WAREHOUSING CREDIT AGREEMENT
AMONG
AMERICAN FINANCE GROUP, INC.
AND
THE LENDERS LISTED HEREIN,
as Lenders
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......................................18
1.4 Schedules And Exhibits...........................18
SECTION 2. ......................AMOUNT AND TERMS OF CREDIT 18
2.1 Commitment To Lend...............................18
2.1.1 Revolving Facility.............18
(a) Facility Commitments...........18
(b) Each Loan......................19
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
2.3 Calculation Of Interest; Post-Maturity Interest..20
2.4 Manner Of Payments...............................21
2.5 Payment On Non-Business Days.....................21
2.6 Application Of Payments..........................21
2.7 Procedure For The Borrowing Of Loans.............21
2.7.1 Notice Of Borrowing............21
2.7.2 Unavailability Of LIBOR Loans..22
2.8 Conversion And Continuation Elections............22
2.8.1 Election.......................22
2.8.2 Notice Of Conversion...........22
2.8.3 Interest Period................23
2.8.4 Unavailability Of LIBOR Loans..23
2.9 Discretion Of Lenders As To Manner Of Funding....23
2.10 Distribution Of Payments.........................23
2.11 Agent's Right To Assume Funds Available For Advances...23
2.12 Agent's Right To Assume Payments Will Be Made By Borrower.24
2.13 Capital Requirements.............................24
2.14 Taxes............................................24
2.14.1 No Deductions..................24
2.14.2 Miscellaneous Taxes............24
2.14.3 Indemnity......................25
2.14.4 Required Deductions............25
2.14.5 Evidence Of Payment............25
2.14.6 Foreign Persons................25
2.14.7 Income Taxes...................26
2.14.8 Reimbursement Of Costs.........26
2.14.9 Jurisdiction...................27
2.15 Illegality.......................................27
2.15.1 LIBOR Loans....................27
2.15.2 Prepayment.....................27
2.15.3 Prime Rate Borrowing...........27
2.16 Increased Costs..................................27
2.17 Inability To Determine Rates.....................27
2.18 Prepayment Of LIBOR Loans........................28
SECTION 3. ............................CONDITIONS PRECEDENT 28
3.1 Effectiveness Of This Agreement..................28
3.1.1 Corporate Documents............28
3.1.2 Notes..........................29
3.1.3 Security Documents.............29
3.1.4 Opinion Of Counsel.............29
3.1.5 Guaranty.......................29
3.1.6 Bringdown Certificate..........29
3.1.7 Fees...........................29
3.1.8 Other Documents................29
3.2 All Loans........................................29
3.2.1 Notice Of Borrowing............30
3.2.2 No Event Of Default............30
3.2.3 Officer's Certificate..........30
3.2.4 Officer's Certificate - Leases.30
3.2.5 Insurance......................31
3.2.6 Other Instruments..............31
SECTION 4. .......BORROWER'S REPRESENTATIONS AND WARRANTIES 31
4.1 Existence And Power..............................31
4.2 Loan Documents And Note Authorized; Binding Obligations..31
4.3 No Conflict; Legal Compliance....................32
4.4 Financial Condition..............................32
4.5 Executive Offices................................32
4.6 Litigation.......................................32
4.7 Consents And Approvals...........................32
4.8 Other Agreements.................................33
4.9 ERISA............................................33
4.10 Labor Matters....................................33
4.11 Margin Regulations...............................33
4.12 Taxes............................................33
4.13 Environmental Quality............................34
4.14 Trademarks, Patents, Copyrights, Franchises And Licenses..34
4.15 Full Disclosure..................................34
4.16 Other Regulations................................34
4.17 Solvency.........................................35
4.18 Survival Of Representations And Warranties.......35
4.19 Eligible Leases..................................35
4.20 Year 2000........................................35
SECTION 5. ................BORROWER'S AFFIRMATIVE COVENANTS 36
5.1 Records And Reports..............................36
5.1.1 Quarterly Statements...........36
5.1.2 Annual Statements..............36
5.1.3 Borrowing Base Certificate.....36
5.1.4 Compliance Certificate.........37
5.1.5 Reports........................37
5.1.6 Lease Receivables Aging Reports...37
5.1.7 Insurance Reports..............37
5.1.8 Certificate Of Responsible Officer..37
5.1.9 Employee Benefit Plans.........38
5.1.10 ERISA Notices..................38
5.1.11 Pension Plans..................38
5.1.12 SEC Reports....................38
5.1.13 Tax Returns....................38
5.1.14 Additional Information.........38
5.2 Existence; Compliance With Law...................39
5.3 Insurance........................................39
5.4 Taxes And Other Liabilities......................39
5.5 Inspection Rights; Assistance....................39
5.6 Maintenance Of Facilities; Modifications; Performance
Of Leases........................................40
5.6.1 Maintenance Of Facilities......40
5.6.2 Performance Of Leases..........40
5.7 Supplemental Disclosure..........................40
5.8 Further Assurances...............................40
5.9 Lockbox..........................................40
5.10 Environmental Laws...............................40
SECTION 6. ...................BORROWER'S NEGATIVE COVENANTS 40
6.1 Liens; Negative Pledges; And Encumbrances........41
6.2 Limitations On Indebtedness......................41
6.3 Disposition Of Assets............................41
6.4 Restricted Payments..............................41
6.5 Restriction On Fundamental Changes...............41
6.6 Transactions With Affiliates.....................42
6.7 No Loans To Affiliates...........................42
6.8 No Investment....................................42
6.9 Maintenance Of Business..........................42
6.10 No Subsidiaries..................................42
6.11 Events Of Default................................42
6.12 ERISA............................................42
6.13 No Use Of Any Lender's Name......................43
6.14 Certain Accounting Changes.......................43
SECTION 7. .................FINANCIAL COVENANTS OF BORROWER 43
7.1 Minimum Consolidated Tangible Net Worth..........43
7.2 Minimum Interest Coverage Ratio..................43
SECTION 8. ..................EVENTS OF DEFAULT AND REMEDIES 43
8.1 Events Of Default................................43
8.1.1 Failure To Make Payments.......44
8.1.2 Other Agreements...............44
8.1.3 Breach Of Covenants............44
8.1.4 Breach Of Representations Or Warranties..44
8.1.5 Failure To Cure................44
8.1.6 Insolvency.....................44
8.1.7 Bankruptcy Proceedings.........45
8.1.8 Material Adverse Effect........45
8.1.9 Judgments, Writs And Attachments..45
8.1.10 Legal Obligations..............45
8.1.11 Criminal Proceedings...........45
8.1.12 Action By Governmental Authority..45
8.2 Waiver Of Default................................46
8.3 Remedies.........................................46
8.4 Set-Off..........................................46
8.5 Rights And Remedies Cumulative...................47
SECTION 9. ...........................................AGENT 47
9.1 Appointment......................................47
9.2 Delegation Of Duties.............................48
9.3 Exculpatory Provisions...........................48
9.4 Reliance By Agent................................48
9.5 Notice Of Default................................48
9.6 Non-Reliance On Agent And Other Lenders..........49
9.7 Indemnification..................................49
9.8 Agent In Its Individual Capacity.................49
9.9 Resignation And Appointment Of Successor Agent...50
SECTION 10. ........................EXPENSES AND INDEMNITIES 50
10.1 Expenses.........................................50
10.2 Indemnification..................................51
10.2.1 General Indemnity..............51
10.2.2 Environmental Indemnity........51
10.2.3 Survival; Defense..............52
SECTION 11. ...................................MISCELLANEOUS 52
11.1 Survival.........................................52
11.2 No Waiver By Agent Or Lenders....................52
11.3 Notices..........................................52
11.4 Headings.........................................52
11.5 Severability.....................................53
11.6 Entire Agreement; Construction; Amendments And Waivers..53
11.7 Reliance By Lenders..............................53
11.8 Marshalling; Payments Set Aside..................53
11.9 No Set-Offs By Borrower..........................54
11.10 Binding Effect, Assignment..............54
11.11 Counterparts............................55
11.12 Equitable Relief........................55
11.13 Written Notice Of Claims; Claims Bar....55
11.14 Waiver Of Punitive Damages..............56
11.15 Governing Law...........................56
11.16 Waiver Of Jury Trial....................56
NEW AFG Warehousing
Credit Agreement
($60MM)
WAREHOUSING CREDIT AGREEMENT
THIS WAREHOUSING CREDIT AGREEMENT is entered into as of December 15,
1998, by and among AMERICAN FINANCE GROUP, INC., a Delaware corporation
("Borrower"), the banks, financial institutions and institutional lenders party
hereto and defined as Lenders herein, and FIRST UNION NATIONAL BANK ("FUNB"),
not in its individual capacity, but solely as Agent.
RECITALS
A. Borrower desires to obtain from Lenders a revolving credit facility with
an aggregate principal availability of up to $60,000,000 for the purpose of
financing the purchase of finance leases, all as more particularly described
below; and
B. Lenders have agreed to make such credit available to Borrower, but only
upon the terms and subject to the conditions hereinafter set forth and in
reliance on the representations and warranties set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants hereinafter set forth, and intending to be legally bound, the
parties hereto agree as follows:
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,
limited liability company 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:
Adjusted LIBOR = LIBOR
-----------------------------------------
1.00 - Eurodollar Reserve Percentage
The Adjusted LIBOR shall be adjusted automatically as of the effective
date of any change in the Eurodollar Reserve Percentage.
"Administrative Lease" means any Investment Grade Lease which would
otherwise constitute an Eligible Lease but for the fact that payments thereunder
are more than ninety (90) days delinquent, but no more than one hundred eighty
(180) days delinquent, for reasons determined by Borrower to be unrelated to the
lessee's financial ability to make scheduled lease payments. For purposes of
this Agreement, Administrative Leases shall be considered Eligible Leases,
except as specifically provided under the definition of Borrowing Base.
"Advance" means any Advance made or to be made by any Lender to
Borrower as set forth in Section 2.1.1.
"Affiliate" means, with respect to any Person, (a) each Person that,
directly or indirectly, through one or more intermediaries, owns or controls,
whether beneficially or as a trustee, guardian or other fiduciary, five percent
(5.0%) or more of the stock having ordinary voting power in the election of
directors of such Person or of the ownership interests in any partnership or
joint venture, (b) each Person that controls, is controlled by or is under
common control with such Person or any Affiliate of such Person, or (c) each of
such Person's officers, directors, joint venturers and partners; provided,
however, that in no case shall any Lender or Agent be deemed to be an Affiliate
of Borrower for purposes of this Agreement. For the purpose of this definition,
"control" of a Person shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of its management or policies, whether
through the ownership of voting securities, by contract or otherwise.
"AFG Master Trust" means the trust established by and under the AFG
Master Trust Agreement.
"AFG Master Trust Agreement" means the Pooling and Servicing Agreement
and Indenture of Trust dated as of July 1, 1995, as amended from time to time,
by and among AFG Credit Corporation, as transferor, Borrower, as servicer, and
Bankers Trust Company, as trustee and collateral trustee.
"AFG Master Trust Program" means the program for the sale of Leases
under the AFG Master Trust Agreement.
"Agent" means FUNB solely when acting in its capacity as 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 between Borrower and FUNB as Agent.
"Agreement" means this 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.
"Applicable Margin" means:
(a) with respect to Prime Rate Loans, zero percent (0.00%);
and
(b) with respect to LIBOR Loans, one and three-eighths percent
(1.375%).
"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 one hundred percent (100.0%) of the
aggregate Discounted Present Value of all Eligible Leases then owned of record
by Borrower, computed (i) with respect to any requested Loan, as of the
requested Funding Date (and shall include the aggregate Discounted Present Value
of all Eligible Leases to be acquired with the proceeds of the requested Loan),
and (ii) with respect to the delivery of any monthly Borrowing Base Certificate
to be furnished pursuant to Section 5.1.3, as of the last day of the calendar
month for which such Borrowing Base Certificate is furnished; provided, however,
that there shall be excluded from the calculation under this clause (i), (1) as
to any single lessee under one or more Leases which are not Investment Grade
Leases but which are otherwise Eligible Leases, the amount by which the
aggregate Discounted Present Value of such Leases exceeds $2,000,000, (2) as to
all Lessees under Leases which are not Investment Grade Leases but which are
otherwise Eligible Leases, the amount by which the Aggregate Discounted Present
Value of such Leases exceeds $10,000,000, (3) Leases which are not Investment
Grade Leases but which are otherwise Eligible Leases to the extent such Leases
have otherwise been eligible for inclusion within the Borrowing Base beyond a
period of 120 days, and (4) the aggregate Discounted Present Value in excess of
$1,000,000 of Administrative Leases; and
(b) an amount equal to ninety percent (90.0%) of the aggregate
Invoice Price of Eligible 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.
"Cash Equivalents" means:
(a) securities issued or unconditionally guaranteed or insured
by the United States Government or any agency or any State thereof and backed by
the full faith and credit of the United States or such State having maturities
of not more than six (6) months from the date of acquisition;
(b) certificates of deposit, time deposits, Eurodollar time
deposits, repurchase agreements, reverse repurchase agreements, or bankers'
acceptances, having in each case a tenor of not more than six (6) months, issued
by any Lender, or by any nationally or state chartered commercial bank or any
branch or agency of a foreign bank licensed to conduct business in the United
States having combined capital and surplus of not less than $100,000,000 whose
short-term securities are rated at least A-1 by Standard & Poor's Corporation
and P-1 by Moody's Investors Service, Inc.; and
(c) commercial paper of an issuer rated at least A-1 by
Standard & Poor's Corporation or P-1 by Moody's Investor Service, Inc., and in
either case having a tenor of not more than six (6) months.
"Casualty Loss" means any of the following events with respect to any
item of Equipment: (a) the actual total loss or compromised total loss of such
item of Equipment; (b) such item of Equipment shall become lost, stolen,
destroyed, damaged beyond repair or permanently rendered unfit for use for any
reason whatsoever; (c) the seizure of such item of Equipment for a period
exceeding sixty (60) days or the condemnation or confiscation of such item of
Equipment; or (d) such item of Equipment shall be deemed under its Lease to have
suffered a casualty loss as to the entire item of Equipment.
"Charges" means all federal, state, county, city, municipal, local,
foreign or other governmental taxes, levies, assessments, charges or claims, in
each case then due and payable, upon or relating to (a) the Loans hereunder, (b)
Borrower's employees, payroll, income or gross receipts, (c) Borrower's
ownership or use of any of its Properties or assets, or (d) any other aspect of
Borrower's business.
"Closing" means the time at which each of the conditions precedent set
forth in Section 3 to the making of the first Loan hereunder shall have been
duly fulfilled or satisfied by Borrower.
"Closing Date" means the date on which Closing occurs.
"Code" means the Internal Revenue Code of 1986, as amended, the
Treasury Regulations adopted thereunder and the Treasury Regulations proposed
thereunder (to the extent Requisite Lenders, in their sole discretion,
reasonably determine that such proposed regulations set forth the regulations
that apply in the circumstances), as the same may be in effect from time to
time.
"Collateral" means the Collateral described in the Security Agreement.
"Commitment" means with respect to each Lender the amounts set forth on
Schedule A and "Commitments" means all such amounts collectively, as each may be
amended from time to time upon the execution and delivery of an instrument of
assignment pursuant to Section 11.10, which amendments shall be evidenced on
Schedule 1.1.
"Commitment Fee Percentage" has the meaning set forth in Section 2.3.
"Commitment Percentage" means, as to any Lender, the percentage
equivalent of such Lender's Commitment divided by aggregate of all Commitments.
"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 Intangible Assets" means, for any Person, as measured at
any date of determination on a consolidated basis, all intangible assets of such
Person.
"Consolidated Net Worth" means, for any Person, as measured at any date
of determination, the difference between Consolidated Total Assets and
Consolidated Total Liabilities.
"Consolidated Tangible Net Worth" means, for any Person, as measured at
any date of determination, the difference between Consolidated Net Worth and
Consolidated Intangible Assets.
"Consolidated Total Assets" means, for any Person, as measured at any
date of determination on a consolidated basis, all assets of such Person.
"Consolidated Total Liabilities" means, for any Person, as measured at
any date of determination on a consolidated basis, all liabilities of such
Person.
"Contingent Obligation" means, as to any Person, (a) any Guaranty
Obligation of that Person and (b) any direct or indirect obligation or
liability, contingent or otherwise, of that Person, (i) in respect of any letter
of credit or similar instrument issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of drawings, (ii) with
respect to the Indebtedness of any partnership or joint venture of which such
Person is a partner or a joint venturer, (iii) to purchase any materials,
supplies or other property from, or to obtain the services of, another Person if
the relevant contract or other related document or obligation requires that
payment for such materials, supplies or other property, or for such services,
shall be made regardless of whether delivery of such materials, supplies or
other property is ever made or tendered, or such services are ever performed or
tendered, or (iv) in respect of any interest rate protection contract that is
not entered into in connection with a bona fide hedging operation that provides
offsetting benefits to such Person. The amount of any Contingent Obligation
shall (subject, in the case of Guaranty Obligations, to the last sentence of the
definition of "Guaranty Obligation") be deemed equal to the maximum reasonably
anticipated liability in respect thereof, and shall, with respect to clause
(b)(iv) of this definition, be marked to market on a current basis.
"Default Rate" has the meaning set forth in Section 2.4.
"Designated Deposit Account" means a demand deposit account maintained
by Borrower with FUNB designated by written notice from Borrower to Agent.
"Discount Rate" means, as at and for any date of determination, the
then effective two-year U.S. Treasury Bill rate plus two percent (2.00%),
calculated on the basis of a 360 day year and actual number of days elapsed.
"Discounted Present Value" means, with respect to any Lease or any
Master Trust Pooled Lease, the present value of the unpaid balance of the total
rent to be paid under such Lease or Master Trust Pooled Lease calculated for the
period from the applicable date of determination through the remaining lease
term (provided that for Leases having original lease terms exceeding eighty-four
(84) months, such period of calculation shall only extend through the end of the
eighty-fourth (84th) month of such original lease term), in each case discounted
at the Discount Rate.
"Dollars" and the sign "$" means lawful money of the United States of
America.
"EBIT" means, as calculated for Borrower on a consolidated basis for
any period as of any date of determination, the sum of (a) Net Income, plus (b)
Interest Expense to the extent included in the determination of Net Income, plus
(c) net taxes on income attributable to the business of Borrower and actually
payable by Borrower.
"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.
"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 by the Administrative 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 Equipment" means any item of Equipment other than commercial
jet aircraft designed to carry more than fifty (50) passengers or self-powered
ocean-going vessels.
"Eligible Lease" means any Lease in respect of which the lessee and
Lease terms (including, without limitation, as to credit quality, rental rate,
maturity and insurance coverage) are acceptable to Agent, in its sole
discretion, and otherwise comply with the following requirements:
(a) the original term shall be at least six (6) months;
(b) the lessee shall not be a Governmental Authority;
(c) Lease payments shall be due in United States Dollars;
(d) the lessee shall not be in default under the Lease (except
as permitted by clause (f), below) or subject to bankruptcy, insolvency,
reorganization or liquidation proceedings or other proceedings for relief under
any bankruptcy or similar insolvency law;
(e) neither the Lease nor the Equipment leased thereunder
shall be subject to any Lien of any nature other than the Lien granted in favor
of Agent on behalf of Lenders under the Security Agreement and the other
Security Documents;
(f) amounts due under the Lease shall be less than thirty (30)
days delinquent at the time of the Funding Date related to the Lease and remain
at all times less than four (4) scheduled payments past due, unless such Lease
is an Administrative Lease;
(g) the Lease shall contain a "hell or highwater" provision
which unconditionally obligates the lessee to maintain the Equipment in good
working order, bear all costs of operating such Equipment and make periodic
Lease payments, including, without limitation, taxes, notwithstanding damage to
or destruction of the Equipment leased thereunder or any other event;
(h) the Lease shall not be subject to cancellation by the
lessee and shall not permit early termination unless the lessee pays an amount
not less than the Discounted Present Value of the Lease;
(i) payments under the Lease shall be absolute, unconditional
obligations of the lessee without the right to offset for any reason;
(j) the Lease shall require the lessee to maintain the
Equipment in good working order and to bear the costs of operating and
maintaining the Equipment, including, without limitation, taxes and insurance;
(k) the Lease shall permit the lessor to accelerate all Lease
payments in the event of the lessee's default;
(l) payments under the Lease shall be made no less frequently
than semi-annually;
(m) the Lease shall provide that in the event of a Casualty
Loss, the lessor shall have the option, at the lessee's sole cost and expense,
to
(i) repair the Equipment to good condition and
working order,
(ii) replace the Equipment with like Equipment of the
same or later model in good repair, condition and working order, or
(iii) require the lessee to pay to the lessor the
Stipulated Loss Value of the Equipment;
(n) the Equipment subject to the Lease shall be
Eligible Equipment; and
(o) the lessee shall have a rating by Moody's
Investors Service, Inc. equal to B3 or higher, by Standard & Poor's Corporation
equal to B- or higher or the equivalent under the Alcar Debt Rater System;
provided, however, if lessee is domiciled outside the United States, the Lease
must be an Investment Grade Lease.
Any Lease which is an Eligible Lease will cease to be an Eligible Lease at any
time it no longer meets all of the foregoing requirements.
"Employee Benefit Plan" means any Pension Plan and any employee welfare
benefit plan, as defined in Section 3(1) of ERISA, that is maintained for the
employees of Borrower or any ERISA Affiliate of Borrower.
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law or for release or injury
to the environment or threat to public health, personal injury (including
sickness, disease or death), property damage, natural resources damage, or
otherwise alleging liability or responsibility for damages (punitive or
otherwise), cleanup, removal, remedial or response costs, restitution, civil or
criminal penalties, injunctive relief, or other type of relief, resulting from
or based upon (a) the presence, placement, discharge, emission or release
(including intentional and unintentional, negligent and non-negligent, sudden or
non-sudden, accidental or non-accidental placement, spills, leaks, discharges,
emissions or releases) of any Hazardous Material at, in, or from Property,
whether or not owned by Borrower, or (b) any other circumstances forming the
basis of any violation, or alleged violation, of any Environmental Law.
"Environmental Laws" means all foreign, federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental, health, safety and land use
matters, including the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Clean Air Act, the Federal Water Pollution Control
Act of 1972, the Solid Waste Disposal Act, the Federal Resource Conservation and
Recovery Act, the Toxic Substances Control Act and the Emergency Planning and
Community Right-to-Know Act.
"Environmental Permit" has the meaning set forth in Section 4.13.2.
"Equipment" means the assets (including office or other equipment)
leased to a lessee pursuant to a Lease.
"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 2.15.6.
"Form 4224" has the meaning set forth in Section 2.15.6.
"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.
"Guarantor" means PLMI.
"Guaranty" means that certain Guaranty dated as of the date of this
Agreement, executed by Guarantor in favor of Lenders and Agent.
"Guaranty Obligation" means, as applied to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease for
capital equipment other than Equipment under an Eligible Lease, dividend, letter
of credit or other obligation (the "primary obligations") of another Person (the
"primary obligor"), including any obligation of that Person, whether or not
contingent, (a) to purchase, repurchase or otherwise acquire such primary
obligations or any property constituting direct or indirect security therefor,
or (b) to advance or provide funds (i) for the payment or discharge of any such
primary obligation, or (ii) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet item, level of income or financial condition of the primary
obligor, or (c) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation, or (d) otherwise
to assure or hold harmless the holder of any such primary obligation against
loss in respect thereof. The amount of any Guaranty Obligation shall be deemed
equal to the stated or determinable amount of the primary obligation in respect
of which such Guaranty Obligation is made or, if not stated or if
indeterminable, the maximum reasonably anticipated liability in respect thereof.
"Hazardous Materials" means all those substances which are regulated
by, or which may form the basis of liability under, any Environmental Law,
including all substances identified under any Environmental Law as a pollutant,
contaminant, hazardous waste, hazardous constituent, special waste, hazardous
substance, hazardous material, or toxic substance, or petroleum or petroleum
derived substance or waste.
"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 Coverage Ratio" means, as calculated quarterly on the last
day of each fiscal quarter of Borrower on a rolling four (4) fiscal quarter
basis, the ratio of (a) EBIT to (b) Interest Expense.
"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 Expense" means, as calculated for Borrower on a consolidated
basis for any period as at any date of determination, interest expense for such
period (whether cash or non-cash) determined in accordance with GAAP.
"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 Borrower pursuant to Section 2, in
each instance commencing on the applicable Funding Date of the Loan; provided,
however, that any Interest Period which would otherwise end on a day that is not
a Business Day shall end on the next succeeding Business Day except that in the
instance of any LIBOR Loan, if such next succeeding Business Day falls in the
next calendar month, the Interest Period shall end on the next preceding
Business Day.
"Investment" means, when used in connection with any Person, any
investment by or of that Person, whether by means of purchase or other
acquisition of stock or other securities of any other Person or by means of loan
or advance (other than advances to employees for moving or travel expenses,
drawing accounts and similar expenditures in the ordinary course of business),
capital contribution, guaranty or other debt or equity participation or
interest, or otherwise, in any other Person, including any partnership and joint
venture interests of such Person in any other Person or in any item of
transportation-related equipment, owned by a Person unaffiliated with Borrower
and on lease to another third party, in which Borrower acquires a right to
share, directly or indirectly.
"Investment Company Act" means the Investment Company Act of 1940, as
amended (15 U.S.C. ss. 80a-1 et seq.), as the same may be in effect from time to
time, or any successor statute thereto.
"Investment Grade Lease" means an Eligible Lease under which the lessee
has an investment grade rating by Moody's Investors Service, Inc. of Baa3 or
higher, by Standard & Poor's Corporation of BBB- or higher or the equivalent
under the Alcar Debt Rater System.
"Invoice Price" means the sum of the purchase price (including
modifications, as applicable), delivery charges, third party brokerage fees and
other reasonable closing costs, if any (provided that delivery charges, third
party brokerage fees and closing costs shall be included in the computation of
the "Invoice Price" only to the extent that they do not, in the aggregate,
exceed five percent (5.0%) of the total purchase price), and all applicable
taxes, paid by Borrower for or with respect to any item of Equipment.
"IRS" means the Internal Revenue Service and any successor thereto.
"Lease" means each and every item of chattel paper, installment sales
agreement, equipment lease or rental agreement (including progress payment
authorizations) relating to an item of Equipment of which Borrower is the
lessor. The term "Lease" includes (a) all payments to be made thereunder, (b)
all rights of Borrower therein, and (c) any and all amendments, renewals,
extensions or guaranties thereof.
"Lease Sale Program" means any lease sale program established by a
Subsidiary of Borrower, so long as any debt incurred by such Subsidiary is
non-recourse to Borrower, including, without limitation, the AFG Master Trust
Program and the United Bank of Kuwait Program.
"Lender Affiliate" means a Person engaged primarily in the business of
commercial banking and that is an Affiliate of a Lender or of a Person of which
a Lender is an Affiliate.
"Lenders" means the banks, financial institutions or other
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.
"Lenders' Side Letter" means the side letter relating to fees dated
December 15, 1998 among Borrower and the Lenders party to this Agreement as of
the Closing Date, other than FUNB.
"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 Guaranty and any and all other
agreements, documents and instruments executed and delivered by or on behalf or
support of Borrower to Agent or any Lender or any of their respective authorized
designees evidencing or otherwise relating to the Advances and the Liens granted
to Agent, on behalf of Lenders, with respect to the Advances, as the same may
from time to time be amended, modified, supplemented or renewed.
"Lockbox" has the meaning set forth in Section 5.9.
"Lockbox Agreement" means the Lockbox Agreement dated December 15,
1998, among Borrower, FUNB and Agent on behalf of Lenders, relating to the
Lockbox.
"Majority 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 fifty percent (50.00%) of all such amounts
outstanding or the total Commitments, as the case may be; provided, however,
that in the event there are two (2) or more Lenders, Majority Lenders must
include at least two (2) Lenders.
"Master Trust Equipment" means the assets (including office or other
equipment) leased to a lessee pursuant to a Master Trust Pooled Lease.
"Master Trust Pooled Lease" means each and every item of chattel paper,
installment sales agreement, equipment lease or rental agreement (including
progress payment authorizations) included within the "Aggregate Net Pool
Balance", as such term is defined as of the Closing Date in the AFG Master Trust
Agreement.
"Material Adverse Effect" means any set of circumstances or events
which (a) has or could reasonably be expected to have any material adverse
effect whatsoever upon the validity or enforceability of any Loan Document, (b)
is or could reasonably be expected to be material and adverse to the condition
(financial or otherwise) or business operations of Borrower or Guarantor, (c)
materially impairs or could reasonably be expected to materially impair the
ability of Borrower or Guarantor to perform its Obligations, or (d) materially
impairs or could reasonably be expected to materially impair the ability of
Agent or any Lender to enforce any of its or their legal remedies pursuant to
the Loan Documents.
"Maximum Availability" has the meaning set forth in Section 2.1.1.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA, and to which Borrower or any ERISA Affiliate of Borrower is
making, or is obligated to make, contributions or has made, or been obligated to
make, contributions within the preceding five (5) years.
"Net Income" means, as calculated for Borrower on a consolidated basis
for any period as of any of determination, the net income (or loss) of Borrower
for such period taken as a single accounting period.
"Note" or "Notes" 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.
"Opinion of Counsel" means the favorable written legal opinion of Susan
Santo, general counsel of Borrower and Guarantor, substantially in the form of
Exhibit D.
"Other Taxes" has the meaning set forth in Section 2.15.2.
"Overadvance" has the meaning set forth in Section 2.1.1(a)(iii).
"PBGC" means the Pension Benefit Guaranty Corporation and any successor
thereto.
"Pension Plan" means any employee pension benefit plan, as defined in
Section 3(2) of ERISA, that is maintained for the employees of Borrower or any
ERISA Affiliate of Borrower, other than a Multiemployer Plan.
"Permitted Liens" has the meaning set forth in Section 6.1.
"Permitted Rights of Others" means, as to any Property in which a
Person has an interest, (a) an option or right to acquire a Lien that would be a
Permitted Lien, (b) the reversionary interest of a lessor under a lease of such
Property, and (c) an option or right of the lessee under a lease of such
Property to purchase such Property at fair market value.
"Person" means any individual, sole proprietorship, partnership, joint
venture, limited liability company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or Governmental Authority.
"PLMI" means PLM International, Inc., a Delaware corporation, of which
Borrower is a wholly owned subsidiary.
"Potential Event of Default" means a condition or event which, after
notice or lapse of time or both, will constitute an Event of Default.
"Prepayment Date" has the meaning set forth in Section 2.2.2.
"Prime Rate" means, at any time, the rate of interest per annum
publicly announced from time to time by FUNB as its prime rate. Each change in
the Prime Rate shall be effective as of the opening of business on the day such
change in the Prime Rate occurs. The parties hereto acknowledge that the rate
announced publicly by FUNB as its Prime Rate is an index or base rate and shall
not necessarily be its lowest rate charged to FUNB's customers or other banks.
"Prime Rate Loan" means any borrowing which bears interest at a rate
determined with reference to the Prime Rate.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, whether tangible or intangible.
"Pro Rata Share" means, 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.
"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 (66.67%) of all
such amounts outstanding or the total Commitments, as the case may be; provided,
however, that in the event there are two (2) or more Lenders, Requisite Lenders
must include at least two (2) 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 that certain Security Agreement dated as of
the date of this Agreement, between Borrower and Agent, on behalf 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.
"Stipulated Loss Value" means, with respect to any Lease, the amount
payable by the lessee after a Casualty Loss with respect to the Equipment
subject thereto.
"Subsidiary" means, with respect to any Person, any corporation,
association, partnership, limited liability company 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 2.15.1.
"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 or any of its ERISA Affiliates
from a Pension Plan during a plan year in which any of them was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA, or (c) the filing of a
notice of intent to terminate a Pension Plan or the treatment of a Pension Plan
amendment as a termination under Section 4041 of ERISA, or (d) the institution
of proceedings to terminate a Pension Plan by the PBGC, or (e) any other event
or condition which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan.
"UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of 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.
"United Bank of Kuwait Program" means, collectively, the programs for
the sale of Leases under (a) the Master Purchase Agreement dated as of January
30, 1996, by and between Borrower and AFG/Eireann Limited Partnership II, a
limited partnership organized under the laws of the Commonwealth of
Massachusetts, and (b) the Master Purchase Agreement dated as of November 25,
1997, by and between Borrower and AFG/Eireann Limited Partnership III, a limited
partnership organized under the laws of the Commonwealth of Massachusetts.
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.
1.3 Other Terms. All other undefined terms contained in this Agreement
shall, unless the context indicates otherwise, have the meanings provided for by
the UCC to the extent the same are used or defined therein. The words "herein,"
"hereof" and "hereunder" and other words of similar import refer to this
Agreement as a whole, including the Exhibits and Schedules hereto, all of which
are by this reference incorporated into this Agreement, as the same may from
time to time be amended, modified or supplemented, and not to any particular
section, subsection or clause contained in this Agreement. The term "including"
shall not be limiting or exclusive, unless specifically indicated to the
contrary. The term "or" is disjunctive; the term "and" is conjunctive. The term
"shall" is mandatory; the term "may" is permissive. Wherever from the context it
appears appropriate, each term stated in either the singular or plural shall
include the singular and plural, and pronouns stated in the masculine, feminine
or neuter gender shall include the masculine, feminine and the neuter.
1.4 Schedules And Exhibits. Any reference to a "Sections," "Subsection,"
"Exhibit," or "Schedule" shall refer to the relevant Section or Subsection of or
Exhibit or Schedule to this Agreement, unless specifically indicated to the
contrary.
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 this Agreement and (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" and collectively, the "Notes").
(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, taking
into account such Lender's Pro Rata Share of the principal amounts outstanding
under this Agreement and the making of such Advance, exceeds the lesser of (A)
such Lender's Commitment for the Facility and (B) such Lender's Pro Rata Share
of the Borrowing Base.
(iii) If at any time and for any reason the aggregate
principal amount of the Loan(s) then outstanding shall exceed the Maximum
Availability (the amount of such excess, if any, being an "Overadvance"),
Borrower shall immediately, and in no event more than two (2) Business Days
thereafter, repay the full amount of such Overadvance, together with all
interest accrued thereon.
(iv) Amounts borrowed by Borrower under this Facility may be
repaid and, prior to the Commitment Termination Date and subject to the
applicable terms and conditions precedent to borrowings hereunder, reborrowed;
provided, however, that no Loan shall mature later than the Commitment
Termination Date.
(v) Each request for a Loan hereunder shall constitute a
reaffirmation by Borrower and the Responsible Officer requesting the same that
the representations and warranties contained in this Agreement are true, correct
and complete in all material respects to the same extent as though made on and
as of the date of the request, except to the extent such representations and
warranties specifically relate to an earlier date, in which event they shall be
true, correct and complete in all material respects as of such earlier date.
(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, plus, in each case, the Applicable Margin.
Interest on each Loan funded hereunder shall be due and payable in arrears on
each Interest Payment Date, with all accrued but unpaid interest on such Loan
being due and payable on the date such Loan is repaid, whether by prepayment or
at maturity, and with all accrued but unpaid interest being due and payable on
the Commitment Termination Date.
Each Advance made by a Lender as part of a Loan hereunder and all
repayments of principal with respect to such Advance shall be evidenced by
notations made by such Lender on the books and records of such Lender; provided,
however, that the failure by such Lender to make such notations shall not limit
or otherwise affect the obligations of Borrower with respect to the repayments
of principal or payments of interest on any Advance or Loan. The aggregate
unpaid amount of each Advance set forth on the books and records of a Lender
shall be presumptive evidence of such Lender's portion of the principal amount
owing and unpaid under the 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 3:00 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 Eligible Leases pending
the sale of such Leases under a Lease Sale Program.
2.2 Repayment And Prepayment.
2.2.1 Repayment. Unless prepaid pursuant to Section 2.1.1.(a)(iii) or
Section 2.2.2, the principal amount of each Loan hereunder shall be repaid by
Borrower to Lenders not later than the Commitment Termination Date.
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' prior written notice with respect to the prepayment of LIBOR Loans and at
least one (1) Business Day's prior written notice with respect to the prepayment
of Prime Rate Loans, or three (3) Business Days' or one (1) Business Day's, as
applicable, prior 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.
2.3 Commitment Fee for Providing Commitments. In consideration of Lenders'
agreement to commit to make the Loans available to Borrower as contemplated by
this Agreement, Borrowers agree to pay to Agent, on behalf of and for the
ratable benefit of Lenders according to their respective Commitment Percentage
of the aggregate Commitments, a commitment fee in an amount equal to fifteen-one
hundredths of one per cent (0.15%) (the "Commitment Fee Percentage") multiplied
by the average daily difference between the aggregate Commitments and the sum of
the aggregate outstanding principal amount of Loans, due and payable quarterly
in arrears on the last day of each Fiscal Quarter, with the final such payment
due and payable on the Commitment Termination Date.
2.4 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.
2.5 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, any Note or any of the other Loan Documents shall
be in lawful money of the United States of America in immediately available
funds and delivered to Agent, for the account of Lenders, not later than 1:00
p.m., North Carolina time, on the date due at First Union National Bank, 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.
2.6 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 Commitment
Termination Date.
2.7 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.
2.8 Procedure For The Borrowing Of Loans.
2.8.1 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 Officer 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 for LIBOR Loans and one (1) Business Day prior to the
Funding Date for Prime Rate Loans) 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) and if greater, in additional increments of $100,00, and if a Prime
Rate Loan is requested, shall be not less than Two Hundred Fifty Thousand
Dollars ($250,000) and if greater, in additional increments of $10,000;
(b) the requested Funding Date, which shall be a
Business Day;
(c) whether the borrowing is to be comprised of one
or more LIBOR Loans or Prime Rate Loans; and
(d) the duration of the Interest Period applicable to
any such LIBOR Loans included in such Notice of Borrowing. If the Notice of
Borrowing shall fail to specify the duration of the Interest Period for any
borrowing comprised of LIBOR Loans, such Interest Period shall be one (1) month.
2.8.2 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.
2.9 Conversion And Continuation Elections.
2.9.1 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) and if greater, in additional increments of $100,000) 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) and if greater, in
additional increments of $100,000);
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.
2.9.2 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.
2.9.3 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.
2.9.4 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.
2.10 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.
2.11 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.
2.12 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 2.12 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.
2.13 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.
Nothing in this Section 2.13 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.
2.14 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.
2.15 Taxes.
2.15.1 No Deductions. Subject to Section 2.15.7, 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").
2.15.2 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").
2.15.3 Indemnity. Subject to Section 2.15.7, 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 2.15) 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.
2.15.4 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 2.15.7:
(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 2.15) 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.
2.15.5 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.
2.15.6 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 (b)
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.
2.15.7 Income Taxes. Borrower will not be required to pay any
additional amounts in respect of United States Federal income tax pursuant to
Section 2.15.4 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 2.15.6 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 2.15.6 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 2.15.6, 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.
2.15.8 Reimbursement Of Costs. If, at any time, Borrower requests any
Lender to deliver any forms or other documentation pursuant to Section
2.15.6(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.
2.15.9 Jurisdiction. If Borrower is required to pay additional amounts
to any Lender or Agent pursuant to Section 2.15.4, 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.
2.16 Illegality.
2.16.1 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.
2.16.2 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.
2.16.3 Prime Rate Borrowing. If Borrower is required to prepay any
LIBOR Loan immediately as provided in Section 2.16.2, then concurrently with
such prepayment, Borrower shall borrow, in the amount of such prepayment, a
Prime Rate Loan.
2.17 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.
2.18 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.
2.19 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:
2.19.1 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
2.19.2 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 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 each of Borrower and Guarantor, including all corporate resolutions of
each of Borrower and Guarantor authorizing or relating to the execution,
delivery and performance of the Loan Documents and the consummation of the
transactions contemplated hereby and thereby;
(b) A certificate of a Responsible Officer of
Borrower and Guarantor, respectively, certifying that (i) attached are copies of
the Certificate of Incorporation and Bylaws of Borrower or Guarantor, as the
case may be, which remain in full force and effect and have not been amended
since the respective date thereof, and (ii) such Person is in good standing
under the laws of the state of its formation and each other jurisdiction where
its ownership of Property and assets or conduct of its business requires such
qualification;
(c) A certificate of the secretary or assistant
secretary of AFG Credit Corporation, certifying that (i) the attached are copies
of the Certificate of Incorporation and Bylaws of AFG Credit Corporation, which
remain in full force and effect and have not been amended since the respective
date thereof, and (ii) AFG Credit Corporation is in good standing under the laws
of the state of its formation and each other jurisdiction where its ownership of
Property and assets or conduct of its business requires such qualification;
(d) A certificate of Borrower (executed by a
Responsible Officer thereof), as the servicer for and behalf of the AFG Master
Trust, and by AFG Credit Corporation (executed by the secretary or assistant
secretary thereof) as the transferor for and on behalf of the AFG Master Trust,
certifying that attached to such certificate is a true and accurate copy of the
AFG Master Trust Agreement, as amended through the Closing Date, which remains
in full force and effect; and
(e) Such other documents relating to Borrower or
Guarantor as Lenders reasonably may request.
3.1.2 Notes. Agent shall have received the Notes, in form and
substance satisfactory to Lenders, duly executed and delivered by Borrower.
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 Guarantor, in form and
substance satisfactory to Lenders, dated as of the Closing Date and addressed to
Lenders, together with copies of any officer's certificate or legal opinion of
other counsel or law firm specifically identified and expressly relied upon by
such counsel.
3.1.5 Guaranty. Agent shall have received the Guaranty, in form and
substance satisfactory to Lenders, duly executed and delivered by Guarantor.
3.1.6 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.
3.1.7 Fees. Agent, on behalf of itself and on behalf of those Lenders
party to the Lenders' Side Letter, shall have received Agent's Side Letter and
the Lenders' Side Letter, respectively, each duly executed by Borrower and shall
have received the fees described therein.
3.1.8 Other Documents. Agent shall have received such other documents,
information and items from Borrower and Guarantor as reasonably requested by
Agent.
3.2 All Loans. Unless waived in writing by Requisite Lenders (or, in the
case of Section 3.2.2, unless waived in writing by all 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 Leases by Borrower, Agent
shall have received (a) a Notice of Borrowing; (b) a Borrowing Base Certificate;
and (c) other information as may be requested by Agent to confirm that such
Lease satisfies the criteria for Eligible Leases.
3.2.2 No Event Of Default. No event shall have occurred and be
continuing or would result from the making of any Loan on such Funding Date
which constitutes an Event of Default or Potential Event of Default under this
Agreement or which with notice or lapse of time or both would constitute an
Event of Default or Potential Event of Default under this Agreement.
3.2.3 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 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).
3.2.4 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 Eligible Lease being
financed with such Loan to the effect that:
(a) Borrower has in its possession each of the
following: (i) valid lease documentation, including, without limitation, the
original master lease agreement, or a copy thereof and original lease schedules,
including all amendments, modifications, supplements or addenda made thereto;
(ii) the purchase agreement and assignment of lease, or bill of sale, as
applicable; (iii) invoices with respect to the Equipment subject to the Lease
against which the Loan is to be made, together with evidence of payment to the
vendor or supplier of the Equipment; (iv) the original equipment acceptance
executed by the obligor under the Lease; and (v) certificates of title for the
Equipment subject to the Lease, if applicable;
(b) The Lease constitutes the entire agreement of the
parties thereto and no party thereto shall be bound except in accordance
therewith, and no amendments, modifications, supplements or addenda have been
made to, or schedules attached to, the Lease except as disclosed in such
certificate;
(c) No material default exists under the Lease as of
the date of the Loan; provided that a payment delinquency under the Lease of
less than sixty (60) days shall not constitute a material default;
(d) The Lease constitutes the valid contract of
Borrower and each lessee that is a party to the Lease, and shall at all times be
enforceable against each such lessee in accordance with its terms, subject to
the limitations on enforceability imposed by bankruptcy and creditors' rights
laws and the general principles of equity, and each party thereto has executed
the Lease with full power, authority and capacity to contract;
(e) Upon delivery of the purchase price and the
executed bill of sale or similar instrument of title, a true and correct copy of
which is to be attached, Borrower shall acquire good title to the Equipment
subject to the Eligible Lease against which the Loan is to be made, free and
clear of all Liens and other encumbrances on title (other than Permitted Liens);
(f) The lessee is responsible for the payment of all
taxes, insurance and similar charges so that all Lease payments will be net to
Borrower; and
(g) No rentals, fees, costs, expenses or charges paid
or payable by any lessee under the Lease violate any known statute, rule,
regulation, court ruling or other regulation or limitation relating to the
maximum fees, costs, expenses or charges permitted in any state in which the
Equipment is located or in which the lessee is located, resides or is domiciled,
or in which the transaction was consummated, or in any other state which has
jurisdiction of the Equipment, Lease or lessee.
3.2.5 Insurance. The insurance required to be maintained by Borrower
pursuant to the Loan Documents shall be in full force and effect.
3.2.6 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.
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 Delaware and is
duly qualified and licensed as a foreign corporation and authorized to do
business in each jurisdiction within the United States where its ownership of
Property and assets or conduct of business requires such qualification. Borrower
has the corporate power and authority, rights and franchises to own its Property
and assets and to carry on its business as now conducted. Borrower has the
corporate power and authority to execute, deliver and perform the terms of the
Loan Documents (to the extent either is a party thereto) and all other
instruments and documents contemplated hereby or thereby.
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 certificate of incorporation or bylaws; (b) contravene, conflict with
or violate any applicable law or regulation, or any order, writ, judgment,
injunction, decree, determination or award of any Governmental Authority, which
contravention, conflict or violation, in the aggregate, may have a Material
Adverse Effect; or (c) violate or result in the breach of, or constitute a
default under any indenture or other loan or credit agreement, or other
agreement or instrument to which Borrower is a party or by which Borrower, or
its Property and assets may be bound or affected. Borrower is not in violation
or breach of or default under any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or any contract, agreement, lease,
license, indenture or other instrument to which it is a party, the
non-compliance with, the violation or breach of or the default under which
would, with reasonable likelihood, have a Material Adverse Effect.
4.4 Financial Condition. Guarantor's audited consolidated financial
statements as of December 31, 1997, and Borrower's and Guarantor'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
Borrower and Guarantor, respectively, as of the date thereof, and have been
prepared in accordance with GAAP, subject to fiscal year-end audit adjustments.
There has been no material adverse change in the business, properties or assets,
operations, prospects, profitability or financial or other condition of Borrower
or Guarantor since December 31, 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 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 4.7, all consents and approvals of, filings and registrations with, and
other actions in respect of, all Governmental Authorities required to be
obtained by Borrower in order to make or consummate the transactions
contemplated under the Loan Documents have been, or prior to the time when
required will have been, obtained, given, filed or taken and are or will be in
full force and effect.
4.8 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.
4.9 ERISA. All Employee Benefit Plans of Borrower are listed on Schedule
4.9. All Pension Plans of Borrower, including terminated Pension Plans, that are
intended to be qualified under Section 401(a) of the Code have been determined
by the IRS to be qualified. All Pension Plans existing as of the date hereof
continue to be so qualified. No "reportable event" (as defined in Section 4043
of ERISA) has occurred and is continuing with respect to any Pension Plan for
which the thirty-day notice requirement may not be waived other than those of
which the appropriate Governmental Authority has been notified. All Employee
Benefit Plans of Borrower have been operated in all material respects in
accordance with their terms and applicable law, including ERISA, and no
"prohibited transaction" (as defined in ERISA and the Code) that would result in
any material liability to Borrower has occurred with respect to any such
Employee Benefit Plan.
4.10 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.
4.11 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.
4.12 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.
4.13 Environmental Quality.
4.13.1 Except as specifically disclosed in Schedule 4.13, the on-going
operations of Borrower comply in all material respects with all Environmental
Laws.
4.13.2 Except as specifically disclosed in Schedule 4.13, Borrower has
obtained all licenses, permits, authorizations and registrations required under
any Environmental Law ("Environmental Permits") and necessary for its ordinary
course operations, all such Environmental Permits are in good standing, and
Borrower is in compliance with all material terms and conditions of such
Environmental Permits.
4.13.3 Except as specifically disclosed in Schedule 4.13, neither
Borrower nor any of its present Property or operations is subject to any
outstanding written order from or agreement with any Governmental Authority nor
subject to any judicial or docketed administrative proceeding, respecting any
Environmental Law, Environmental Claim or Hazardous Material.
4.13.4 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.
4.14 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.
4.15 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.
4.16 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.
4.17 Solvency. Borrower is Solvent.
4.18 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.
4.19 Eligible Leases. With respect to each Eligible Lease financed by a
Loan:
4.19.1 Borrower maintains in its possession each of the following: (a)
valid lease documentation, including, without limitation, the original master
lease agreement, or a copy thereof and original lease schedules, together with
all amendments, modifications, supplements or addenda made, or schedules
attached, thereto; (b) the purchase agreement and assignment of lease, or bill
of sale, as applicable; (c) invoices with respect to Equipment subject to the
Lease, together with evidence of payment to the vendor or supplier of the
Equipment; (d) the original equipment acceptance executed by the obligor under
the Lease; and (e) certificates of title for the Equipment subject to the Lease,
if applicable;
4.19.2 No material default exists under the Lease; provided that a
payment delinquency under the Lease of less than sixty (60) days shall not
constitute a material default;
4.19.3 The Lease constitutes the valid contract of Borrower and each
lessee that is a party to the Lease, and shall at all times be enforceable
against each such lessee in accordance with its terms, subject to the
limitations on enforceability imposed by bankruptcy and creditors' rights laws
and the general principles of equity, and each party thereto has executed the
Lease with full power, authority and capacity to contract;
4.19.4 Borrower has good title to the Equipment subject to the
Eligible Lease, free and clear of all Liens and other encumbrances on title
(other than Permitted Liens);
4.19.5 The lessee is responsible for the payment of all taxes,
insurance and similar charges so that all Lease payments will be net to
Borrower; and
4.19.6 No rentals, fees, costs, expenses or charges paid or payable by
any lessee under the Lease violate any known statute, rule, regulation, court
ruling or other regulation or limitation relating to the maximum fees, costs,
expenses or charges permitted in any state in which the Equipment is located or
in which the lessee is located, resides or is domiciled, or in which the
transaction was consummated, or in any other state which has jurisdiction of the
Equipment, Lease or lessee
4.20 Year 2000. Borrower has reviewed the areas within its business and
operations which could be adversely affected by, and have developed or are
developing a program to address on a timely basis, the "Year 2000 Problem" (that
is, the risk that computer applications used by Borrower and its Subsidiaries
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 warrants that the "Year
2000 Problem" would not with reasonable likelihood have or result in a Material
Adverse Effect.
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 and Guarantor, 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 Borrower and Guarantor as at the end of such
period and the related consolidated statements of income, stockholders' equity
and cash flows of Guarantor (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 and Guarantor that they (i) are
complete and fairly present the financial condition of Borrower and Guarantor 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
and Guarantor 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
Guarantor, consolidated and consolidating balance sheets of Guarantor and the
related consolidated (and, as to statements of income only for Guarantor,
consolidating) statements of income, stockholders' equity and cash flows of
Guarantor for such fiscal year, setting forth in each case, in comparative form
the consolidated figures for the previous year, all in reasonable detail and (i)
in the case of such consolidated financial statements, accompanied by a report
thereon of an independent public accountant of recognized national standing
selected by Guarantor and satisfactory to Agent, which report shall contain an
opinion which is not qualified in any manner or which otherwise is satisfactory
to Requisite Lenders, in their sole discretion, and (ii) in the case of such
consolidating financial statements, certified by the Chief Financial Officer or
Corporate Controller of Guarantor;
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 sixty (60) days after the end of each fiscal quarter of Borrower,
a Compliance Certificate dated as of the last day of such fiscal quarter, duly
executed by the Chief Financial Officer or Corporate Controller of Borrower,
with appropriate insertions;
5.1.5 Reports. At Agent's request, promptly upon receipt thereof,
copies of all reports submitted to Borrower or Guarantor by independent public
accountants in connection with each annual, interim or special audit of the
financial statements of Borrower or Guarantor made by such accountants;
5.1.6 Lease Receivables Aging Reports. As soon as practicable and in
any event within sixty (60) days after the end of each quarterly accounting
period of Borrower, a Lease receivables aging report as at the end of such
period, all in reasonable detail and certified by the Chief Financial Officer or
Corporate Controller of Borrower that they are complete and fairly present the
Lease receivables aging of Borrower as at the dates indicated.
5.1.7 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;
5.1.8 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 or Guarantor or taken any other
action with respect to a claimed default or event or condition of the type
referred to in Section 8.1.2, (iii) of the institution of any litigation or of
the receipt of written notice from any Governmental Authority as to the
commencement of any formal investigation involving an alleged or asserted
liability of Borrower of any amount and of Guarantor equal to or greater than
$500,000 or any adverse judgment in any litigation involving a potential
liability of Borrower of any amount and of Guarantor 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 or
Guarantor, 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 or Guarantor has taken, is taking and proposes to take with
respect thereto;
5.1.9 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;
5.1.10 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;
5.1.11 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;
5.1.12 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
Guarantor;
5.1.13 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 and Guarantor; and
5.1.14 Additional Information. Such other information respecting the
condition or operations, financial or otherwise, of Borrower and Guarantor 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.
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.
All financial statements of Borrower and Guarantor to be delivered by
Borrower and Guarantor to Agent pursuant to this Section 5.1 will be complete
and correct and present fairly the financial condition of Borrower and Guarantor
as of the date thereof; will disclose all liabilities of Borrower and Guarantor
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 and
Guarantor will, to the best of Borrower's and Guarantor's knowledge, after due
inquiry, be true and correct. Borrower and Guarantor hereby agree that each time
either submits a financial statement or tax return to Agent, Borrower and
Guarantor shall be deemed to represent and warrant to Lenders that such
financial statement or tax return complies with all of the preceding
requirements set forth in this paragraph.
5.2 Existence; Compliance With Law. 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, property insurance coverage for
Borrower under the existing blanket policies of insurance for Guarantor and its
Subsidiaries, and all such policies of property insurance shall carry
endorsements naming Agent as principal loss payee as to any property owned by
Borrower; and public liability insurance, which shall carry endorsements naming
Agent and each Lender as an additional insured, and in each case indicating that
(i) any loss thereunder shall be payable to Agent or Lenders, as the case may
be, notwithstanding any action, inaction or breach of representation or warranty
by Borrower; (ii) there shall be no recourse against any Lender for payment of
premiums or other amounts with respect thereto, and (iii) at least fifteen (15)
days' prior written notice of cancellation, lapse or material change in coverage
shall be given to Agent by the insurer. In addition, Borrower shall require each
lessee under each Eligible Lease that is not an Investment Grade Lease to
maintain and keep in force property insurance covering the Equipment subject to
such Eligible Lease.
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
Guarantor 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. Without limitation of the other inspection and audits rights
provided by this Section 5.5, Borrower agrees to bear the costs, up to an annual
maximum of $7,500, of field audits of the Equipment and Leases conducted by an
independent auditing or appraisal firm retained by Agent, on behalf and for the
benefit of Lenders (provided that such cap on costs borne by Borrower shall not
apply to the extent Section 10.1(d) applies).
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 Performance Of Leases. Borrower shall timely perform in all
material respects each of its covenants and obligations under the Eligible
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.
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 any Lien of any nature upon or with respect to
any of its 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 and which were not incurred in connection
with the borrowing of money or the obtaining of advances or credit; provided
that the Liens permitted by this Section 6.1.3 do not in the aggregate
materially detract from the value of any assets or property of or materially
impair the use thereof in the operation of the business of Borrower; and
provided further that the adverse determination of any claim or liability,
contingent or otherwise, secured by any of such Liens would not either
individually or in the aggregate, with reasonable likelihood, have a Material
Adverse Effect; and
6.1.4 Permitted Rights Of Others.
6.2 Limitations On Indebtedness. Borrower shall not create, incur, assume
or suffer to exist, any Indebtedness or Contingent Obligation; provided,
however, that this Section 6.2 shall not be deemed to prohibit the Obligations
to Lenders and Agent arising under this Agreement and the other Loan Documents.
6.3 Disposition Of Assets. Borrower shall not sell, assign or otherwise
dispose of any of its assets, except for full, fair and reasonable
consideration, or enter into any sale and leaseback agreement covering any of
its fixed or capital assets.
6.4 Restricted Payments. Borrower shall not make any dividend payment or
other distribution of assets, properties, cash, rights, obligations or
securities on account of any shares of any class of its capital stock, or
purchase, redeem or otherwise acquire for value any shares of its capital stock
or any warrants, rights or options to acquire such shares, now or hereafter
outstanding, if such payment would cause an Event of Default or a Potential
Event of Default to occur.
6.5 Restriction On Fundamental Changes. Borrower shall not enter into any
transaction of Acquisition, merger, consolidation or recapitalization, directly
or indirectly, whether by operation of law or otherwise, or liquidate, wind up
or dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease, assign, transfer or otherwise dispose of, in one transaction or a series
of transactions, all or any part of its business, Property or assets, whether
now owned or hereafter acquired, or acquire by purchase or otherwise all or
substantially all the business, Property or assets of, or stock or other
evidence of beneficial ownership of, any Person, except for the acquisition or
resale of Leases and Equipment in the ordinary course of business and as
contemplated by this Agreement.
6.6 Transactions With Affiliates. Borrower shall not directly or
indirectly, enter into or permit to exist any transaction (including, without
limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service) with any of its Affiliates on terms that are less
favorable to Borrower than those that might be obtained at the time from Persons
who are not such Affiliates.
6.7 No Loans To Affiliates. Borrower shall not make any loans to any of its
Affiliates.
6.8 No Investment. Borrower shall not make or suffer to exist any
Investments, except for:
(a) Investments in Cash Equivalents;
(b) subject to Section 6.10, Investments in new
Subsidiaries for the purpose of capitalizing Lease Sale Programs; and
(c) extensions of credit in the nature of accounts
receivable or notes receivable arising form the sale or lease of goods or
services in the ordinary course of Borrower's business.
6.9 Maintenance Of Business. Borrower shall not engage in any business
other than the originating and purchase of leases of equipment and the
operation, remarketing and resale of such leases and equipment.
6.10 No Subsidiaries. Except for such existing Subsidiaries listed in
Schedule 6.10, and such future Subsidiaries as Borrower may create after
providing Agent with prior written notice of its intention to do so and so long
as any Indebtedness or other obligations or liabilities of any Subsidiary shall
be non-recourse to Borrower, Borrower shall not create any Subsidiaries.
6.11 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.
6.12 ERISA.
6.12.1 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.
6.12.2 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.
6.13 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.
6.14 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.
SECTION 7. FINANCIAL COVENANTS OF BORROWER.
Borrower covenants and agrees that, so long as the Commitment hereunder
shall be available, and until full, complete and indefeasible payment and
performance of the Obligations, including, without limitation, all Loans
evidenced by the Notes, unless Requisite Lenders shall otherwise consent in
writing, Borrower shall perform the following financial covenant. Borrower
agrees and understands that (except as expressly provided herein) the covenant
under this Section 7 shall be subject to quarterly compliance or compliance as
of the date of any request for a Loan pursuant to Section 3.2.1 (as measured on
the last day of each fiscal quarter of Borrower or as of the date of any request
for a Loan pursuant to Section 3.2.1), and in each case review by Lenders of the
respective fiscal quarter's consolidated financial statements delivered to Agent
by Borrower pursuant to Section 5.1.
7.1 Minimum Consolidated Tangible Net Worth. Borrower shall maintain a
Consolidated Tangible Net Worth (exclusive of intercompany payables and
receivables between Borrower and Guarantor) of not less than the sum of (i)
$15,750,000, plus (ii) an amount equal to fifty percent (50.0%) of Borrower's
cumulative Net Income, as calculated on an annual basis for each fiscal year of
Borrower commencing with Borrower's fiscal year ending December 31, 1998.
7.2 Minimum Interest Coverage Ratio. Borrower shall maintain an Interest
Coverage Ratio of not less than 1.15:1.00.
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 or Guarantor fails to pay any
sum due to Lenders or Agent arising under this Agreement, any 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 by
payment in full of the amount thereof within five (5) calendar days; or
8.1.2 Other Agreements. (a) Borrower defaults in the repayment of any
principal of or the payment of any interest on any Indebtedness of Borrower, or
breaches any term of any evidence of such Indebtedness or defaults in any
payment in respect of any Contingent Obligation, (b) Guarantor defaults in the
repayment of any principal of or the payment of any interest on any Indebtedness
of Guarantor, or breaches any term of any evidence of such Indebtedness or
defaults in any payment in respect of any Contingent Obligations (excluding, as
to Guarantor, any Contingent Obligations of Guarantor arising solely as a result
of Guarantor's status as a general partner of any Person), in each case
exceeding, in the aggregate outstanding principal amount, $2,000,000, or (c)
Borrower or Guarantor breaches or violates any term or provision of any evidence
of such Indebtedness or Contingent Obligation or of any such loan agreement,
mortgage, indenture, guaranty or other agreement relating thereto if the effect
of such breach is to permit acceleration under the applicable instrument, loan
agreement, mortgage, indenture, guaranty or other agreement and such failure
shall not have been cured within the applicable cure period, or there is an
acceleration under the applicable instrument, loan agreement, mortgage,
indenture, guaranty or other agreement; or
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, 6.2,
6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 7.1 and 7.2 of this Agreement; or
8.1.4 Breach Of Representations Or Warranties. Any representation or
warranty made by or on behalf of Borrower or Guarantor in this Agreement or any
other Loan Document or any statement or certificate at any time given in writing
pursuant hereto or thereto or in connection herewith or therewith 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 or Guarantor fails or neglects to perform, keep or observe any covenant
or provision of this Agreement or of any of the other Loan Documents or any
other document or agreement executed by Borrower or Guarantor in connection
therewith and the same has not been cured to Requisite Lenders' satisfaction
within thirty (30) calendar days after Borrower or Guarantor shall become aware
thereof, whether by written notice from Agent or any Lender or otherwise; or
8.1.6 Insolvency. Borrower or Guarantor shall (i) cease to be Solvent,
(ii) admit in writing its inability to pay its debts as they mature, (iii) make
an assignment for the benefit of creditors, or (iv) apply for or consent to the
appointment of a receiver, liquidator, custodian or trustee for it or for a
substantial part of its Properties or business, or such a receiver, liquidator,
custodian or trustee otherwise shall be appointed and shall not be discharged
within sixty (60) days after such appointment; or
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 or Guarantor or any order, judgment or decree shall be entered against
Borrower or Guarantor 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 or Guarantor 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 or Guarantor which (net of insurance coverage) remains
unvacated, unbonded, unstayed or unpaid or undischarged for more than sixty (60)
days (whether or not consecutive) or in any event later than five (5) calendar
days prior to the date of any proposed sale thereunder, which, together with all
such other unvacated, unbonded, unstayed, unpaid and undischarged judgments or
attachments against Borrower in any amount; against Guarantor exceeds in the
aggregate $500,000; or against any combination of the foregoing Persons exceeds
in the aggregate $1,000,000; or
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 or Guarantor, not
to be, a legal, valid and binding obligation of Borrower or Guarantor,
respectively, enforceable against such Person in accordance with its terms; or
8.1.11 Criminal Proceedings. A criminal proceeding shall have been
filed in any court naming Borrower as a defendant for which forfeiture is a
potential penalty under applicable federal or state law which, in the reasonable
determination of Requisite Lenders, may have a Material Adverse Effect; or
8.1.12 Action By Governmental Authority. Any Governmental Authority
enters a decree, order or ruling ("Government Action") which will materially and
adversely affect Borrower's or Guarantor's financial condition, operations or
ability to perform or pay such party's obligations arising under this Agreement
or any instrument or agreement executed pursuant to the terms of this Agreement.
Borrower or Guarantor shall have thirty (30) days from the earlier of the date
(a) Borrower or Guarantor, as applicable, first discovers it is the subject of
Government Action or (b) a Lender or any agency gives notice of Government
Action to take such steps as are necessary to obtain relief from the Government
Action. For the purpose of this paragraph, "relief from Government Action" means
to discharge or to obtain a dismissal of or release or relief from (i) any
Government Action so that the affected party or parties do not incur (x) any
monetary liability in the case of Borrower, or (y) monetar liability of more
than $1,000,000 in the case of Guarantor, or (ii) any disqualification of or
other limitation on the operation of Borrower or Guarantor, or either of them,
which in the reasonable determination of the Requisite Lenders may have a
Material Adverse Effect; or
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, at the option of Required Lenders, Lenders or Agent, on behalf and for
the benefit of Lenders, may 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 or Guarantor
(exclusive of deposits in accounts expressly held in the name of third parties
or held in trust for benefit of third parties) may be set-off against the
Obligations and any and all other liabilities, direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, of Borrower
or Guarantor to Lenders. Each Lender agrees to notify promptly Borrower or
Guarantor and Agent of any such set-off; provided, that the failure to give such
notice shall not affect the validity of any such set-off.
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 Agent of such Lender under this Agreement and the other Loan
Documents, and each such Lender irrevocably authorizes FUNB as 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 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, 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. 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 Guarantor and made its own decision to make its Loans hereunder and
enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of
Borrower and Guarantor. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by Agent hereunder or by the
other Loan Documents, Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, property, financial and other condition or creditworthiness of
Borrower and Guarantor which may come into the possession of Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.
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 Guarantor as though Agent were not Agent hereunder. With respect to
Advances made or renewed by it, Agent shall have the same rights and powers
under this Agreement and the other Loan Documents as any Lender and may exercise
the same as though it were not Agent, and the terms "Lender" and "Lenders" shall
include Agent in its individual capacity.
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
Majority 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, but
subject to Section 5.5, so long as no Event of Default or Potential Event of
Default shall have occurred and be continuing, all appraisals of the Eligible
Leases shall be at the expense of Lenders. If an Event of Default or Potential
Event of Default shall have occurred and be continuing, such appraisals shall be
at the expense of Borrower.
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 subsection headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
11.5 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 Guarantor from, any provision in this Agreement
or any of the other Loan Documents relating to (i) the definition of "Borrowing
Base" or "Requisite Lenders," (ii) any increase of the amount of any Commitment,
(iii) any reduction of principal, interest or fees payable hereunder, (iv) any
postponement of any date fixed for any payment or prepayment of principal or
interest hereunder or (v) this Section 11.6.3 shall be effective without the
written consent of all Lenders. Any and all other amendments, modifications,
discharges or waivers of, or consents to any departures from any provision of
this Agreement or of any of the other Loan Documents shall not be effective
without the written consent of the Requisite Lenders. Any waiver or consent with
respect to any provision of the Loan Documents shall be effective only in the
specific instance and for the specific purpose for which it was given. No notice
to or demand on Borrower in any case shall entitle Borrower to any other or
further notice or demand in similar or other circumstances. Any amendment,
modification, waiver or consent effected in accordance with this Section 11.6
shall be binding upon each Lender then party hereto and each subsequent Lender,
and on Borrower.
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 Marshalling; 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 neither Borrower nor
Guarantor may assign its rights hereunder or thereunder or any interest herein
or therein without the prior written consent of each Lender. Each Lender shall
(i) have the right in accordance with this Section 11.10 to sell and assign to
any Eligible Assignee all or any portion of its interest (provided that any such
partial assignment shall not be for a principal amount of less than Five Million
Dollars ($5,000,000)) under this Agreement, its respective Note and the other
Loan Documents (as separately described and defined in those agreements),
subject to the prior written consent of Borrower, which consent shall not be
unreasonably withheld, and (ii) to grant any participation or other interest
herein or therein, except that each potential participant to which a Lender
intends to grant any rights under Sections 2.9, 2.10, 5.1 or 10.2 shall be
subject to the prior written consent of Borrower, which consent shall not be
unreasonably withheld; provided, however, that no such sale, assignment or
participation grant shall result in requiring registration under the Securities
Act of 1933, as amended, or qualification under any state securities law.
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 instrument of
Assignment and Assumption in the form of Exhibit G (the "Assignment and
Acceptance") executed by the assignor Lender (hereinafter from time to time
referred to as the "Assignor Lender") and such Affiliate or other financial
institution (which, upon such assignment shall become a Lender hereunder
(hereinafter from time to time referred to as the "Assignee Lender")). The
Assignment and Assumption need not include any of the economic or financial
terms upon which such Assignee Lender receives the assignment from the Assignor
Lender, and such terms need not be disclosed to or approved by Borrower;
provided only that such terms do not diminish the obligations undertaken by such
Assignee Lender in the Assignment and Assumption or increase the obligations of
Borrower under this Agreement. Upon execution of an Assignment and Assumption,
(i) the definition of "Commitments" in Section 1 hereof and the Pro Rata Shares
set forth therein shall be deemed to be amended to reflect each Lender's share
of the Commitments, giving effect to the assignment and (ii) the Assignee Lender
shall, from the effective date of the Assignment and Assumption, be subject to
all of the obligations, and entitled to all of the rights, of a Lender
hereunder, except as may be expressly provided to the contrary in the Assignment
and Assumption. To the extent the obligations hereunder of the Assignor Lender
are assumed by the Assignee Lender, the Assignor Lender shall be relieved of
such obligations. Upon the assignment of any interest by any Assignor Lender
pursuant to this Section 11.10.2, such Assignor Lender agrees to supplement
Schedule 1.1 to show the date of such assignment, the Assignor Lender, the
Assignee Lender, the Assignee Lender's address for notice purposes and the
amount of the Commitments so assigned. In connection and as a condition to each
assignment hereunder, the Assignor Lender agrees to pay or to cause the Assignee
Lender to pay to Agent a processing fee of $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, its 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 GUARANTOR, BY EXECUTION HEREOF, AND 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 AGENT AND EACH LENDER TO ACCEPT THIS AGREEMENT AND THE NOTES
EXECUTED AND DELIVERED BY BORROWER PURSUANT TO THIS AGREEMENT.
WITNESS the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
BORROWER AMERICAN FINANCE GROUP, INC.
By: /s/ Donald R. Dugan
----------------------------
Printed Name: Donald R. Dugan
Title: President
Notice to be sent to:
AMERICAN FINANCE GROUP, INC.
24 School Street
Boston, MA 02108
Attention: D.R. Dugan, President
Telephone: (617) 557-9329
Facsimile: (617) 557-9348
with a copy to:
PLM INTERNATIONAL, INC.
One Market
Steuart Street Tower, Suite 900
San Francisco, CA 94105
Attention: J. Michael Allgood,
Chief Financial Officer
Telephone: (415) 905-7228
Facsimile: (415) 905-7256
AGENT FIRST UNION NATIONAL BANK
By: /s/ Russell D. Morrison
------------------------------------
Printed Name: Russell D. Morrison
Title: 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) 374-3254
LENDERS FIRST UNION NATIONAL BANK
By: /s/ Russell D. Morrison
-------------------------------
Printed Name: Russell D. Morrison
Title: 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) 374-3254
EUROPEAN AMERICAN BANK
By: /s/ Robert W. Peck
-----------------------------
Printed Name: Robert W. Peck
Title: Vice President
Notice to be sent to:
EUROPEAN AMERICAN BANK
400 Oak Street
Garden City, NY 11530
Attention: Robert Peck
Telephone: (516) 357-1189
Facsimile: (516) 357-1784
IMPERIAL BANK
By: /s/ Russell A. Colombo
----------------------------------
Printed Name: Russell A. Colombo
Title: Regional Vice President
Notice to be sent to:
IMPERIAL BANK
Embarcadero Center West
275 Battery Street, Suite 1100
San Francisco, CA 94115
Attention: Russell Colombo,
Regional Vice President
Telephone: (415) 954-5059
Facsimile: (415) 954-5020
MEES PIERSON, N.V.
By: /s/ In D. van der Klaauw
------------------------------------
Printed Name: In D. van der Klaauw
Title: J.G.H.M. Hanegraaf
Notice to be sent to:
MEES PIERSON, N.V.
Coolsingel 93
3012 AE Rotterdam (courier address)
P.O. Box 749
3000 AS Rotterdam (mailing address)
The Netherlands
Attention: Hans Hanegraaf
Telephone: (011) 3110-401-61-60
Facsimile: (011) 3110-401-63-43
SCHEDULE A
COMMITMENTS
Lender COMMITMENT PRO RATA SHARE
First Union National Bank $25,000,000 41.666666667%
European American Bank $10,000,000 16.666666667%
Imperial Bank $10,000,000 16.666666667%
Mees Pierson, N.V. $15,000,000 25.000000000%
C
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
C:\#351852 v3 - NEW AFG Warehousing Credit Agreement ($60MM).doc
ii
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 Consent and Approvals
Schedule 4.9 Employee Benefit Plans
Schedule 4.13 Environmental Disclosures
Schedule 6.10 Subsidiaries
EXHIBIT A
REVOLVING PROMISSORY NOTE
[LENDER]
$______________ San Francisco, California
Date: December [___], 1998
AMERICAN FINANCE GROUP, INC., a Delaware 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 Warehousing Credit Agreement dated as of December 15, 1998
(as the same may from time to time be amended, modified, supplemented, renewed,
extended or restated, the "Credit Agreement") by and among 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 First Union National Bank 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, the entire principal amount outstanding under each Loan shall
be due and payable on the Commitment Termination Date.
2. Interest Rate. 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
Agent, on behalf of [_________________], at the office of First Union National
Bank, One First Union Center, 301 South College Street, Charlotte, North
Carolina 28288, Attention: Elisha Sabido, or such other place of payment as may
be specified by 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 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 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. 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 Requisite Lenders, be immediately collectible by the Lenders and
Agent pursuant to the Credit Agreement and applicable law.
6. Waivers. 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 Borrower and shall extend to
any holder hereof.
BORROWER AMERICAN FINANCE GROUP, INC.,
a Delaware corporation
By
Printed Name
Title