunder, the date which is one hundred fifty (150) days after the Funding Date
of such Loan or such earlier or later date as requested by Borrower and approved
by the Requisite Lenders, in their sole and absolute discretion; provided,
however, in no event shall any Maturity Date be a date which is later than the
Commitment Termination Date.
"Maximum Availability" has the meaning set forth in Section 2.1.1.
"Multiemployer Plan" means 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 E, 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 F,
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.
"Operating Agreement" means the Fifth Amended and Restated Operating
Agreement of Income Fund I, entered into as of January 24, 1995.
"Opinion of Counsel" means the favorable written legal opinion of Susan
Santo, general counsel of Borrower and TEC, substantially in the form of Exhibit
D.
"Other Taxes" has the meaning set forth in Section 2.14.2.
"Overadvance" has the meaning set forth in Section 2.1.1(a)(iii).
"Owner Trustee" means any person acting in the capacity of (a) a
trustee for any owner trust or (b) a nominee entity, in each case holding title
to any Eligible Inventory pursuant to a trust or similar agreement with Borrower
or FSI.
"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.
"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, as to any Lender at any time, the percentage
equivalent (expressed as a decimal, rounded to the ninth decimal place) at such
time of the Effective Amount of such Lender's Loans divided by the Effective
Amount of all Loans, or if no Loans are outstanding, the percentage equivalent
(expressed as a decimal, rounded to the ninth decimal place) at such time of
such Lender's aggregate Commitments divided by the aggregate Commitments, or, if
the Commitments have expired or been terminated and all Loans repaid in full,
the percentage equivalent (expressed as a decimal, rounded to the ninth decimal
place) of the Effective Amount of such Lender's Loans divided by the aggregate
Effective Amount of all Loans immediately before such repayment in full.
"Public Utility Holding Company Act" means the Public Utility Holding
Company Act of 1935, as amended (15 U.S.C. ss. 79 et seq.) as the same shall be
in effect from time to time, and any successor statute thereto.
"Railcar" means all railroad rolling stock, including, without
limitation, all coal, timber, plastic pellet, tank, hopper, flat and box cars
and locomotives.
"Reaffirmation of Guaranty" means the Acknowledgement and Reaffirmation
of Guaranty dated as of December 15, 1998, executed by PLMI in favor of Lenders
reaffirming its obligations under the Guaranty.
"Regulations T, U and X" means, collectively, Regulations T, U and X
adopted by the Federal Reserve Board (12 C.F.R. Parts 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 2/3%) of all
such amounts outstanding or the total Commitments, as the case may be; provided,
however, that in the event there are only two (2) Lenders, Requisite Lenders
means both Lenders.
"Responsible Officer" means 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 the Amended and Restated Security Agreement
entered into as of December 15, 1998, between Borrower and Agent, on behalf and
for the benefit of Lenders, 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.
"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 Borrower is a
special purpose Subsidiary.
"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.
"Trailer" means (a) vehicles having a minimum length of twenty (20)
feet used in trailer or freight car service and constructed for the transport of
commodities or containers from point to point and (b) associated equipment.
"UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of California; 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 California, the term "UCC" shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions hereof relating to such attachment, perfection or priority and
for purposes of definitions related to such provisions.
"Utilization Leases" means Leases for Equipment held for lease in
pooling or similar arrangements where the actual rental payments under such
Lease is based on and for the actual period of utilization of such item of
Equipment rather than the Lease term.
1.2 Accounting Terms. Any accounting term used in this Agreement shall
have, unless otherwise specifically provided herein, the meaning customarily
given such term in accordance with GAAP, and all financial data required to be
submitted by this Agreement shall be prepared and computed, unless otherwise
specifically provided herein, in accordance with GAAP. That certain terms or
computations are explicitly modified by the phrase "in accordance with GAAP"
shall in no way be construed to limit the foregoing. In the event that GAAP
changes during the term of this Agreement such that the covenants contained in
Section 7 would then be calculated in a different manner or with different
components, (a) the parties hereto agree to amend this Agreement in such
respects as are necessary to conform those covenants as criteria for evaluating
Borrower's financial condition to substantially the same criteria as were
effective prior to such change in GAAP and (b) Borrower shall be deemed to be in
compliance with the covenants contained in the aforesaid Sections during the
sixty (60) day period following any such change in GAAP if and to the extent
that Borrower would have been in compliance therewith under GAAP as in effect
immediately prior to such change.
1.3 Other Terms. All other undefined terms contained in this Agreement
shall, unless the context indicates otherwise, have the meanings provided for by
the UCC to the extent the same are used or defined therein. The words "herein,"
"hereof" and "hereunder" and other words of similar import refer to this
Agreement as a whole, including the Exhibits and Schedules hereto, all of which
are by this reference incorporated into this Agreement, as the same may from
time to time be amended, modified or supplemented, and not to any particular
section, Section or clause contained in this Agreement. The term "including"
shall not be limiting or exclusive, unless specifically indicated to the
contrary. The term "or" is disjunctive; the term "and" is conjunctive. The term
"shall" is mandatory; the term "may" is permissive. Wherever from the context it
appears appropriate, each term stated in either the singular or plural shall
include the singular and plural, and pronouns stated in the masculine, feminine
or neuter gender shall include the masculine, feminine and the neuter.
1.4 Schedules and Exhibits. Any reference to a "Sections", "Section",
"Exhibit", or "Schedule" shall refer to the relevant Section or Section of or
Exhibit or Schedule to this Agreement, unless specifically indicated to the
contrary.
SECTION 2. AMOUNT AND TERMS OF CREDIT.
2.1 Commitment to Lend.
2.1.1 Revolving Facility. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of 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 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 by each Lender shall be evidenced
by Borrower's revolving promissory note in favor of such Lender, substantially
in the form of Exhibit A (each, a "Note").
(ii) The obligation of Lenders to make any Loan from time to
time hereunder shall be limited to the then applicable Maximum Availability. For
the purpose of determining the amount of the Borrowing Base available at any one
time, the amount available shall be the total amount of the Borrowing Base as
set forth in the Borrowing Base Certificate delivered to Agent pursuant to
Section 3.2.1 with respect to 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 portion of the principal amounts
outstanding under this Agreement and the making of such Advance exceeds the
lesser of (A) such Lender's Commitment for the Facility and (B) such Lender's
Pro Rata Share of the Borrowing Base, or (2) taking into account such Lender's
portion of the principal amounts outstanding under this Agreement, under the
Growth Fund 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 repay the full amount of such Overadvance, together
with all interest accrued thereon; provided, however, that if such Overadvance
occurs solely as a result of a decrease in the amount of the Borrowing Base due
solely to a decrease in the computation of the Borrowing Base under clause (b)
of the definition of Borrowing Base, as set forth on a Borrowing Base
Certificate delivered to Agent pursuant to Section 5.1.3, then, to the extent of
such decrease, Borrower shall not be required under this Section 2.1.1(a)(iii)
to prepay such Overadvance but Lenders shall have no obligation to make or fund
any Loans or extend any credit hereunder so long as such Overadvance condition
shall remain in effect.
(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 have a Maturity Date which is 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.
(b) Each Loan. 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, as the case may be plus 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 Maturity Date for such Loan.
Each Advance made by a Lender as part of a Loan hereunder and all
repayments of principal with respect to such Advance shall be evidenced by
notations made by such Lender on the books and records of such Lender; provided,
however, that the failure by such Lender to make such notations shall not limit
or otherwise affect the obligations of Borrower with respect to the repayments
of principal or payments of interest on any Advance or Loan. The aggregate
unpaid amount of each Advance set forth on the books and records of a Lender
shall be presumptive evidence of such Lender's Pro Rata Share of the principal
amount owing and unpaid under the respective Note.
2.1.2 Funding. Promptly following the receipt of such documents
required pursuant to Section 3.2.1 and approval of a Loan by 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.
2.1.3 Utilization of the Loans. The Loans made under the Facility may
be used solely for the purpose of acquiring the specific items of Eligible
Inventory approved by Agent, in its sole discretion, and against which Lenders
have made Advances; provided, however, in no event shall the proceeds of any
Loan be used to finance more than eighty percent (80.0%) of the Invoice Price of
any item of Eligible Inventory to be purchased with the proceeds of such Loan.
The parties hereto understand and contemplate that the Loans are being requested
to finance the acquisition of items of Eligible Inventory and that only upon the
funding of such Loans and the acquisition of record title by Borrower or a
Marine Subsidiary or by an Owner Trustee for the beneficial interest of Borrower
or a Marine Subsidiary in a single or back-to-back transaction will the
ownership requirements of Eligible Inventory be satisfied.
2.2 Repayment and Prepayment.
2.2.1 Repayment. Unless prepaid pursuant to Section 2.2.2, the
principal amount of each Loan hereunder shall be repaid by Borrower to Lenders
not later than the Maturity Date of such Loan.
2.2.2 Voluntary Prepayment. 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.
2.2.3 Mandatory Prepayments.
(a) In the event that any item of Eligible Inventory shall be
sold or assigned by Borrower or any Marine Subsidiary, or the ownership
interests (whether Stock or otherwise) of Borrower in any Marine Subsidiary
owning record or beneficial title to any item of Eligible Inventory shall be
sold or transferred, then Borrower shall immediately prepay the Loan made with
respect to such Eligible Inventory so sold or assigned or with respect to the
Eligible Inventory owned by such Marine Subsidiary so sold or transferred,
together with accrued interest on such Loan to the date of prepayment and any
amounts required pursuant to Section 2.18. The sale or assignment of Eligible
Inventory by an Owner Trustee, or the sale or assignment of Borrower's or any
Marine Subsidiary's beneficial interest in any owner trust (or nominee entity)
holding title to Eligible Inventory shall be considered a sale or assignment, as
the case may be, of such Eligible Inventory by Borrower or such Marine
Subsidiary, as the case may be.
(b) In the event that any of the Eligible Inventory shall have
sustained a Casualty Loss, Borrower shall promptly notify Agent and Lenders of
such Casualty Loss and make arrangements reasonably acceptable to the Agent to
cause any and all cash proceeds received by Borrower to be paid to Lenders as a
prepayment hereunder. To the extent not so prepaid, the Loan funded with respect
to such Eligible Inventory will nevertheless be paid by Borrower as provided in
Section 2.2.1.
(c) In the event Borrower, any Marine Subsidiary or any Owner
Trustee shall sell or assign any partial (i.e., less than one hundred percent
(100.0%)) interest in any item of Eligible Inventory pursuant to Section 6.5,
Borrower shall immediately prepay the Loan made with respect to such Eligible
Inventory in which an interest has been so sold or assigned in an amount equal
to that portion of the purchase price paid for such partial interest which is
ratably related to the percentage of the Invoice Price paid by Borrower, such
Marine Subsidiary or Owner Trustee for such item of Eligible Inventory when
originally financed by such Loan, together with all interest accrued on such
Loan to the date of prepayment. For example, if Borrower paid an Invoice Price
of $10,000,000 for an item of Eligible Inventory, of which $8,000,000 was
financed with a Loan hereunder, if Borrower subsequently sells to an Equipment
Growth Fund a forty percent (40.0%) interest in such item of Eligible Inventory
for a purchase price of $4,000,000, Borrower shall prepay the related Loan in
the principal amount of $3,200,000.
(d) In the event that the Growth Fund Agreement shall be
terminated for any reason as to any one or more of the Growth Funds, then
Borrower shall immediately prepay any and all amounts outstanding under this
Agreement and the Lenders' Commitments shall, without notice, immediately and
automatically terminate.
2.3 Calculation of Interest; Post-Maturity Interest. Interest on the Loans
shall be computed on the basis of a 365/366-day year for all Prime Rate Loans
and a 360-day year for all LIBOR Loans and the actual number of days elapsed in
the period during which such interest accrues. In computing interest on any
Loan, the date of the making of such Loan shall be included and the date of
payment shall be excluded. Each change in the interest rate of 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.
2.4 Manner of Payments. All repayments or prepayments of principal and all
payments of interest, fees, costs, expenses and other sums chargeable to
Borrower under this Agreement, the Notes or any of the other Loan Documents
shall be in lawful money of the United States of America in immediately
available funds and delivered to Agent, for the account of Lenders, not later
than 1:00 p.m., North Carolina time, on the date due at First Union National
Bank, One First Union Center, 301 South College Street, Charlotte, North
Carolina 28288, Attention: Maria Ostrowski, or such other place as shall have
been designated in writing by Agent.
2.5 Payment on Non-Business Days. Whenever any payment to be made under
this Agreement, any Note or any of the other Loan Documents shall be stated to
be due on a day which is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall in such case be
included in the computation of the payment of interest thereon; provided,
however, that no Loan shall have remained outstanding after the Maturity Date of
such Loan.
2.6 Application of Payments. All payments to or for the benefit of Lenders
hereunder shall be applied 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.
2.7 Procedure for the Borrowing of Loans.
2.7.1 Notice of Borrowing. 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 three (3) months.
2.7.2 Unavailability of LIBOR Loans. Unless Agent shall otherwise
consent, during the existence of an Event of Default or Potential Event of
Default, Borrower may not elect to have a Loan made as a LIBOR Loan.
2.8 Conversion and Continuation Elections.
2.8.1 Election. 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.
2.8.2 Notice of Conversion. 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.
2.8.3 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.
2.8.4 Unavailability of LIBOR Loans. Unless Agent shall otherwise
consent, during the existence of an Event of Default or Potential Event of
Default, Borrower may not elect to have a Loan converted into or continued as a
LIBOR Loan.
2.9 Discretion of Lenders as to Manner of Funding. Notwithstanding any
provision of this Agreement to the contrary, each Lender shall be entitled to
fund and maintain its funding of all or any part of its LIBOR Loans in any
manner it elects, it being understood, however, that for the purposes of this
Agreement all determinations hereunder shall be made as if such Lender actually
funded and maintained each LIBOR Loan through the purchase of deposits having a
maturity corresponding to the maturity of the LIBOR Loan and bearing an interest
rate equal to the LIBOR rate (whether or not, in any instance, Lender shall have
granted any participations in such Loan). Each Lender may, if it so elects,
fulfill any commitment to make LIBOR Loans by causing a foreign branch or
affiliate to make or continue such LIBOR Loans; provided, however, that in such
event such Loans shall be deemed for the purposes of this Agreement to have been
made by such Lender, and the obligation of 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.
2.10 Distribution of Payments. Agent shall immediately distribute to each
Lender, at such address as each Lender shall designate, its respective interest
in all repayments and prepayments of principal and all payments of interest and
all fees, expenses and costs received by Agent on the same day and in the same
type of funds as payment was received. In the event Agent does not distribute
such payments on the same day received, if such payments are received by Agent
by 1:00 p.m., North Carolina time, or if received after such time, on the next
succeeding Business Day, such payment shall accrue interest at the Federal Funds
Rate.
2.11 Agent's Right to Assume Funds Available for Advances. Unless Agent
shall have been notified by any Lender no later than the Business Day prior to
the respective Funding Date of a Loan that such Lender does not intend to make
available to Agent an Advance in immediately available funds equal to such
Lender's Pro Rata Share of the total principal amount of such Loan, Agent may
assume that such Lender has made such Advance to Agent on the date of the Loan
and Agent may, in reliance upon such assumption, make available to 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.
2.12 Agent's Right to Assume Payments Will be Made by Borrower. 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 Lende 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.
2.13 Capital Requirements. If any Lender determines that compliance with
any law or regulation or with any guideline or request from any central bank or
other Governmental Authority (whether or not having the force of law) has or
would have the effect of reducing the rate of return on the capital of such
Lender or any corporation controlling such Lender as a consequence of, or with
reference to, such Lender's Commitment or its making or maintaining its Pro Rata
Share of the Loans below the rate which such Lender or such other corporation
could have achieved but for such compliance (taking into account the policies of
such Lender or corporation with regard to capital), then 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.
2.14 Taxes.
2.14.1 No Deductions. Subject to Section 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").
2.14.2 Miscellaneous 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").
2.14.3 Indemnity. Subject to Section 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.
2.14.4 Required Deductions. 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 Section 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.
2.14.5 Evidence of Payment. 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.
2.14.6 Foreign Persons. Each Lender which is a foreign person (i.e., a
person other than a United States person for United States Federal income tax
purposes) shall:
(a) No later than the date upon which such Lender becomes a party
hereto deliver to 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.
2.14.7 Income Taxes. Borrower will not be required to pay any
additional amounts in respect of United States Federal income tax pursuant to
Section 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 Section 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 Section 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 Section 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.
2.14.8 Reimbursement of Costs. If, at any time, Borrower requests any
Lender to deliver any forms or other documentation pursuant to Section
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.
2.14.9 Jurisdiction. If Borrower is required to pay additional amounts
to any Lender or Agent pursuant to Section 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.
2.15 Illegality.
2.15.1 LIBOR Loans. If any Lender shall determine that the
introduction of any Requirement of Law, or any change in any Requirement of Law
or in the interpretation or administration thereof, has made it unlawful, or
that any central bank or other Governmental Authority has asserted that it is
unlawful, for such Lender or its Lending Office to make LIBOR Loans, then, on
notice thereof by Lender to 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.
2.15.2 Prepayment. 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.
2.15.3 Prime Rate Borrowing. If Borrower is required to prepay any
LIBOR Loan immediately as provided in Section 2.15.2, then concurrently with
such prepayment, Borrower shall borrow, in the amount of such prepayment, a
Prime Rate Loan.
2.16 Increased Costs. If any Lender shall determine that, due to either (a)
the introduction of or any change (other than any change by way of imposition of
or increase in reserve requirements included in the calculation of the LIBOR) in
or in the interpretation of any Requirement of Law or (b) the compliance with
any guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
cost to such Lender of agreeing to make or making, funding or maintaining any
LIBOR Loans, then 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.
2.17 Inability to Determine Rates. If Agent shall have determined that for
any reason adequate and reasonable means do not exist for ascertaining the LIBOR
for any requested Interest Period with respect to a proposed LIBOR Loan or that
the LIBOR applicable for any requested Interest Period with respect to a
proposed LIBOR Loan does not adequately and fairly reflect the cost to Lenders
of funding such Loan, Agent will forthwith give notice of such determination to
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.
2.18 Prepayment of LIBOR Loans. 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:
2.18.1 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
2.18.2 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.
SECTION 3. CONDITIONS PRECEDENT.
3.1 Effectiveness of this Agreement. The effectiveness of this amended and
restated Agreement is subject to the satisfaction of the following conditions
precedent:
3.1.1 Corporate Documents. 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
Borrower and PLMI, including all corporate resolutions of Borrower and PLMI
authorizing or relating to the execution, delivery and performance of this
Agreement and the other Loan Documents and the consummation of the transactions
contemplated hereby and thereby;
(b) A certificate of a Responsible Officer of each of Borrower
and PLMI, stating that (A) the articles or certificate of incorporation, as the
case may be, bylaws and any other formation documents of Borrower and PLMI
previously delivered to Agent in relation to the TEC AcquiSub Agreement are true
and accurate, remain in full force and effect and have not been amended since
the date thereof and (B) each of Borrower and PLMI 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 business requires such
qualification;
(c) Certificates of incumbency and signature with respect to the
authorized representatives of Borrower and PLMI executing this Agreement and the
other Loan Documents and requesting Loans; and
(d) Such other documents relating to Borrower or PLMI as Lenders
reasonably may request.
3.1.2 Notes. Agent shall have received the Note, in form and substance
satisfactory to Lenders, duly executed and delivered by Borrower, which Note
shall replace and supersede the existing Note dated as of November 3, 1997,
issued by Borrower to FUNB.
3.1.3 Security Documents. Agent shall have received the Security
Documents in form and substance satisfactory to Lenders, duly executed and
delivered by Borrower.
3.1.4 Opinion of Counsel. Agent shall have received an originally
executed Opinion of Counsel on behalf of Borrower and PLMI, in form and
substance satisfactory to Lenders, dated as of the Closing Date and addressed to
Lenders, together with copies of any officer's certificate or legal opinion of
other counsel or law firm specifically identified and expressly relied upon by
such counsel.
3.1.5 Reaffirmation of Guaranty. Agent shall have received the
Reaffirmation of Guaranty duly executed and delivered by PLMI.
3.1.6 Growth Fund Agreement. 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.
3.1.7 Bringdown Certificate. 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.
3.1.8 Fees. Agent shall have received the Agent's Side Letter duly
executed by Borrower and each of the Growth Funds, and Agent shall have received
the fees described in the Agent's Side Letter.
3.1.9 Other Documents. Agent shall have received such other documents,
information and items from Borrower and PLMI as reasonably requested by Agent.
3.2 All Loans. Unless waived in writing by Requisite Lenders, the
obligation of any Lender to make any Advance is subject to the satisfaction of
the following further conditions precedent:
3.2.1 Notice of Borrowing. At least three (3) Business Days before
each Loan hereunder with respect to any acquisition of Equipment by Borrower,
Agent shall have received (a) a Notice of Borrowing; (b) a Borrowing Base
Certificate; (c) a description of the transaction, including (i) a listing of
all Equipment against which Borrower is requesting that a Loan be made,
identifying each item of Equipment by serial number, registration number or
other identifying mark, as applicable, and indicating whether each such item is
owned by Borrower or by an Owner Trustee for the benefit of Borrower (and if the
latter, identifying such Owner Trustee and date of any applicable trust or
similar agreement), (ii) the lessee, the date of the lease and the lease
termination date, (iii) lessee financial information, and (iv) the terms of the
underlying lease; and (d) other information as may be requested by the Agent to
confirm that such Equipment satisfies the criteria for Eligible Inventory.
3.2.2 Invoices. At least five (5) Business Days before each Loan
hereunder with respect to any acquisition of Equipment by Borrower, Agent shall
have received invoice and such other information related to the purchase of each
item of Equipment as Agent shall reasonably request to confirm that the proceeds
of the requested Loan will not be used to finance more than eighty percent
(80.0%) of the Invoice Price of such Equipment.
3.2.3 Title to Equipment. At least five (5) Business Days before each
Loan hereunder with respect to any acquisition of Equipment by Borrower, Agent
shall have received such documents and copies of instruments of title as Agent
shall reasonably request to confirm that upon the consummation of such
acquisition, Borrower shall have acquired of record (or if such Equipment is to
be acquired of record by an Owner Trustee, the beneficial interest in) such
Equipment, free and clear of any Liens or other encumbrances on title (other
than Permitted Liens).
3.2.4 Approval of Loan. Approval of such requested Loan by Agent,
after review of the lessee, Equipment, Lease and any other material
circumstances relating to the Loan.
3.2.5 Leases. Prior to the Funding Date of any such Loan, if
available, and in no event later than five (5) Business Days following such
Funding Date, Borrower shall have delivered to Agent, on behalf of Lenders, the
original executed counterparts of each Lease or schedules thereto or other
chattel paper, if any, relating to such Equipment and Eligible Inventory (other
than with respect to Railcars if such Railcars are leased pursuant to a master
lease, in which event Borrower shall deliver to Agent the applicable schedule(s)
to such master lease), against which the Loan is to be made.
3.2.6 No Event of Default. No event shall have occurred and be
continuing or would result from the making of any Loan on such Funding Date
which constitutes an Event of Default or Potential Event of Default under this
Agreement or under (and as separately defined in) the Growth Fund 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.
3.2.7 Officer's Certificate. 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 (i) 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), (ii) Borrower shall have either available cash or have
received a capital contribution from TEC for the purpose of funding at least
twenty percent (20.0%) of the Invoice Price of the Equipment to be financed with
such requested Loan, and if such a capital contribution has been made, attaching
a certificate of the Chief Financial Officer or Corporate Controller of TEC to
the effect that the making of such capital contributions has not caused TEC to
cease to be Solvent and (iii) from the perspective of prudent portfolio
diversity and management, given the Growth Funds' then existing portfolio, such
Equipment is of a type, model, age and condition consistent with the investment
objectives of the Growth Funds.
3.2.8 Officer's Certificate - Leases. 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 Lease relating to an item
of Equipment being financed with such Loan to the effect that:
(a) The Lease constitutes the entire agreement of the parties
thereto and no party thereto shall be bound except in accordance therewith;
(b) No amendments, modifications, supplements or addenda have
been made to, or schedules attached to, the Lease except as disclosed in such
certificate and the sole original thereof having been delivered to Agent;
(c) No material default exists under the Lease as of the date of
the Loan;
(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) Borrower is the sole owner and lessor of the Equipment
covered by the Lease;
(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
(except with respect to Leases covering time charters for marine vessels,
railcars and trailers consistent with industry standards for such type of
leases);
(g) Borrower has not and will not give or loan to any lessee that
is a party to the Lease, directly or indirectly, any unpaid rent or other amount
due or to become due under the Lease; and
(h) 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.
3.2.9 Insurance. The insurance required to be maintained by Borrower
pursuant to the Loan Documents shall be in full force and effect.
3.2.10 Warranty of TEC AcquiSub. Agent shall have received from
Borrower its written representation and warranty that 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 (or if an Owner
Trustee or Marine Subsidiary is to acquire record title, such Owner Trustee or
Marine Subsidiary) shall acquire good title to the item of Equipment against
which the Loan is to be made, free and clear of all Liens and other encumbrances
on title (other than Permitted Liens).
3.2.11 Other Instruments. 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.
3.3 Further Conditions to All Loans. Notwithstanding anything to the
contrary contained in this Agreement, unless waived in writing by Requisite
Lenders, no Lender shall have any obligation hereunder to make any Advance if
any of the following events shall occur:
3.3.1 General Partner or Manager. FSI shall have ceased to be the sole
general partner of any Growth Fund or the sole manager of Income Fund I, whether
due to the voluntary or involuntary withdrawal, substitution, removal or
transfer of FSI from or of all or any portion of FSI's general partnership
interest in any Growth Fund or capital contribution in Income Fund I.
3.3.2 Removal of General Partner or Manager. Twenty five percent
(25.0%) or more of the limited partners (measured by such partners' percentage
interest) of any Equipment Growth Fund shall at any time vote to remove FSI as
the general partner of such Equipment Growth Fund or a majority in interest of
Class A members, as that term is defined in the Operating Agreement of Income
Fund I, of Income Fund I shall at any time vote to remove FSI as the manager of
Income Fund I, in each case, regardless of whether FSI is actually removed.
3.3.3 Cash Balances. The Equipment Growth Funds of which FSI is the
sole general partner shall at any time fail to maintain unrestricted cash
balances totaling, in the aggregate, $10,000,000.
3.3.4 Purchaser. Borrower or its Subsidiaries, Growth Funds, FSI or
its Subsidiaries shall have ceased to be the purchaser of Eligible Inventory for
any Growth Fund.
SECTION 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:
4.1 Existence and Power. Borrower is a corporation, duly organized, validly
existing and in good standing under the laws of the State of California 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 it is a party thereto) and all other instruments
and documents contemplated hereby or thereby.
4.2 Loan Documents and Note Authorized; Binding Obligations. 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 Notes 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.
4.3 No Conflict; Legal Compliance. The execution, delivery and performance
of this Agreement, and each of the other Loan Documents and the execution,
delivery and payment of the Notes will not: (a) contravene any provision of
Borrower's articles 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.
4.4 Financial Condition. FSI's audited consolidated financial statements as
of December 31, 1997, and Borrower's and FSI's unaudited consolidated financial
statements as of September 30, 1998, 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 FSI, as of the date
thereof, and have been prepared in accordance with GAAP, subject to fiscal
year-end audit adjustments. There has been no material adverse change in the
business, properties or assets, operations, prospects, profitability or
financial or other condition of Borrower or FSI since December 31, 1997.
4.5 Executive Offices. The current location of Borrower's chief executive
offices and principal places of business is set forth on Schedule 4.5.
4.6 Litigation. 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.
4.7 Material Contracts. Schedule 4.7 lists all currently effective
contracts and agreements (whether written or oral) to which Borrower is a party.
There are no material defaults under any such contract or agreement by Borrower.
Borrower has delivered to Agent true and correct copies of all such contracts or
agreements (or, with respect to oral contracts or agreements, written
descriptions of the material terms thereof).
4.8 Consents and Approvals. 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 4.8, 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.
4.9 Other Agreements. 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.
4.10 Employment and Labor Agreements. There are no employment agreements
covering management of Borrower and there are no collective bargaining
agreements or other labor agreements covering any employees of Borrower.
4.11 ERISA. Borrower does not have any Employee Benefit Plan which is
subject to ERISA.
4.12 Labor Matters. 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.
4.13 Margin Regulations. Borrower does not own any "margin security", as
that term is defined in Regulation 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 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.
4.14 Taxes. 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.
4.15 Environmental Quality.
4.15.1 Except as specifically disclosed in Schedule 4.15, the on-going
operations of Borrower comply in all material respects with all Environmental
Laws.
4.15.2 Except as specifically disclosed in Schedule 4.15, 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.
4.15.3 Except as specifically disclosed in Schedule 4.15, 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.
4.15.4 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.
4.16 Trademarks, Patents, Copyrights, Franchises and Licenses. 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.
4.17 Full Disclosure. As of the Closing Date, no information contained in
this Agreement, the other Loan Documents or any other documents or written
materials furnished by or on behalf of 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.
4.18 Other Regulations. 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.
4.19 Solvency. Borrower is Solvent.
4.20 Year 2000. Borrower has reviewed the areas within its business and
operations which could be adversely affected by, and has developed or is
developing a program to address on a timely basis, the "Year 2000 Problem" (that
is, the risk that computer applications used by Borrower may be unable to
recognize and perform properly date-sensitive functions involving certain dates
prior to and any date on or after December 31, 1999), and have made related
appropriate inquiry of material suppliers, vendors and customers. Based on such
review and program, Borrower believes that the "Year 2000 Problem" would not
with reasonable likelihood have or result in a Material Adverse Effect.
4.21 Survival of Representations and Warranties. So long as any of the
Commitments shall be available and until payment and performance in full of the
Obligations, the representations and warranties contained herein shall have a
continuing effect as having been true when made.
SECTION 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:
5.1 Records and Reports. Maintain a system of accounting administered in
accordance with sound business practices to permit preparation of financial
statements in conformity with GAAP, and deliver to Agent or caused to be
delivered to Agent:
5.1.1 Quarterly Statements. As soon as practicable and in any event
within sixty (60) days after the end of each quarterly accounting period of
Borrower, FSI and PLMI, except with respect to the final fiscal quarter of each
fiscal year, in which case as soon as practicable and in any event within one
hundred twenty (120) days after the end of such fiscal quarter, consolidated and
consolidating balance sheets of FSI and PLMI and a balance sheet of Borrower as
at the end of such period and the related consolidated (and, as to statements of
income only for FSI, consolidating) statements of income and stockholders'
equity of Borrower and FSI 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, FSI and PLMI that they
(i) are complete and fairly present the financial condition of Borrower, FSI and
PLMI as at the dates indicated and the results of their operations and changes
in their cash flow for the periods indicated, (ii) disclose all liabilities of
Borrower, FSI and PLMI that are required to be reflected or reserved against
under GAAP, whether liquidated or unliquidated, fixed or contingent and (iii)
have been prepared in accordance with GAAP, subject to changes resulting from
audit and normal year-end adjustment;
5.1.2 Annual Statements. As soon as practicable and in any event
within one hundred twenty (120) days after the end of each fiscal year of
Borrower, FSI and PLMI, consolidated and consolidating balance sheets of FSI and
PLMI and a balance sheet of Borrower as at the end of such year and the related
consolidated (and, as to statements of income only for FSI and PLMI,
consolidating) statements of income, stockholders' equity and cash flows of
Borrower, FSI 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 Borrower, FSI 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 FSI and
PLMI;
5.1.3 Borrowing Base Certificate. As soon as practicable, and in any
event not later than fifteen (15) days after the end of each calendar month in
which a Loan has been, or is outstanding, a Borrowing Base Certificate dated as
of the last day of such month, duly executed by a Chief Financial Officer or
Corporate Controller of Borrower, with appropriate insertions;
5.1.4 Compliance Certificate. As soon as practicable, and in any event
not later than forty-five (45) days after the end of each fiscal quarter of
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;
5.1.5 Reports. At Agent's request, promptly upon receipt thereof,
copies of all reports submitted to Borrower, FSI, TEC or PLMI by independent
public accountants in connection with each annual, interim or special audit of
the financial statements of Borrower, FSI, TEC or PLMI made by such accountants;
5.1.6 Insurance Reports. (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;
5.1.7 Certificate of Responsible Officer. 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, FSI, TEC 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 FSI, TEC 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 FSI, TEC 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, FSI, TEC
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, FSI, TEC or PLMI has taken, is taking and proposes to take
with respect thereto;
5.1.8 Employee Benefit Plans. Promptly upon becoming aware of the
occurrence of any (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;
5.1.9 ERISA Notices. 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;
5.1.10 Pension Plans. 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;
5.1.11 SEC Reports. As soon as available and in no event later than
five (5) days after the same shall have been filed with the SEC, a copy of each
Form 8-K Current Report, Form 10-K Annual Report, Form 10-Q Quarterly Report,
Annual Report to Shareholders, Proxy Statement and Registration Statement of
PLMI;
5.1.12 Tax Returns. Upon the request of Agent, copies of all federal,
state, local and foreign tax returns and reports in respect of income, franchise
or other taxes on or measured by income (excluding sales, use or like taxes)
filed by or on behalf of Borrower, FSI, TEC and PLMI; and
5.1.13 Additional Information. 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, FSI and PLMI to be delivered by
Borrower, FSI and PLMI to Agent pursuant to this Section 5.1 will be complete
and correct and present fairly the financial condition of Borrower, FSI and PLMI
as of the date thereof; will disclose all liabilities of Borrower, FSI and PLMI
that are required to be reflected or reserved against under GAAP, whether
liquidated or unliquidated, fixed or contingent; and will have been prepared in
accordance with GAAP. All tax returns submitted to Agent by Borrower, FSI and
PLMI will, to the best of Borrower's, FSI's and PLMI's knowledge, after due
inquiry, be true and correct. Borrower, FSI and PLMI hereby agree that each time
either submits a financial statement or tax return to Agent, Borrower, FSI 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.
Statements of financial performance required to be provided by Borrower
to Agent pursuant to this Section 5.1 shall (i) include a statement that the
Year 2000 remediation efforts of Borrower are proceeding as scheduled and no
Material Adverse Effect is expected to result from the "Year 2000 Problem"
(within the meaning of such term set forth in Section 4.20) or such remediation
efforts and (ii) indicate whether an auditor, regulator or third party
consultant has issued a management letter or other communication regarding the
Year 2000 exposure, program or progress of Borrower.
5.2 Existence; Compliance with Law. 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.
5.3 Insurance. 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, fire, extended coverage, public
liability, property damage, environmental hazard and workers' compensation, in
each case carried with financially sound Persons and in amounts satisfactory to
the Requisite Lenders (subject to commercial reasonableness as to each type of
insurance); provided, however, that the types and amounts of insurance shall not
provide any less coverage for Borrower than provided as of the Closing Date by
the existing blanket policies of insurance for PLMI and its Subsidiaries. All
such policies of property insurance carry endorsements naming Agent as principal
loss payee as to any property owned by Borrower and all such policies as to
liability insurance 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.
5.4 Taxes and Other Liabilities. 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.
5.5 Inspection Rights; Assistance. At any reasonable time and from time to
time during normal business hours, permit Agent or any Lender or any agent,
representative or employee thereof, to examine and make copies of and abstracts
from the financial records and books of account of 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.
5.6 Maintenance of Facilities; Modifications; Performance of Leases.
5.6.1 Maintenance of Facilities. 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.
5.6.2 Certain Modifications to the Equipment. Subject to Section
5.6.1, Borrower shall promptly make, or cause to be made, all modifications,
additions and adjustments to the Eligible Inventory as may from time to time be
required by any Governmental Authority having jurisdiction over the operation,
safety or use thereof.
5.6.3 Performance of Leases. Borrower shall timely perform in all
material respects each of its covenants and obligations under the Leases to
which it is a party.
5.7 Supplemental Disclosure. 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.
5.8 Further Assurances. 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.
5.9 Lockbox. 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.
5.10 Environmental Laws. Borrower shall conduct its operations and keep and
maintain its Property in material compliance with all Environmental Laws.
5.11 Equipment Purchase Agreement. Borrower shall, upon the request of
Agent, which request may be made with respect to any Loan on or after the date
which is one hundred twenty (120) days after the Funding Date of such Loan,
deliver to Agent an Equipment Purchase Agreement with respect to the Equipment
against which such Loan was made.
SECTION 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:
6.1 Liens; Negative Pledges; and Encumbrances. Borrower shall not create,
incur, assume or suffer to exist, and shall not permit any Marine Subsidiary or
Owner Trustee to create, incur, assume or suffer to exist, any Lien of any
nature upon or with respect to any of their respective Property, whether now or
hereafter owned, leased or acquired, except (collectively, the "Permitted
Liens"):
6.1.1 Liens granted in favor of Agent on behalf of Lenders under the
Security Agreement and the other Security Documents;
6.1.2 Liens for Charges if payment shall not at the time be required
to be made in accordance with Section 5.4;
6.1.3 Liens in respect of pledges, obligations or deposits (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, any Marine Subsidiary or any Owner Trustee
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 or any Owner Trustee; 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
6.1.4 Permitted Rights of Others.
6.2 Acquisitions. Borrower shall not, and shall not permit any Marine
Subsidiary to, make any Acquisition or enter into any agreement to make any
Acquisition, except with respect to the formation of Marine Subsidiaries and the
purchase of Equipment in the ordinary course of its or their respective
business.
6.3 Limitations on Indebtedness. Borrower shall not, and shall not permit
any Marine Subsidiary or Owner Trustee to, create, incur, assume or suffer to
exist, any Indebtedness or Contingent Obligation; provided, however, that this
Section 6.3 shall not be deemed to prohibit:
6.3.1 The Obligations to Lenders and Agent arising under this
Agreement and the other Loan Documents; and
6.3.2 With the prior written consent of Agent, Indebtedness incurred
in respect of the deferred purchase price for an item of Eligible Inventory to
be financed with the proceeds of a Loan hereunder, but only to the extent that
the incurrence of such Indebtedness is customary in the industry with respect to
the purchase of this type of equipment (provided that such Indebtedness shall
only be permitted under this clause (b) if, taking into account the incurrence
of such Indebtedness, Borrower shall not be in violation of any of the financial
covenants set forth in Section 7 if measured as of the date of incurrence as
determined by GAAP).
6.4 Use of Proceeds. Borrower and FSI shall not, and shall not permit any
Marine Subsidiary or Owner Trustee holding record title to any Eligible
Inventory for the beneficial interest of Borrower or FSI to, use the proceeds of
any Loan except for the purpose set forth in Section 2.1.3, and shall not, and
shall not permit any such Marine Subsidiary or such Owner Trustee to, use the
proceeds to repay any loans or advances made by any other Person.
6.5 Disposition of Assets. Borrower shall not, and shall not permit any
Marine Subsidiary or any Owner Trustee to, sell, assign or otherwise dispose of,
any of its or their respective assets, except for full, fair and reasonable
consideration, or enter or permit any Marine Subsidiary or Owner Trustee to
enter into any sale and leaseback agreement covering any of its fixed or capital
assets. In this regard, Borrower shall not sell, assign or dispose of, and shall
not permit any Marine Subsidiary or Owner Trustee to sell, assign or dispose of,
any partial record or beneficial ownership interest in any Eligible Inventory,
except upon the payment in cash to Borrower or such Marine Subsidiary or Owner
Trustee of a purchase price equal to the ratable portion of the Invoice Price
paid by Borrower or such Marine Subsidiary or Owner Trustee for such item of
Eligible Inventory so sold, assigned or otherwise disposed of, which cash
purchase price is received by Borrower or such Marine Subsidiary or Owner
Trustee will be subject to mandatory prepayment pursuant to Section 2.2.3(c).
6.6 Restricted Payments. Borrower shall not declare or 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; except that Borrower may, (a) following the resale of any item of
Eligible Inventory to PLMI, any Equipment Growth Fund or any third party and
after having repaid in full the Loan advanced by Lender to finance the
acquisition of such Eligible Inventory, dividend the remaining proceeds of such
resale to TEC and (b) no more frequently than monthly and in no event prior to
such time has Borrower shall have made payment in full of all interest on the
Loans funded hereunder accrued through the last day of the previous calendar
month, Borrower may dividend its net profits (revenues less interest and
operating expenses) to TEC.
6.7 Restriction on Fundamental Changes. Borrower shall not, and shall not
permit any Marine Subsidiary to, enter into any transaction of merger,
consolidation or recapitalization, directly or indirectly, whether by operation
of law or otherwise, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, assign, transfer or
otherwise dispose of, in one transaction or a series of transactions, all or any
part of its business, Property or assets, whether now owned or hereafter
acquired, or acquire by purchase or otherwise all or substantially all the
business, Property or assets of, or stock or other evidence of beneficial
ownership of, any Person, except for the formation of Marine Subsidiaries, the
sale and transfer of all of its ownership interest (whether Stock or otherwise)
in any Marine Subsidiary to an Equipment Growth Fund and the acquisition or
resale of Equipment in the ordinary course of business and as contemplated by
this Agreement.
6.8 Transactions with Affiliates. Borrower shall not, and shall not permit
any Marine Subsidiary to, directly or indirectly, enter into or permit to exist
any transaction (including, without limitation, the purchase, sale, lease or
exchange of any property or the rendering of any service) with any of its
Affiliates on terms that are less favorable to Borrower or such Marine
Subsidiary than those that might be obtained at the time from Persons who are
not such Affiliates.
6.9 No Loans to Affiliates. Borrower shall not make any loans to any of its
Affiliates other than to its Marine Subsidiaries.
6.10 No Investment. Borrower shall not make or suffer to exist, or permit
or suffer any of its Marine Subsidiaries to make or suffer to exist, any
Investment except the sharing arrangements with respect to Equipment which are
shared with Equipment Growth Funds.
6.11 Maintenance of Business. Borrower shall not engage in any business
other than the purchase of transportation equipment and the operation, leasing,
remarketing and resale of such equipment.
6.12 No Modification to Leases. Borrower shall not modify or agree to
modify any material term of any Lease to which it is a party without the written
consent of Agent, which consent will not be unreasonably withheld. For purposes
of this Section 6.12, material Lease terms shall include, without limitation,
terms relating to lease payments, maturity and the amount and scope of the
lessee's insurance coverage.
6.13 No Subsidiaries. Borrower shall not create any Subsidiaries except
Marine Subsidiaries.
6.14 Amendments of Charter Documents. Borrower shall not amend its articles
of incorporation, bylaws and any other charter documents or permit any Marine
Subsidiary to amend its articles of incorporation, bylaws or other charter
documents.
6.15 Events of Default. 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.
6.16 ERISA.
6.16.1 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.
6.16.2 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.
6.17 No Use of Any Lender's Name. 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.
6.18 Certain Accounting Changes. Borrower shall not change its fiscal year
end from December 31, nor make any change in its accounting treatment and
reporting practices except as permitted by GAAP; provided, however, that should
Borrower change its accounting treatment or reporting practices in a way that
would cause a change in the calculation, or in the results of a calculation, of
any of the financial covenants set forth in Section 7, below, then Borrower,
shall continue to calculate such covenants as if such accounting treatment or
reporting practice had not been changed unless otherwise agreed to by Requisite
Lenders.
SECTION 7. FINANCIAL COVENANTS OF BORROWER.
Borrower covenants and agrees that, so long as the Commitments
hereunder shall be available, and until full, complete and indefeasible payment
and performance of the Obligations, including, without limitation, all Loans
evidenced by any Note, unless Requisite Lenders shall otherwise consent in
writing, Borrower shall perform the following financial covenants. Borrower
agrees and understands that (except as expressly provided herein) all covenants
under this Section 7 shall be subject to quarterly compliance (as measured on
the last day of each fiscal quarter of Borrower), 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.
7.1 Minimum Consolidated Tangible Net Worth. Borrower shall at all times
maintain a Consolidated Tangible Net Worth of not less than twenty percent
(20.0%) of the net book value of Eligible Inventory.
SECTION 8. EVENTS OF DEFAULT AND REMEDIES.
8.1 Events of Default. The occurrence of any one or more of the following
shall constitute an Event of Default:
8.1.1 Failure to Make Payments. Borrower, FSI or any Owner Trustee
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
8.1.2 Other Agreements. (a) Borrower or any Marine Subsidiary or any
Owner Trustee thereof defaults in the repayment of any principal of or the
payment of any interest on any Indebtedness of Borrower or such Marine
Subsidiary or Owner Trustee, or breaches any term of any evidence of such
Indebtedness or defaults in any payment in respect of any Contingent Obligation,
(b) FSI, TEC or any Owner Trustee thereof defaults in the repayment of any
principal of or the payment of any interest on any Indebtedness of FSI or TEC,
respectively, or breaches any term of any evidence of such Indebtedness or
defaults in any payment in respect of any Contingent Obligations (excluding, as
to FSI, any Contingent Obligations of FSI arising solely as a result of FSI's
status as a general partner of any Person other than Borrower), in each case
exceeding, in the aggregate outstanding principal amount, $2,000,000, (c)
Borrower, any Marine Subsidiary, FSI, TEC or any Owner Trustee breaches or
violates any term or provision of any evidence of such Indebtedness or
Contingent Obligation or of any such loan agreement, mortgage, indenture,
guaranty or other agreement relating thereto if the effect of such breach is to
permit acceleration under the applicable instrument, loan agreement, mortgage,
indenture, guaranty or other agreement and such failure shall not have been
cured within the applicable cure period, or there is an acceleration under the
applicable instrument, loan agreement, mortgage, indenture, guaranty or other
agreement, or (d) PLMI defaults in the repayment of any principal of or the
payment of any interest on any Indebtedness, including, without limitation,
Indebtedness arising under or in respect of the Senior Agreement or defaults in
any payment in respect of any Contingent Obligation, in each case exceeding, in
the aggregate outstanding principal amount, $2,000,000, or PLMI breaches or
violates any term or provision of any evidence of such Indebtedness or
Contingent Obligation or of any such loan agreement, mortgage, indenture,
guaranty or other agreement relating thereto with the result that such
Indebtedness or Contingent Obligation becomes or is caused to become then due
and payable in its entirety, whether by acceleration of otherwise; or
8.1.3 Breach of Covenants. 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,
5.11, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11, 6.12, 6.13 and 6.14,
or any of the financial covenants contained in Section 7 of this Agreement; or
8.1.4 Breach of Representations or Warranties. Any representation or
warranty made by or on behalf of Borrower or FSI in this Agreement or any
statement or certificate at any time given in writing pursuant hereto or in
connection herewith shall be false, misleading or incomplete in any material
respect when made; or
8.1.5 Failure to Cure. Except as provided in Sections 8.1.1 and 8.1.3,
Borrower, FSI or any Marine Subsidiary or Owner Trustee 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, FSI or any Marine Subsidiary or Owner Trustee in connection therewith
and the same has not been cured to Requisite Lenders' satisfaction within thirty
(30) calendar days after Borrower, FSI or any Marine Subsidiary or Owner Trustee
shall become aware thereof, whether by written notice from Agent or any Lender
or otherwise; or
8.1.6 Insolvency. Borrower, any Marine Subsidiary, FSI, TEC, PLMI or
any Owner Trustee or any other guarantor of any of Borrower's or FSI'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, (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
8.1.7 Bankruptcy Proceedings. Bankruptcy, insolvency, reorganization
or liquidation proceedings or other proceedings for relief under any bankruptcy
law or any law for the relief of debtors shall be instituted by or against
Borrower, any Marine Subsidiary, FSI, TEC, PLMI or any Owner Trustee or any
other guarantor of any of Borrower's or FSI's obligations to Lenders or any
order, judgment or decree shall be entered against Borrower, any Marine
Subsidiary, FSI, TEC, PLMI or any Owner Trustee or any other guarantor of any of
Borrower's or FSI's obligations to Lenders decreeing its dissolution or
division; provided, however, with respect to an involuntary petition in
bankruptcy, such petition shall not have been dismissed within sixty (60) days
after the filing of such petition; or
8.1.8 Material Adverse Effect. There shall have been a change in the
assets, liabilities, financial condition, operations, affairs or prospects of
Borrower, any Marine Subsidiary, FSI, TEC, PLMI or any Owner Trustee or any
other guarantor of any of Borrower's or FSI's obligations to Lenders which, in
the reasonable determination of Requisite Lenders has, either individually or in
the aggregate, had a Material Adverse Effect; or
8.1.9 Judgments, Writs and Attachments. There shall be a money
judgment, writ or warrant of attachment or similar process entered or filed
against Borrower, any Marine Subsidiary, FSI, TEC or any Owner Trustee 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 or
any Marine Subsidiary in any amount; against FSI exceeds in the aggregate
$500,000; against TEC exceeds in the aggregate $500,000; or against any Owner
Trustee exceeds in the aggregate $1,000,000; or against any combination of the
foregoing Persons exceeds in the aggregate $1,000,000; or
8.1.10 Legal Obligations. Any of the Loan Documents shall for any
reason other than the full, complete and indefeasible satisfaction of the
Obligations thereunder cease to be, or be asserted by Borrower, FSI, TEC or any
Marine Subsidiary or Owner Trustee not to be, a legal, valid and binding
obligation of Borrower, FSI, TEC or any such Marine Subsidiary or Owner Trustee,
respectively, enforceable against such Person in accordance with its terms; or
8.1.11 Growth Fund Agreement. Without limiting the generality of, and
in addition to the events described in Section 8.1.1, 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
8.1.12 Board of Directors. Borrower shall at any time fail either (i)
to have at least one member of its board of directors be an outside independent
director, not employed or otherwise engaged as an officer, employee, consultant,
director or in any other capacity by PLMI or any of its Subsidiaries or (ii) to
have (1) at least one member of its board of directors be a Person who is not a
member of the board of directors of PLMI or any of its other Subsidiaries and
(2) at least one additional member of its board of directors be a Person who is
not an inside director, whether employed as an officer or employee, of PLMI or
any of its other Subsidiaries and is not the Chairman of the Board of PLMI; or
8.1.13 Criminal Proceedings. A criminal proceeding shall have been
filed in any court naming Borrower or any Marine Subsidiary or Owner Trustee as
a defendant for which forfeiture is a potential penalty under applicable federal
or state law which, in the reasonable determination of Requisite Lenders, may
have a Material Adverse Effect; or
8.1.14 Action by Governmental Authority. Any Governmental Authority
enters a decree, order or ruling ("Government Action") which will materially and
adversely affect Borrower's, any Marine Subsidiary's, FSI's, TEC's, or PLMI's
financial condition, operations or ability to perform or pay such party's
obligations arising under this Agreement or any instrument or agreement executed
pursuant to the terms of this Agreement or which will similarly affect any Owner
Trustee. Borrower or FSI shall have thirty (30) days from the earlier of the
date (a) Borrower or FSI, as applicable, first discovers it is the subject of
Government Action or (b) a Lender or any agency gives notice of Government
Action to take such steps as are necessary to obtain relief from the Government
Action. For the purpose of this paragraph, "relief from Government Action" means
to discharge or to obtain a dismissal of or release or relief from (i) any
Government Action so that the affected party or parties do not incur (v) any
monetary liability in the case of Borrower or any Marine Subsidiary, (w)
monetary liability of more than $500,000 in the case of FSI, (x) monetary
liability of more than $500,000 in the case of TEC, (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, any Marine Subsidiary, FSI, TEC, and PLMI, or any of them, which in
the reasonable determination of the Requisite Lenders may have a Material
Adverse Effect; or
8.1.15 Governmental Decrees. Any Governmental Authority, including,
without limitation, the SEC, shall enter a decree, order or ruling prohibiting
the Equipment Growth Funds from releasing or paying to FSI any funds in the form
of management fees, profits or otherwise which, in the reasonable determination
of Requisite Lenders, may have a Material Adverse Effect.
8.2 Waiver of Default. An Event of Default may be waived only with the
written consent of Requisite Lenders, or if expressly provided, of all Lenders.
Any Event of Default so waived shall be deemed to have been cured and not to be
continuing; but no such waiver shall be deemed a continuing waiver or shall
extend to or affect any subsequent like default or impair any rights arising
therefrom.
8.3 Remedies. Upon the occurrence and continuance of any Event of Default
or Potential Event of Default, Lenders shall have no further obligation to
advance money or extend credit to or for the benefit of 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:
8.3.1 Declare all or any of the Obligations of Borrower under this
Agreement, the Notes, 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;
8.3.2 Terminate this Agreement as to any future liability or
obligation of Agent or Lenders; and
8.3.3 Exercise in addition to all other rights and remedies granted
hereunder, any and all rights and remedies granted under the Loan Documents or
otherwise available at law or in equity.
8.4 Set-Off.
8.4.1 During the continuance of an Event of Default, any deposits or
other sums credited by or due from any Lender to Borrower, TEC or FSI (exclusive
of deposits in accounts expressly held in the name of third parties or held in
trust for benefit of third parties) may be set-off against the Obligations and
any and all other liabilities, direct or indirect, absolute or contingent, due
or to become due, now existing or hereafter arising, of Borrower, TEC or FSI to
Lenders. Each Lender agrees to notify promptly Borrower, TEC or FSI and Agent of
any such set-off; provided, that the failure to give such notice shall not
affect the validity of any such set-off.
8.4.2 Each Lender agrees that if it shall, whether by right of
set-off, banker's lien or similar remedy pursuant to Section 8.4.1, obtain any
payment as a result of which the outstanding and unpaid principal portion of the
Commitments of such Lender shall be less than such Lender's Pro Rata Share of
the outstanding and unpaid principal portion of the aggregate of all
Commitments, such Lender receiving such payment shall simultaneously purchase
from each other Lender a participation in the Commitments held by such Lenders
so that the outstanding and unpaid principal amount of the Commitments and
participations in Commitments of such Lender shall be in the same proportion to
the unpaid principal amount of the aggregate of all Commitments then outstanding
as the unpaid principal amount under the Commitments of such Lender outstanding
immediately prior to receipt of such payment was to the unpaid principal amount
of the aggregate of all Commitments outstanding immediately prior to such
Lender's receipt of such payment; provided, however, that if any such purchase
shall be made pursuant to this Section 8.4.2 and the payment giving rise thereto
shall thereafter be recovered, such purchase shall be rescinded to the extent of
such recovery and the purchase price restored without interest. Borrower
expressly consents to the foregoing arrangements and agrees that any Lender
holding a participation in a Commitment deemed to have been so purchased may
exercise any and all rights of set-off, banker's lien or similar remedy with
respect to any and all moneys owing by Borrower to such Lender as fully as if
such Lender held a Commitment in the amount of such participation.
8.5 Rights and Remedies Cumulative. The enumeration of the rights and
remedies of Agent and Lenders set forth in this Agreement is not intended to be
exhaustive and the exercise by Agent and Lenders of any right or remedy shall
not preclude the exercise of any other rights or remedies, all of which shall be
cumulative, and shall be in addition to any other right or remedy given
hereunder or under the Loan Documents or that may now or hereafter exist in law
or in equity or by suit or otherwise. No delay or failure to take action on the
part of Agent and Lenders in exercising any right, power or privilege shall
operate as a waiver hereof, nor shall any single or partial exercise of any such
right, power or privilege preclude other or further exercise thereof or the
exercise of any other right, power or privilege or shall be construed to be a
waiver of any Event of Default or Potential Event of Default. No course of
dealing between 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.
SECTION 9. AGENT.
9.1 Appointment. Each of the Lenders hereby irrevocably designates and
appoints FUNB as the Agent of such Lender under this Agreement and the other
Loan Documents, and each such Lender irrevocably authorizes FUNB 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.
9.2 Delegation of Duties. Agent may execute any of its duties under this
Agreement and the other Loan Documents by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. Agent shall not be responsible for the negligence or misconduct of
any agents or attorneys-in-fact selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (a)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or the other Loan Documents (except
for its or such Person's own gross negligence or willful misconduct), or (b)
responsible in any manner to any Lender for any recitals, statements,
representations or warranties made by 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.
9.4 Reliance by Agent. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to 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.
9.5 Notice of Default. Agent shall not be deemed to have knowledge or
notice of the occurrence of any Event of Default or Potential Event of Default
hereunder unless Agent has received notice from a Lender or 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.
9.6 Non-Reliance on Agent and Other Lenders. Each Lender expressly
acknowledges that neither Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates has made any representations or
warranties to it and that no act by Agent hereinafter taken, including any
review of the affairs of Borrower, shall be deemed to constitute any
representation or warranty by Agent to any Lender. Each Lender represents to
Agent that it has, independently and without reliance upon Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of
Borrower and FSI and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Lender also represents that it will, independently and
without reliance upon Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of Borrower and FSI. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by Agent hereunder or by the other Loan Documents, Agent shall not
have any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, financial and other
condition or creditworthiness of Borrower and FSI which may come into the
possession of Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
9.7 Indemnification. Each Lender agrees to indemnify Agent in its capacity
as such (to the extent not reimbursed by 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.
9.8 Agent in Its Individual Capacity. Agent and its Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
Borrower or FSI as though Agent were not Agent hereunder. With respect to
Advances made or renewed by it, Agent shall have the same rights and powers
under this Agreement and the other Loan Documents as any Lender and may exercise
the same as though it were not Agent, and the terms "Lender" and "Lenders" shall
include Agent in its individual capacity.
9.9 Resignation and Appointment of Successor Agent. Agent may resign at any
time by giving thirty (30) days' prior written notice thereof to Lenders and
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.
SECTION 10. EXPENSES AND INDEMNITIES.
10.1 Expenses. 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
Notes, 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 Inventory shall be at the expense of
Lenders. If an Event of Default or Potential Event of Default shall have
occurred and be continuing, such appraisals shall be at the expense of Borrower.
10.2 Indemnification. Whether or not the transactions contemplated hereby
shall be consummated:
10.2.1 General Indemnity. 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.
10.2.2 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.
10.2.3 Survival; Defense. The obligations in this Section 10.2
shall survive payment of all other Obligations. At the election of any
Indemnified Person, 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.
SECTION 11. MISCELLANEOUS.
11.1 Survival. All covenants, agreements, representations and warranties
made herein shall survive the execution and delivery of the Loan Documents and
the making of the Loans hereunder.
11.2 No Waiver by Agent or Lenders. No failure or delay on the part of
Agent or any Lender in the exercise of any power, right or privilege under this
Agreement, any Note or any of the other Loan Documents shall impair such power,
right or privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other right,
power or privilege.
11.3 Notices. Except as otherwise provided in this Agreement, any notice or
other communication herein required or permitted to be given shall be in writing
and may be delivered in person, with receipt acknowledged, or sent by telex,
facsimile, telecopy, computer transmission or by United States mail, registered
or certified, return receipt requested, or by Federal Express or other
nationally recognized overnight courier service, postage prepaid and
confirmation of receipt requested, and addressed as set forth on the signature
pages to this Agreement or at such other address as may be substituted by notice
given as herein provided. The giving of any notice required hereunder may be
waived in writing by the party entitled to receive such notice. Every notice,
demand, request, consent, approval, declaration or other communication hereunder
shall be deemed to have been duly given or served on the date on which the same
shall have been personally delivered, with receipt acknowledged, or sent by
telex, facsimile, telecopy or computer transmission (with appropriate
answerback), three (3) Business Days after the same shall have been deposited in
the United States mail or on the next succeeding Business Day if the same has
been sent by Federal Express or other nationally recognized overnight courier
service. Failure or delay in delivering copies of any notice, demand, request,
consent, approval, declaration or other communication to the persons designated
above to receive copies shall in no way adversely affect the effectiveness of
such notice, demand, request, consent, approval, declaration or other
communication.
11.4 Headings. Section and Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
11.5 Severability. Whenever possible, each provision of this Agreement,
each 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, any Note or any of the other Loan Documents
shall be invalid, illegal or unenforceable under the applicable law of any
jurisdiction, the validity, legality and enforceability of the remaining
provisions, or of such provision in any other jurisdiction, shall not in any way
be affected or impaired thereby.
11.6 Entire Agreement; Construction; Amendments and Waivers.
11.6.1 This Agreement, the Notes and each of the other Loan Documents
dated as of the date hereof, taken together, constitute and contain the entire
agreement among 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.
11.6.2 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.
11.6.3 No amendment, modification, discharge or waiver of or consent
to any departure by Borrower or FSI 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.
11.7 Reliance by Lenders. 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.
11.8 Marshaling; Payments Set Aside. Lenders shall be under no obligation
to marshal 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
11.9 No Set-Offs by Borrower. All sums payable by Borrower pursuant to this
Agreement, any Note or any of the other Loan Documents shall be payable without
notice or demand and shall be payable in United States Dollars without set-off
or reduction of any manner whatsoever.
11.10 Binding Effect, Assignment.
11.10.1 This Agreement, the Notes 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 Borrower shall not
assign its rights hereunder or thereunder or any interest herein or therein
without the prior written consent of each Lender. Each Lender shall (a) have the
right in accordance with this Section 11.10 to sell and assign to any Eligible
Assignee all or any portion of its interest (provided that any such partial
assignment shall not be for a principal amount of less than Five Million Dollars
($5,000,000)) under this Agreement, its respective Notes and the other Loan
Documents, together with a ratable interest in the Growth Funds Agreement and
the related Notes and other Loan Documents (as separately described and defined
in those agreements), subject to the prior written consent of the affected
Borrower, which consent shall not be unreasonably withheld, and (b) to grant any
participation or other interest herein or therein, except that each potential
participant to which a Lender intends to grant any rights under Sections 2.9,
2.10, 5.1 or 10.2 shall be subject to the prior written consent of the affected
Borrower, which consent shall not be unreasonably withheld; provided, however,
that no such sale, assignment or participation grant shall result in requiring
registration under the Securities Act of 1933, as amended, or qualification
under any state securities law.
11.10.2 Subject to the limitations of this Section 11.10.2, each Lender
may sell and assign, from time to time, all or any portion of its Pro Rata Share
of the Commitments to any of its Affiliates or, with the approval of 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 Assignment and Assumption
in the form of Exhibit G ("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
such 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
instrument of assignment and assumption, be subject to all of the obligations,
and entitled to all of the rights, of a Lender hereunder, except as may be
expressly provided to the contrary in the Assignment and Assumption. To the
extent the obligations hereunder of the Assignor Lender are assumed by the
Assignee Lender, the Assignor Lender shall be relieved of such obligations. Upon
the assignment of any interest by any Assignor Lender pursuant to this Section
11.10.2, such Assignor Lender agrees to supplement Schedule 1.1 to show the date
of such assignment, the Assignor Lender, the Assignee Lender, the Assignee
Lender's address for notice purposes and the amount of the Commitments so
assigned. In connection and as a condition to each assignment hereunder, the
Assignor Lendor agrees to pay or to cause the Assignee Lender to pay to Agent a
processing fee f $3,500; provided that no processing fee shall be charged for
any assignment to a Lender or a Lender Affiliate.
11.10.3 Subject to the limitations of this Section 11.10.3, any Lender
may also grant, from time to time, participation interests in the interests of
such Lender under this Agreement, the 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.
11.11 Counterparts. This Agreement and any amendments, waivers, consents or
supplements hereto may be executed in any number of counterparts, and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument. Each such agreement
shall become effective upon the execution of a counterpart hereof or thereof by
each of the parties hereto or thereto, delivery of each such counterpart to
Agent.
11.12 Equitable Relief. Borrower recognize that, in the event Borrower
fails to perform, observe or discharge any of its obligations or liabilities
under this Agreement, any 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.
11.13 Written Notice of Claims; Claims Bar. 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, ANY
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.
11.14 Waiver of Punitive Damages. 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.
11.15 Governing Law. Except as otherwise expressly provided in any of the
Loan Documents, in all respects, including all matters of construction, validity
and performance, this Agreement and the Obligations arising hereunder shall be
governed by, and construed and enforced in accordance with, the laws of the
State of California applicable to contracts made and performed in such state,
without regard to the principles thereof regarding conflict of laws, and any
applicable laws of the United States of America.
11.16 Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
BORROWER AND FSI, BY EXECUTION HEREOF, AND THE AGENT AND EACH LENDER, BY
ACCEPTANCE HEREOF, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS
AGREEMENT, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION WITH THIS AGREEMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY WITH RESPECT HERETO. THIS PROVISION IS A MATERIAL
INDUCEMENT TO THE AGENT AND EACH LENDER TO ACCEPT THIS AGREEMENT AND THE NOTES
EXECUTED AND DELIVERED BY 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 TEC ACQUISUB, INC.
By /s/ Robert N. Tidball
------------------------------
Robert N. Tidball
President
Notice to be sent to:
TEC AcquiSub, Inc.
One Market
Steuart Street Tower, Suite 900
San Francisco, CA 94105
Attention: Robert N. Tidball
President
Telephone: 415/896-1138
Facsimile: 415/882-0860
With a copy to:
TEC AcquiSub, Inc.
One Market
Steuart Street Tower, Suite 900
San Francisco, CA 94105
Attention: General Counsel
Telephone: 415/896-1138
Facsimile: 415/882-0860
AGENT FIRST UNION NATIONAL BANK
By /s/ Bill A. Shirley
----------------------------
Printed Name: Bill A. Shirley
Title: Senior Vice President
Notice to be sent to:
First Union National Bank
One First Union Center
301 South College Street
Charlotte, NC 28288
Attention: Russ Morrison
Telephone: 704/383-9687
Facsimile: 704/374-4092
LENDERS FIRST UNION NATIONAL BANK
By /s/ Bill A. Shirley
------------------------------
Printed Name: Bill A. Shirley
Title: Senior Vice President
Notice to be sent to:
First Union National Bank
One First Union Center
301 South College Street
Charlotte, NC 28288
Attention: Russ Morrison
Telephone: 704/383-9687
Facsimile: 704/374-4092
ACKNOWLEDGEMENT AND
REAFFIRMATION OF GUARANTY
SECTION 1. PLM International, Inc. ("PLMI") hereby acknowledges and
confirms that it has reviewed and approved the terms and conditions of this
Agreement.
SECTION 2. PLMI hereby consents to this Agreement and agrees that its
Guaranty of the Obligations of Borrower under the Agreement shall continue in
full force and effect, shall be valid and enforceable and shall not be impaired
or otherwise affected by the execution of this Agreement or any other document
or instrument delivered in connection herewith.
SECTION 3. PLMI represents and warrants that, after giving effect to
this Agreement, that all representations and warranties contained in its
Guaranty are true, accurate and complete as if made the date hereof.
GUARANTOR PLM INTERNATIONAL, INC.
By /s/ Robert N. Tidball
------------------------------
Robert N. Tidball
President
SCHEDULE A
(COMMITMENTS)
Pro
Rata
Lender Commitment Share
First Union National Bank $24,500,000 100%
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 Opinion of Counsel
Exhibit E Form of Notice of Borrowing
Exhibit F Form of Notice of Conversion/Continuation
Exhibit G Form of Assignment and Acceptance
INDEX OF SCHEDULES
Schedule A Commitments
Schedule 1.1 Amendments to Schedule A
Schedule 4.5 Executive Offices and Principal Places of Business
Schedule 4.6 Litigation
Schedule 4.7 Material Contracts
Schedule 4.8 Consent and Approvals
Schedule 4.15 Environmental Disclosures
Schedule 6.1 Existing Liens
EXHIBIT A
REVOLVING PROMISSORY NOTE
[LENDER]
$____________________ San Francisco, California
Date: December __, 1998
TEC ACQUISUB, Inc., a California corporation (the "Borrower"), FOR
VALUE RECEIVED, hereby unconditionally promises to pay to the order of [LENDER]
("[__________________]"), in lawful money of the United States of America, the
aggregate principal amount of [__________________]'s Pro Rata Share of all Loans
outstanding under the Credit Agreement referred to below, payable in the
amounts, on the dates and in the manner set forth below.
This revolving promissory note (the "Note") is one of the Notes referred to in
that certain Third Amended and Restated Warehousing Credit Agreement dated as
of December 15, 1998 (as the same may from time to time be further amended,
modified, supplemented, renewed, extended or restated, the "Credit
Agreement"), by and among the Borrower, the banks, financial institutions and
other institutional lenders from time to time party thereto and defined
therein as Lenders (such entities, together with their respective successors
and assigns being collectively referred to herein as "Lenders"), and FUNB in
its capacity as Agent on behalf and for the benefit of Lenders ("Agent"). All
capitalized terms used but not defined herein shall have the same meaning as
given to them in the Credit Agreement.
1. Principal Payments. Subject to the terms and conditions of the
Credit Agreement, including, without limitation, terms relating to mandatory
prepayments of principal (Section 2.2.3), the entire principal amount
outstanding under each Loan shall be due and payable on the Maturity Date with
respect to such Loan, with any and all unpaid and not previously due and payable
principal amounts under the Loans being due and payable on the Commitment
Termination Date.
2. Interest Rate. The Borrower further promises to pay interest on the
sum of the daily unpaid principal balance of all Loans outstanding on each day
in lawful money of the United States of America, from the Closing Date until all
such principal amounts shall have been repaid in full, which interest shall be
payable at the rates per annum and on the dates determined pursuant to the
Credit Agreement.
3. Place of Payment. All amounts payable hereunder shall be payable to
the Agent, on behalf of [__________________], at the office of First Union
National Bank of North Carolina, One First Union Center, 301 South College
Street, Charlotte, North Carolina 28288, Attention: Maria Ostrowski, or such
other place of payment as may be specified by the Agent in writing.
4. Application of Payments; Acceleration. Payments on this Note shall
be applied in the manner set forth in the Credit Agreement. The Credit Agreement
contains provisions for acceleration of the maturity of the Loans upon the
occurrence of certain stated events and also provides for mandatory and optional
prepayments of principal prior to the stated maturity on the terms and
conditions therein specified.
Each Advance made by [__________________] to the Borrower constituting
[__________________]'s Pro Rata Share of a Loan pursuant to the Credit Agreement
shall be recorded by [__________________] on its books and records. The failure
of [__________________] to record any Advance or any repayment or prepayment
made on account of the principal balance thereof shall not limit or otherwise
affect the obligations of the Borrower under this Note and under the Credit
Agreement to pay the principal, interest and other amounts due and payable
hereunder and thereunder.
5. Default. The Borrower's failure to pay timely any of the principal
amount due under this Note or any accrued interest or other amounts due under
this Note on or within five (5) calendar days after the date the same becomes
due and payable shall constitute a default under this Note. Upon the occurrence
of a default hereunder or an Event of Default under the Credit Agreement, all
unpaid principal, accrued interest and other amounts owing hereunder shall, at
the option of Required Lenders, be immediately collectible by the Lenders and
the Agent pursuant to the Credit Agreement and applicable law.
6. Waivers. The Borrower waives presentment and demand for payment,
notice of dishonor, protest and notice of protest of this Note, and shall pay
all costs of collection when incurred by or on behalf of the Lenders, including,
without limitation, reasonable attorneys' fees, costs and other expenses as
provided in the Credit Agreement.
7. Governing Law. This Note shall be governed by, and construed and
enforced in accordance with, the laws of the State of California, excluding
conflict of laws principles that would cause the application of laws of any
other jurisdiction.
8. Successors and Assigns. The provisions of this Note shall inure to
the benefit of and be binding on any successor to the Borrower and shall extend
to any holder hereof.
BORROWER TEC ACQUISUB, INC.,
a California corporation
By
J. Michael Allgood
Chief Financial Officer