SECOND AMENDED AND RESTATED
WAREHOUSING CREDIT AGREEMENT
AMONG
PLM EQUIPMENT GROWTH FUND III
PLM EQUIPMENT GROWTH FUND IV
PLM EQUIPMENT GROWTH FUND V
PLM EQUIPMENT GROWTH FUND VI
PLM EQUIPMENT GROWTH & INCOME FUND VII
PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
PLM FINANCIAL SERVICES, INC.
AND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
AND SUCH OTHER FINANCIAL INSTITUTIONS
AS SHALL BECOME LENDERS HEREUNDER
AND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
AS AGENT
May 31, 1996
WAREHOUSING CREDIT AGREEMENT
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS..............................................2
1.1 Defined Terms............................................2
1.2 Accounting Terms........................................18
1.3 Other Terms.............................................18
1.4 Schedules And Exhibits..................................19
SECTION 2. AMOUNT AND TERMS OF CREDIT..............................19
2.1 Commitment To Lend......................................19
2.1.1 Revolving Facility...........................19
(a) Facility Commitments..................19
(b) Each Loan.............................20
2.1.2 Funding......................................21
2.1.3 Utilization Of The Loans.....................21
2.2 Repayment And Prepayment................................21
2.2.1 Repayment....................................21
2.2.2 Voluntary Prepayment.........................21
2.2.3 Mandatory Prepayments........................22
2.3 Calculation Of Interest; Post-Maturity Interest.........22
2.4 Manner Of Payments......................................23
2.5 Payment On Non-Business Days............................23
2.6 Application Of Payments.................................23
2.7 Procedure For The Borrowing Of Loans....................23
2.7.1 Notice Of Borrowing..........................23
2.7.2 Unavailability Of LIBOR Loans................24
2.8 Conversion And Continuation Elections...................24
2.8.1 Election.....................................24
2.8.2 Notice Of Conversion.........................24
2.8.3 Interest Period..............................25
2.8.4 Unavailability Of LIBOR Loans................25
2.9 Discretion Of Lenders As To Manner Of Funding...........25
2.10 Distribution Of Payments................................25
2.11 Agent's Right To Assume Funds Available For Advances....25
2.12 Agent's Right To Assume Payments Will Be Made By Borrower..26
2.13 Capital Requirements....................................26
2.14 Taxes...................................................27
2.14.1 No Deductions................................27
2.14.2 Miscellaneous Taxes..........................27
2.14.3 Indemnity....................................27
2.14.4 Required Deductions..........................27
2.14.5 Evidence of Payment..........................27
2.14.6 Foreign Persons..............................28
2.14.7 Income Taxes.................................28
2.14.8 Reimbursement Of Costs.......................29
2.14.9 Jurisdiction.................................29
2.15 Illegality..............................................29
2.15.1 LIBOR Loans..................................29
2.15.2 Prepayment...................................29
2.15.3 Prime Rate Borrowing.........................30
2.16 Increased Costs.........................................30
2.17 Inability To Determine Rates............................30
2.18 Prepayment Of LIBOR Loans...............................30
SECTION 3. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS AGREEMENT AND
THE MAKING OF LOANS............... 31
3.1 Effectiveness of This Agreement.........................31
3.1.1 Partnership, Company And Corporate Documents..31
3.1.2 Notes........................................31
3.1.3 Opinion Of Counsel...........................31
3.1.4 Reaffirmation of Guaranty....................31
3.1.5 TEC AcquiSub Amendment.......................31
3.1.6 AFG Agreement................................31
3.1.7 Bringdown Certificate........................31
3.1.8 Fees.........................................32
3.1.9 Other Documents..............................32
3.2 All Loans...............................................32
3.2.1 Notice Of Borrowing..........................32
3.2.2 No Event Of Default..........................32
3.2.3 Representations And Warranties...............32
3.2.4 Insurance....................................32
3.2.5 Other Instruments............................32
3.3 Further Conditions To All Loans.........................32
3.3.1 General Partner Or Manager...................32
3.3.2 Removal Of General Partner Or Manager........33
3.3.3 Purchaser....................................33
SECTION 4. BORROWERS' AND FSI'S REPRESENTATIONS AND WARRANTIES.....33
4.1 General Representations And Warranties..................33
4.1.1 Existence And Power..........................33
4.1.2 Loan Documents And Notes Authorized; Binding
Obligations........................... 33
4.1.3 No Conflict; Legal Compliance................34
4.1.4 Financial Condition..........................34
4.1.5 Executive Offices............................34
4.1.6 Litigation...................................34
4.1.7 Material Contracts...........................35
4.1.8 Consents And Approvals.......................35
4.1.9 Other Agreements.............................35
4.1.10 Employment And Labor Agreements..............35
4.1.11 ERISA........................................35
4.1.12 Labor Matters................................36
4.1.13 Margin Regulations...........................36
4.1.14 Taxes........................................36
4.1.15 Environmental Quality........................36
4.1.16 Trademarks, Patents, Copyrights, Franchises And
Licenses........................... 37
4.1.17 Full Disclosure..............................37
4.1.18 Other Regulations............................37
4.1.19 Solvency.....................................38
4.2 Representations And Warranties At Time Of First Advance..38
4.2.1 Power And Authority..........................38
4.2.2 No Conflict..................................38
4.2.3 Consents And Approvals.......................38
4.3 Survival Of Representations And Warranties..............38
SECTION 5. BORROWERS' AND FSI'S AFFIRMATIVE COVENANTS..............38
5.1 Records And Reports.....................................39
5.1.1 Quarterly Statements.........................39
5.1.2 Annual Statements............................39
5.1.3 Borrowing Base Certificate...................39
5.1.4 Compliance Certificate.......................40
5.1.5 Reports......................................40
5.1.6 Insurance Reports............................40
5.1.7 Certificate Of Responsible Officer...........40
5.1.8 Employee Benefit Plans.......................40
5.1.9 ERISA Notices................................41
5.1.10 Pension Plans................................41
5.1.11 SEC Reports..................................41
5.1.12 Tax Returns..................................41
5.1.13 Additional Information.......................41
5.2 Existence; Compliance With Law..........................42
5.3 Insurance...............................................42
5.4 Taxes And Other Liabilities.............................42
5.5 Inspection Rights; Assistance...........................43
5.6 Maintenance Of Facilities; Modifications................43
5.6.1 Maintenance Of Facilities....................43
5.6.2 Certain Modifications To The Equipment.......43
5.7 Supplemental Disclosure.................................43
5.8 Further Assurances......................................43
5.9 Lockbox.................................................44
5.10 Environmental Laws......................................44
SECTION 6. BORROWER'S AND FSI'S NEGATIVE COVENANTS.................44
6.1 Liens; Negative Pledges; And Encumbrances...............44
6.2 Acquisitions............................................45
6.3 Limitations On Indebtedness.............................45
6.4 Use Of Proceeds.........................................46
6.5 Disposition Of Assets...................................46
6.6 Restriction On Fundamental Changes......................46
6.7 Transactions With Affiliates............................47
6.8 Maintenance Of Business.................................47
6.9 No Distributions........................................47
6.10 Events Of Default.......................................47
6.11 ERISA...................................................47
6.12 No Use Of Any Lender's Name.............................47
6.13 Certain Accounting Changes..............................47
6.14 Amendments Of Limited Partnership Or Operating Agreements..48
SECTION 7. FINANCIAL COVENANTS OF BORROWER AND FSI.................48
7.1 Maximum Funded Debt Ratio...............................48
7.2 Minimum Debt Service Ratio..............................48
7.3 Minimum Consolidated Tangible Net Worth.................48
7.4 Cash Balances...........................................48
SECTION 8. EVENTS OF DEFAULT AND REMEDIES..........................48
8.1 Events Of Default.......................................48
8.1.1 Failure To Make Payments.....................48
8.1.2 Other Agreements.............................49
8.1.3 Breach Of Covenants..........................49
8.1.4 Breach Of Representations Or Warranties......49
8.1.5 Failure To Cure..............................49
8.1.6 Insolvency...................................50
8.1.7 Bankruptcy Proceedings.......................50
8.1.8 Material Adverse Effect......................50
8.1.9 Judgments, Writs And Attachments.............50
8.1.10 Legal Obligations............................51
8.1.11 TEC AcquiSub Agreement.......................51
8.1.12 AFG Agreement................................51
8.1.13 Change Of General Partner Or Manager.........51
8.1.14 Change Of Purchaser..........................51
8.1.15 Criminal Proceedings.........................51
8.1.16 Action By Governmental Authority.............52
8.1.17 Governmental Decrees.........................52
8.2 Waiver Of Default.......................................52
8.3 Remedies................................................52
8.4 Set-Off.................................................53
8.5 Rights And Remedies Cumulative..........................54
SECTION 9. AGENT...................................................54
9.1 Appointment.............................................54
9.2 Delegation Of Duties....................................54
9.3 Exculpatory Provisions..................................55
9.4 Reliance By Agent.......................................55
9.5 Notice Of Default.......................................55
9.6 Non-Reliance On Agent And Other Lenders.................56
9.7 Indemnification.........................................56
9.8 Agent In Its Individual Capacity........................56
9.9 Resignation And Appointment Of Successor Agent..........57
SECTION 10. EXPENSES AND INDEMNITIES................................57
10.1 Expenses................................................57
10.2 Indemnification.........................................58
10.2.1 General Indemnity............................58
10.2.2 Environmental Indemnity......................58
10.2.3 Survival; Defense............................59
SECTION 11. MISCELLANEOUS...........................................59
11.1 Survival................................................59
11.2 No Waiver By Agent Or Lenders...........................59
11.3 Notices.................................................59
11.4 Headings................................................60
11.5 Severability............................................60
11.6 Entire Agreement; Construction; Amendments And Waivers..60
11.7 Reliance By Lenders.....................................61
11.8 Marshalling; Payments Set Aside.........................61
11.9 No Set-Offs By Borrowers................................61
11.10 Binding Effect, Assignment..............................61
11.11 Counterparts............................................63
11.12 Equitable Relief........................................63
11.13 Written Notice Of Claims; Claims Bar....................63
11.14 Waiver Of Punitive Damages..............................63
11.15 Relationship Of Parties.................................63
11.16 Obligations Of Each Borrower............................64
11.17 Co-Borrower Waivers.....................................65
11.18 Governing Law...........................................66
11.19 Consent To Jurisdiction.................................66
11.20 No Novation.............................................66
11.21 Waiver Of Jury Trial....................................66
INDEX OF EXHIBITS
Exhibit A-1 Form of Revolving Promissory Note - EGF III
Exhibit A-2 Form of Revolving Promissory Note - EGF IV
Exhibit A-3 Form of Revolving Promissory Note - EGF V
Exhibit A-4 Form of Revolving Promissory Note - EGF VI
Exhibit A-5 Form of Revolving Promissory Note - EGF VII
Exhibit A-6 Form of Revolving Promissory Note - Income Fund I
Exhibit B Form of Borrowing Base Certificate
Exhibit C Form of Reaffirmation of Guaranty
Exhibit D Form of Opinion of Counsel (Stephen Peary)
Exhibit E Form of Compliance Certificate
Exhibit F Form of Lockbox Agreement
Exhibit G Form of Notice of Borrowing
Exhibit H Form of Notice of Conversion/Continuation
Exhibit I Form of Assignment and Acceptance
INDEX OF SCHEDULES
Schedule A Commitments
Schedule 1.1 Amendments to Schedule A
Schedule 4.1.5 Executive Offices and Principal Places of Business
Schedule 4.1.6 Litigation
Schedule 4.1.7 Material Contracts
Schedule 4.1.8 Consent and Approvals
Schedule 4.1.15 Environmental Disclosures
Schedule 6.1 Existing Liens
Schedule 6.3(a) Existing Indebtedness
Schedule 6.3(b) Anticipated Indebtedness
1
SECOND AMENDED AND RESTATED
WAREHOUSING CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED WAREHOUSING CREDIT AGREEMENT is
entered into as of May 31, 1996, by and among PLM EQUIPMENT GROWTH FUND III, a
California limited partnership ("EGF III"), PLM EQUIPMENT GROWTH FUND IV, a
California limited partnership ("EGF IV"), PLM EQUIPMENT GROWTH FUND V, a
California limited partnership ("EGF V"), PLM EQUIPMENT GROWTH FUND VI, a
California limited partnership ("EGF VI"), PLM EQUIPMENT GROWTH & INCOME FUND
VII, a California limited partnership ("EGF VII"), and PROFESSIONAL LEASE
MANAGEMENT INCOME FUND I, L.L.C., a Delaware limited liability company ("Income
Fund I") (EGF III, EGF IV, EGF V, EGF VI, EGF VII and Income Fund I each
individually being a "Borrower" and, collectively, the "Borrowers"), and PLM
FINANCIAL SERVICES, INC., a Delaware corporation and the sole general partner,
in the case of EGF III, EGF IV, EGF V, EGF VI and EGF VII, and the sole manager,
in the case of Income Fund I ("FSI"), and FIRST UNION NATIONAL BANK OF NORTH
CAROLINA ("FUNB") and each other financial institution which may hereafter
execute and deliver an instrument of assignment with respect to this Agreement
pursuant to Section 11.10 (each individually being a "Lender," and collectively,
the "Lenders"), and FIRST UNION NATIONAL BANK OF NORTH CAROLINA, as agent on
behalf and for the benefit of the Lenders (not in its individual capacity, but
solely as agent, the "Agent"). This Agreement amends, restates and supersedes
the Growth Fund Agreement (as defined below).
RECITALS
A. Borrowers, PLM Equipment Growth Fund II, a California limited
partnership ("EGF II"), Lenders and Agent have entered into that certain Amended
and Restated Warehousing Credit Agreement dated as of September 27, 1995 (the
"Growth Fund Agreement").
B. Borrowers, FSI, Lenders and Agent desire to amend and restate the
Growth Fund Agreement with this amended and restated Agreement and to remove EGF
II as a borrower under the revolving credit facility.
C. Borrowers desire, on a several but not joint basis, to obtain from
Lenders a revolving credit facility with an aggregate principal availability up
to but not to exceed the maximum amount set forth on Schedule A for the purpose
of financing the purchase of transportation equipment for periods up to one
hundred seventy-nine (179) days, all as more particularly described below.
D. Lenders have agreed to make such credit available to Borrowers, but
only upon the terms and subject to the conditions hereinafter set forth and in
reliance on the representations and warranties set forth herein. This Agreement
amends, restates and supersedes the Growth Fund Agreement in the its entirety.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants hereinafter set forth, and intending to be legally bound, the
parties hereto agree as follows:
. 1. DEFINITIONS
. As used herein, the following terms have the following meanings:
"Acquisition" means, with respect to any Borrower, any transaction, or
any series of related transactions, by which such Borrower, FSI or any of FSI's
Subsidiaries, including, without limitation, TEC AcquiSub, directly or
indirectly (a) acquires any ongoing business or all or substantially all of the
assets of any Person or division thereof, whether through a purchase of assets,
merger or otherwise, or (b) acquires (in one transaction or as the most recent
transaction in a series of transactions) control of at least a majority of the
stock of a corporation having ordinary voting power for the election of
directors, or (c) acquires control of at least a majority of the ownership
interests in any partnership or joint venture.
"Adjusted LIBOR" means, for each Interest Period in respect of LIBOR
Loans, an interest rate per annum (rounded upward to the nearest 1/16th of one
percent (0.0625%)) determined pursuant to the following formula:
Adjusted LIBOR = LIBOR
----------------------------------------
1.00 - Eurodollar Reserve Percentage
1The Adjusted LIBOR shall be adjusted automatically as of the effective date of
any change in the Eurodollar Reserve Percentage.
"Advance" means any Advance made or to be made by any Lender to any
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 any Borrower or FSI 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" means American Finance Group, Inc., a Delaware corporation.
"AFG Agreement" means the Warehousing Credit Agreement dated as of the
date hereof, by and among AFG, and Lenders and Agent, as the same from time to
time may be amended, modified, supplemented, renewed, extended or restated.
"Agent" means FUNB solely when acting in its capacity as the Agent
under this Agreement or any of the other Loan Documents, and any successor
Agent.
"Agent's Side Letter" means the side letter agreement dated as of the
date hereof by and between Borrowers, TEC AcquiSub, AFG and Agent.
"Agreement" means this Second Amended and Restated Warehousing Credit
Agreement dated as of May 31, 1996, including all amendments, modifications and
supplements hereto, renewals, extensions or restatements hereof, and all
appendices, exhibits and schedules to any of the foregoing, and shall refer to
the Agreement as the same may be in effect from time to time.
"Aircraft" means any corporate, commuter, or commercial aircraft or
helicopters, with modifications (as applicable) and replacement or spare parts
used in connection therewith, including, without limitation, engines, rotables
or propellers, and any engines, rotables and propellers used on a stand-lone
basis.
"Applicable Margin" means:
(a) with respect to Prime Rate Loans, zero percent (0.00%);
and
(b) with respect to LIBOR Loans, two percent (2.00%).
"Assignment and Acceptance" has the meaning set forth in Section
10.11.2.
"Bank Affiliate" means a Person engaged primarily in the business of
commercial banking and that is an Affiliate of a Lender or of a Person of which
a Lender is an Affiliate.
"Bankruptcy Code" means the Bankruptcy Code of 1978, as amended, as
codified under Title 11 of the United States Code, and the Bankruptcy Rules
promulgated thereunder, as the same may be in effect from time to time.
"Borrowing Base" means, as calculated separately for each Borrower
individually as at any date of determination, an amount not to exceed the sum
of:
(a) fifty percent (50.0%) of the unrestricted cash
available for the purchase of Eligible Inventory by such Borrower,
plus
(b) an amount equal to the lesser of (i) seventy
percent (70.0%) of the aggregate net book value or (ii) fifty percent (50.0%) of
the aggregate net fair market value of all Eligible Inventory then owned by such
Borrower or a Marine Subsidiary or owned of record by an Owner Trustee for the
beneficial interest of such Borrower or any Marine Subsidiary of such Borrower
(provided, however, that there shall be excluded from this clause (b) the
aggregate net book value or aggregate net fair market value, as the case may be,
of all items of Eligible Inventory which are either (i) off-lease or (ii)
subject to a Lease under which any applicable lease or rental payment is more
than ninety (90) days past due, but only to the extent and in the amount that
the aggregate net book value or net fair market value, as the case may be, of
such otherwise excluded Eligible Inventory exceeds fifteen percent (15.0%) of
the respective net book value or net fair market value of all Eligible Inventory
included in this clause (b) notwithstanding this proviso),
less
(c) the aggregate Consolidated Funded Debt of such
Borrower then outstanding, excluding the aggregate principal amounts of the
Loans outstanding for such Borrower under the Facility,
in each case computed, (1) with respect to any requested Loan, as of the
requested Funding Date (and shall include the item(s) of Eligible Inventory to
be acquired with the proceeds of the requested Loan), and (2) with respect to
the delivery of any monthly Borrowing Base Certificate to be furnished pursuant
to Section 5.1.3, as of the last day of the calendar month for which such
Borrowing Base Certificate is furnished (provided, that for the purpose of
computing the Borrowing Base, in the event that any Borrower or a Marine
Subsidiary of such Borrower shall own less than one hundred percent (100.0%) of
the record or beneficial interests in any item of Eligible Inventory, with one
or more of the other Equipment Growth Funds owning of record or beneficially the
remaining interests, there shall be included only such Borrower's or such Marine
Subsidiary's, as the case may be, ratable interest in such item of Eligible
Inventory).
"Borrowing Base Certificate" means, with respect to any Borrower, a
certificate with appropriate insertions setting forth the components of the
Borrowing Base of such Borrower 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 such Borrower.
"Business Day" means any day which is not a Saturday, Sunday or a legal
holiday under the laws of the States of California or North Carolina or is not a
day on which banking institutions located in the States of California or North
Carolina are authorized or permitted by law or other governmental action to
close and, with respect to LIBOR Loans, means any day on which dealings in
foreign currencies and exchanges may be carried on by Agent and Lenders in the
London interbank market.
"Casualty Loss" means any of the following events with respect to any
item of Eligible Inventory: (a) the actual total loss or compromised total loss
of such item of Eligible Inventory; (b) such item of Eligible Inventory shall
become lost, stolen, destroyed, damaged beyond repair or permanently rendered
unfit for use for any reason whatsoever; (c) the seizure of such item of
Eligible Inventory for a period exceeding sixty (60) days or the condemnation or
confiscation of such item of Eligible Inventory; or (d) such item of Eligible
Inventory shall be deemed under its lease to have suffered a casualty loss as to
the entire item of Eligible Inventory.
"Charges" means, with respect to any Borrower, 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 made to such Borrower hereunder, (b) such Borrower's
employees, payroll, income or gross receipts, (c) such Borrower's ownership or
use of any of its Properties or assets or (d) any other aspect of such
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 each 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.
"Commitment" means with respect to each Lender the amounts set forth on
Schedule A and "Commitments" means all such amounts collectively, as each may be
amended from time to time upon the execution and delivery of an instrument of
assignment pursuant to Section 11.10, which amendments shall be evidenced on
Schedule 1.1.
"Commitment Termination Date" means May 23, 1997.
"Compliance Certificate" means, with respect to any Borrower, a
certificate signed by a Responsible Officer of such Borrower, substantially in
the form of Exhibit E, with such changes as Agent 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 EBITDA" means, for any Borrower, as measured as at any
date of determination for any period on a consolidated basis, the sum of (a) the
Consolidated Net Income of such Borrower, plus (b) all amounts treated as
expenses for depreciation and the amortization of intangibles of any kind, plus
(c) all accrued taxes on or measured by income, plus (d) Consolidated Interest
Expense, and in the cases of clauses (b), (c) and (d), above, each to the extent
included in the determination of Consolidated Net Income.
"Consolidated Funded Debt" means, for any Borrower, as measured at any
date of determination on a consolidated basis, the total amount of all interest
bearing obligations (including Indebtedness for borrowed money) of such
Borrower, capital lease obligations of such Borrower as a lessee and the stated
amount of all outstanding undrawn letters of credit issued on behalf of such
Borrower or for which such Borrower is liable.
"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 Interest Expense" means, for any Borrower, as measured at
any date of determination for any period on a consolidated basis, the gross
interest expense of such Borrower for the period (including all commissions,
discounts, fees and other charges in connection with standby letters of credit
and similar instruments), less interest income for that period.
"Consolidated Net Income" means, for any Borrower, as measured at any
date of determination for any period on a consolidated basis, the net income (or
loss) of such Borrower for such period taken as a single accounting period.
"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.
"Debt Service Ratio" means, as measured separately for each Borrower as
at any date of determination, the ratio of (a) Consolidated EBITDA to (b) the
sum of (i) Consolidated Interest Expense plus (ii) an amount equal to three and
one-eighths percent (3.125%) of Consolidated Funded Debt (Consolidated EBITDA
and Consolidated Interest Expense to be measured on a quarterly basis for the
current fiscal quarter).
"Default Rate" has the meaning set forth in Section 2.3.
"Designated Deposit Account" means a demand deposit account maintained
by Borrowers with FUNB designated by written notice from Borrowers to Agent.
"Dollars" and the sign "$" means lawful money of the United States of
America.
"EGF" means PLM Equipment Growth Fund, a California limited
partnership.
"EGF II" means PLM Equipment Growth Fund II, a California limited
partnership.
"EGF III" means PLM Equipment Growth Fund III, a California limited
partnership.
"EGF IV" has the meaning set forth in the Preamble to this Agreement.
"EGF V" has the meaning set forth in the Preamble to this Agreement
"EGF VI" has the meaning set forth in the Preamble to this Agreement
"EGF VII" has the meaning set forth in the Preamble to this Agreement.
"Eligible Assignee" means (a) a commercial bank organized under the
laws of the United States, or any state thereof, and having a combined capital
and surplus of at least $100,000,000, (b) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development, or a political subdivision of any such country, and
having a combined capital and surplus of at least $100,000,000, provided that
such bank is acting through a branch or agency located in the United States, and
(c) any Bank Affiliate.
"Eligible Inventory" means, with respect to any Borrower, all Trailers,
Aircraft and Aircraft engines, Railcars, cargo-containers, marine vessels and,
if approved by Requisite Lenders, other related Equipment, in each case owned by
such Borrower or a Marine Subsidiary of such Borrower (or jointly by such
Borrower and one or more of the other Equipment Growth Funds) or, subject to the
approval of Agent, any owner trust of which such Borrower is the sole
beneficiary or owner (or is the beneficiary or owner jointly with one or more of
the other Equipment Growth Funds), as applicable, or solely with respect to any
marine vessel registered in Liberia, The Bahamas, Hong Kong, Singapore or other
registry acceptable to Agent in its sole discretion, any nominee entity of which
such Borrower or a Marine Subsidiary of such Borrower is the sole beneficiary or
direct or indirect owner (or as the beneficiary or direct or indirect owner
jointly with one or more of the other Equipment Growth Funds).
"Employee Benefit Plan" means, with respect to any Borrower, any
Pension Plan and any employee welfare benefit plan, as defined in Section 3(1)
of ERISA, that is maintained for the employees of such Borrower, FSI or any of
FSI's Subsidiaries or any ERISA Affiliate of such Borrower.
"Environmental Claims" means, with respect to any Borrower, 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 such Borrower, FSI or any
Subsidiary of FSI, 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 4.1.15.
"Equipment" means, with respect to any Borrower, all items of
transportation related equipment owned directly or beneficially by such Borrower
or by any Marine Subsidiary of such Borrower and held for lease or rental, and
shall include items of equipment legal or record title to which is held by any
owner trust or nominee entity in which such Borrower or any Marine Subsidiary of
such Borrower holds the sole beneficial interest.
"Equipment Growth Funds" means any and all of EGF, EGF II, EGF III, EGF
IV, EGF V, EGF VI, EGF VII and Income Fund I.
"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 Borrowers, on a several but not joint basis, according to each
Lender's Pro Rata Share.
"Federal Funds Rate" means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)". If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the "Composite 3:30 p.m.
Quotation") for such day under the caption "Federal Funds Effective Rate". If on
any relevant day the appropriate rate for such previous day is not yet published
in either H.15(519) or the Composite 3:30 p.m. Quotation, the rate for such day
will be the arithmetic mean of the rates for the last transaction in overnight
Federal funds arranged prior to 9:00 a.m. (New York time) on that day by each of
three leading brokers of Federal funds transactions in New York City selected by
Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System and any successor thereto.
"Fee Letter" means the fee letter agreement dated as of the date
hereof, by and among Borrowers, TEC AcquiSub, AFG, and Agent, on behalf and for
the benefit of Lenders.
"Form 1001" has the meaning set forth in Section 2.14.6.
"Form 4224" has the meaning set forth in Section 2.14.6.
"FSI" means PLM Financial Services, Inc., a Delaware corporation.
"Funded Debt Ratio" means, as measured separately for each Borrower as
at any date of determination, the ratio of (a) the Consolidated Funded Debt of
such Borrower to (b) the sum of (i) the aggregate net fair market value of the
Equipment owned of record and beneficially by such Borrower or any Marine
Subsidiary of such Borrower or owned of record by an Owner Trustee for the
beneficial interest of such Borrower or any Marine Subsidiary of such Borrower
plus (ii) the unrestricted cash available for the purchase of Eligible Inventory
for such Borrower (provided, that for the purpose of computing the Funded Debt
Ratio, in the event that any Borrower or a Marine Subsidiary of such Borrower
shall own less than one hundred percent (100.0%) of the record or beneficial
interests in any item of Equipment, with one or more of the other Equipment
Growth Funds owning of record or beneficially the remaining interests, there
shall be included any such Borrower's or such Marine Subsidiary's, as the case
may be, ratable interest in such item of Equipment).
"Funding Date" means with respect to any proposed borrowing hereunder,
the date funds are advanced to any Borrower for any Loan requested by such
Borrower.
"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.
"Guaranty" means that certain Guaranty dated as of September 27, 1995,
executed by FSI in favor of Lenders and Agent.
"Guaranty Obligation" means, as applied to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease for
capital equipment other than Equipment, 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.
"IMI" means PLM Investment Management, Inc., a California corporation
and a wholly-owned Subsidiary of FSI.
"Income Fund I" has the meaning set forth in the Preamble to this
Agreement.
"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.
"Indemnified Person" has the meaning set forth in Section 10.2.
"Interest Differential" means, with respect to any prepayment of a
LIBOR Loan on a day other than an Interest Payment Date on which such LIBOR Loan
matures, the difference between (a) the per annum interest rate payable with
respect to such LIBOR Loan as of the date of the prepayment and (b) the Adjusted
LIBOR on, or as near as practicable to, the date of the prepayment for a LIBOR
Loan commencing on such date and ending on the last day of the applicable
Interest Period. The determination of the Interest Differential by Agent shall
be conclusive in the absence of manifest error.
"Interest Payment Date" means, with respect to any LIBOR Loan, the last
day of each Interest Period applicable to such Loan and, with respect to Prime
Rate Loans, the first Business Day of each calendar month following the Funding
Date of such Prime Rate Loan; provided, however, that if any Interest Period for
a LIBOR Loan exceeds three (3) months, interest shall also be paid on the date
which falls three (3) months after the beginning of such Interest Period.
"Interest Period" means, with respect to any LIBOR Loan, the one-month,
two-month or three-month period selected by the Requesting 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 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.
"IRS" means the Internal Revenue Service and any successor thereto.
"Lease" means, for any Borrower, 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 such
Borrower is the record or beneficial lessor and in respect of which the lessee
and lease terms (including, without limitation, as to rental rate, maturity and
insurance coverage) are acceptable to Agent, in its reasonable discretion. The
term "Lease" includes (a) all payments to be made thereunder, (b) all rights of
such Borrower therein, and (c) any and all amendments, renewals, extensions or
guaranties thereof.
"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 Borrowers 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.
"Limited Partnership Agreement" means (a) for EGF III, the Limited
Partnership Agreement dated as of October 15, 1987, as amended by the First
Amended and Restated Limited Partnership Agreement as of February 9, 1988, the
Second Amended and Restated Limited Partnership Agreement as of March 10, 1988,
a First Amendment to the Second Amended and Restated Limited Partnership
Agreement as of November 18, 1991 and the Reformed First Amendment to the Second
Amended and Restated Limited Partnership Agreement as of November 18, 1991, (b)
for EGF IV, the Amended and Restated Limited Partnership Agreement dated as of
May 22, 1989, (c) for EGF V, the Limited Partnership Agreement dated as of
November 14, 1989, (d) for EGF VI, the Amended and Restated Limited Partnership
Agreement dated as of December 20, 1991, and (e) for EGF VII, the Third Amended
and Restated Limited Partnership Agreement of EGF VII dated as of May 10, 1993,
as amended by the First Amendment to the Third Amended and Restated Limited
Partnership Agreement dated May 28, 1993 and by the Second Amendment to Third
Amended and Restated Limited Partnership Agreement dated as of January 21, 1994.
"Loan" has the meaning set forth in Section 2.1.1.
"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 Lockbox
Agreement and the Guaranty and any and all other agreements, documents and
instruments executed and delivered by or on behalf or support of any Borrower to
Agent or any Lender or any of their respective authorized designees evidencing
or otherwise relating to the Advances and the Liens granted to Agent, on behalf
of Lenders, with respect to the Advances, as the same may from time to time be
amended, modified, supplemented or renewed.
"Lockbox" has the meaning set forth in Section 5.9.
"Lockbox Agreement" means the Agreement of even date herewith between
Borrowers, FUNB and Agent on behalf of Lenders, substantially in the form of
Exhibit F, relating to the Lockbox.
"Marine Subsidiary" means, for any Borrower, a Subsidiary of such
Borrower (in which the remaining record or beneficial ownership interests may be
held by TEC AcquiSub or any Equipment Growth Fund) organized for the purpose of
holding legal record title to one or more marine vessels or to aircraft rotables
and spare parts.
"Material Adverse Effect" means, with respect to any Borrower, 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 such
Borrower or FSI, (c) materially impairs or could reasonably be expected to
materially impair the ability of such Borrower or FSI to perform its
Obligations, or (d) materially impairs or could reasonably be expected to
materially impair the ability of Agent or any Lender to enforce any of its or
their legal remedies pursuant to the Loan Documents.
"Maturity Date" means, with respect to each Loan advanced by Lenders
hereunder, the date which is one hundred seventy-nine (179) days after the
Funding Date of such Loan or such earlier or later date as requested by the
Requesting Borrower and approved by Requisite Lenders, in their sole and
absolute discretion; provided, however, in no event shall any Maturity Date be a
date which is later than the Commitment Termination Date.
"Maximum Availability" has the meaning set forth in Section 2.1.1.
"Multiemployer Plan" means, with respect to any Borrower, a
"multiemployer plan" as defined in Section 4001(a)(3) of ERISA, and to which
such Borrower, FSI or any of FSI's Subsidiaries or any ERISA Affiliate of such
Borrower, FSI or any of FSI's Subsidiaries is making, or is obligated to make,
contributions or has made, or been obligated to make, contributions within the
preceding five (5) years.
"Note" has the meaning set forth in Section 2.1.1(a)(i), and any and
all replacements, substitutions and renewals thereof.
"Notice of Borrowing" means a notice given by any Borrower to Agent in
accordance with Section 2.7, substantially in the form of Exhibit G, with
appropriate insertions.
"Notice of Conversion/Continuation" means a notice given by any
Borrower to Agent in accordance with Section 2.8, substantially in the form of
Exhibit H, with appropriate insertions.
"Obligations" means, with respect to any Borrower, all loans, advances,
liabilities and obligations for monetary amounts owing by such 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 such 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 such Borrower under any of the Loan
Documents.
"Operating Agreement" means the Fifth Amended and Restated Operating
Agreement of Income Fund I, entered into as of January 24, 1995.
"Opinion of Counsel" means the favorable written legal opinion of
Stephen Peary, general counsel of FSI on behalf of FSI for itself and as the
sole general partner or managing member, as applicable, of each Borrower,
substantially in the form of Exhibit D, together with copies of any officer's
certificate or legal opinion of another counsel or law firm specifically
identified and expressly relied upon by such counsel in its opinion.
"Other Taxes" has the meaning set forth in Section 2.14.2.
"Overadvance" has the meaning set forth in Sections 2.1.1(a)(iii) and
(iv).
"Owner Trustee" means any Person acting in the capacity of (a) a
trustee for any owner trust or (b) a nominee entity, in each case holding title
to any Eligible Inventory pursuant to a trust or similar agreement with any
Borrower or FSI.
"PBGC" means the Pension Benefit Guaranty Corporation and any successor
thereto.
"Pension Plan" means, with respect to any Borrower, any employee
pension benefit plan, as defined in Section 3(2) of ERISA, that is maintained
for the employees of such Borrower, FSI or any of FSI's Subsidiaries or any
ERISA Affiliate of such Borrower, FSI or any of FSI's Subsidiaries, other than a
Multiemployer Plan.
"Permitted Liens" has the meaning set forth in Section 6.1.
"Permitted Rights of Others" means, as to any Property in which a
Person has an interest, (a) an option or right to acquire a Lien that would be a
Permitted Lien, (b) the reversionary interest of a lessor under a lease of such
Property and (c) an option or right of the lessee under a lease of such Property
to purchase such property at fair market value.
"Person" means any individual, sole proprietorship, partnership, joint
venture, limited liability company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or Governmental Authority.
"PLMI" means PLM International, Inc., a Delaware corporation.
"Potential Event of Default" means a condition or event which, after
notice or lapse of time or both, will constitute an Event of Default.
"Prepayment Date" has the meaning set forth in Section 2.2.2.
"Prime Rate" means, at any time, the rate of interest per annum
publicly announced from time to time by FUNB as its prime rate. Each change in
the Prime Rate shall be effective as of the opening of business on the day such
change in the Prime Rate occurs. The parties hereto acknowledge that the rate
announced publicly by FUNB as its Prime Rate is an index or base rate and shall
not necessarily be its lowest rate charged to FUNB's customers or other banks.
"Prime Rate Loan" means any borrowing which bears interest at a rate
determined with reference to the Prime Rate.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, whether tangible or intangible.
"Pro Rata Share" means, for any Lender, the proportion such Lender's
Commitment with respect to the Facility has to the aggregate of all Commitments
with respect to the Facility.
"Public Utility Holding Company Act" means the Public Utility Holding
Company Act of 1935, as amended (15 U.S.C. ss. 79 et seq.) as the same shall be
in effect from time to time, and any successor statute thereto.
"Railcar" means all railroad rolling stock, including, without
limitation, all coal, timber, plastic pellet, tank, hopper, flat and box cars
and locomotives.
"Reaffirmation of Guaranty" means the Acknowledgement and Reaffirmation
of Guaranty, dated as of the date hereof, executed by FSI in favor of Lenders
reaffirming its obligations under the Guaranty.
"Regulations G, T, U and X" means, collectively, Regulations G, T, U
and X adopted by the Federal Reserve Board (12 C.F.R. Parts 207, 220, 221 and
224, respectively) and any other regulation in substance substituted therefor.
"Requesting Borrower" means any Borrower requesting a Loan pursuant to
Section 2.1.1.
"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 percent (60.0%) of all such amounts
outstanding or the total Commitments, as the case may be.
"Responsible Officer" means for (i) FSI, any of the President,
Executive Vice President, Chief Financial Officer, Secretary or Corporate
Controller of FSI having authority to request Advances or perform other duties
required hereunder, and (ii) Borrowers, any of the President, Executive Vice
President, Chief Financial Officer, Secretary or Corporate Controller of FSI as
the sole general partner of EGF III, EGF IV, EGF V, EGF VI or EGF VII, as the
case may be, or sole manager of Income Fund I, in each case having authority to
request Advances or perform other duties required hereunder
"SEC" means the Securities and Exchange Commission and any successor
thereto.
"Solvent" means, as to any Person at any time, that (a) the fair value
of the Property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code; (b) the present fair saleable value of the
Property in an orderly liquidation of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its debts
as they become absolute and matured; (c) such Person is able to realize upon its
Property and pay its debts and other liabilities (including disputed, contingent
and unliquidated liabilities) as they mature in the normal course of business;
(d) such Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature; and (e) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person's property would constitute unreasonably small capital.
"Subsidiary" means, with respect to any Person, any corporation,
association, partnership, limited liability company or other business entity
(other than Equipment Growth Funds) 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%) or more of the outstanding stock, units or other voting
interest having ordinary voting power to elect a majority of the directors,
managers or trustees of such Person (irrespective of whether, at the time, the
stock, units or other voting interest of any other class or classes of such
Person shall have or might have voting power by reason of the happening of any
contingency) is at the time, directly or indirectly, owned legally or
beneficially by such Person and/or one or more Subsidiaries of such Person.
"Taxes" has the meaning set forth in Section 2.14.1.
"TEC" means PLM Transportation Equipment Corporation, a California
corporation and a wholly-owned Subsidiary of FSI.
"TEC AcquiSub" means TEC AcquiSub, Inc., a California special purpose
corporation and a wholly-owned Subsidiary of TEC.
"TEC AcquiSub Agreement" means the Amended and Restated Warehousing
Credit Agreement dated as of September 27, 1995, as amended by the TEC AcquiSub
Amendment, by and among TEC AcquiSub, Lenders and Agent, and as the same may
from time to time be further amended, modified, supplemented, renewed, extended
or restated.
"TEC AcquiSub Amendment" means the Amendment No. 1 to Amended and
Restated Warehousing Credit Agreement dated as of the date hereof, by and among
TEC AcquiSub, Lenders and Agent.
"Termination Event" means, with respect to any Borrower, (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 such
Borrower, FSI or any of FSI's Subsidiaries or any of their ERISA Affiliates from
a Pension Plan during a plan year in which any of them was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA, or (c) the filing of a
notice of intent to terminate a Pension Plan or the treatment of a Pension Plan
amendment as a termination under Section 4041 of ERISA, or (d) the institution
of proceedings to terminate a Pension Plan by the PBGC, or (e) any other event
or condition which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan.
"Trailer" means (a) vehicles having a minimum length of twenty (20)
feet used in trailer or freight car service and constructed for the transport of
commodities or containers from point to point and (b) associated equipment.
"UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of North Carolina; provided, however, in the
event that, by reason of mandatory provisions of law, any and all of the
attachment, perfection or priority of the Lien of Agent, on behalf of Lenders,
in and to any collateral is governed by the Uniform Commercial Code as in effect
in a jurisdiction other than the State of North Carolina, the term "UCC" shall
mean the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such attachment, perfection or
priority and for purposes of definitions related to such provisions.
"Utilization Leases" means Leases for Equipment held for lease in
pooling or similar arrangements where the actual rental payments under such
Lease is based on and for the actual period of utilization of such item of
Equipment rather than the Lease term.
. Any accounting term used in this Agreement shall have, unless
otherwise specifically provided herein, the meaning customarily given such term
in accordance with GAAP, and all financial data required to be submitted by this
Agreement shall be prepared and computed, unless otherwise specifically provided
herein, in accordance with GAAP. That certain terms or computations are
explicitly modified by the phrase "in accordance with GAAP" shall in no way be
construed to limit the foregoing. In the event that GAAP changes during the term
of this Agreement such that the covenants contained in Section 7 would then be
calculated in a different manner or with different components, (a) the parties
hereto agree to amend this Agreement in such respects as are necessary to
conform those covenants as criteria for evaluating each Borrower's financial
condition to substantially the same criteria as were effective prior to such
change in GAAP and (b) each Borrower shall be deemed to be in compliance with
the covenants contained in the aforesaid subsections during the sixty (60) day
period following any such change in GAAP if and to the extent that each Borrower
would have been in compliance therewith under GAAP as in effect immediately
prior to such change.
. All other undefined terms contained in this Agreement shall, unless
the context indicates otherwise, have the meanings provided for by the UCC to
the extent the same are used or defined therein. The words "herein," "hereof"
and "hereunder" and other words of similar import refer to this Agreement as a
whole, including the Exhibits and Schedules hereto, all of which are by this
reference incorporated into this Agreement, as the same may from time to time be
amended, modified or supplemented, and not to any particular section, subsection
or clause contained in this Agreement. The term "including" shall not be
limiting or exclusive, unless specifically indicated to the contrary. The term
"or" is disjunctive; the term "and" is conjunctive. The term "shall" is
mandatory; the term "may" is permissive. Wherever from the context it appears
appropriate, each term stated in either the singular or plural shall include the
singular and plural, and pronouns stated in the masculine, feminine or neuter
gender shall include the masculine, feminine and the neuter.
. Any reference to a "Section," "Subsection," "Exhibit," or "Schedule"
shall refer to the relevant Section or Subsection of or Exhibit or Schedule to
this Agreement, unless specifically indicated to the contrary.
. 2. AMOUNT AND TERMS OF CREDIT
. 1 Commitment To Lend
. Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Borrowers set forth herein,
Lenders hereby agree to make Advances (as defined below) of immediately
available funds to Borrowers, 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 amounts
then outstanding under the TEC AcquiSub Agreement and under the AFG Agreement or
(b) for any one Borrower, its respective Borrowing Base (such lesser amount
being the "Maximum Availability"), as more fully set forth in this Section
2.1.1. The obligation of Borrowers to repay the Advances made to any Borrower
shall be several but not joint.
. (a) Facility Commitments
(i) On the Funding Date requested by any
Borrower (the "Requesting Borrower"), after such 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 such Borrower at the Designated Deposit
Account (or such other deposit account at FUNB or such other financial
institution as to which such 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. The Requesting 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 the Requesting Borrower incurred in
connection therewith shall be due and payable no later than the
Maturity Date of such Loan. Each Loan advanced hereunder shall be
evidenced by the Requesting Borrower's revolving promissory note
substantially in the form of Exhibits A-1 through A-6, as applicable
(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 such requested Loan. Nothing contained in this Agreement
shall under any circumstance be deemed to require any Lender to make
any Advance under the Facility which, in the aggregate principal
amount, either (1) taking into account such Lender's portion of the
principal amounts outstanding under this Agreement and the making of
such Advance, exceeds the lesser of (A) such Lender's Commitment for
the Facility and (B) such Lender's Pro Rata Share of the Requesting
Borrower's Borrowing Base, or (2) taking into account such Lender's
portion of the aggregate principal amounts outstanding under this
Agreement, under the TEC AcquiSub Agreement, under the AFG Agreement
and the making of such Advance, exceeds such Lender's Commitment for
the Facility.
(iii) If at any time and for any reason the
aggregate principal amount of the Loan(s) then outstanding to any
Borrower shall exceed the Maximum Availability for such Borrower (the
amount of such excess, if any, being an "Overadvance"), such Borrower
shall immediately repay the full amount of such Overadvance, together
with all interest accrued thereon; provided, however, that if such
Overadvance occurs solely as a result of a decrease in the amount of
the Borrowing Base due solely to a decrease in the computation of the
Borrowing Base under clause (b), as set forth on a Borrowing Base
Certificate delivered to Agent pursuant to Section 5.1.3, then, to the
extent of such decrease, such Borrower shall not be required under this
Section 2.1.1(a)(iii) to prepay such Overadvance but Lenders shall have
no obligation to make or fund any Loans hereunder so long as such
Overadvance condition shall remain in effect.
(iv) Amounts borrowed by Borrowers under this
Facility may be repaid and, prior to the Commitment Termination Date
and subject to the applicable terms and conditions precedent to
borrowings hereunder, reborrowed; provided, however, that no Loan shall
have a Maturity Date which is later than the Commitment Termination
Date and no LIBOR Loan shall have an Interest Period ending after the
Maturity Date.
(v) Each request for a Loan hereunder shall
constitute a reaffirmation by the Requesting Borrower and the
Responsible Officer requesting the same that the representations and
warranties contained in this Agreement are true, correct and complete
in all material respects to the same extent as though made on and as of
the date of the request, except to the extent such representations and
warranties specifically relate to an earlier date, in which event they
shall be true, correct and complete in all material respects as of such
earlier date.
. Each Loan made by Lenders hereunder shall, at the
Requesting Borrower's option in accordance with the terms of this Agreement, be
either in the form of a Prime Rate Loan or a LIBOR Loan. Subject to the terms
and conditions of this Agreement, each Loan shall bear interest on the sum of
the unpaid principal balance thereof outstanding on each day from the date when
made, continued or converted until such Loan shall have been fully repaid at a
rate per annum equal to the Prime Rate, as the same may fluctuate on a daily
basis, or the Adjusted LIBOR, as the case may be, plus the Applicable Margin.
Interest on each Loan funded hereunder shall be due and payable by the
Requesting Borrower 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 by the Requesting Borrower on the Maturity Date
for such Loan.
Each Advance made by a Lender as part of a Loan hereunder and all
repayments of principal with respect to such Advance shall be evidenced by
notations made by such Lender on the books and records of such Lender; provided,
however, that the failure by such Lender to make such notations shall not limit
or otherwise affect the obligations of any Borrower with respect to the
repayments of principal or payments of interest on any Advance or Loan. The
aggregate unpaid amount of each Advance set forth on the books and records of a
Lender shall be presumptive evidence of such Lender's Pro Rata Share of the
principal amount owing and unpaid by any Borrower under its Note.
. Promptly following the receipt of such documents required
pursuant to Section 3.2.1 and approval of a Loan by the Agent, Agent shall
notify by telephone, telecopier, facsimile or telex each Lender of the (a)
Requesting Borrower, (b) the principal amount (including Lender's Pro Rata Share
thereof) and (c) Funding Date of the Loan requested by such Requesting Borrower.
Not later than 1:00 p.m., North Carolina time, on the Funding Date for any Loan,
each Lender shall make an Advance to Agent for the account of Requesting
Borrower in the amount of its Pro Rata Share of the Loan being requested. Upon
satisfaction of the applicable conditions precedent set forth in Section 3, all
Advances shall be credited in immediately available funds to the Designated
Deposit Account.
. The Loans made under the Facility may be used solely for the
purpose of acquiring the specific items of Equipment.
. 2 Repayment And Prepayment
. Unless prepaid pursuant to Section 2.2.2, the principal
amount of each Loan hereunder made to a Requesting Borrower shall be repaid by
the Requesting Borrower to Lenders not later than the Maturity Date of such
Loan.
. Subject to Section 2.18, any Borrower may in the ordinary
course of such Borrower's business, upon at least three (3) Business Days'
written notice, or telephonic notice promptly confirmed in writing to Agent,
which notice shall be irrevocable, prepay any Loan in whole or in part. Such
notice of prepayment shall specify the date and amount of such prepayment and
whether such prepayment is of Prime Rate Loans or LIBOR Loans, or any
combination thereof. Such prepayment of Loans, together with any amounts
required pursuant to Section 2.18, shall be in immediately available funds and
delivered to Agent not later than 1:00 p.m., North Carolina time, on the date
for prepayment stated in such notice (the "Prepayment Date"). With respect to
any prepayment under this Section 2.2.2, all interest on the amount prepaid
accrued up to but excluding the date of such prepayment shall be due and payable
on the Prepayment Date.
. .3 Mandatory Prepayments
(a) In the event that any item of Eligible
Inventory shall be sold or assigned by any Borrower or any Marine Subsidiary of
such Borrower, or the ownership interests (whether Stock or otherwise) of any
Borrower in any Marine Subsidiary of such Borrower owning record or beneficial
title to any item of Eligible Inventory shall be sold or transferred, then such
Borrower shall immediately prepay the Loan made with respect to such Eligible
Inventory so sold or assigned or with respect to the Eligible Inventory owned by
such Marine Subsidiary so sold or transferred, together with any accrued
interest on such Loan to the date of prepayment and any amounts required
pursuant to Section 2.18. The sale or assignment of Eligible Inventory by an
Owner Trustee, or the sale or assignment of any Borrower's or any Marine
Subsidiary's beneficial interest in any owner trust (or nominee entity) holding
title to Eligible Inventory, shall be considered a sale or assignment, as the
case may be, of such Eligible Inventory by such Borrower or such Marine
Subsidiary, as the case may be.
(b) In the event that any of the Eligible
Inventory shall have sustained a Casualty Loss, the applicable Borrower shall
promptly notify Agent and Lenders of such Casualty Loss and make arrangements
reasonably acceptable to the Agent to cause any and all cash proceeds received
by such Borrower to be paid to Lenders as a prepayment hereunder. To the extent
not so prepaid, the Loan funded with respect to such Eligible Inventory will
nevertheless be paid by such Borrower as provided in Section 2.2.1.
. 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 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 Borrowers notice of any such change in the Prime Rate;
provided, however, that any failure by Agent to provide Borrowers 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 (2.00%) to the Applicable Margin
for such Loan (the "Default Rate"). This may result in the compounding of
interest. The imposition of a Default Rate will not constitute a waiver of any
Event of Default.
. All repayments or prepayments of principal and all payments of
interest, fees, costs, expenses and other sums chargeable to Borrowers under
this Agreement, the Notes or any of the other Loan Documents shall be in lawful
money of the United States of America in immediately available funds and
delivered to Agent, for the account of Lenders, not later than 1:00 p.m., North
Carolina time, on the date due at First Union National Bank of North Carolina,
One First Union Center, 301 South College Street, Charlotte, North Carolina
28288, Attention: Hannah Carmody, or such other place as shall have been
designated in writing by Agent.
. Whenever any payment to be made under this Agreement, the Note or any
of the other Loan Documents shall be stated to be due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day and
such extension of time shall in such case be included in the computation of the
payment of interest thereon; provided, however, that no Loan shall have remained
outstanding after the Maturity Date of such Loan.
. All payments to or for the benefit of Lenders hereunder shall be
applied to the Obligations of any Borrower making payment in the following
order: (a) then due and payable fees as set forth in Section 2.1.1(a)(i) and, at
the direction of such Borrower or upon prior notice given to such Borrower by
Agent, other 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 such Borrower as Lenders may deem advisable. To the extent
any 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 such Borrower. To the extent permitted by law, all
amounts advanced by any Lender hereunder or under other provisions of the Loan
Documents shall accrue interest at the same rate as Loans hereunder.
. 7 Procedure For The Borrowing Of Loans
. Each borrowing of Loans shall be made upon any Requesting
Borrower's irrevocable written notice delivered to Agent in the form of a Notice
of Borrowing, executed by a Responsible Person of such Requesting Borrower, with
appropriate insertions (which Notice of Borrowing must be received by Lender
prior to 12:00 noon, Charlotte, North Carolina time, three (3) Business Days
prior to the requested Funding Date) specifying:
(a) the amount of the requested borrowing, which, if a
LIBOR Loan is requested, shall be not less than One Million Dollars
($1,000,000);
(b) the requested Funding Date, which shall be a
Business Day;
(c) whether the borrowing is to be comprised of one or
more LIBOR Loans or Prime Rate Loans; and
(d) the duration of the Interest Period applicable to
any such LIBOR Loans included in such Notice of Borrowing. If the
Notice of Borrowing shall fail to specify the duration of the Interest
Period for any borrowing comprised of LIBOR Loans, such Interest Period
shall be three (3) months.
. Unless Agent shall otherwise consent, during the existence
of an Event of Default or Potential Event of Default, Borrowers may not elect to
have a Loan made as a LIBOR Loan.
. 8 Conversion And Continuation Elections
. Each Borrower may, upon irrevocable written notice to Agent:
(a) elect to convert on any Business Day, any Prime Rate
Loan (or any portion thereof in an amount equal to at least One Million
Dollars ($1,000,000)) into a LIBOR Loan; or
(b) elect to convert on any Interest Payment Date any
LIBOR Loan maturing on such Interest Payment Date (or any portion
thereof) into a Prime Rate Loan; or
(c) elect to continue on any Interest Payment Date any
LIBOR Loan maturing on such Interest Payment Date (or any portion
thereof in an amount equal to at least One Million Dollars
($1,000,000));
provided, that if the aggregate amount of LIBOR Loans outstanding to such
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 such Borrower to continue such Loans as, and convert such Loans into,
LIBOR Loans shall terminate.
. Each conversion or continuation of Loans shall be made upon
any Borrower's irrevocable written notice delivered to Agent in the form of a
Notice of Conversion/Continuation, executed by a Responsible Person of such
Borrower, with appropriate insertions (which Notice of Conversion/Continuation
must be received by Lender prior to 12:00 noon, Charlotte, North Carolina time,
at least three (3) Business Days in advance of the proposed conversion date or
continuation date specifying:
(a) the proposed conversion date or continuation date;
(b) the aggregate amount of Loans to be converted or
continued;
(c) the nature of the proposed conversion or
continuation; and
(d) the duration of the requested Interest Period.
. If upon the expiration of any Interest Period applicable to
any LIBOR Loan, the Requesting Borrower has failed to select a new Interest
Period to be applicable to such LIBOR Loan, such Borrower shall be deemed to
have elected to convert such LIBOR Loan into a Prime Rate Loan effective as of
the last day of such current Interest Period.
. Unless Agent shall otherwise consent, during the existence
of an Event of Default or Potential Event of Default, Borrowers may not elect to
have a Loan converted into or continued as a LIBOR Loan.
. Notwithstanding any provision of this Agreement to the contrary, each
Lender shall be entitled to fund and maintain its funding of all or any part of
its LIBOR Loans in any manner it elects, it being understood, however, that for
the purposes of this Agreement all determinations hereunder shall be made as if
such Lender actually funded and maintained each LIBOR Loan through the purchase
of deposits having a maturity corresponding to the maturity of the LIBOR Loan
and bearing an interest rate equal to the LIBOR rate (whether or not, in any
instance, Lender shall have granted any participations in such Loan). Each
Lender may, if it so elects, fulfill any commitment to make LIBOR Loans by
causing a foreign branch or affiliate to make or continue such LIBOR Loans;
provided, however, that in such event such Loans shall be deemed for the
purposes of this Agreement to have been made by such Lender, and the obligation
of Borrowers to repay such Loans shall nevertheless be to such Lender and shall
be deemed held by such Lender, to the extent of such Loans, for the account of
such branch or affiliate.
. Agent shall immediately distribute to each Lender, at such address as
each Lender shall designate, its respective interest in all repayments and
prepayments of principal and all payments of interest and all fees, expenses and
costs received by Agent on the same day and in the same type of funds as payment
was received. In the event Agent does not distribute such payments on the same
day received, if such payments are received by Agent by 1:00 p.m., North
Carolina time, or if received after such time, on the next succeeding Business
Day, such payment shall accrue interest at the Federal Funds Rate.
. Unless Agent shall have been notified by any Lender no later than the
Business Day prior to the respective Funding Date of a Loan that such Lender
does not intend to make available to Agent an Advance in immediately available
funds equal to such Lender's Pro Rata Share of the total principal amount of
such Loan, Agent may assume that such Lender has made such Advance to Agent on
the date of the Loan and Agent may, in reliance upon such assumption, make
available to the Requesting Borrower a corresponding Advance. If Agent has made
funds available to such 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 such Requesting Borrower and such Requesting 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 such Requesting Borrower to the date such corresponding amount
is recovered by Agent at the Federal Funds Rate. Nothing in this Section 2.11
shall be deemed to relieve any Lender from its obligation to fulfill its
Commitment or to prejudice any rights which Agent or such Requesting Borrower
may have against such Lender as a result of any default by such Lender under
this Agreement.
. Unless Agent shall have been notified by any Borrower prior to the
date on which any payment to be made by such Borrower hereunder is due that such
Borrower does not intend to remit such payment, Agent may, in its sole
discretion, assume that such Borrower has remitted such payment when so due and
Agent may, in its sole discretion and in reliance upon such assumption, make
available to each Lender on such payment date an amount equal to such Lender's
Pro Rata Share of such assumed payment. If such Borrower has not in fact
remitted such payment to Agent, each Lender shall forthwith on demand repay to
Agent the amount of such assumed payment made available to such Lender, together
with interest thereon in respect of each date from and including the date such
amount was made available by Agent to such Lender to the date such amount is
repaid to Agent at the Federal Funds Rate.
. If any Lender determines that compliance with any law or regulation
or with any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law) has or would have the effect
of reducing the rate of return on the capital of such Lender or any corporation
controlling such Lender as a consequence of, or with reference to, such Lender's
Commitment or its making or maintaining its Pro Rata Share of the Loans below
the rate which such Lender or such other corporation could have achieved but for
such compliance (taking into account the policies of such Lender or corporation
with regard to capital), then each 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 (a) such additional amounts as shall be sufficient to
compensate such Lender or other corporation for such reduction resulting from
such Borrower's Loans or (b) in the case where such reduction results from
compliance with any such law, regulation, guideline or request affecting only
the Commitments and not the Loans, such additional amounts as shall be
sufficient to compensate such Lender or other corporation for such reduction
based on each Borrower's percentage of average usage of the Commitments versus
the total average usage by all Borrowers. A certificate submitted by such Lender
to any 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 effected Borrowers and
Agent of any circumstances that would cause any Borrower to pay additional
amounts pursuant to this section, provided that the failure to give such notice
shall not affect Borrowers' obligation to pay any such additional amounts.
. 14 Taxes
. Subject to Subsection 2.14.7, any and all payments by each
Borrower to each Lender or Agent under this Agreement shall be made free and
clear of, and without deduction or withholding for, any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender and
Agent, such taxes (including income taxes or franchise taxes) as are imposed on
or measured by each Lender's net income (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as "Taxes").
. In addition, Borrowers shall pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Loan Documents (hereinafter referred to as "Other Taxes").
. Subject to Subsection 2.14.7, each Borrower shall indemnify
and hold harmless each Lender and Agent for the full amount of Taxes or Other
Taxes (including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.14) paid by such Lender or Agent in relation to any
payments made by or Obligations of such Borrower and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. Payment under this indemnification shall be made within thirty
(30) days from the date any Lender or Agent makes written demand therefor.
. If any Borrower shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to any Lender or Agent, then, subject to Subsection 2.14.7:
(a) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.14) such
Lender or Agent, as the case may be, receives an amount equal to the
sum it would have received had no such deductions been made;
(b) such Borrower shall make such deductions, and
(c) such Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with
applicable law.
. Within thirty (30) days after the date of any payment by any
Borrower of Taxes or Other Taxes, such Borrower shall furnish to Agent the
original or a certified copy of a receipt evidencing payment thereof, or other
evidence of payment satisfactory to Agent.
. Each Lender which is a foreign person (i.e., a person other
than a United States person for United States Federal income tax purposes)
shall:
(a) No later than the date upon which such Lender
becomes a party hereto deliver to Borrowers 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 Borrowers through Agent in replacement for, or in addition
to, the forms previously delivered by it hereunder, two accurate and
complete signed originals of Form 4224; or two accurate and complete
signed originals of Form 1001, as appropriate, in each case indicating
that the Lender is on the date of delivery thereof entitled to receive
payments of principal, interest and fees under this Agreement free from
withholding of United States Federal income tax;
(c) Before or promptly after the occurrence of any event
(including the passing of time but excluding any event mentioned in
(ii) above) requiring a change in or renewal of the most recent Form
4224 or Form 1001 previously delivered by such Lender, deliver to
Borrowers 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 any Borrower's or Agent's reasonable
request to that effect, deliver to such 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.
. Borrowers will not be required to pay any additional amounts
in respect of United States Federal income tax pursuant to Subsection 2.14.4 to
Lender for the account of any Lending Office of such Lender:
(a) If the obligation to pay such additional amounts
would not have arisen but for a failure by such Lender to comply with
its obligations under Subsection 2.14.6 in respect of such Lending
Office;
(b) If such Lender shall have delivered to Borrowers a
Form 4224 in respect of such Lending Office pursuant to Subsection
2.14.6 and such Lender shall not at any time be entitled to exemption
from deduction or withholding of United States Federal income tax in
respect of payments by Borrowers 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 Borrowers a
Form 1001 in respect of such Lending Office pursuant to Subsection
2.14.6, and such Lender shall not at any time be entitled to exemption
from deduction or withholding of United States Federal income tax in
respect of payments by Borrowers hereunder for the account of such
Lending Office for any reason other than a change in United States law
or regulations or any applicable tax treaty or regulations or in the
official interpretation of any such law, treaty or regulations by any
Governmental Authority charged with the interpretation or
administration thereof (whether or not having the force of law) after
the date of delivery of such Form 1001.
. If, at any time, any Borrower requests any Lender to deliver
any forms or other documentation pursuant to Subsection 2.14.6(a), then such
Borrower shall, on demand of such Lender through Agent, reimburse such Lender
for any costs and expenses (including reasonable attorney fees) reasonably
incurred by such Lender in the preparation or delivery of such forms or other
documentation.
. If any Borrower is required to pay additional amounts to any
Lender or Agent pursuant to Subsection 2.14.4, then such Lender shall use its
reasonable good faith efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its Lending Office so as to
eliminate any such additional payment by such Borrower which may thereafter
accrue if such change, in the judgment of such Lender, is not otherwise
disadvantageous to such Lender.
. 15 Illegality
. If any Lender shall determine that the introduction of any
Requirement of Law, or any change in any Requirement of Law or in the
interpretation or administration thereof, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for such Lender or its Lending Office to make LIBOR Loans, then, on notice
thereof by Lender to the Requesting Borrower, the obligation of such Lender to
make LIBOR Loans shall be suspended until such Lender shall have notified the
Requesting Borrower that the circumstances giving rise to such determination no
longer exists.
. If a Lender shall determine that it is unlawful to maintain
any LIBOR Loan, Borrowers shall prepay in full all LIBOR Loans of such Lender
then outstanding, together with interest accrued thereon, either on the last day
of the Interest Period thereof if such Lender may lawfully continue to maintain
such LIBOR Loans to such day, or immediately, if such Lender may not lawfully
continue to maintain such LIBOR Loans, together with any amounts required to be
paid in connection therewith pursuant to Section 2.18.
. If any Borrower is required to prepay any LIBOR Loan
immediately as provided in Section 2.2.3, then concurrently with such
prepayment, such Borrower shall borrow, in the amount of such prepayment, a
Prime Rate Loan.
. If any Lender shall determine that, due to either (a) the
introduction of or any change (other than any change by way of imposition of or
increase in reserve requirements included in the calculation of the LIBOR) in or
in the interpretation of any Requirement of Law or (b) the compliance with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
cost to such Lender of agreeing to make or making, funding or maintaining any
LIBOR Loans, then Borrowers shall be liable on a joint and several basis for,
and shall from time to time, upon demand therefor by such Lender, pay to such
Lender such additional amounts as are sufficient to compensate such Lender for
such increased costs.
. If Agent shall have determined that for any reason adequate and
reasonable means do not exist for ascertaining the LIBOR for any requested
Interest Period with respect to a proposed LIBOR Loan or that the LIBOR
applicable for any requested Interest Period with respect to a proposed LIBOR
Loan does not adequately and fairly reflect the cost to Lenders of funding such
Loan, Agent will forthwith give notice of such determination to Borrowers 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 Requisite Lenders, revokes such notice in writing. Upon receipt
of such notice, Borrowers may revoke any Notice of Borrowing or Notice of
Conversion/Continuation then submitted. If a Borrower does not revoke such
notice, Lenders shall make, convert or continue the Loans, as proposed by such
Borrower, in the amount specified in the applicable notice submitted by such
Borrower, but such Loans shall be made, converted or continued as Prime Rate
Loans instead of LIBOR Loans, as the case may be.
. Each Borrower agrees, severally but not jointly, that in the event
that such 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. Borrowers 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:
(a) 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
(b) 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.
.. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS AGREEMENT AND THE
MAKING OF LOANS
. The effectiveness of this Agreement is subject to the satisfaction of
the following conditions precedent:
. Agent shall have received, in form and substance
satisfactory to Lenders and their respective counsel a certified copy of the
records of all actions taken by each Borrower and FSI, including all resolutions
of each Borrower and corporate resolutions of FSI, authorizing or relating to
the execution, delivery and performance of this Agreement and the other Loan
Documents and the consummation of the transactions contemplated hereby and
thereby.
. Agent shall have received new Notes, in form and substance
satisfactory to Lenders, and duly executed and delivered by each Borrower, which
Notes shall replace and supersede the Notes issued by Borrowers to Agent
pursuant to the Growth Fund Agreement.
. Agent shall have received an originally executed Opinion of
Counsel, in form and substance satisfactory to Lenders, dated as of the Closing
Date and addressed to Lenders, together with copies of any officer's certificate
or legal opinion of other counsel or law firm specifically identified and
expressly relied upon by such counsel.
. Agent shall have received the Reaffirmation of Guaranty, in
form and substance satisfactory to Lenders, duly executed and delivered by FSI.
. Agent shall have received the TEC AcquiSub Amendment, duly
executed and delivered by TEC AcquiSub, and all conditions precedent to the
effectiveness of the TEC AcquiSub Amendment shall have been satisfied.
. Agent shall have received the AFG Agreement, duly executed
and delivered by AFG, and all conditions precedent to the effectiveness of the
AFG Agreement shall have been satisfied.
. Separate certificates, dated as of the Closing Date, of the
Chief Financial Officer or Corporate Controller of FSI, in its capacity as the
sole general partner of EGF III, EGF IV, EGF V, EGF VI and EGF VII and as the
sole manager of Income Fund I, to the effect that (i) the representations and
warranties of each Borrower contained in Section 4 are true, accurate and
complete in all material respects as of the Closing Date as though made on such
date and (ii) no Event of Default or Potential Event of Default under this
Agreement has occurred.
. Agent shall have received the Fee Letter and the Agent's
Side Letter, duly executed by Borrowers, TEC AcquiSub and AFG, and the
arrangement fee and the Agent's fee described in the Fee Letter and Agent's Side
Letter, respectively.
. Agent shall have received such other documents, information
and items from Borrowers and FSI as reasonably requested by Agent.
. Unless waived in writing by Requisite Lenders, the obligation of any
Lender to make any Advance is subject to the satisfaction of the following
further conditions precedent:
. At least three (3) Business Days before each Loan hereunder
with respect to any acquisition of Equipment by any Borrower, Agent shall have
received (i) Notice of Borrowing and (ii) a Borrowing Base Certificate, with
appropriate insertions, executed by the Chief Financial Officer or Corporate
Controller of such Borrower.
. No event shall have occurred and be continuing or would
result from the making of any Loan on such Funding Date which constitutes an
Event of Default or Potential Event of Default under this Agreement or under
(and as separately defined in) the TEC AcquiSub Agreement or under (and as
separately defined in) the AFG Agreement, or which with notice or lapse of time
or both would constitute an Event of Default or Potential Event of Default under
this Agreement or under the TEC AcquiSub Agreement or the AFG Agreement.
. All representations and warranties contained in the Loan
Documents shall be 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).
. The insurance required to be maintained by such Borrower
pursuant to the Loan Documents shall be in full force and effect.
. Agent shall have received such other instruments and
documents as it may have reasonably requested from Borrowers in connection with
the Loans to be made on such date.
. Notwithstanding anything to the contrary contained in this Agreement,
unless waived in writing by Requisite Lenders, no Lender shall have any
obligation hereunder to make any Advance if any of the following events shall
occur:
. FSI shall have ceased to be the sole general partner of any
of EGF III, EGF IV, EGF V, EGF VI or EGF VII or the sole manager of Income Fund
I, whether due to the voluntary or involuntary withdrawal, substitution, removal
or transfer of FSI from or of all or any portion of FSI's general partnership
interest or capital contribution in such Borrower.
. Twenty five percent (25.0%) or more of the limited partners
(measured by such partners' percentage interest) of any Equipment Growth Fund
shall at any time vote to remove FSI as the general partner of such Equipment
Growth Fund or a majority in interest of Class A members, as that term is
defined in the Operating Agreement, of Income Fund I shall at any time vote to
remove FSI as manager of Income Fund I, in each case, regardless of whether FSI
is actually removed.
Requesting Borrower, TEC AcquiSub, FSI or their Subsidiaries
shall have ceased to be the purchaser of Eligible Inventory for such Requesting
Borrower.
. 4. BORROWERS' AND FSI'S REPRESENTATIONS AND WARRANTIES
. Each Borrower, severally, as to itself, but not jointly as to the
other Borrowers and FSI, and FSI, jointly and severally with each Borrower as to
each such Borrower and as to itself, hereby warrant and represent to Agent and
each Lender as follows, and agree 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:
. Each Borrower is a limited partnership or, in the case of
Income Fund I, a limited liability company, and FSI is a corporation, each duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and is duly qualified and licensed as a foreign
corporation, partnership or limited liability company, as applicable, 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. Each Borrower and FSI has the power and authority, rights and
franchises to own their Property and assets and to carry on their businesses as
now conducted. Each Borrower and FSI has the power and authority to execute and
deliver the Loan Documents (to the extent each is a party thereto) and all other
instruments and documents contemplated hereby or thereby.
. The execution, delivery and performance of this Agreement
and each of the other Loan Documents to which any Borrower is a party and
delivery and payment of such Borrower's respective Note have been duly
authorized by all necessary and proper action on the part of such Borrower. The
execution, delivery and performance of this Agreement and each of the other Loan
Documents to which FSI is a party have been duly authorized by all necessary and
proper corporate action on the part of FSI. The Loan Documents constitute
legally valid and binding obligations of each Borrower and FSI, as the case may
be, enforceable against each Borrower and FSI, to the extent any one of them 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.
. (a) 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: (i) contravene any provision of FSI's certificate
of incorporation or bylaws; (ii) contravene any provision of any Borrowers'
Limited Partnership Agreements or, in the case of Income Fund I, Operating
Agreement or other formation or organization document; or (iii) 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 Material Adverse Effect; and (b) the execution and delivery of this
Agreement, and each of the other Loan Documents and the execution and delivery
of the Notes will not 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 which are, in the aggregate, material and to which any
Borrower or FSI is a party or by which any Borrower, FSI or their Property and
assets may be bound or affected. Neither any Borrower nor FSI is 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 any one of them 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.
. Each Borrower's and FSI's audited consolidated financial
statements as of December 31, 1995 and Borrowers' and FSI's unaudited
consolidated financial statements as of March 31, 1996, copies of which
heretofore have been delivered to Agent by such Borrower and FSI, respectively,
and all other financial statements and other data submitted in writing by any
Borrower and FSI 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 such Borrower and FSI, as of the date
thereof, and have been prepared in accordance with GAAP, subject to fiscal
year-end audit adjustments. There has been no material adverse change in the
business, properties or assets, operations, prospects, profitability or
financial or other condition of any Borrower or FSI since March 31, 1996.
. The current location of each Borrower's and FSI's chief
executive offices and principal places of business is set forth on Schedule
4.1.5.
. Except as disclosed on Schedule 4.1.6, there are no claims,
actions, suits, proceedings or other litigation pending or, to the best of each
Borrower's and FSI's knowledge, after due inquiry, threatened against any
Borrower, FSI or any of FSI's Subsidiaries, including, without limitation, TEC
AcquiSub, at law or in equity before any Governmental Authority or, to the best
of each Borrower's and FSI's knowledge, after due inquiry, any investigation by
any Governmental Authority of any Borrower's or FSI's or any of FSI's
Subsidiaries', including, without limitation, TEC AcquiSub's, affairs,
Properties or assets which would, with reasonable likelihood, if adversely
determined, have a Material Adverse Effect. Other than any liability incident to
the litigation or proceedings disclosed on Schedule 4.1.6, neither any Borrower,
nor FSI nor any of FSI's Subsidiaries, including, without limitation, TEC
AcquiSub, has any Contingent Obligations which are not provided for or disclosed
in the financial statements delivered to Agent pursuant to Sections 4.1.4 and
5.1.
. Schedule 4.1.7 lists all currently effective contracts and
agreements (whether written or oral) to which each Borrower is a party and which
(i) could involve the payment or receipt by such Borrower after the date of this
Agreement of more than $250,000 or (ii) otherwise materially affect the
business, operations or financial condition of any Borrower (the "Material
Contracts"). Except as disclosed on Schedule 4.1.7, there are no material
defaults under any such Material Contract by any Borrower, to the best of each
Borrower's knowledge, by any other party to any such Material Contract. Each
Borrower has delivered to Agent true and correct copies of all such contracts or
agreements (or, with respect to oral contracts or agreements, written
descriptions of the material terms thereof).
. Except as set forth in Schedule 4.1.8, all consents and
approvals of, filings and registrations with, and other actions in respect of,
all Governmental Authorities required to be obtained by any Borrower, FSI or any
of FSI's Subsidiaries 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.
. Neither any Borrower, FSI nor any of FSI's Subsidiaries,
including, without limitation, TEC AcquiSub, is a party to or is bound by any
agreement, contract, lease, license or instrument, or is 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. Neither
any Borrower nor FSI has entered into and, as of the Closing Date does not
contemplate entering into, any material agreement or contract with any Affiliate
of any Borrower or FSI on terms that are less favorable to such Borrower or FSI
than those that might be obtained at the time from Persons who are not such
Affiliates.
. There are no collective bargaining agreements or other labor
agreements covering any employees of any Borrower, FSI or any of FSI's
Subsidiaries.
. No Borrower has an Employee Benefit Plan subject to ERISA.
All Pension Plans of FSI and any of FSI's Subsidiaries, that are intended to be
qualified under Section 401(a) of the Code have been determined by the IRS to be
qualified or FSI or any of FSI's Subsidiaries will obtain such determination
prior to instituting such a Pension Plan. 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 FSI or any of FSI's Subsidiaries 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 FSI or any of FSI's
Subsidiaries has occurred with respect to any such Employee Benefit Plan.
. There are no strikes or other labor disputes against any
Borrower, FSI or any of FSI's Subsidiaries or, to the best of each Borrower's
and FSI's knowledge, after due inquiry, threatened against any Borrower, FSI or
any of FSI's Subsidiaries, which would, with reasonable likelihood, have a
Material Adverse Effect. All payments due from any Borrower or FSI 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 such Borrower or FSI.
. Neither any Borrower nor FSI own any "margin security", as
that term is defined in Regulations G and U of the Federal Reserve Board, and
the proceeds of the Loans under this Agreement will be used only for the
purposes contemplated hereunder. None of the Loans will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin security, for
the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry any margin security or for any other purpose which
might cause any of the Loans under this Agreement to be considered a "purpose
credit" within the meaning of Regulations G, T, U and X. Neither any Borrower
nor FSI will take or permit any agent acting on its behalf to take any action
which might cause this Agreement or any document or instrument delivered
pursuant hereto to violate any regulation of the Federal Reserve Board.
. All federal, state, local and foreign tax returns, reports
and statements required to be filed by any Borrower, FSI and, to the best of
each Borrower's and FSI's knowledge, after due inquiry, by any of FSI's
Subsidiaries 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 any Borrower, FSI or such Subsidiary 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 such Borrower, FSI or such Subsidiary 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. Each Borrower, FSI and, to the best of each Borrower's and FSI's
knowledge, after due inquiry, each of FSI's Subsidiaries has paid when due and
payable all material Charges upon the books of any Borrower, FSI or such
Subsidiary and no Government Authority has asserted any Lien against any
Borrower, FSI or any of FSI's Subsidiaries with respect to unpaid Charges.
Proper and accurate amounts have been withheld by each Borrower, FSI and, to the
best of each Borrower's and FSI's knowledge, after due inquiry, each of FSI's
Subsidiaries 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.
. .15 Environmental Quality
(a) Except as specifically disclosed in Schedule 4.1.15,
the on-going operations of each Borrower, FSI and each of FSI's Subsidiaries
comply in all material respects with all Environmental Laws, except such
non-compliance which would not (if enforced in accordance with applicable law)
result in liability in excess of $250,000 in the aggregate.
(b) Except as specifically disclosed in Schedule 4.1.15,
each Borrower, FSI and each of FSI's Subsidiaries 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 each Borrower, FSI and each
of FSI's Subsidiaries is in compliance with all material terms and conditions of
such Environmental Permits.
(c) Except as specifically disclosed in Schedule 4.1.15,
neither any Borrower, FSI or any of FSI's Subsidiaries nor any of their
respective 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.
(d) Except as specifically disclosed in Schedule 4.1.15,
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 any Borrower, FSI or any of FSI's Subsidiaries that would reasonably be
expected to give rise to Environmental Claims with a potential liability of any
Borrower, FSI or any of FSI's Subsidiaries in excess of $250,000 in the
aggregate for any such condition, circumstance or Property.
. Each Borrower and FSI and, to the best of their knowledge,
after due inquiry, each of FSI's Subsidiaries possess and owns all necessary
trademarks, trade names, copyrights, patents, patent rights, franchises and
licenses which are material to the conduct of their business as now operated.
. As of the Closing Date, no information contained in this
Agreement, the other Loan Documents or any other documents or written materials
furnished by or on behalf of any Borrower or FSI 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.
. Neither any Borrower nor FSI is: (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 each 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.
. Each Borrower and FSI are Solvent.
. At the time any Borrower makes a request for an initial borrowing
hereunder, each such Borrower, severally, as to itself, but not jointly as to
the other Borrowers and FSI, and FSI, jointly and severally with each Borrower
as to each such Borrower and as to itself, hereby warrant and represent to Agent
and each Lender as follows, and agree 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 additional borrowing hereunder:
. Each Borrower and FSI has the power and authority to perform
the terms of the Loan Documents (to the extent each is a party thereto) and all
other instruments and documents contemplated hereby or thereby.
. The performance of this Agreement, and each of the other
Loan Documents and the payment of the Notes will not 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 which are, in the aggregate,
material and to which any Borrower or FSI is a party or by which any Borrower,
FSI or their Property and assets may be bound or affected.
. No approval, authorization or consent of any trustee or
holder of any indebtedness or obligation of any Borrower or FSI or of any other
Person under any such material agreement, contract, lease or license or similar
document or instrument to which such Borrower, FSI or any of FSI's Subsidiaries
is a party or by which such Borrower, FSI or any such Subsidiary is bound, is
required to be obtained by any such Borrower, FSI or any such Subsidiary in
order to make or consummate the transactions contemplated under the Loan
Documents.
. 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.
. 5. BORROWERS' AND FSI'S AFFIRMATIVE COVENANTS
Each Borrower, severally, as to itself, but not jointly as to the other
Borrowers and FSI, and FSI, jointly and severally with each Borrower as to each
Borrower and as to itself (and, where applicable, PLMI) covenant and agree 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, each Borrower and FSI shall do or
cause to have done all of the following:
. Maintain, and cause each of FSI's Subsidiaries to maintain, a system
of accounting administered in accordance with sound business practices to permit
preparation of financial statements in conformity with GAAP, and deliver to
Agent or caused to be delivered to Agent:
. As soon as practicable and in any event within sixty (60)
days after the end of each quarterly accounting period of each Borrower, FSI and
PLMI, except with respect to the final fiscal quarter of each fiscal year, in
which case as soon as practicable and in any event within one hundred twenty
(120) days after the end of such fiscal quarter, consolidated and consolidating
balance sheets of FSI and PLMI and a balance sheet of each Borrower as at the
end of such period and the related consolidated (and, as to statements of income
only for FSI, consolidating) statements of income and stockholders' or members'
equity of each Borrower and FSI and the related consolidated statements of
income, stockholders' or members' equity and cash flows of PLMI (and, as to
statements of income only, consolidating) for such quarterly accounting period,
setting forth in each case in comparative form the consolidated figures for the
corresponding periods of the previous year, all in reasonable detail and
certified by the Chief Financial Officer or Corporate Controller of the general
partner or manager of each Borrower, as applicable, FSI and PLMI that they (i)
are complete and fairly present the financial condition of such Borrower, FSI
and PLMI as at the dates indicated and the results of their operations and
changes in their cash flow for the periods indicated, (ii) disclose all
liabilities of each Borrower, FSI and PLMI that are required to be reflected or
reserved against under GAAP, whether liquidated or unliquidated, fixed or
contingent and (iii) have been prepared in accordance with GAAP, subject to
changes resulting from audit and normal year-end adjustment;
. As soon as practicable and in any event within one hundred
twenty (120) days after the end of each fiscal year of each Borrower, FSI and
PLMI, consolidated and consolidating balance sheets of FSI and PLMI and a
balance sheet of each Borrower as at the end of such year and the related
consolidated (and, as to statements of income only for FSI and PLMI,
consolidating) statements of income, stockholders' or members' equity and cash
flows of each Borrower, if applicable, FSI and PLMI for such fiscal year,
setting forth in each case, in comparative form the consolidated figures for the
previous year, all in reasonable detail and (i) in the case of such consolidated
financial statements, accompanied by a report thereon of an independent public
accountant of recognized national standing selected by each Borrower, FSI and
PLMI and satisfactory to Agent, which report shall contain an opinion which is
not qualified in any manner or which otherwise is satisfactory to Requisite
Lenders, in their sole discretion, and (ii) in the case of such consolidating
financial statements, certified by the Chief Financial Officer or Corporate
Controller of FSI and PLMI;
. 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 the general partner or manager of each Borrower, with appropriate insertions;
. As soon as practicable, and in any event not later than
forty-five (45) days after the end of each fiscal quarter of each Borrower, a
Compliance Certificate dated as of the last day of such fiscal quarter, and
executed by the Chief Financial Officer or Corporate Controller of the general
partner or manager of such Borrower, with appropriate insertions.
. At Agent's request, promptly upon receipt thereof, copies of
all reports submitted to each Borrower, FSI or PLMI by independent public
accountants in connection with each annual, interim or special audit of the
financial statements of such Borrower, FSI or PLMI made by such accountants;
. (i) On the date six months after the Closing Date and
thereafter upon Agent's reasonable request, which request will not be made more
than once during any calendar year (unless an Event of Default shall have
occurred and be continuing), a report from each Borrower's insurance broker, in
such detail as Agent may reasonably request, as to the insurance maintained or
caused to be maintained by each 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 any 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 such Borrower shall give Agent prompt written notice if changes affecting
risk coverage will be made to such policy or if the policy will be terminated;
. Promptly upon any officer of any Borrower or FSI obtaining
knowledge (a) of any condition or event which constitutes an Event of Default or
Potential Event of Default under this Agreement, (b) that any Person has given
any notice to any Borrower, FSI, TEC, TEC AcquiSub or PLMI or taken any other
action with respect to a claimed default or event or condition of the type
referred to in Section 8.1.2, (c) 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 any
Borrower, FSI, TEC, TEC AcquiSub or PLMI equal to or greater than $500,000 or
any adverse judgment in any litigation involving a potential liability of any
Borrower, FSI, TEC, TEC AcquiSub or PLMI equal to or greater than $500,000, or
(d) of a material adverse change in the business, operations, properties, assets
or condition (financial or otherwise) of any Borrower, FSI, TEC, TEC AcquiSub or
PLMI, a certificate of a Responsible Officer of any Borrower or FSI, as
applicable, 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 such Borrower, FSI, TEC, TEC AcquiSub or PLMI
has taken, is taking and proposes to take with respect thereto;
. Promptly upon becoming aware of the occurrence of any (a)
Termination Event in connection with any Pension Plan or (b) "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 any Borrower or any of its ERISA
Affiliates has taken, is taking or proposes to take with respect thereto, and,
when known, any action taken or threatened by the IRS or the PBGC with respect
thereto;
. With reasonable promptness, copies of (a) all notices
received by any Borrower, FSI, any of FSI's Subsidiaries or any of their ERISA
Affiliates of the PBGC's intent to terminate any Pension Plan or to have a
trustee appointed to administer any Pension Plan, (b) each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) filed by any Borrower, FSI,
any of FSI's Subsidiaries or any of their ERISA Affiliates with the IRS with
respect to each Pension Plan covering employees of any Borrower, FSI or any of
FSI's Subsidiaries, and (c) all notices received by any Borrower, FSI, any of
FSI's Subsidiaries or any of their ERISA Affiliates from a Multiemployer Plan
sponsor concerning the imposition or amount of withdrawal liability pursuant to
Section 4202 of ERISA;
. Promptly upon receipt by any Borrower, FSI or any of FSI's
Subsidiaries, any challenge by the IRS to the qualification under Section 401 or
501 of the Code of any Pension Plan;
. As soon as available and in no event later than five (5)
days after the same shall have been filed with the SEC, a copy of each Form 8-K
Current Report, Form 10-K Annual Report, Form 10-Q Quarterly Report, Annual
Report to Shareholders, Proxy Statement and Registration Statement of any
Borrower and PLMI;
. Upon the request of Agent, copies of all federal, state,
local and foreign tax returns and reports in respect of income, franchise or
other taxes on or measured by income (excluding sales, use or like taxes) filed
by or on behalf of any Borrower and FSI; and
. Such other information respecting the condition or
operations, financial or otherwise, of any Borrower and PLMI and its
Subsidiaries as Agent or any Lender may from time to time reasonably request,
and such information regarding the lessees under Leases as any Borrower from
time to time receives or Agent or any Lender reasonably requests.
All financial statements of Borrowers, FSI and PLMI to be delivered by
any Borrower and FSI to Agent pursuant to this Section 5.1 will be complete and
correct and present fairly the financial condition of each Borrower, FSI and
PLMI as of the date thereof; will disclose all liabilities of each Borrower, FSI
and PLMI that are required to be reflected or reserved against under GAAP,
whether liquidated or unliquidated, fixed or contingent; and will have been
prepared in accordance with GAAP. All tax returns submitted to Agent by
Borrowers and FSI will, to the best of each Borrower's and FSI's knowledge,
after due inquiry, be true and correct. Each Borrower and FSI hereby agree that
each time any one of them submits a financial statement or tax return to Agent,
such Borrower and FSI 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.
. Each Borrower and FSI shall preserve and maintain, and FSI shall
cause each of FSI's Subsidiaries, including, without limitation, TEC AcquiSub,
to preserve and maintain, their existence and all of their licenses, permits,
governmental approvals, rights, privileges and franchises necessary or desirable
in the normal conduct of their businesses as now conducted or presently proposed
to be conducted (including, without limitation, their qualification to do
business in each jurisdiction in which such qualification is necessary or
desirable in view of its business); conduct, and cause each of FSI's
Subsidiaries, including, without limitation, TEC AcquiSub, and any Owner Trustee
to conduct, its business in an orderly and regular manner; and comply, and cause
each of FSI's Subsidiaries, including, without limitation, TEC AcquiSub, and any
Owner Trustee, to comply, with (a) as to any Borrower, its Limited Partnership
Agreement, Operating Agreement and other organizational documents, as
applicable, and as to FSI and each of its Subsidiaries, including, without
limitation, TEC AcquiSub, the provisions of its respective certificate or
articles of incorporation, as applicable, and bylaws and (b) the requirements of
all applicable laws, rules, regulations or orders of any Governmental Authority
and requirements for the maintenance of any Borrower's, FSI's or such
Subsidiary'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.
. Each Borrower and FSI shall maintain and keep in force, and cause
each of FSI's Subsidiaries, including, without limitation, TEC AcquiSub, to
maintain and keep in force insurance of the types and in amounts then
customarily carried in lines of business similar to that of Borrowers, FSI or
any of FSI's Subsidiaries as the case may be, including, but not limited to,
fire, extended coverage, public liability, property damage, environmental hazard
and workers' compensation, in each case carried with financially sound Persons
and in amounts satisfactory to Requisite Lenders (subject to commercial
reasonableness as to each type of insurance); provided, however, that the types
and amounts of insurance shall not provide any less coverage for any Borrower
than provided as of the Closing Date by the existing blanket policies of
insurance for PLMI and its Subsidiaries. All such policies as to liability
insurance shall carry endorsements naming Agent and each Lender as an additional
insured and, upon the reasonable request of Agent, all such policies of property
insurance shall carry endorsements naming Agent as principal loss payee as to
any property owned by Borrowers and financed by Lenders, and in each case
indicating that (a) 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 any Borrower or FSI; (b) there shall be no
recourse against any Lender for payment of premiums or other amounts with
respect thereto, and (c) at least fifteen (15) days' prior written notice of
cancellation, lapse or material change in coverage shall be given to Agent by
the insurer.
. Promptly pay and discharge and cause each of FSI's Subsidiaries,
including, without limitation, TEC AcquiSub, promptly to 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. Each Borrower and FSI shall promptly notify
Agent of any material challenge, contest or proceeding pending by or against any
Borrower, FSI and PLMI or any of FSI's Subsidiaries before any taxing authority.
. At any reasonable time and from time to time during normal business
hours, permit Agent or any Lender or any agent, representative or employee
thereof, to examine and make copies of and abstracts from the financial records
and books of account of each Borrower, FSI or any of FSI's Subsidiaries,
including, without limitation, TEC AcquiSub, and other documents in the
possession or under the control of any Borrower, FSI or any of FSI's
Subsidiaries, including, without limitation, TEC AcquiSub, relating to any
obligation of any Borrower or FSI arising under or contemplated by this
Agreement and to visit the offices of any Borrower or FSI to discuss the
affairs, finances and accounts of any Borrower or FSI with any of the officers
of any Borrower or FSI, 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 Equipment. Such audits and appraisals shall be subject to
the lessee's right to quiet enjoyment as set forth in the respective lease.
. 6 Maintenance Of Facilities; Modifications
. Each Borrower and FSI shall keep and cause each of FSI's
Subsidiaries, including, without limitation, TEC AcquiSub, to keep, all of their
respective Properties which are useful or necessary to such Borrower's, FSI's or
such Subsidiary's business, in good repair and condition, normal wear and tear
excepted, and from time to time make, and cause each such Subsidiary to make
necessary repairs thereto, and renewals and replacements thereof so that each
Borrower's, FSI's or such Subsidiary's Properties shall be fully and efficiently
preserved and maintained.
. Subject to Section 5.6.1, each Borrower and FSI shall
promptly make, or cause to be made, all modifications, additions and adjustments
to the Eligible Inventory as may from time to time be required by any
Governmental Authority having jurisdiction over the operation, safety or use
thereof.
. From time to time as may be necessary (in the event that such
information is not otherwise delivered by Borrowers or FSI 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 any Borrower or FSI 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 Borrowers or FSI hereunder or thereunder or in connection herewith
which has been rendered inaccurate thereby.
. In addition to the obligations and documents which this Agreement
expressly requires Borrowers or FSI to execute, deliver and perform, each
Borrower or FSI shall execute, deliver and perform, and shall cause FSI's
Subsidiaries to 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.
. Each 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 any Borrower to the obligor relating to Lease payments
shall designate the Lockbox as the place to which such payments shall be made.
. Each Borrower and FSI shall, and FSI shall cause each of its
Subsidiaries to, conduct its operations and keep and maintain its Property in
material compliance with all Environmental Laws.
. 6. BORROWER'S AND FSI'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, each Borrower, severally,
as to itself, but not jointly as to the other Borrowers and FSI, and FSI,
jointly and severally with each Borrower as to such Borrower and to itself,
covenant and agree as follows:
. Each Borrower and FSI shall not create, incur, assume or suffer to
exist, and shall not permit any Marine Subsidiary of such Borrower or Owner
Trustee holding record title to any Eligible Inventory for the beneficial
interest of such Borrower or FSI to create, incur, assume or suffer to exist,
and FSI shall not permit any of its Subsidiaries (including, without limitation,
TEC and TEC AcquiSub) to create, incur, assume or suffer to exist, any Lien of
any nature upon or with respect to any of their respective Property, whether now
or hereafter owned, leased or acquired, except (collectively, the "Permitted
Liens"):
.1 Existing Liens disclosed on Schedule 6.1, provided
that the obligations secured thereby are not increased;
.2 Liens for Charges if payment shall not at the time
be required to be made in accordance with Section 5.4;
.3 Liens in respect of pledges, obligations or
deposits (a) under workers' compensation laws, unemployment insurance and other
types of social security or similar legislation, (b) in connection with surety,
appeal and similar bonds incidental to the conduct of litigation, (c) in
connection with bid, performance or similar bonds and mechanics', laborers' and
materialmen's and similar statutory Liens not then delinquent, or (d) incidental
to the conduct of the business of such Borrower, any Marine Subsidiary of such
Borrower, FSI or any Owner Trustee or any of FSI's Subsidiaries 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 such
Borrower, FSI or any Owner Trustee or any of FSI's Subsidiaries; 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;
.4 Permitted Rights of Others; and
.5 Liens granted in favor of Agent on behalf of
Lenders under the TEC AcquiSub Agreement and the security agreement and other
loan documents delivered by TEC AcquiSub pursuant thereto.
. Each Borrower shall not, and shall not permit any Marine Subsidiary
of such Borrower to, and FSI shall not permit TEC and TEC AcquiSub to, make any
Acquisition or enter into any agreement to make any Acquisition, other than with
respect to the purchase of Equipment in the ordinary course of business or the
formation or acquisition of a Marine Subsidiary.
. Each Borrower and FSI shall not create, incur, assume or suffer to
exist, nor permit any Marine Subsidiary of such Borrower or Owner Trustee
holding record title to any Eligible Inventory for the beneficial interest of
such Borrower or FSI to create, incur, assume or suffer to exist, and FSI shall
not permit any of its Subsidiaries (including, without limitation, TEC and TEC
AcquiSub) to create, incur, assume or suffer to exist, any Indebtedness or
Contingent Obligation; provided, however, that this Section 6.3 shall not be
deemed to prohibit:
.1 The Obligations to Lenders and Agent arising
hereunder and under the other Loan Documents;
.2 Existing Indebtedness disclosed on Schedule 6.3(a)
and anticipated Indebtedness disclosed on Schedule 6.3(b);
.3 Indebtedness of any Subsidiary of FSI, provided
that such Indebtedness is non-recourse as to FSI, TEC and TEC AcquiSub;
.4 The acquisition of goods, supplies or merchandise
on normal trade credit;
.5 The endorsement of negotiable instruments received
in the ordinary course of any Borrower's business as presently conducted;
.6 Indebtedness incurred in respect of the deferred
purchase price for an item of Equipment, but only to the extent that the
incurrence of such Indebtedness is customary in the industry with respect to the
purchase of this type of equipment (provided that such Indebtedness shall only
be permitted under this clause (d) if, taking into account the incurrence of
such Indebtedness, the Borrower incurring such Indebtedness shall not be in
violation of any of the financial covenants set forth in Section 7 if measured
as of the date of incurrence as determined by GAAP);
.7 Any Guaranty Obligations of any Borrower in the
form of performance guaranties undertaken on behalf of a Marine Subsidiary of
such Borrower in favor of the charter party in connection with the leasing of a
marine vessel on a time charter; and
.8 Contingent Obligations (but excluding specifically
Guaranty Obligations which shall be prohibited) of FSI solely in its capacity as
a general partner or manager of the Equipment Growth Funds.
. Each Borrower and FSI shall not, and shall not permit any Marine
Subsidiary of such Borrower or Owner Trustee holding record title to any
Eligible Inventory for the beneficial interest of such Borrower or FSI to, use
the proceeds of any Loan except for the purpose set forth in Recital D, above,
and shall not, and shall not permit any such Marine Subsidiary or such Owner
Trustee to, use the proceeds to repay any loans or advances made by any other
Person.
. Each Borrower and FSI shall not, and shall not permit any Marine
Subsidiary of such Borrower or any Owner Trustee holding record title to any
Eligible Inventory for the beneficial interest of such Borrower or FSI to, sell,
assign or otherwise dispose of, any of its or their respective assets, except
for full, fair and reasonable consideration, or enter into any sale and
leaseback agreement covering any of its or their respective fixed or capital
assets.
. Each Borrower and FSI shall not, and shall not permit any Marine
Subsidiary of such Borrower to, enter into any transaction of merger,
consolidation or recapitalization, directly or indirectly, whether by operation
of law or otherwise, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, assign, transfer or
otherwise dispose of, in one transaction or a series of transactions, all or any
part of its business, Property or assets, whether now owned or hereafter
acquired, or acquire by purchase or otherwise all or substantially all the
business, Property or assets of, or stock or other evidence of beneficial
ownership of, any Person, except (a) sales of Equipment in the ordinary course
of business (for the purposes of this Section 6.6, with respect to any Borrower
and any Marine Subsidiary of such Borrower, ordinary course of business shall
refer to the business of the Equipment Growth Funds and all Marine Subsidiaries,
collectively), and (b) any Subsidiary of FSI (other than TEC AcquiSub) may be
merged or consolidated with or into FSI or any wholly-owned Subsidiary of FSI,
or be liquidated, wound up or dissolved, or all or substantially all of its
business, property or assets may be conveyed, sold, leased, transferred or
otherwise disposed of, in one transaction or a series of transactions, to, FSI
or any wholly-owned Subsidiary of FSI; provided that, in the case of such a
merger or consolidation, FSI or such wholly-owned Subsidiary shall be the
continuing or surviving corporation.
. Each Borrower shall not, and shall not permit any Marine Subsidiary
of such Borrower to, directly or indirectly, enter into or permit to exist any
transaction (including, without limitation, the purchase, sale, lease or
exchange of any property or the rendering of any service) with any of its
Affiliates on terms that are less favorable to such Borrower or such Marine
Subsidiary than those that might be obtained at the time from Persons who are
not such Affiliates.
. Each Borrower and FSI shall not, and FSI shall not permit any of its
existing Subsidiaries to, engage in any business materially different than the
business currently engaged in by such Person.
. Each Borrower shall not make, pay or set apart any funds for the
payment of distribution to its partners or members if such distribution would
cause or result in an Event of Default or Potential Event of Default.
. Each Borrower and FSI 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 either
is a party or by which either or any of their Properties or assets is bound,
which default or event of default would, with reasonable likelihood, have a
Material Adverse Effect.
. If any Borrower or FSI or any of their ERISA Affiliates incurs any
obligation to contribute to any Pension Plan, then such Borrower or FSI, as the
case may be, shall not (a) 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 (b) 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.
. Each Borrower and FSI 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.
. Each Borrower and FSI shall not change their fiscal year end from
December 31, nor make any change in their accounting treatment and reporting
practices except as permitted by GAAP; provided, however, that should any
Borrower or FSI change its accounting treatment or reporting practices in a way
that would cause a change in the calculation, or in the results of a
calculation, of any of the financial covenants set forth in Section 7, below,
then such Borrower or FSI, as applicable, shall continue to calculate such
covenants as if such accounting treatment or reporting practice had not been
changed unless otherwise agreed to by Requisite Lenders.
. Each Borrower and FSI shall not, shall not cause to occur and shall
not permit any amendment, modification or supplement of or to any of the terms
or provisions of such Borrower's Limited Partnership Agreement or, in the case
of Income Fund I, its Operating Agreement, which amendment, modification or
supplement would affect, limit or otherwise impair such Borrower's ability to
pay the Obligations or perform its obligations under this Agreement or any of
the other Loan Documents.
. 7. FINANCIAL COVENANTS OF BORROWER AND FSI
Each Borrower, severally, as to itself, but not jointly as to the other
Borrowers and FSI, and FSI, jointly and severally with each Borrower as to each
Borrower and as to itself, covenant and agree that, so long as the Commitments
hereunder shall be available, and until full, complete and indefeasible payment
and performance of the Obligations, including, without limitation, all Loans
evidenced by the Notes, unless Requisite Lenders shall otherwise consent in
writing, Borrowers and FSI shall perform the following financial covenants. Each
Borrower and FSI agree and understand that (except as expressly provided herein)
all covenants 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 such Borrower, or FSI, as
the case may be, 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 each Borrower and FSI
pursuant to Section 5.1; provided, however, that the following financial
covenants shall apply only as to those Borrowers requesting a Loan or as to
which a Loan remains outstanding.
. Each Borrower shall maintain a Funded Debt Ratio of not greater than
0.5:1.0.
. Each Borrower shall maintain a Debt Service Ratio of not less than
1.75:1.0.
. FSI shall maintain a Consolidated Tangible Net Worth of not less than
$20,000,000.
. The Equipment Growth Funds of which FSI is the sole general partner
shall maintain aggregate unrestricted cash balances of $10,000,000.
. 8. EVENTS OF DEFAULT AND REMEDIES
. As to any Borrower, the occurrence of any one or more of the
following shall constitute an Event of Default for each such Borrower
individually:
. Such Borrower, any Marine Subsidiary of such Borrower or any
Owner Trustee holding record title to any Eligible Inventory for the beneficial
interest of such Borrower or FSI fails to pay any sum due to Lenders or Agent
arising under this Agreement, the Note of such Borrower or any of the other Loan
Documents when and as the same shall become due and payable, whether by
acceleration or otherwise and such failure shall not have been cured to Lenders'
satisfaction within five (5) calendar days; or
. (a) Such Borrower, any Marine Subsidiary of such Borrower,
FSI, TEC, TEC AcquiSub or any Owner Trustee holding record title to any Eligible
Inventory for the beneficial interest of such Borrower defaults in the repayment
of any principal of or the payment of any interest on any Indebtedness of such
Borrower, any such Marine Subsidiary, FSI, TEC, TEC AcquiSub or any such Owner
Trustee, respectively, or breaches any term of any evidence of such Indebtedness
or defaults in any payment in respect of any Contingent Obligation (excluding,
as to FSI, any Contingent Obligation of FSI arising solely as a result of FSI's
status as a general partner of any Person other than such Borrower), in each
case exceeding, in the aggregate outstanding principal amount, $2,000,000, or
such Borrower, any Marine Subsidiary, FSI, TEC, TEC AcquiSub or any Owner
Trustee breaches or violates any term or provision of any evidence of such
Indebtedness or Contingent Obligation or of any such loan agreement, mortgage,
indenture, guaranty or other agreement relating thereto if the effect of such
breach is to permit acceleration under the applicable instrument, loan
agreement, mortgage, indenture, guaranty or other agreement and such failure
shall not have been cured within the applicable cure period, or there is an
acceleration under the applicable instrument, loan agreement, mortgage,
indenture, guaranty or other agreement; or (b) PLMI defaults in the repayment of
any principal of or the payment of any interest on any Indebtedness or defaults
in any payment in respect of any Contingent Obligation, in each case exceeding,
in the aggregate outstanding principal amount, $2,000,000, or PLMI breaches or
violates any term or provision of any evidence of such Indebtedness or
Contingent Obligation or of any such loan agreement, mortgage, indenture,
guaranty or other agreement relating thereto with the result that such
Indebtedness or Contingent Obligation becomes or is caused to become then due
and payable in its entirety, whether by acceleration of otherwise; or
. Such Borrower or FSI fails or neglects to perform, keep or
observe any of the covenants contained in Sections 2.1.3, 5.2, 5.3, 5.9, 6.1,
6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9 or 6.13, or any of the financial
covenants contained in Section 7 of this Agreement; or
. Any representation or warranty made by or on behalf of such
Borrower or FSI in this Agreement or any statement or certificate at any time
given in writing pursuant hereto or in connection herewith shall be false,
misleading or incomplete in any material respect when made; or
. Except as provided in Sections 8.1.1 and 8.1.3, such
Borrower, FSI or any Marine Subsidiary of such Borrower or Owner Trustee holding
record title to any Eligible Inventory for the beneficial interest of such
Borrower or FSI 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 such Borrower, FSI or any Marine Subsidiary of
such Borrower or Owner Trustee holding record title to any Eligible Inventory
for the beneficial interest of such Borrower or FSI in connection therewith and
the same has not been cured to Requisite Lenders' satisfaction within thirty
(30) calendar days after such Borrower, FSI or any Marine Subsidiary of such
Borrower or Owner Trustee holding record title to any Eligible Inventory for the
beneficial interest of such Borrower or FSI shall become aware thereof, whether
by written notice from Agent or any Lender or otherwise; or
. Such Borrower, any Marine Subsidiary of such Borrower, TEC
AcquiSub, any other Borrower (but only for so long as Obligations of such other
Borrower remain or Commitments to such other Borrower are available under this
Agreement), FSI, TEC, PLMI or any Owner Trustee holding record title to any
Eligible Inventory for the beneficial interest of such Borrower or FSI or any
other guarantor of any of such Borrower's or FSI's obligations to Lenders shall
(a) cease to be Solvent, (b) admit in writing its inability to pay its debts as
they mature, (c) make an assignment for the benefit of creditors, (d) apply for
or consent to the appointment of a receiver, liquidator, custodian or trustee
for it or for a substantial part of its Properties or business, or such a
receiver, liquidator, custodian or trustee otherwise shall be appointed and
shall not be discharged within sixty (60) days after such appointment; or
. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against such Borrower, any
Marine Subsidiary of such Borrower, TEC AcquiSub, any other Borrower (but only
for so long as Obligations of such other Borrower remain or Commitments to such
other Borrower are available under this Agreement), FSI, TEC, PLMI or any Owner
Trustee holding record title to any Eligible Inventory for the beneficial
interest of such Borrower or FSI or any other guarantor of any of such
Borrower's or FSI's obligations to Lenders or any order, judgment or decree
shall be entered against such Borrower, any Marine Subsidiary of such Borrower,
TEC AcquiSub, any other Borrower (but only for so long as Obligations of such
other Borrower remain or Commitments to such other Borrower are available under
this Agreement), FSI, TEC, PLMI or any Owner Trustee holding record title to any
Eligible Inventory for the beneficial interest of such Borrower or FSI or any
other guarantor of any of such Borrower's or FSI's obligations to Lenders
decreeing its dissolution or division; provided, however, with respect to an
involuntary petition in bankruptcy, such petition shall not have been dismissed
within sixty (60) days after the filing of such petition; or
. There shall have been a change in the assets, liabilities,
financial condition, operations, affairs or prospects of such Borrower, any
Marine Subsidiary of such Borrower, TEC AcquiSub, FSI, TEC, PLMI or any Owner
Trustee holding record title to any Eligible Inventory for the beneficial
interest of such Borrower or FSI or any other guarantor of any of such
Borrower's or FSI's obligations to Lenders which, in the reasonable
determination of Requisite Lenders has, either individually or in the aggregate,
had a Material Adverse Effect; or
. There shall be a money judgment, writ or warrant of
attachment or similar process entered or filed against such Borrower, any Marine
Subsidiary of such Borrower, TEC AcquiSub, FSI, TEC or any Owner Trustee holding
record title to any Eligible Inventory for the beneficial interest of such
Borrower or FSI 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
such Borrower or any Marine Subsidiary of such Borrower exceeds in the aggregate
$1,000,000; against FSI exceeds in the aggregate $500,000; against TEC or TEC
AcquiSub exceeds in the aggregate $500,000; or against any Owner Trustee holding
record title to any Eligible Inventory for the beneficial interest of such
Borrower or FSI exceeds in the aggregate $1,000,000; or against any combination
of the foregoing Persons exceeds in the aggregate $1,000,000; or
. Any of the Loan Documents shall for any reason other than
the full, complete and indefeasible satisfaction of the Obligations thereunder
cease to be, or be asserted by such Borrower, FSI or any Marine Subsidiary of
such Borrower or Owner Trustee holding record title to any Eligible Inventory
for the beneficial interest of such Borrower or FSI not to be, a legal, valid
and binding obligation of such Borrower, FSI or any Marine Subsidiary of such
Borrower or Owner Trustee holding record title to any Eligible Inventory for the
beneficial interest of such Borrower or FSI, respectively enforceable against
such Person in accordance with its terms; or
. The occurrence of any "Event of Default" as defined under
the TEC AcquiSub Agreement or any other loan or security document related to the
TEC AcquiSub Agreement; or
. The occurrence of any "Event of Default" as defined under
the AFG Agreement or any other loan or security document related to the AFG
Agreement; or
. FSI shall cease to be the sole general partner or the sole
manager, as applicable, of such Borrower, whether due to the voluntary or
involuntary withdrawal, substitution, removal or transfer of FSI from or of all
or any portion of FSI's general partnership interest or capital contribution in
such Borrower; or
. Requesting Borrower, TEC AcquiSub, FSI or their Subsidiaries
shall cease to be the purchaser of Eligible Inventory for such Requesting
Borrower.
. A criminal proceeding shall have been filed in any court
naming any Borrower, FSI or any Marine Subsidiary of such Borrower or Owner
Trustee holding record title to any Eligible Inventory for the beneficial
interest of such Borrower or FSI as a defendant for which forfeiture is a
potential penalty under applicable federal or state law which, in the reasonable
determination of Requisite Lenders, may have a Material Adverse Effect; or
. Any Governmental Authority enters a decree, order or ruling
("Government Action") which will materially and adversely affect any Borrower's,
any Marine Subsidiary of such Borrower's, FSI's, TEC's, TEC AcquiSub's or PLMI's
financial condition, operations or ability to perform or pay such party's
obligations arising under this Agreement or any instrument or agreement executed
pursuant to the terms of this Agreement or which will similarly affect any Owner
Trustee holding record title to any Eligible Inventory for the beneficial
interest of such Borrower or FSI. Such Borrower or FSI shall have thirty (30)
days from the earlier of the date (a) Borrower or FSI, as applicable, first
discovers it is the subject of Government Action or (b) a Lender or any agency
gives notice of Government Action to take such steps as are necessary to obtain
relief from the Government Action. For the purpose of this paragraph, "relief
from Government Action" means to discharge or to obtain a dismissal of or
release or relief from (i) any Government Action so that the affected party or
parties do not incur monetary liability (A) of more than $1,000,000 in the case
of any Borrower or any Marine Subsidiary of such Borrower, (B) of more than
$500,000 in the case of FSI, (C) of more than $500,000 in the case of TEC, (D)
of more than $250,000 in the case of TEC AcquiSub, (E) of more than $1,000,000
in the case of PLMI, or (F) of more than $1,000,000, in the aggregate, in the
case of any combination of the foregoing Persons, or (ii) any disqualification
of or other limitation on the operation of any Borrower, any Marine Subsidiary
of such Borrower, FSI, TEC, TEC AcquiSub and PLMI, or any of them, which in the
reasonable determination of Requisite Lenders may have a Material Adverse
Effect; or
. Any Governmental Authority, including, without limitation,
the SEC, shall enter a decree, order or ruling prohibiting the Equipment Growth
Funds from releasing or paying to FSI any funds in the form of management fees,
profits or otherwise which, in the reasonable determination of Requisite
Lenders, may have a Material Adverse Effect.
. An Event of Default may be waived only with the written consent of
Requisite Lenders, or if expressly provided, of all Lenders. Any Event of
Default so waived shall be deemed to have been cured and not to be continuing;
but no such waiver shall be deemed a continuing waiver or shall extend to or
affect any subsequent like default or impair any rights arising therefrom.
. Upon the occurrence and continuance of any Event of Default or
Potential Event of Default, Lenders shall have no further obligation to advance
money or extend credit to or for the benefit of the defaulting Borrower or any
other Borrower, regardless of whether such Event of Default or Potential Event
of Default has occurred with respect to such Borrower or another Borrower.
In addition, upon the occurrence and during the continuance of an Event
of Default, except an Event of Default arising under Section 8.1.11 hereof (the
remedies for which shall be limited to those set forth in the preceding
paragraph), Lenders or Agent, on behalf of Lenders, may, as to such defaulting
Borrower, or as to all Borrowers should such Event of Default result from the
actions or inactions of FSI, at the option of Requisite Lenders, do any one or
more of the following, all of which are hereby authorized by each Borrower and
FSI:
.1 Declare all or any of the Obligations of such
Borrower under this Agreement, the Note of such Borrower, the other Loan
Documents and any other instrument executed by such 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 part 8.1.6 or 8.1.7 of
Section 8.1, then all of the Obligations of each Borrower shall become
immediately due and payable forthwith without the requirement of any notice or
other action by Lenders or Agent;
.2 Terminate this Agreement as to any future
liability or obligation of Agent or Lenders as to such Borrower or as to each
Borrower if such Event of Default results from the actions, inactions or
violation of any covenant of or by FSI (excluding, as to FSI, Events of Default
under Section 8.1.2 arising in relation to Contingent Obligation of FSI arising
solely as a result of FSI's status as a general partner of any Person other than
such Borrower); and
.3 Exercise in addition to all other rights and
remedies granted hereunder, any and all rights and remedies granted under the
Loan Documents or otherwise available at law or in equity.
. 4 Set-Off
.1 During the continuance of an Event of Default, any
deposits or other sums credited by or due from any Lender to any Borrower or FSI
(exclusive of deposits in accounts expressly held in the name of third parties
or held in trust for benefit of third parties) may be set-off against the
Obligations of such Borrower and any and all other liabilities, due or existing
or hereafter arising and owing by such Borrower or FSI to Lenders. Each Lender
agrees to notify promptly Borrowers and FSI and Agent of any such set-off;
provided, that the failure to give such notice shall not affect the validity of
any such set-off.
.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. Each Borrower expressly consents to the foregoing arrangements and
agrees that any Lender holding a participation in a Commitment deemed to have
been so purchased may exercise any and all rights of set-off, banker's lien or
similar remedy with respect to any and all moneys owing by Borrower to such
Lender as fully as if such Lender held a Commitment in the amount of such
participation.
. The enumeration of the rights and remedies of Agent and Lenders set
forth in this Agreement is not intended to be exhaustive and the exercise by
Agent and Lenders of any right or remedy shall not preclude the exercise of any
other rights or remedies, all of which shall be cumulative, and shall be in
addition to any other right or remedy given hereunder or under the Loan
Documents or that may now or hereafter exist in law or in equity or by suit or
otherwise. No delay or failure to take action on the part of Agent and Lenders
in exercising any right, power or privilege shall operate as a waiver hereof,
nor shall any single or partial exercise of any such right, power or privilege
preclude other or further exercise thereof or the exercise of any other right,
power or privilege or shall be construed to be a waiver of any Event of Default
or Potential Event of Default. No course of dealing between any Borrower, FSI,
Agent, or any Lender or their respective agents or employees shall be effective
to change, modify or discharge any provision of this Agreement or any of the
Loan Documents or to constitute a waiver of any Event of Default or Potential
Event of Default.
. 9. AGENT
. Each of the Lenders hereby irrevocably designates and appoints First
Union National Bank of North Carolina as the Agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes First Union National Bank of North Carolina as the Agent for such
Lender to take such action on its behalf under the provisions of this Agreement
and the other Loan Documents and to exercise such powers and perform such duties
as are expressly delegated to the Agent by the terms of this Agreement and such
other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement or such other Loan Documents, the Agent shall not have any duties
or responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or the other Loan Documents or otherwise exist against Agent. To the
extent any provision of this Agreement permits action by Agent, Agent shall,
subject to the provisions of this Section 9, take such action if directed in
writing to do so by Requisite Lenders.
. Agent may execute any of its duties under this Agreement and the
other Loan Documents by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
. Neither Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates shall be (a) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection with
this Agreement or the other Loan Documents (except for its or such Person's own
gross negligence or willful misconduct), or (b) responsible in any manner to any
Lender for any recitals, statements, representations or warranties made by any
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 any 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 any Borrower.
. Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to Borrowers), 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 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
Requisite Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all Lenders.
. Agent shall not be deemed to have knowledge or notice of the
occurrence of any Event of Default or Potential Event of Default hereunder
unless Agent has received notice from a Lender or any Borrower referring to this
Agreement, describing such Event of Default or Potential Event of Default and
stating that such notice is a "notice of default". In the event that Agent
receives such a notice, Agent shall promptly give notice thereof to Lenders. The
Agent shall take such action with respect to such Event of Default or Potential
Event of Default as shall be reasonably directed by Requisite Lenders; provided
that unless and until Agent shall have received such directions, Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Event of Default or Potential Event of Default as it shall
deem advisable in the best interests of Lenders.
. Each Lender expressly acknowledges that neither Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates has made
any representations or warranties to it and that no act by Agent hereinafter
taken, including any review of the affairs of Borrower, shall be deemed to
constitute any representation or warranty by Agent to any Lender. Each Lender
represents to Agent that it has, independently and without reliance upon Agent
or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of each Borrower and FSI and made its own decision to make its
Loans hereunder and enter into this Agreement. Each Lender also represents that
it will, independently and without reliance upon Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of each Borrower and FSI. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by Agent hereunder
or by the other Loan Documents, Agent shall not have any duty or responsibility
to provide any Lender with any credit or other information concerning the
business, operations, property, financial and other condition or
creditworthiness of each Borrower and FSI which may come into the possession of
Agent or any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
. Each Lender agrees to indemnify Agent in its capacity as such (to the
extent not reimbursed by Borrowers and without limiting the obligation of
Borrowers to do so), ratably according to the respective amounts of their Pro
Rata Share of the Commitments, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against Agent in any way relating to or
arising out of this Agreement or the other Loan Documents, or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by Agent under or
in connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from Agent's bad faith, gross negligence or willful misconduct.
The agreements in this Section 9.7 shall survive the repayment of the Loans and
all other amounts payable hereunder.
. Agent and its Affiliates may make loans to, accept deposits from and
generally engage in any kind of business with any Borrower or FSI as though
Agent were not Agent hereunder. With respect to Advances made or renewed by it,
Agent shall have the same rights and powers under this Agreement and the other
Loan Documents as any Lender and may exercise the same as though it were not
Agent, and the terms "Lender" and "Lenders" shall include Agent in its
individual capacity.
. Agent may resign at any time by giving thirty (30) days' prior
written notice thereof to Lenders and Borrowers; provided, however, that the
retiring Agent shall continue to serve until a successor Agent shall have been
selected and approved pursuant to this Section 9.9. Upon any such notice, Agent
shall have the right to appoint a successor Agent; provided, however, that if
such successor shall not be a signatory to this Agreement, such appointment
shall be subject to the consent of Requisite Lenders. Agent may be replaced by
Requisite Lenders, with or without cause; provided, however, that any successor
agent shall be subject to Borrowers' consent, which consent shall not be
unreasonably withheld. Upon the acceptance of any appointment as an Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Section 9 shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Agent under
this Agreement.
. 10. EXPENSES AND INDEMNITIES
. Borrowers and Lenders agree that, as the following costs, expenses,
charges and other disbursements benefit each Borrower and as such costs,
expenses, charges and other disbursements cannot easily be ratably allocated to
the account of any Borrower or Borrowers, each Borrower, unless otherwise
specified in this Section 10.1, shall pay, as its Obligation, 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 Borrowers' 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
any Lender 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, any Borrower or any other Person) seeking to enforce any
Obligations of, or collecting any payments due from, any Borrower under this
Agreement and the Notes, all of which amounts shall be deemed to be part of the
Obligations; provided, however, that Lenders shall be entitled to collect the
full amount of such costs, expenses, charges and other disbursements only once.
Notwithstanding anything to the contrary contained in this Section 10.1, so long
as no Event of Default or Potential Event of Default shall have occurred and be
continuing, all appraisals of the Eligible Inventory shall be at the expense of
Lenders. If an Event of Default or Potential Event of Default shall have
occurred and be continuing, such appraisals shall be at the expense of the
Requesting Borrower.
. Whether or not the transactions contemplated hereby shall be
consummated:
. Each Borrower, as to itself, and FSI, jointly and severally
as to itself and each 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 Borrowers and FSI shall have no obligation hereunder to any
Indemnified Person with respect to Indemnified Liabilities arising from the
gross negligence or willful misconduct of such Indemnified Person.
. .2 Environmental Indemnity
(a) Each Borrower, to the extent of its pro rata share
of ownership of Property involved in any investigation, litigation or
proceeding, as set forth below, and FSI hereby jointly and severally
agree 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 of 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 such 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 shall (except for
actions which constitute fraud, willful misconduct, gross negligence or
material violations of law) vitiate or in any way impair Borrowers' or
FSI's obligation and duty hereunder to indemnify and hold harmless
Agent and each Lender. Agent and all Lenders agree to use reasonable
efforts to cooperate with Borrowers respecting the defense of any
matter indemnified hereunder, except insofar as and to the extent that
their respective interests may be adverse to Borrowers' or FSI's in
Agent's or such Lender's 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 Borrowers, FSI 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 Borrowers, or any one of them,
or any other Person against, or to inform Borrowers 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 Borrowers, FSI or any other Person any report or
findings made as a result of, or in connection with, any site visit,
observation, or testing by Agent or any Lender.
. The obligations in this Section 10.2 shall survive payment
of all other Obligations. At the election of any Indemnified Person, Borrowers
shall defend such Indemnified Person using legal counsel satisfactory to such
Indemnified Person in such Person's reasonable discretion, at the sole cost and
expense of Borrowers, which cost and expense shall be allocated to Borrowers
according to such Borrower's pro rata share of ownership of any Property in
relation to which such obligations arise. All amounts owing under this Section
10.2 shall be paid within thirty (30) days after written demand.
. 11. MISCELLANEOUS
. All covenants, agreements, representations and warranties made herein
shall survive the execution and delivery of the Loan Documents and the making of
the Loans hereunder.
. No failure or delay on the part of Agent or any Lender in the
exercise of any power, right or privilege under this Agreement, the Note or any
of the other Loan Documents shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege.
. Except as otherwise provided in this Agreement, any notice or other
communication herein required or permitted to be given shall be in writing and
may be delivered in person, with receipt acknowledged, or sent by telex,
facsimile, telecopy, computer transmission or by United States mail, registered
or certified, return receipt requested, or by Federal Express or other
nationally recognized overnight courier service, postage prepaid and
confirmation of receipt requested, and addressed as set forth on the signature
pages to this Agreement or at such other address as may be substituted by notice
given as herein provided. The giving of any notice required hereunder may be
waived in writing by the party entitled to receive such notice. Every notice,
demand, request, consent, approval, declaration or other communication hereunder
shall be deemed to have been duly given or served on the date on which the same
shall have been personally delivered, with receipt acknowledged, or sent by
telex, facsimile, telecopy or computer transmission (with appropriate
answerback), three (3) Business Days after the same shall have been deposited in
the United States mail or on the next succeeding Business Day if the same has
been sent by Federal Express or other nationally recognized overnight courier
service. Failure or delay in delivering copies of any notice, demand, request,
consent, approval, declaration or other communication to the persons designated
above to receive copies shall in no way adversely affect the effectiveness of
such notice, demand, request, consent, approval, declaration or other
communication.
. Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
. Whenever possible, each provision of this Agreement, the Note and
each of the other Loan Documents shall be interpreted in such a manner as to be
valid, legal and enforceable under the applicable law of any jurisdiction.
Without limiting the generality of the foregoing sentence, in case any provision
of this Agreement, the Note or any of the other Loan Documents shall be invalid,
illegal or unenforceable under the applicable law of any jurisdiction, the
validity, legality and enforceability of the remaining provisions, or of such
provision in any other jurisdiction, shall not in any way be affected or
impaired thereby.
. 6 Entire Agreement; Construction; Amendments And Waivers
.1 This Agreement, the Notes and each of the other
Loan Documents dated as of the date hereof, taken together, constitute and
contain the entire agreement among Borrowers, Lenders and Agent and supersede
any and all prior agreements, negotiations, correspondence, understandings and
communications between the parties, whether written or oral, respecting the
subject matter hereof.
.2 This Agreement is the result of negotiations
between and has been reviewed by each Borrower, FSI, and each Lender 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 Borrowers,
FSI, Lenders or Agent. Borrowers, FSI, 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 Borrowers', FSI's
any Lender's or Agent's actual intentions.
.3 No amendment, modification, discharge or waiver of
or consent to any departure by any Borrower or FSI from, any provision in this
Agreement or any of the other Loan Documents relating to (a) the definition of
"Borrowing Base" or "Requisite Lenders," (b) any increase of the amount of any
Commitment, (c) any reduction of principal, interest or fees payable hereunder,
(d) any postponement of any date fixed for any payment or prepayment of
principal or interest hereunder or (e) 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 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 any Borrower or FSI in any case shall entitle
any Borrower or FSI 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, on Borrower, and on FSI.
. All covenants, agreements, representations and warranties made herein
by each Borrower or FSI shall, notwithstanding any investigation by Lenders or
Agent be deemed to be material to and to have been relied upon by Lenders.
. Lenders shall be under no obligation to marshall any assets in favor
of any Borrower or any other person or against or in payment of any or all of
the Obligations. To the extent that any Borrower makes a payment or payments to
Lenders or Agent, or Lenders or Agent, on behalf of Lenders, enforce their or
its Liens or exercises their or its rights of set-off, and such payment or
payments or the proceeds of such enforcement or set-off or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under Title
11 of the United States Code or under any other similar federal or state law,
common law or equitable cause, then to the extent of such recovery the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such enforcement or set-off had not occurred.
. All sums payable by Borrowers or FSI pursuant to this Agreement, the
Note or any of the other Loan Documents shall be payable without notice or
demand and shall be payable in United States Dollars without set-off or
reduction of any manner whatsoever.
. 10 Binding Effect, Assignment
.1 This Agreement, the Note and the other Loan
Documents shall be binding upon and shall inure to the benefit of the parties
hereto and thereto and their respective successors and assigns, except that no
Borrower nor FSI may assign its rights hereunder or thereunder or any interest
herein or therein without the prior written consent of each Lender. Each Lender
shall (a) have the right in accordance with this Section 11.10 to sell and
assign to any Eligible Assignee all or any portion of its interest (provided
that any such partial assignment shall not be for a principal amount of less
than Five Million Dollars ($5,000,000)) under this Agreement, the Notes and the
other Loan Documents, together with a ratable interest in the AFG Agreement and
the TEC AcquiSub Agreement and the related Notes and other Loan Documents (as
separately described and defined in those agreements), subject to the prior
written consent of the affected Borrower, which consent shall not be
unreasonably withheld, and (b) to grant any participation or other interest
herein or therein, except that each potential participant to which a Lender
intends to grant any rights under Sections 2.9, 2.10, 5.1 or 10.2 shall be
subject to the prior written consent of the affected Borrower, which consent
shall not be unreasonably withheld; provided, however, that no such sale,
assignment or participation grant shall result in requiring registration under
the Securities Act of 1933, as amended, or qualification under any state
securities law.
.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 the affected Borrower and FSI (which approval shall not be
unreasonably withheld), to any other financial institution acceptable to Agent,
subject to the assumption by such assignee of the share of the Commitments so
assigned. The assignment to such Affiliate or other financial institution shall
be evidenced by an Assignment and Assumption in the form of Exhibit I
("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 such Borrower or
FSI; 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 Borrowers or FSI under this Agreement. Upon execution of such
Assignment and Assumption, (a) 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 (b) the Assignee Lender shall, from the effective date of the
instrument of assignment and assumption, be subject to all of the obligations,
and entitled to all of the rights, of a Lender hereunder, except as may be
expressly provided to the contrary in the Assignment and Assumption. To the
extent the obligations hereunder of the Assignor Lender are assumed by the
Assignee Lender, the Assignor Lender shall be relieved of such obligations. Upon
the assignment of any interest by any Assignor Lender pursuant to this Section
11.10.2, such Assignor Lender agrees to supplement Schedule 1.1 to show the date
of such assignment, the Assignor Lender, the Assignee Lender, the Assignee
Lender's address for notice purposes and the amount of the Commitments so
assigned.
.3 Subject to the limitations of this Section
11.10.3, any Lender may also grant, from time to time, participation interests
in the interests of such Lender under this Agreement, the Notes and the other
Loan Documents to any other financial institution without notice to, or approval
of, any Borrower or FSI. The grant of such a participation interest shall be on
such terms as the granting Lender determines are appropriate, provided only that
(a) 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 (b) 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 (i) increase the
monetary amount of any Commitment, (ii) decrease any fee or any other monetary
amount payable to Lenders, or (iii) extend the date upon which any monetary
amount is payable to Lenders.
. This Agreement and any amendments, waivers, consents or supplements
hereto may be executed in any number of counterparts, and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed an original, but all such counterparts together shall constitute
but one and the same instrument. Each such agreement shall become effective upon
the execution of a counterpart hereof or thereof by each of the parties hereto
or thereto, delivery of each such counterpart to Agent.
. Borrowers and FSI recognize that, in the event any Borrower or FSI
fails to perform, observe or discharge any of its obligations or liabilities
under this Agreement, the Notes or any of the other Loan Agreements, any remedy
at law may prove to be inadequate relief to Lenders or Agent; therefore,
Borrowers and FSI agree 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.
. EACH BORROWER AND FSI HEREBY AGREE THAT EACH SHALL GIVE PROMPT
WRITTEN NOTICE OF ANY CLAIM OR CAUSE OF ACTION IT BELIEVES IT HAS, OR MAY SEEK
TO ASSERT OR ALLEGE AGAINST ANY LENDER OR AGENT, WHETHER SUCH CLAIM IS BASED IN
LAW OR EQUITY, ARISING UNDER OR RELATED TO THIS AGREEMENT, THE NOTES OR ANY OF
THE OTHER LOAN DOCUMENTS OR TO THE LOANS CONTEMPLATED HEREBY OR THEREBY OR ANY
ACT OR OMISSION TO ACT BY ANY LENDER OR AGENT WITH RESPECT HERETO OR THERETO,
AND THAT IF IT SHALL FAIL TO GIVE SUCH PROMPT NOTICE TO AGENT WITH REGARD TO ANY
SUCH CLAIM OR CAUSE OF ACTION, IT SHALL BE DEEMED TO HAVE WAIVED, AND SHALL BE
FOREVER BARRED FROM BRINGING OR ASSERTING SUCH CLAIM OR CAUSE OF ACTION IN ANY
SUIT, ACTION OR PROCEEDING IN ANY COURT OR BEFORE ANY GOVERNMENTAL AUTHORITY.
. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT,
EACH BORROWER AND FSI HEREBY AGREE THAT EACH SHALL NOT SEEK FROM LENDERS OR
AGENT, UNDER ANY THEORY OF LIABILITY, INCLUDING, WITHOUT LIMITATION, ANY THEORY
IN TORTS, ANY PUNITIVE DAMAGES.
. The relationship between Borrowers and FSI, on the one hand, and
Lenders and Agent, on the other, is, and at all time shall remain solely that of
a borrower and lenders. Neither Lenders nor Agent shall under any circumstances
be construed to be partners or joint venturers of Borrowers or FSI or any of
their Affiliates; nor shall Lenders nor Agent under any circumstances be deemed
to be in a relationship of confidence or trust or a fiduciary relationship with
Borrowers or FSI or any of their Affiliates, or to owe any fiduciary duty to any
Borrower or any of its Affiliates. Lenders and Agent do not undertake or assume
any responsibility or duty to Borrowers or FSI or any of their Affiliates to
select, review, inspect, supervise, pass judgment upon or otherwise inform
Borrowers or any of their Affiliates of any matter in connection with its or
their Property, any collateral held by Agent or any Lender or the operations of
Borrowers or FSI or any of their Affiliates. Borrowers and each of their
Affiliates shall rely entirely on their own judgment with respect to such
matters, and any review, inspection, supervision, exercise of judgment or supply
of information undertaken or assumed by any Lender or Agent in connection with
such matters is solely for the protection of Lenders and Agent and neither
Borrowers nor any Affiliate is entitled to rely thereon.
. Each Borrower and FSI agrees that its liability hereunder shall be
the immediate, direct, and primary obligation of such Borrower or FSI, as the
case may be, and shall not be contingent upon the Agent's or any Lender's
exercise or enforcement of any remedy it may have against any other Borrower,
FSI or any other person, or against any collateral or any security for the
Obligations. Without limiting the generality of the foregoing, the Obligations
shall remain in full force and effect without regard to and shall not be
impaired or affected by, nor shall such Borrower or FSI be exonerated or
discharged by, any of the following events:
.1 Insolvency, bankruptcy, reorganization,
arrangement, adjustment, composition, assignment for the benefit of creditors,
death, liquidation, winding up or dissolution of any Borrower or any guarantor
of the Obligations of any Borrower;
.2 Any limitation, discharge, or cessation of the
liability of any other Borrower or any guarantor for the Obligations of such
other Borrower due to any statute, regulation or rule of law, or any invalidity
or unenforceability in whole or in part of the documents evidencing the
Obligations of such other Borrower or any guaranty of the Obligations of such
other Borrower;
.3 Any merger, acquisition, consolidation or change
in structure of any Borrower or any guarantor of the Obligations of any Borrower
or any sale, lease, transfer or other disposition of any or all of the assets,
shares or interests in or of any Borrower or any guarantor of the Obligations of
any Borrower;
.4 Any assignment or other transfer, in whole or in
part, of any Lender's interests in and rights under this Agreement or any of the
other Loan Documents, including, without limitation, any assignment or other
transfer, in whole or in part, of Banks' interests in and to any collateral;
.5 Any claim, defense, counterclaim or setoff, other
than that of prior performance, that any Borrower or any guarantor of the
Obligations of any Borrower may have or assert, including, but not limited to,
any defense of incapacity or lack of corporate or other authority to execute any
documents relating to the Obligations of any Borrower or any collateral;
.6 Agent's or any Lender's amendment, modification,
renewal, extension, cancellation or surrender of any agreement, document or
instrument relating to this Agreement, the Obligations of any Borrower or any
collateral, or any exchange, release, or waiver of any collateral;
.7 Agent's or any Lender's exercise or nonexercise of
any power, right or remedy with respect to the Obligations of any Borrower or
any collateral, including, but not limited to, the compromise, release,
settlement or waiver with or of any Borrower or any other person;
.8 Agent's or any Lender's vote, claim, distribution,
election, acceptance, action or inaction in any bankruptcy case related to the
Obligations of any Borrower or any collateral; and
.9 Any impairment or invalidity of any collateral or
any failure to perfect any of Agent's liens thereon.
. Each Borrower and FSI hereby expressly waives (a) diligence,
presentment, demand for payment and protest affecting any other Borrower's or
FSI's liability under the Loan Documents; (b) discharge due to any disability of
any Borrower or FSI; (c) any defenses of any other Borrower or FSI to
obligations under the Loan Documents not arising under the express terms of the
Loan Documents or from a material breach thereof by Agent or any Lender which
under applicable law has the effect of discharging any other Borrower from the
Obligations of any Borrower as to which this Agreement is sought to be enforced;
(d) the benefit of any act or omission by Agent or any Lender which directly or
indirectly results in or aids the discharge of any other Borrower from any of
the Obligations of any such Borrower by operation of law or otherwise; (e) all
notices whatsoever, including, without limitation, notice of acceptance of the
incurring of the Obligations of any Borrower; (f) any right it may have to
require Agent or any Lender to disclose to it any information that Agent or
Lenders may now or hereafter acquire concerning the financial condition or any
circumstances that bear on the risk of nonpayment by any other Borrower,
including the release of such other Borrower from its Obligations hereunder; and
(g) any requirement that Agent and Lenders exhaust any right, power or remedy or
proceed against any other Borrower or any other security for, or any guarantor
of, or any other party liable for, any of the Obligations of any Borrower, or
any portion thereof (including without limitation any requirements set forth in
Section 26-7 of the North Carolina General Statutes). Each Borrower specifically
agrees that it shall not be necessary or required, and Borrowers shall not be
entitled to require, that Agent or any Lender (i) file suit or proceed to assert
or obtain a claim for personal judgment against any other Borrower for all or
any part of the Obligations of any Borrower; (ii) make any effort at collection
or enforcement of all or any part of the Obligations of any Borrower from any
Borrower; (iii) foreclose against or seek to realize upon any collateral or any
other security now or hereafter existing for all or any part of the Obligations
of any Borrower; (iv) file suit or proceed to obtain or assert a claim for
personal judgment against any Borrower or any guarantor or other party liable
for all or any part of the Obligations of any Borrower; (v) exercise or assert
any other right or remedy to which Agent or any Lender is or may be entitled in
connection with the Obligations of any Borrower or any security or guaranty
relating thereto to assert; or (vi) file any claim against assets of one
Borrower before or as a condition of enforcing the liability of any other
Borrower under this Agreement or the Notes.
. Except as otherwise expressly provided in any of the Loan Documents,
in all respects, including all matters of construction, validity and
performance, this Agreement and the Obligations arising hereunder shall be
governed by, and construed and enforced in accordance with, the laws of the
State of North Carolina applicable to contracts made and performed in such
state, without regard to the principles thereof regarding conflict of laws, and
any applicable laws of the United States of America.
. Each Borrower and FSI hereby irrevocably consent to the personal
jurisdiction of the state and federal courts located in Mecklenburg County,
North Carolina, in any action, claim or other proceeding arising out of any
dispute in connection with this Agreement, the Note and the other Loan
Documents, any rights or obligations hereunder or thereunder, or the performance
of such rights and obligations. Each Borrower hereby irrevocably consents to the
service of a summons and complaint and other process in any action, claim or
proceeding brought by Agent or any Lender in connection with this Agreement or
the other Loan Documents, any rights or obligations hereunder or thereunder, or
the performance of such rights and obligations, on behalf of itself or its
Property, in the manner specified in Section 11.3. Nothing in this Section 11.19
shall affect the right of the Agent or any Lender to serve legal process in any
other manner permitted by applicable law or affect the right of Agent or any
Lender to bring any action or proceeding against any Borrower or its properties
in the courts of any other jurisdictions.
. This Agreement is not intended to be, and shall not be construed to
create, a novation or accord and satisfaction, and, except as otherwise provided
herein, the Growth Fund Agreement, as executed and delivered on September 27,
1995, shall remain in full force and effect. Without limiting the generality of
the foregoing, Section 10.2 of the Growth Fund Agreement shall survive the
effectiveness of the Agreement and shall remain enforceable against both the
Borrowers and EGF II.
. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER AND FSI, BY
EXECUTION HEREOF, AND THE AGENT AND EACH LENDER, BY ACCEPTANCE HEREOF,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS AGREEMENT, OR ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY AGREEMENT CONTEMPLATED
TO BE EXECUTED IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PARTY WITH RESPECT HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE AGENT
AND EACH LENDER TO ACCEPT THIS AGREEMENT AND THE NOTES EXECUTED AND DELIVERED BY
EACH 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 PLM EQUIPMENT GROWTH FUND III
BY PLM FINANCIAL SERVICES, INC.,
ITS GENERAL PARTNER
By /s/ J. Michael Allgood
-----------------------------
J. Michael Allgood
Chief Financial Officer
PLM EQUIPMENT GROWTH FUND IV
BY PLM FINANCIAL SERVICES, INC.,
ITS GENERAL PARTNER
By /s/ J. Michael Allgood
-----------------------------
J. Michael Allgood
Chief Financial Officer
PLM EQUIPMENT GROWTH FUND V
BY PLM FINANCIAL SERVICES, INC.,
ITS GENERAL PARTNER
By /s/ J. Michael Allgood
------------------------------
J. Michael Allgood
Chief Financial Officer
PLM EQUIPMENT GROWTH FUND VI
BY PLM FINANCIAL SERVICES, INC.,
ITS GENERAL PARTNER
By /s/ J. Michael Allgood
------------------------------
J. Michael Allgood
Chief Financial Officer
PLM EQUIPMENT GROWTH & INCOME FUND VII
BY PLM FINANCIAL SERVICES, INC.,
ITS GENERAL PARTNER
By /s/ J. Michael Allgood
-----------------------------
J. Michael Allgood
Chief Financial Officer
PROFESSIONAL LEASE MANAGEMENT INCOME FUND I,
L.L.C.
BY PLM FINANCIAL SERVICES, INC.,
ITS MANAGER
By /s/ J. Michael Allgood
------------------------------
J. Michael Allgood
Chief Financial Officer
Notice to any Borrower to be sent to:
[Insert name of Borrower]
c/o PLM Financial Services, Inc.
One Market Plaza
Steuart Street Tower, Suite 900
San Francisco, CA 94105
Attention: J. Michael Allgood
Vice President of Finance
and Chief Financial Officer
Telephone: 415/974-1399
Telecopy: 415/882-0860
With a copy to:
TEC AcquiSub, Inc.
One Market Plaza
Steuart Street Tower, Suite 900
San Francisco, CA 94105
Attention: General Counsel
Telephone: 415/896-1138
Facsimile: 415/882-0860
FSI PLM FINANCIAL SERVICES, INC.
By /s/ J. Michael Allgood
-----------------------------------
J. Michael Allgood
Chief Financial Officer
Notice to be sent to:
PLM Financial Services, Inc.
One Market Plaza
Steuart Street Tower, Suite 900
San Francisco, CA 94105
Attention: J. Michael Allgood
Vice President of Finance
and Chief Financial Officer
Telephone: 415/974-1399
Telecopy: 415/882-0860
AGENT FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
By /s/ Bill A. Shirley
-----------------------------------
Bill A. Shirley
Vice President
Notice to be sent to:
First Union National Bank of North Carolina
One First Union Center
301 South College Street
Charlotte, NC 28288
Attention: Milton Anderson,
Director
Telephone: 704/383-5164
Facsimile: 704/374-4092
LENDERS FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
By /s/ Bill A. Shirley
-----------------------------------
Bill A. Shirley
Vice President
Notice to be sent to:
First Union National Bank of North Carolina
One First Union Center
301 South College Street
Charlotte, NC 28288
Attention: Milton Anderson,
Director
Telephone: 704/383-5164
Facsimile: 704/374-4092
The undersigned acknowledges and agrees to Section 11.20 of this Agreement.
PLM EQUIPMENT GROWTH FUND II
BY PLM FINANCIAL SERVICES, INC.,
ITS GENERAL PARTNER
By /s/ J. Michael Allgood
-----------------------------------
J. Michael Allgood
Chief Financial Officer
SCHEDULE A
(COMMITMENTS)
Pro
Rate
Lender Commitment Share
First Union National Bank $35,000,000 35/35 x 100%
of North Carolina