AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT

Exhibit 10.1

Published CUSIP Number: [              ]

AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN

AGREEMENT

Dated as of September 29, 2006

by and among

CONTAINER APPLICATIONS INTERNATIONAL, INC.

(the “Borrower”)

THE LENDERS LISTED ON SCHEDULE 1 HERETO

and

BANK OF AMERICA, N.A.

as Administrative Agent (the “Administrative Agent”)

with

BANC OF AMERICA SECURITIES LLC ,

acting as Lead Arranger and Book Manager (the “Arranger”)

and

LASALLE BANK NATIONAL ASSOCIATION

as Syndication Agent (the “Syndication Agent”)

and

UNION BANK OF CALIFORNIA, N.A.

as Documentation Agent (the “Documentation Agent”)

TABLE OF CONTENTS

 

 

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Exhibits

 

 

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Schedules

 

[Schedules omitted from this copy]

 

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AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT

This AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN AGREEMENT is made as of September 29, 2006, by and among CONTAINER APPLICATIONS INTERNATIONAL, INC. (the “ Borrower ”), a Nevada corporation having its principal place of business at One Embarcadero Center Suite 2101, San Francisco, California 94111, the lending institutions from time to time listed on Schedule 1 hereto (the “ Lenders ”), BANK OF AMERICA, N.A., as administrative agent for itself and the other Lenders (in such capacity, the “ Administrative Agent ”), LASALLE BANK NATIONAL ASSOCIATION as syndication agent for itself and the other Lenders (in such capacity, the “ Syndication Agent ”), and UNION BANK OF CALIFORNIA, N.A. , as documentation agent for itself and the other Lenders (in such capacity, the “ Documentation Agent ”), with BANC OF AMERICA SECURITIES LLC acting as lead arranger and book manager.

1. DEFINITIONS AND RULES OF INTERPRETATION .

1.1. Definitions . The following terms shall have the meanings set forth in this §1 or elsewhere in the provisions of this Credit Agreement referred to below:

Accounts Receivable . All rights of the Borrower or any of its Subsidiaries to payment for goods sold, leased or otherwise marketed in the ordinary course of business and all rights of the Borrower or any of its Subsidiaries to payment for services rendered in the ordinary course of business and all sums of money or other proceeds due thereon pursuant to transactions with account debtors, except for that portion of the sum of money or other proceeds due thereon that relate to sales, use or property taxes in conjunction with such transactions, recorded on books of account in accordance with GAAP.

Adjustment Date . The first day of the month immediately following the month in which a Compliance Certificate is to be delivered by the Borrower pursuant to §8.4(d).

Administrative Agent’s Office . The Administrative Agent’s office located at 100 Federal Street, Boston, Massachusetts 02110, or at such other location as the Administrative Agent may designate from time to time.

Administrative Agent . Bank of America, N.A., acting as administrative agent for the Lenders, and each other Person appointed as the successor Administrative Agent in accordance with §14.9.

Administrative Agent’s Special Counsel . Bingham McCutchen LLP or such other counsel as may be approved by the Administrative Agent.

Administrative Questionnaire . An Administrative Questionnaire in a form supplied by the Administrative Agent.

Affiliate . With respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

Agent Parties . See §16.6.3.

Applicable Margin . For each period commencing on an Adjustment Date through the date immediately preceding the next Adjustment Date (each a “ Rate Adjustment Period ”), the Applicable Margin shall be the applicable margin set forth below with respect to the Total Leverage Ratio, as determined for the Reference Period of the Borrower and its Subsidiaries ending on the fiscal quarter ended immediately prior to the applicable Rate Adjustment Period.

 

Notwithstanding the foregoing, (a) for the Loans outstanding and the Letter of Credit Fees and the Commitment Fee payable during the period commencing on the Closing Date through the date immediately preceding the Adjustment Date with respect

 

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to the receipt of a Compliance Certificate for the period ending December 31, 2006, the Applicable Margin shall be no lower than the Applicable Margin set forth in Level II above, and (b) if the Borrower fails to deliver any Compliance Certificate pursuant to §8.4(d) hereof, then for the period commencing on the next Adjustment Date to occur (or was to have occurred) subsequent to such failure through the date immediately following the date on which such Compliance Certificate is actually delivered, the Applicable Margin shall be the highest Applicable Margin set forth above (i.e., Level I above).

Notwithstanding the foregoing to the contrary, in the event either the Borrower or the Administrative Agent determines, in good faith, that the calculation of the Total Leverage Ratio on which the Applicable Margin for any particular period was determined is inaccurate and, as a consequence thereof, the Applicable Margin was lower or higher than it would have been, (i) the Borrower shall promptly (but in any event within ten (10) Business Days) deliver (after the Borrower discovers such inaccuracy or the Borrower is notified by the Administrative Agent of such inaccuracy, as the case may be) to the Administrative Agent correct financial statements for such period (and if such financial statements are not accurately restated and delivered within thirty (30) days after the first discovery of such inaccuracy by the Borrower or such notice, as the case may be, and the Applicable Margin was lower than it should have been, then Pricing Level I shall apply retroactively for such period until such time as the correct financial statements are delivered and, upon the delivery of such corrected financial statements, thereafter the corrected Pricing Level shall apply for such period), (ii) the Administrative Agent shall determine and notify the Borrower of the amount of interest that would have been due in respect of outstanding Obligations, if any, during such period had the Applicable Margin been calculated based on the correct Total Leverage Ratio (or, to the extent applicable, the Level I Applicable Margin if such corrected financial statements were not delivered as provided herein) and (iii) the Borrower shall promptly pay to the Administrative Agent the difference, if any, between that amount and the amount actually paid in respect of such period. The foregoing notwithstanding shall in no way limit the rights of the Administrative Agent or the Lenders to exercise their rights to impose the rate of interest applicable during an Event of Default as provided herein.

Applicable Pension Legislation . At any time, any pension or retirement benefits legislation (be it national, federal, provincial, territorial or otherwise) then applicable to the Borrower or any of its Subsidiaries.

Approved Fund . Any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

Arranger . Banc of America Securities LLC, in its capacity as lead arranger and book manager.

 

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Assignee Group . Two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

Assignment and Assumption . An assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by §15.1.1, and accepted by the Administrative Agent, in substantially the form of Exhibit E or any other form approved by the Administrative Agent.

Auto-Extension Letter of Credit . See §4.1.6.

Balance Sheet Date . December 31, 2005.

Bank of America . Bank of America, N.A., in its individual capacity.

Base Rate . For any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate”. The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

Base Rate Loans . Revolving Credit Loans or the Term Loan (or any portion thereof) bearing interest calculated by reference to the Base Rate.

Borrower . As defined in the preamble hereto.

Borrower Materials . See §8.4.

Borrowing Base . At the relevant time of reference thereto, an amount determined by the Administrative Agent by reference to the most recent Borrowing Base Report delivered to the Lenders pursuant to §8.4(f) which is equal to the sum of:

(a) 85.00% of the Net Book Value of Eligible Containers; plus

 

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(b) 75.00% of Eligible Container Receivables, provided that the amount included in the Borrowing Base pursuant to this clause (b) shall not exceed $20,000,000; plus

(c) 90.00% of the Net Present Value of Direct Finance Lease Receivables (other than Direct Finance Lease Receivables arising from Eligible Containers which are included in clause (a) of this definition).

Borrowing Base Report . A Borrowing Base Report signed by the chief financial officer of the Borrower and in substantially the form of Exhibit A hereto.

Business Day . Any day on which banking institutions in Boston, Massachusetts and San Francisco, California, are open for the transaction of banking business and, in the case of Eurodollar Rate Loans, also a day which is a Eurodollar Business Day.

Capital Assets . Fixed assets, both tangible (such as land, buildings, fixtures, machinery and equipment) and intangible (such as patents, copyrights, trademarks, franchises and good will); provided that Capital Assets shall not include any item customarily charged directly to expense or depreciated over a useful life of twelve (12) months or less in accordance with GAAP.

Capital Expenditures . Amounts paid or Indebtedness incurred by the Borrower or any of its Subsidiaries in connection with (i) the purchase or lease by the Borrower or any of its Subsidiaries of Capital Assets that would be required to be capitalized and shown on the balance sheet of such Person in accordance with GAAP or (ii) the lease of any assets by the Borrower or any of its Subsidiaries as lessee under any Synthetic Lease to the extent that such assets would have been Capital Assets had the Synthetic Lease been treated for accounting purposes as a Capitalized Lease.

Capitalized Leases . Leases under which the Borrower or any of its Subsidiaries is the lessee or obligor, the discounted future rental payment obligations under which are required to be capitalized on the balance sheet of the lessee or obligor in accordance with GAAP.

Capital Stock . Any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

Cash Collateral . See §4.7.

 

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Cash Management Agreement . Any agreement to provide cash management services, including treasury, depository, overdraft, credit or debit card, electronic funds transfer and other cash management arrangements.

CERCLA . See §7.18(a).

Change of Control . Means an event or series of events by which:

(a) at any time prior to the creation of a Public Market, the Equity Investors shall cease to own and control legally and beneficially (free and clear of all Liens), either directly or indirectly, equity securities in the Borrower representing at least fifty-one percent (51%) of the combined voting power of all equity securities entitled to vote for members of the board of directors or equivalent governing body of the Borrower on a fully-diluted basis (and taking into account all such securities that Equity Investors have the right to acquire pursuant to any option right (as defined in clause (b) below)) provided , that the issuance of equity securities to Interpool upon the conversion of the Interpool Convertible Subordinated Debt shall not result in a Change of Control within the meaning of this clause (a);

(b) at any time after the creation of a Public Market, any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) other than the Equity Investors becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “ option right ”)), directly or indirectly, of 30% or more of the equity securities of the Borrower entitled to vote for members of the board of directors or equivalent governing body of the Borrower on a fully-diluted basis (and taking into account all such securities that such “person” or “group” has the right to acquire pursuant to any option right) provided , that Interpool’s right to acquire equity securities upon conversion of the Interpool Convertible Subordinated Debt, or the issuance of equity securities to Interpool upon the conversion of the Interpool Convertible Subordinated Debt shall not be deemed to be a Change of Control under this paragraph (b);

(c) during any period of 24 consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Borrower cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such

 

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election or nomination at least a majority of that board or equivalent governing body, provided , that directors nominated and elected to fill vacancies created by the resignation of directors elected by Interpool following the transactions contemplated by the Redemption Agreement shall be deemed to satisfy the criteria of this clause (ii), or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body (excluding, in the case of both clause (ii) and clause (iii), any individual whose initial nomination for, or assumption of office as, a member of that board or equivalent governing body occurs as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors by any person or group other than a solicitation for the election of one or more directors by or on behalf of the board of directors);

(d) any Person or two or more Persons acting in concert, other than one or more of the Equity Investors, shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation thereof, will result in its or their acquisition of the power to exercise, directly or indirectly, a controlling influence over the management or policies of the Borrower, or control over the equity securities of the Borrower entitled to vote for members of the board of directors or equivalent governing body of the Borrower on a fully-diluted basis (and taking into account all such securities that such Person or Persons have the right to acquire pursuant to any option right but excluding, in the case of Interpool, equity securities issued to Interpool upon the conversion of the Interpool Convertible Subordinated Debt) representing 30% or more of the combined voting power of such securities; or

(e) a “change of control” or any comparable term under any other document or instrument evidencing Indebtedness shall have occurred.

Closing Date . The first date all the conditions precedent in §11 (other than the conditions described in §11.13) are satisfied or waived and any Loans are to be made or any Letters of Credit are to be issued hereunder.

Co-Agent . See Introductory Paragraph.

Code . The Internal Revenue Code of 1986.

Collateral . All of the property, rights and interests of the Borrower and each of the Guarantors that are or are intended to be subject to the Liens created by the Security Documents.

 

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Commitment . With respect to each Revolving Credit Lender, the amount set forth on Schedule 1 hereto as the amount of such Lender’s commitment to make Revolving Credit Loans to, to participate in the issuance, extension and renewal of Letters of Credit for the account of, and to purchase participations in Swing Line Loans made to, the Borrower, as the same may be increased pursuant to §15.9 or reduced from time to time; or if such commitment is terminated pursuant to the provisions hereof, zero.

Commitment Fee . See §2.2.

Commitment Percentage . With respect to each Revolving Credit Lender, the percentage set forth on Schedule 1 hereto as such Lender’s percentage of the aggregate Commitments of all of the Revolving Credit Lenders.

Compliance Certificate . See §8.4(d).

Consolidated or consolidated . With reference to any term defined herein, shall mean that term as applied to the accounts of the Borrower and its Subsidiaries, consolidated in accordance with GAAP.

Consolidated EBITDA . With respect to any fiscal period, an amount equal to the sum of (a) Consolidated Net Income (or Deficit) of the Borrower and its Subsidiaries for such fiscal period, plus (b) in each case to the extent deducted in the calculation of such Person’s Consolidated Net Income and without duplication, (i) depreciation and amortization for such period, plus (ii) income tax expense for such period, plus (iii) Consolidated Total Interest Expense paid or accrued during such period, plus (iv) other noncash charges for such period, plus (v) principal payments received by the Borrower or any of its Subsidiaries during such period with respect to Direct Finance Leases, all as determined in accordance with GAAP.

Consolidated EBITDAR . With respect to any fiscal period of the Borrower and its Subsidiaries, an amount equal to the sum of (a) Consolidated EBITDA for such fiscal period plus (b) consolidated rental expense for such fiscal period as determined in accordance with GAAP.

Consolidated Funded Debt . At any time of determination, with respect to the Borrower and its Subsidiaries, the sum, without duplication, of (a) the aggregate amount of Indebtedness (including Subordinated Debt) of the Borrower and its Subsidiaries, on a consolidated basis, relating to (i) the borrowing of money or the obtaining of credit, including the issuance of notes or bonds, (ii) the deferred purchase price of assets (other than trade payables incurred in the ordinary course of business), (iii) Capitalized Leases, (iv) Rental Obligations, and (v) the maximum drawing amount of all letters of credit outstanding plus (b) Indebtedness of the type referred to in clause (a) of another Person guaranteed by the Borrower or any of its Subsidiaries .

 

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Consolidated Net Income (or Deficit) . The consolidated net income (or deficit) of the Borrower and its Subsidiaries, after deduction of all expenses, taxes, and other proper charges, determined in accordance with GAAP , after eliminating therefrom all extraordinary items of income or loss.

Consolidated Operating Cash Flow . With respect to any fiscal period of the Borrower and its Subsidiaries, an amount equal to (i) Consolidated EBITDAR for such fiscal period minus (ii) cash income taxes paid or payable in such period, excluding cash income taxes with respect to the Borrower’s fiscal year 2006 income paid by the Borrower in the 2007 fiscal year, in an amount not exceeding $10,000,000 in the aggregate, all as determined in accordance with GAAP.

Consolidated Total Debt Service . With respect to the Borrower and its Subsidiaries and for any Reference Period, the sum, without duplication, of (a) any and all repayments or prepayments of principal (excluding past prepayments of the Existing Interpool Subordinated Debt and the prepayment of the Existing Interpool Subordinated Debt contemplated by Section 9.8), during such period in respect of Indebtedness that becomes due and payable or that are to become due and payable during such period pursuant to any agreement or instrument to which the Borrower or any of its Subsidiaries is a party relating to (i) the borrowing of money or the obtaining of credit, including the issuance of notes or bonds, (ii) the deferred purchase price of assets (other than trade payables incurred in the ordinary course of business), (iii) in respect of any Synthetic Leases or any Capitalized Leases, (iv) in respect of any reimbursement obligations in respect of letters of credit due and payable during such period, and (v) Indebtedness of the type referred to above of another Person guaranteed by the Borrower or any of its Subsidiaries, plus (b) Consolidated Total Interest Expense paid or payable in cash during such Reference Period, plus (c) one tenth (1/10) of the average daily outstanding amount of the Revolving Credit Loans during such Reference Period, plus (d) consolidated rental expense for such period as determined in accordance with GAAP. Demand obligations shall be deemed to be due and payable during any fiscal period during which such obligations are outstanding.

Consolidated Total Interest Expense . For any period, the aggregate amount of interest required to be paid or accrued by the Borrower and its Subsidiaries during such period on all Indebtedness of the Borrower and its Subsidiaries outstanding during all or any part of such period, whether such interest was or is required to be reflected as an item of expense or capitalized, including payments consisting of interest in respect of any Capitalized Lease or any Synthetic Lease, and including commitment fees, agency fees, facility fees, balance deficiency fees and similar fees or expenses in connection with the borrowing of money, provided , that with respect to the Interpool Convertible Subordinated Debt, all interest payable in cash in any period shall be included in Consolidated Total Interest Expense for such period.

 

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Containers . The marine and intermodal cargo containers either owned or leased by the Borrower and employed by the Borrower in the conduct of its business, including, without limitation, refrigerated, dry van, tank, open top and flat rack containers and refrigeration units and generator sets associated therewith, but excluding any chassis for such containers.

Control . The possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “ Controlling ” and “ Controlled ” have meanings correlative thereto.

Conversion Request . A notice given by the Borrower to the Administrative Agent of the Borrower’s election to convert or continue a Loan in accordance with §2.7.

Credit Agreement or Agreement . This Amended and Restated Revolving Credit and Term Loan Agreement, including the Schedules and Exhibits hereto as the same may be amended, restated, supplemented or otherwise modified and in effect from time to time.

Default . See §13.1.

Delinquent Lender . See §14.5.3.

Direct Finance Lease Receivables . All rights of the Borrower to payment in respect of Direct Finance Leases that are not in default and all sums of money or other proceeds due the Borrower pursuant to such Direct Finance Leases, except for that portion of the sum of money or other proceeds due thereon that relate to sales, use or property taxes in conjunction with such transactions, recorded on the Borrower’s books of account in accordance with generally accepted accounting principles. The Administrative Agent shall hold a valid and perfected first priority security interest in any Direct Finance Lease Receivables included in the Borrowing Base.

Direct Finance Lease Rate . With respect to any Direct Finance Lease, the interest rate applicable to such Direct Finance Lease.

 

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Direct Finance Leases . Leases pursuant to which the Borrower leases Containers to a lessee and (a) the terms of such lease provide that title to such Containers will pass to such lessee at the end of the lease term automatically or at the option of the lessee for no additional consideration or for consideration so nominal that the lessee would be economically compelled to exercise such option and (b) the interest component of the proceeds of such lease are booked on the Borrower’s financial statements as “Income from Direct Finance Leases.”

Distribution . (a) The declaration or payment of any dividend on or in respect of any shares of any class of Capital Stock of the Borrower, other than dividends payable solely in shares of common stock of the Borrower; (b) the purchase, redemption, defeasance, retirement or other acquisition of any shares of any class of Capital Stock of the Borrower, directly or indirectly through a Subsidiary of the Borrower or otherwise (including the setting apart of assets for a sinking or other analogous fund to be used for such purpose); (c) the return of capital by the Borrower to its shareholders as such; or (d) any other distribution on or in respect of any shares of any class of Capital Stock of the Borrower.

Dollars or $ . Dollars in lawful currency of the United States of America.

Domestic Lending Office . Initially, the office of each Lender designated as such in Schedule 1 hereto; thereafter, such other office of such Lender, if any, located within the United States that will be making or maintaining Base Rate Loans.

Drawdown Date . The date on which any Revolving Credit Loan, the Term Loan or Swing Line Loan is made or is to be made, and the date on which any Revolving Credit Loan or the Term Loan (or any portion thereof) is converted or continued in accordance with §2.7.

Eligible Assignee . (a) A Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person (other than a natural person) approved by (i) the Administrative Agent, the L/C Issuer and the Swing Line Lender, and (ii) unless an Event of Default has occurred and is continuing, the Borrower (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall not include the Borrower or any of the Borrower’s Affiliates or Subsidiaries or any competitor of the Borrower (provided, however, that no financial institution or Approved Fund shall be deemed to be a competitor of the Borrower).

Eligible Containers . Containers owned by the Borrower which (a) are subject to a first priority fully perfected security interest in favor of the Administrative Agent for the benefit of the Lenders in all jurisdictions within the United States of America where

 

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filing financing statements in accordance with the Uniform Commercial Code is necessary to perfect the Lenders’ security interest in such Containers, (b) are subject to no other Liens except Permitted Liens that (i) secure Subordinated Debt and are fully subordinated to the Lenders’ security interest in such Containers pursuant to the terms of the Subordination and Intercreditor Agreement or (ii) are permitted pursuant to §§9.2.1(v) and (xi), (c) are in a serviceable condition in the normal course of business, (d) have a Net Book Value greater than zero, (e) have not suffered an Event of Loss and (f) are not the subject of a finance or trade credit arrangement between the Borrower as obligor and a third party obligee but are owned by the Borrower outright.

Eligible Container Receivables . The aggregate of the unpaid portions of Accounts Receivable generated in connection with sales by the Borrower of Containers permitted by §9.5.2 (net of any credits, rebates, offsets, holdbacks or other adjustments or commissions payable to third parties that are adjustments to such Accounts Receivable): (a) that the Borrower reasonably and in good faith determines to be collectible; (b) that are with account debtors or other obligors that (i) are not Affiliates of the Borrower, unless such Affiliate is Interpool, (ii) purchased the Containers giving rise to the relevant Account Receivable in an arm’s length transaction, (iii) are not insolvent or involved in any case or proceeding, whether voluntary or involuntary, under any bankruptcy, reorganization, arrangement, insolvency, adjustment of debt, dissolution, liquidation or similar law of any jurisdiction and (iv) are, in the Administrative Agent’s reasonable judgment, creditworthy; (c) that are in payment of obligations that have been fully performed, do not consist of progress billings or bill and hold invoices and are not subject to dispute or any other similar claims that would reduce the cash amount payable therefor; (d) that are not subject to any pledge, restriction, security interest or other lien or encumbrance other than Permitted Liens; (e) in which the Administrative Agent has a valid and perfected first priority security interest; (f) that are not outstanding for more than sixty (60) days past the earlier to occur of (i) the due date listed on the respective original invoices therefor and (ii) the date of shipment thereof; (g) that are not due from any single account debtor or other obligor if more than fifteen percent (15%) of the aggregate amount of all Accounts Receivable owing from such account debtor or other obligor would otherwise not be Eligible Container Receivables; (h) that are payable in Dollars (or such other currency as the Administrative Agent may agree in its sole discretion); (i) that are not secured by a letter of credit unless the Administrative Agent has a prior security interest in such letter of credit perfected by control; (j) that are in payment of obligations under agreements that contain terms requiring the relevant account debtor to return the Container to the Borrower in the event that such Account Receivable is not fully paid when due; and (k) are generated in connection with sales of Containers owned by the Borrower outright that are not the subject of a finance or trade credit arrangement between the Borrower as obligor and a third party obligee.

Employee Benefit Plan . Any employee benefit plan within the meaning of §3(3) of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate (other than Interpool), other than a Guaranteed Pension Plan or a Multiemployer Plan.

 

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Environmental Laws . See §7.18(a).

EPA . See §7.18(b).

Equity Investors . Mr. Hiromitsu Ogawa, members of his immediate family and trusts established for the benefit of Mr. Hiromitsu Ogawa and members of his immediate family, and senior executives of the Borrower.

ERISA . The Employee Retirement Income Security Act of 1974, as amended.

ERISA Affiliate . Any Person which is treated as a single employer with the Borrower under §414 of the Code.

ERISA Event . (a) An ERISA Reportable Event with respect to a Guaranteed Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Guaranteed Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of an Employee Benefit Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Guaranteed Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Guaranteed Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

ERISA Reportable Event . A reportable event with respect to a Guaranteed Pension Plan within the meaning of §4043 of ERISA and the regulations promulgated thereunder as to which the requirement of notice has not been waived.

Eurodollar Base Rate . See definition of Eurodollar Rate.

Eurodollar Business Day . Any day on which commercial banks are open for international business (including dealings in Dollar deposits) in London or such other eurodollar interbank market as may be selected by the Administrative Agent in its sole discretion acting in good faith.

 

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Eurodollar Lending Office . Initially, the office of each Lender designated as such in Schedule 1 hereto; thereafter, such other office of such Lender, if any, that shall be making or maintaining Eurodollar Rate Loans.

Eurodollar Rate . For any Interest Period with respect to a Eurodollar Rate Loan, a rate per annum determined by the Administrative Agent pursuant to the following formula:

 

Where,

Eurodollar Base Rate . For such Interest Period, the rate per annum equal to the British Bankers Association LIBOR Rate (“ BBA LIBOR ”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period. If such rate is not available at such time for any reason, then the “Eurodollar Base Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period.

Eurodollar Reserve Percentage For any day during any Interest Period, the reserve percentage (expressed as a decimal, carried out to five decimal places) in effect on such day, whether or not applicable to any Lender, under regulations issued from time to time by the FRB for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as “eurocurrency liabilities”). The Eurodollar Rate for each outstanding Eurodollar Rate Loan shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage.

Eurodollar Rate Loans . Revolving Credit Loans or the Term Loan (or any portion thereof) bearing interest calculated by reference to the Eurodollar Rate.

Event of Default . See §13.1.

 

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Event of Loss . With respect to any Container, the occurrence of any of the following events:

(a) total loss or destruction thereof;

(b) theft or disappearance thereof without recovery within sixty (60) days after such theft or disappearance becomes known to the Borrower;

(c) damage rendering such Container unfit for normal use and, in the judgment of the Borrower, beyond repair at reasonable cost; and

(d) any condemnation, seizure, forced sale or other taking of title to or use of any such Container.

Excess Availability . At any time of determination, (a) the lesser of (i) the Total Commitment at such time, plus the outstanding principal amount of the Term Loan at such time or (ii) the Borrowing Base at such time, minus (b) the sum of (i) the outstanding amount of the Revolving Credit Loans at such time, plus (ii) the Maximum Drawing Amount and all Unpaid Reimbursement Obligations at such time, plus (iii) the outstanding amount of Swing Line Loans at such time, plus (iv) the outstanding principal amount of the Term Loan at such time.

Existing Credit Agreement . The Revolving Credit Agreement, dated as of April 28, 2005 by and among the Borrower, the lenders party thereto and Bank of America, as administrative agent for the lenders.

Existing Letters of Credit . Those letters of credit issued for the account of the Borrower under the Existing Credit Agreement and set forth on Schedule 1.1 hereto.

Existing Interpool Subordinated Debt . The Indebtedness of the Borrower to Interpool in the original principal amount of $33,650,000, and evidenced by the Existing Subordinated Note Purchase Agreement and the promissory notes issued pursuant thereto, which Indebtedness is intended to be paid in full promptly following the Closing Date. The outstanding principal amount of the Existing Interpool Subordinated Indebtedness on the Closing Date is $3,027,062.50.

Existing Subordinated Note Purchase Agreement . That certain Note Purchase Agreement, dated as of April 30, 1998, between the Borrower and Interpool, as amended by that certain Amendment No. 1, dated as of April 28, 2000, that certain Amendment No. 2, dated as of March 15, 2002, that certain Amendment No. 3, dated as of June 27, 2002, that certain Amendment No. 4, dated as of February 25, 2003.

 

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Federal Funds Rate . For any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.

Fee Letter . The fee letter, dated as of August 17, 2006, among the Borrower, the Administrative Agent and the Arranger, as the same may be amended, restated, supplemented or otherwise modified and in effect from time to time.

Fund . Any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

GAAP or generally accepted accounting principles . (a) When used in §10, whether directly or indirectly through reference to a capitalized term used therein, means (i) principles that are consistent with the principles promulgated or adopted by the Financial Accounting Standards Board and its predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and (ii) to the extent consistent with such principles, the accounting practice of the Borrower reflected in its financial statements for the year ended on the Balance Sheet Date, and (b) when used in general, other than as provided above, means principles that are (i) consistent with the principles promulgated or adopted by the Financial Accounting Standards Board and its predecessors, as in effect from time to time, and (ii) consistently applied with past financial statements of the Borrower adopting the same principles, provided that in each case referred to in this definition of “ GAAP ” a certified public accountant would, insofar as the use of such accounting principles is pertinent, be in a position to deliver an unqualified opinion (other than a qualification regarding changes in GAAP) as to financial statements in which such principles have been properly applied.

Governing Documents . With respect to any Person, its certificate or articles of incorporation, its by-laws and all shareholder agreements, voting trusts and similar arrangements applicable to any of its Capital Stock.

 

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Governmental Authority . Any foreign, federal, state, regional, local, municipal or other government, or any department, commission, board, bureau, agency, public authority or instrumentality thereof, or any court or arbitrator.

Guaranteed Pension Plan . Any employee pension benefit plan within the meaning of §3(2) of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate the benefits of which are guaranteed on termination in full or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer Plan.

Guarantors . Collectively, each of (a) Container Applications International (U.K.) Limited, a United Kingdom corporation, (b) Container Applications (Malaysia) SDN BHD, a Malaysian corporation, (c) Container Applications International Corporation, a Japanese corporation, (d) Sky Container Trading Limited, a limited company formed under the laws of England and Wales, (e) Sky Domestic Container Leasing Limited, a limited company formed under the laws of England and Wales and (f) each Subsidiary of the Borrower which is required to become a Guarantor pursuant to §8.16 hereof. Each Guarantor shall be a party to the Guaranty.

Guaranty . The Amended and Restated Guaranty, dated or to be dated as of the Closing Date, made by each Guarantor in favor of the Lenders and the Administrative Agent pursuant to which such Guarantor guarantees to the Lenders and the Administrative Agent the payment and performance of the Obligations.

Hazardous Substances . See §7.18(b).

Honor Date . See §4.2.

Increase Effective Date . See §2.11.4

Indemnitee . See §16.3.

Identified Containers . See definition of “Nonrecourse Loan”.

Indebtedness . As to any Person and whether recourse is secured by or is otherwise available against all or only a portion of the assets of such Person and whether or not contingent, but without duplication:

(a) every obligation of such Person for money borrowed,

 

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(b) every obligation of such Person evidenced by bonds, debentures, notes or other similar instruments, including obligations incurred in connection with the acquisition of property, assets or businesses,

(c) every reimbursement obligation of such Person with respect to letters of credit, bankers’ acceptances or similar facilities issued for the account of such Person,

(d) every obligation of such Person issued or assumed as the deferred purchase price of property or services (including securities repurchase agreements but excluding trade accounts payable or accrued liabilities arising in the ordinary course of business which are not overdue or which are being contested in good faith),

(e) every obligation of such Person under any Capitalized Lease,

(f) every obligation of such Person under any Synthetic Lease,

(g) all sales by such Person of (i) accounts or general intangibles for money due or to become due, (ii) chattel paper, instruments or documents creating or evidencing a right to payment of money or (iii) other receivables (collectively “ receivables ”), whether pursuant to a purchase facility or otherwise, other than in connection with the disposition of the business operations of such Person relating thereto or a disposition of defaulted receivables for collection and not as a financing arrangement, and together with any obligation of such Person to pay any discount, interest, fees, indemnities, penalties, recourse, expenses or other amounts in connection therewith,

(h) every obligation of such Person (an “ equity related purchase obligation ”) to purchase, redeem, retire or otherwise acquire for value any shares of Capital Stock issued by such Person or any rights measured by the value of such Capital Stock,

(i) every obligation of such Person under any forward contract, futures contract, swap, option or other financing agreement or arrangement (including, without limitation, caps, floors, collars and similar agreements), the value of which is dependent upon interest rates, currency exchange rates, commodities or other indices (a “ derivative contract ”),

(j) every obligation in respect of Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent that such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent that the terms of such Indebtedness provide that such Person is not liable therefor and such terms are enforceable under applicable law,

 

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(k) every obligation, contingent or otherwise, of such Person guaranteeing, or having the economic effect of guarantying or otherwise acting as surety for, any obligation of a type described in any of clauses (a) through (j) (the “ primary obligation ”) of another Person (the “ primary obligor ”), in any manner, whether directly or indirectly, and including, without limitation, any obligation of such Person (i) to purchase or pay (or advance or supply funds for the purchase of) any security for the payment of such primary obligation, (ii) to purchase property, securities or services for the purpose of assuring the payment of such primary obligation, or (iii) to maintain working capital, equity capital or other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such primary obligation, and

(l) all Rental Obligations of such Person.

The “ amount ” or “ principal amount ” of any Indebtedness at any time of determination represented by (i) any Indebtedness, issued at a price that is less than the principal amount at maturity thereof, shall be the amount of the liability in respect thereof determined in accordance with GAAP, (ii) any Capitalized Lease shall be the principal component of the aggregate of the rental obligation under such Capitalized Lease payable over the term thereof that is not subject to termination by the lessee, (iii) any sale of receivables shall be the amount of unrecovered capital or principal investment of the purchaser (other than the Borrower or any of its wholly-owned Subsidiaries) thereof, excluding amounts representative of yield or interest earned on such investment, (iv) any Synthetic Lease shall be the stipulated loss value, termination value or other equivalent amount, (v) any derivative contract shall be the maximum amount of any termination or loss payment required to be paid by such Person if such derivative contract were, at the time of determination, to be terminated by reason of any event of default or early termination event thereunder, whether or not such event of default or early termination event has in fact occurred, (vi) any equity related purchase obligation shall be the maximum fixed redemption or purchase price thereof inclusive of any accrued and unpaid dividends to be comprised in such redemption or purchase price, and (vii) any guaranty or other contingent liability referred to in clause (k) shall be an amount equal to the stated or determinable amount of the primary obligation in respect of which such guaranty or other contingent obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.

Interest Payment Date . (a) As to any Base Rate Loan (including any Swing Line Loan), the last Business Day of the calendar quarter with respect to interest accrued during such calendar quarter, including, without limitation, the calendar quarter which includes the Drawdown Date of such Base Rate Loan; and (b) as to any Eurodollar Rate Loan in respect of which the Interest Period is (i) 3 months or less, the last Business Day of such Interest Period and (ii) more than 3 months, the date that is 3 months from the first day of such Interest Period and, in addition, the last Business Day of such Interest Period.

 

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Interest Period . With respect to any Loan, (a) initially, the period commencing on the Drawdown Date of such Loan and ending on the last day of one of the periods set forth below, as selected by the Borrower in a Loan Request or as otherwise required by the terms of this Credit Agreement (i) for any Base Rate Loan, the last day of the calendar quarter; and (ii) for any Eurodollar Rate Loan, 1, 2, 3 or 6 months; and (b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Loan and ending on the last day of one of the periods set forth above, as selected by the Borrower in a Conversion Request; provided that all of the foregoing provisions relating to Interest Periods are subject to the following:

(A) if any Interest Period with respect to a Eurodollar Rate Loan would otherwise end on a day that is not a Eurodollar Business Day, that Interest Period shall be extended to the next succeeding Eurodollar Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the immediately preceding Eurodollar Business Day;

(B) if any Interest Period with respect to a Base Rate Loan would end on a day that is not a Business Day, that Interest Period shall end on the next succeeding Business Day;

(C) if the Borrower shall fail to give notice as provided in §2.7, the Borrower shall be deemed to have requested a conversion of the affected Eurodollar Rate Loan to a Base Rate Loan and the continuance of all Base Rate Loans as Base Rate Loans on the last day of the then current Interest Period with respect thereto;

(D) any Interest Period relating to any Eurodollar Rate Loan that begins on the last Eurodollar Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Eurodollar Business Day of a calendar month; and

(E) any Interest Period that would otherwise extend beyond the Maturity Date shall end on the Maturity Date.

 

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Interest Rate Protection Agreement . Any agreement entered into between the Borrower and any of the Lenders providing for an interest rate swap, cap, collar, or other hedging mechanism with respect to interest payable on Indebtedness.

Internal Control Event . A material weakness in, or fraud that involves management or other employees who have a significant role in, the Borrower’s internal controls over financial reporting, in each case as described in the Securities Laws.

Interpool . Interpool, Inc., a Delaware corporation.

Interpool Convertible Subordinated Debt . The Indebtedness of the Borrower to Interpool in the original principal amount of $37,500,000, and evidenced by the Interpool Convertible Subordinated Debt Documents, which Indebtedness has been subordinated to the Obligations pursuant to the terms of the Subordination and Intercreditor Agreement.

Interpool Convertible Subordinated Debt Documents . That certain Note Issuance Agreement and Investors’ Rights Agreement, each dated as of October 1, 2006, between the Borrower and Interpool, and as the same may be amended from time to time in accordance with §9.8 hereof, together with all other documents, instruments, and other agreements entered into in connection therewith, each in the form delivered to the Administrative Agent prior to the Closing Date.

Investments . All expenditures made and all liabilities incurred (contingently or otherwise) for the acquisition of stock or Indebtedness of, or for loans, advances, capital contributions or transfers of property to, or in respect of any guaranties (or other commitments as described under Indebtedness), or obligations of, any Person. In determining the aggregate amount of Investments outstanding at any particular time: (a) the amount of any Investment represented by a guaranty shall be taken at not less than the principal amount of the obligations guaranteed and still outstanding; (b) there shall be included as an Investment all interest accrued with respect to Indebtedness constituting an Investment unless and until such interest is paid; (c) there shall be deducted in respect of each such Investment any amount received as a return of capital (but only by repurchase, redemption, retirement, repayment, liquidating dividend or liquidating distribution); (d) there shall not be deducted in respect of any Investment any amounts received as earnings on such Investment, whether as dividends, interest or otherwise, except that accrued interest included as provided in the foregoing clause (b) may be deducted when paid; and (e) there shall not be deducted from the aggregate amount of Investments any decrease in the value thereof.

 

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Issuer Documents . With respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by the L/C Issuer and the Borrower or in favor the L/C Issuer and relating to such Letter of Credit.

L/C Advance . With respect to each Revolving Credit Lender, such Lender’s funding of its participation in any L/C Borrowing in accordance with its Commitment Percentage.

L/C Borrowing . An extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Revolving Credit Loan.

L/C Exposure . At any time, the sum of (a) the aggregate Maximum Drawing Amount of all outstanding Letters of Credit at such time plus (b) the aggregate amount of all Unpaid Reimbursement Obligations at such time. The L/C Exposure of any Revolving Credit Lender at any time shall be its Commitment Percentage of the total L/C Exposure at such time.

L/C Issuer . (i) Bank of America in its capacity as issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder and (ii) with respect to Existing Letters of Credit, Bank of America in its capacity as issuer of the Existing Letters of Credit.

Lease Collateral . See definition of “Nonrecourse Loan”.

Lender Affiliate . With respect to any Lender, (i) an Affiliate of such Lender or (ii) any entity (whether a corporation, partnership, limited liability company, trust or legal entity) that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and is administered or managed by such Lender or an Affiliate of such Lender.

Lenders . Bank of America and the other lending institutions listed on Schedule 1 hereto and any other Person who becomes an assignee of any rights and obligations of a Lender pursuant to §15, and, as the context requires, includes the Swing Line Lender and the L/C Issuer. For the avoidance of doubt, the term “Lenders” includes the Revolving Credit Lenders and the Term Loan Lenders.

Letter of Credit . See §4.1.1.

 

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Letter of Credit Application . See §4.1.1.

Letter of Credit Expiration Date . The day that is seven days prior to the Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business Day).

Letter of Credit Fee . See §4.6.

Letter of Credit Participation . See §4.1.4.

Letter of Credit Sublimit . An amount equal to $15,000,000. The Letter of Credit Sublimit is part of, and not in addition to, the Total Commitment.

Lien . Any mortgage, deed of trust, security interest, pledge, hypothecation, assignment, attachment, deposit arrangement, encumbrance, lien (statutory, judgment or otherwise), or other security agreement or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any Capitalized Lease, any Synthetic Lease, any financing lease involving substantially the same economic effect as any of the foregoing and the filing of any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction).

Loan Documents . This Credit Agreement, the Notes, the Letter of Credit Applications, the Letters of Credit , each Issuer Document, the Subordination and Intercreditor Agreement, the Guaranty, the Fee Letter and the Security Documents.

Loan Request . See §2.6.

Loans . Collectively, the Revolving Credit Loans and the Term Loan.

Material Adverse Effect . With respect to any event or occurrence of whatever nature (including any adverse determination in any litigation, arbitration or governmental investigation or proceeding):

(a) a material adverse effect on the business, properties, prospects, condition (financial or otherwise), assets, operations or income of the Borrower, individually or the Borrower and its Subsidiaries, taken as a whole;

 

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(b) an adverse effect on the ability of the Borrower or any of its Subsidiaries, individually and/or taken as a whole, to perform any of their respective Obligations under any of the Loan Documents to which it is a party; or

(c) any impairment of the validity, binding effect or enforceability of this Credit Agreement or any of the other Loan Documents, any impairment of the rights, remedies or benefits available to the Administrative Agent or any Lender under any Loan Document or any impairment of the attachment, perfection or priority of any Lien of the Administrative Agent under the Security Documents.

Maturity Date . September 30, 2010.

Maximum Drawing Amount . The maximum aggregate amount that the beneficiaries may at any time draw under outstanding Letters of Credit, as such aggregate amount may be reduced or increased from time to time pursuant to the terms of the Letters of Credit.

Moody’s . Moody’s Investors Services, Inc.

Multiemployer Plan . Any multiemployer plan within the meaning of §3(37) of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate.

Net Book Value . With respect to any Containers owned by the Borrower which are standard dry cargo Containers and which were acquired on or after July 1, 2001, the Original Cost to the Borrower of such Containers adjusted to reflect depreciation over twelve and a half years on a straight line basis, to residuals of $645 for a 20-foot standard dry cargo Container, $795 for a 40-foot standard dry cargo Container and $805 for a 40-foot standard “high-cube” dry cargo Container. With respect to any Containers owned by the Borrower which are non-standard Containers, the Original Cost to the Borrower of such Containers adjusted to reflect depreciation over fifteen years on a straight line basis to a residual of 15% of the Original Cost of such Containers. With respect to any Containers owned by the Borrower which are standard dry cargo Containers and which were acquired on or before June 30, 2001, the Original Cost to the Borrower of such Containers adjusted to reflect depreciation using the following depreciation method: from the date of purchase until June 30, 2001, the Original Cost to the Borrower of such Containers adjusted to reflect depreciation on a straight line basis over fifteen years to a residual value of 15% of the Original Cost of such Containers. From and after July 1, 2001, depreciation shall be calculated over the remainder of a cumulative twelve and a half year life, on a straight line basis, to residuals of $645 for a 20-foot standard dry cargo Container, $795 for a 40-foot standard dry cargo Container and $805 for a 40-foot standard “high-cube” dry cargo Container.

 

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Net Present Value . At the relevant time of reference thereto, and as the context may require, the discounted present value of Direct Finance Lease Receivables, discounted at the Direct Finance Lease Rate per annum of the remaining term of the applicable Direct Finance Lease.

Non-Extension Notice Date . See §4.1.6.

Nonrecourse Loan . A loan to the Borrower (a) which is secured solely by (i) specifically identified Containers (the “ Identified Containers ”), (ii) one or more leases of such Identified Containers, including all rentals thereunder (the “ Lease Collateral ”), and (iii) all proceeds of such Identified Containers and Lease Collateral; (b) which is payable solely from the related Identified Containers and Lease Collateral, and as to which rentals under the related Lease Collateral have been assigned to the applicable lender, and are paid directly to such lender; and (c) with respect to which payments of principal and interest are without recourse to the Borrower or the Borrower’s property (other than the related Identified Containers and Lease Collateral).

Notes . Collectively, the Revolving Credit Notes and the Term Loan Notes.

Obligations . All indebtedness, obligations and liabilities of any of the Borrower and its Subsidiaries to any of the Lenders, the Swing Line Lender, the L/C Issuer and the Administrative Agent, individually or collectively, existing on the date of this Credit Agreement or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under this Credit Agreement or any of the other Loan Documents or any Interest Rate Protection Agreement , any Swap Contract or any Cash Management Agreement entered into with any Lender or the Administrative Agent (or Affiliates thereof) or any of the Revolving Credit Loans, the Term Loan or Swing Line Loans made or Reimbursement Obligations incurred or any of the Notes, Letter of Credit Applications, Letters of Credit or other instruments at any time evidencing any of the foregoing.

Original Cost . With respect to any Container, the purchase price therefor expressed in Dollars, as determined in accordance with GAAP, consistently applied.

outstanding . With respect to the Revolving Credit Loans or Swing Line Loans, the aggregate unpaid principal thereof as of any date of determination.

Participant . See §15.1.4.

 

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PBGC . The Pension Benefit Guaranty Corporation created by §4002 of ERISA and any successor entity or entities having similar responsibilities.

PCAOB . The Public Company Accounting Oversight Board.

Perfection Certificate . The Perfection Certificate as defined in the Security Agreement.

Permitted Liens . Liens permitted by §9.2.

Person . Any individual, corporation, limited liability company, limited liability partnership, trust, other unincorporated association, business, or other legal entity, and any Governmental Authority.

Platform. See §8.4.

Public Market. A Public Market shall exist if (a) a Public Offering has been consummated and (b) any equity interests of the Borrower have been distributed by means of an effective registration statement under the Securities Act of 1933.

Public Offering A public offering of the equity interests of the Borrower pursuant to an effective registration statement under the Securities Act of 1933.

RCRA . See §7.18(a).

Real Estate . All real property at any time owned or leased (as lessee or sublessee) by the Borrower or any of its Subsidiaries.

Redemption Agreement . That certain Redemption Agreement to be dated on or about October 1, 2006, between the Company and Interpool, substantially in the form delivered to the Administrative Agent on or prior to the Closing Date.

Reference Period . As of any date of determination, the period of four (4) consecutive fiscal quarters of the Borrower and its Subsidiaries ending on such date, or if such date is not a fiscal quarter end date, the period of four (4) consecutive fiscal quarters most recently ended (in each case treated as a single accounting period).

 

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Register . See §15.1.3.

Reimbursement Obligation . The Borrower’s obligation to reimburse the Administrative Agent and the relevant Lenders on account of any drawing under any Letter of Credit as provided in §4.2.

Related Parties . With respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

Rental Obligations . All present or future obligations of the Borrower or any of its Subsidiaries under any rental agreements or leases of real or personal property, other than (a) obligations that can be terminated by the giving of notice without liability to the Borrower or such Subsidiary in excess of the liability for rent due as of the date on which such notice is given and under which no penalty or premium is paid as a result of any such termination, (b) obligations under rental agreements relating to equipment other than Containers having an aggregate value of less than $1,000,000 for all such agreements, and (c) obligations in respect of any Capitalized Leases. For purposes of this Credit Agreement, the aggregate amount of Rental Obligations of the Borrower and its Subsidiaries shall, as at any date of determination, be an amount equal to the net present value, calculated at a discount rate of nine percent (9.00%) per annum, of the future Rental Obligations of such Person.

Required Lenders . As of any date, the Lenders holding Revolving Credit Exposures, unused Commitments and the outstanding principal amount of the Term Loan representing more than fifty percent (50%) of the sum of the total Revolving Credit Exposures, unused Commitments and the outstanding principal amount of the Term Loan, in each case, at such time; provided that the Commitment of, the portion of the Revolving Exposures held or deemed held by and/or the outstanding principal amount of the Term Loan held by, any Delinquent Lender shall be excluded for purposes of making a determination of Required Lenders.

Responsible Officer . The chief executive officer, president or chief financial officer of the Borrower. Any document delivered hereunder that is signed by a Responsible Officer of the Borrower shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of the Borrower and such Responsible Officer shall be conclusively presumed to have acted on behalf of the Borrower.

Restricted Payment . In relation to the Borrower and its Subsidiaries, any (a) Distribution or (b) payment or prepayment by the Borrower or its Subsidiaries to (i) the

 

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Borrower’s or any Subsidiary’s shareholders (or other equity holders), in each case, other than to the Borrower, or (ii) to any Affiliate of the Borrower or any Subsidiary or any Affiliate of the Borrower’s or such Subsidiary’s shareholders (or other equity holders), in each case, other than to the Borrower.

Revolving Credit Exposure . With respect to any Revolving Credit Lender at any time, the sum of the outstanding principal amount of such Revolving Credit Lender’s Revolving Credit Loans and its L/C Exposure and Swing Line Exposure at such time.

Revolving Credit Lender . Each Lender with a Commitment or, following termination of the Commitments, which has Revolving Credit Loans outstanding or participations in an outstanding Letter of Credit or Swing Line Loan and any other Person who becomes an assignee of rights and obligations of a Revolving Credit Lender.

Revolving Credit Loans . Revolving credit loans made or to be made by the Revolving Credit Lenders to the Borrower pursuant to §2.

Revolving Credit Note Record . The grid attached to a Revolving Credit Note, or the continuation of such grid, or any other similar record, including computer records, maintained by any Lender with respect to any Revolving Credit Loan referred to in such Revolving Credit Note.

Revolving Credit Notes . See §2.4.

SARA . See §7.18(a).

Securities Laws . The Securities Act of 1933, the Securities Exchange Act of 1934, Sarbanes-Oxley and the applicable accounting and auditing principles, rules, standards and practices promulgated, approved or incorporated by the SEC or the PCAOB.

Security Agreement . The Amended and Restated Security Agreement, dated or to be dated as of the Closing Date, between the Borrower, each Guarantor party thereto and the Administrative Agent, and in form and substance satisfactory to the Lenders and the Administrative Agent, as the same may be amended, restated, supplemented or otherwise modified and in effect from time to time.

Security Documents . The Security Agreement, the Stock Pledge Agreement, the Trademark Security Agreement and all other instruments and documents, including

 

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without limitation, Uniform Commercial Code financing statements (or the equivalent thereof in any applicable foreign jurisdiction) and the Perfection Certificates, required to be executed or delivered pursuant to (a) any Security Document or (b) §§8.16, 8.17 or 8.18.

Senior Funded Debt . At any time of determination, with respect to the Borrower and its Subsidiaries, the sum, without duplication, of (a) the aggregate amount of Indebtedness (excluding Subordinated Debt) of the Borrower and its Subsidiaries, on a consolidated basis, relating to (i) the borrowing of money or the obtaining of credit, including the issuance of notes or bonds, (ii) the deferred purchase price of assets (other than trade payables incurred in the ordinary course of business), (iii) Capitalized Leases, (iv) Rental Obligations, and (v) the maximum drawing amount of all letters of credit outstanding plus (b) Indebtedness of the type referred to in clause (a) of another Person guaranteed by the Borrower or any of its Subsidiaries .

Senior Leverage Ratio . As at any date of determination, the ratio of (a) Senior Funded Debt as at such date to (b) Consolidated EBITDAR for the Reference Period most recently ended.

S&P . Standard & Poor’s Ratings Group.

Solvent . With respect to any Person on a particular date, that on such date (a) the fair value of the assets of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person, (b) the present fair saleable value of the assets 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 assets and pay its debts and other liabilities, contingent obligations and other commitments 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 after giving due consideration to the prevailing practice in the industry in which such Person is engaged. In computing the amount of contingent liabilities at any time, it is intended that such liabilities will be computed at the amount which, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

Staff Loan Program . A program administered by the Borrower pursuant to which the Borrower makes loans to employees; provided , that the aggregate principal amount of loans outstanding at any time under such program shall not exceed $1,500,000, and that no more than an aggregate of $100,000 of which may be unsecured.

 

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Stock Pledge Agreement . The Amended and Restated Stock Pledge Agreement, dated or to be dated as of the Closing Date, between the Borrower, certain Guarantors and the Administrative Agent, and in form and substance satisfactory to the Lenders and the Administrative Agent as the same may be amended, restated, supplemented and otherwise modified and in effect from time to time.

Subordinated Debt . The Interpool Convertible Subordinated Debt and other Indebtedness of the Borrower or any of its Subsidiaries that is expressly subordinated and made junior to the payment and performance in full of the Obligations, and evidenced as such by the Subordination and Intercreditor Agreement or by another written instrument containing subordination provisions in form and substance approved by the Administrative Agent and the Lenders in writing.

Subordination and Intercreditor Agreement . That certain Subordination and Intercreditor Agreement, dated as of the Closing Date, among the Administrative Agent, Interpool and the Borrower and in form and substance satisfactory to the Lenders and the Administrative Agent and as the same may be amended, restated, supplemented and in effect from time to time.

Subordination Documents . The Subordination and Intercreditor Agreement, Interpool Convertible Subordinated Debt Documents and all other documents, instruments and other agreements entered into in connection with Subordinated Debt, in each case, in form and substance reasonably satisfactory to the Administrative Agent.

Subsidiary . Any corporation, association, trust, or other business entity of which the designated parent shall at any time own directly or indirectly through a Subsidiary or Subsidiaries at least a majority (by number of votes) of the outstanding Voting Stock.

Swap Contract . (a) Any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

 

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Swing Line . The revolving credit facility made available by the Swing Line Lender pursuant to §2.10.

Swing Line Borrowing . A borrowing of a Swing Line Loan pursuant to §2.10.

Swing Line Exposure . At any time, the aggregate principal amount of all Swing Line Loans outstanding at such time. The Swing Line Exposure of any Revolving Lender at any time shall be its Commitment Percentage of the total Swing Line Exposure at such time.

Swing Line Lender . Bank of America in its capacity as provider of Swing Line Loans, or any successor swing line lender hereunder.

Swing Line Loan . See §2.10.1.

Swing Line Loan Notice . A notice of a Swing Line Borrowing pursuant to §2.10.2, which, if in writing, shall be substantially in the form of Exhibit F .

Swing Line Sublimit . An amount equal to the lesser of (a) $10,000,000 and (b) the Total Commitment. The Swing Line Sublimit is part of, and not in addition to, the Total Commitment.

Syndication Agent. See Introductory Paragraph.

Synthetic Lease . Any lease of goods or other property, whether real or personal, which is treated as an operating lease under GAAP and as a loan or financing for U.S. income tax purposes.

Term Loan . The term loan made by the Term Loan Lenders to the Borrower pursuant to §2. The original principal amount of the Term Loan is $20,000,000.

Term Loan Lender . Each Lender that holds a portion of the outstanding Term Loan and any other Person who becomes an assignee of the rights and obligations of a Term Loan Lender.

 

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Term Loan Notes . See §2.4.

Term Loan Note Record . The grid attached to a Term Loan Note, or the continuation of such grid, or any other similar record, including computer records, maintained by any Lender with respect to its portion of the Term Loan referred to in such Term Loan Note.

Term Loan Percentage . With respect to each Term Loan Lender, the percentage set forth on Schedule 1 hereto as such Term Loan Lender’s percentage of the aggregate amount of the Term Loan made or to be made by all of the Term Loan Lenders.

Total Commitment . The sum of the Commitments of the Lenders, as in effect from time to time. The Total Commitment on the Closing Date is $170,000,000.

Total Leverage Ratio . As at any date of determination, the ratio of (a) Consolidated Funded Debt as at such date to (b) Consolidated EBITDAR for the Reference Period most recently ended.

Trademark Security Agreement . The Trademark Security Agreement, dated or to be dated as of the Closing Date, between the Borrower, each Guarantor party thereto and the Administrative Agent, and in form and substance satisfactory to the Lenders and the Administrative Agent, as the same may be amended, restated, supplemented or otherwise modified and in effect from time to time.

Type . As to any Revolving Credit Loan or the Term Loan or any portion thereof), its nature as a Base Rate Loan or a Eurodollar Rate Loan.

Unpaid Reimbursement Obligation . Any Reimbursement Obligation for which the Borrower does not reimburse the Administrative Agent and the Lenders on the date specified in, and in accordance with, §4.2.

Voting Stock . Stock or similar interests, of any class or classes (however designated), the holders of which are at the time entitled, as such holders, to vote for the election of a majority of the directors (or persons performing similar functions) of the corporation, association, trust or other business entity involved, whether or not the right so to vote exists by reason of the happening of a contingency.

 

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Rules of Interpretation .

(a) A reference to any document or agreement shall include such document or agreement as amended, modified or supplemented from time to time in accordance with its terms and the terms of this Credit Agreement.

(b) The singular includes the plural and the plural includes the singular.

(c) A reference to any law includes any amendment or modification to such law.

(d) A reference to any Person includes its permitted successors and permitted assigns.

(e) Accounting terms not otherwise defined herein have the meanings assigned to them by GAAP applied on a consistent basis by the accounting entity to which they refer.

(f) The words “include”, “includes” and “including” are not limiting.

(g) All terms not specifically defined herein or by GAAP, which terms are defined in the Uniform Commercial Code as in effect in the State of New York, have the meanings assigned to them therein, with the term “ instrument ” being that defined under Article 9 of the Uniform Commercial Code.

(h) Reference to a particular “§” refers to that section of this Credit Agreement unless otherwise indicated.

(i) The words “herein”, “hereof”, “hereunder” and words of like import shall refer to this Credit Agreement as a whole and not to any particular section or subdivision of this Credit Agreement.

(j) Unless otherwise expressly indicated, in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including,” the words “to” and “until” each mean “to but excluding,” and the word “through” means “to and including.”

(k) This Credit Agreement and the other Loan Documents are the result of negotiation among, and have been reviewed by counsel to, among others, the Administrative Agent and the Borrower and are the product of discussions and negotiations among all parties. Accordingly, this Credit Agreement and the other Loan Documents are not intended to be construed against the Administrative Agent or any of the Lenders merely on account of the Administrative Agent’s or any Lender’s involvement in the preparation of such documents.

 

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(l) Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided , however , that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the “International Standby Practices 1998” (ISP) published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance), such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

2. THE SENIOR CREDIT FACILITY .

2.1. Commitment to Lend .

2.1.1. Revolving Credit Loans . Subject to the terms and conditions set forth in this Credit Agreement, each of the Revolving Credit Lenders severally agrees to lend to the Borrower and the Borrower may borrow, repay, and reborrow from time to time from the Closing Date until the Maturity Date upon notice by the Borrower to the Administrative Agent given in accordance with §2.6, such sums as are requested by the Borrower up to a maximum aggregate amount outstanding (after giving effect to all amounts requested) at any one time equal to such Revolving Credit Lender’s Commitment minus such Revolving Credit Lender’s Commitment Percentage of (i) the sum of the Maximum Drawing Amount and all Unpaid Reimbursement Obligations plus (ii) the outstanding amount of Swing Line Loans, provided that (a) prior to the earlier of (x) the second anniversary of the Closing Date or (y) the date that the Borrower prepays (in whole or in part) any outstanding Interpool Convertible Subordinated Debt, the sum of the outstanding amount of the Revolving Credit Loans (after giving effect to all amounts requested) plus the Maximum Drawing Amount and all Unpaid Reimbursement Obligations plus the outstanding amount of Swing Line Loans shall not at any time exceed the lesser of (i) the Total Commitment at such time and (ii) the Borrowing Base at such time or (b) at all other times, the sum of the outstanding amount of the Revolving Credit Loans (after giving effect to all amounts requested) plus the Maximum Drawing Amount and all Unpaid Reimbursement Obligations plus the outstanding amount of Swing Line Loans plus the outstanding principal amount of the Term Loan shall not at any time exceed the lesser of (i) the Total Commitment at such time plus the outstanding principal amount of the Term Loan at such time and (ii) the Borrowing Base at such time. The Revolving Credit Loans shall be made pro rata in accordance with each Revolving Credit Lender’s Commitment Percentage. Each request for a Revolving Credit Loan hereunder shall constitute a representation and warranty

 

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by the Borrower that the conditions set forth above and in §11 and §12, in the case of the initial Revolving Credit Loans to be made on the Closing Date, and §12, in the case of all other Revolving Credit Loans, have been satisfied on the date of such request. The Revolving Credit Loans advanced on the Closing Date shall be made by the Revolving Credit Lenders as a Base Rate Loan, subject to conversion after the Closing Date in accordance with §2.7.

2.1.2. The Term Loan . Subject to the terms and conditions of this Agreement, each Term Loan Lender severally (and not jointly) agrees to make an advance of its Term Loan Percentage of the Term Loan to the Borrower on one occasion on or within fourteen (14) days following the Closing Date. The principal amount of the Term Loan outstanding hereunder from time to time shall bear interest and the Term Loan shall be repayable as herein provided. No amount of the Term Loan repaid or prepaid by the Borrower may be reborrowed hereunder. The Borrower shall give to the Administrative Agent written notice in the form of Exhibit C hereto (or telephonic notice confirmed in a writing in the form of Exhibit C hereto) of the Term Loan requested hereunder no later than 2:00 p.m. Boston time one (1) Business Days prior to the proposed Drawdown Date of the Term Loan. On the Drawdown Date of the Term Loan, each Term Loan Lender shall, pursuant to the terms and subject to the conditions of this Agreement, make the amount of its Term Loan Percentage of the Term Loan available by wire transfer to the Administrative Agent. Such wire transfer shall be directed to the Administrative Agent at the Administrative Agent’s Office and shall be in the form of same day funds in Dollars. The amount so received by the Administrative Agent shall, subject to the terms and conditions of this Agreement, including without limitation the satisfaction of all applicable conditions in §11 and §12, be made available to the Borrower by delivery of the proceeds thereof as shall be directed by the Borrower and acceptable to the Administrative Agent. The Term Loan shall be made by the Term Loan Lenders as a Base Rate Loan, subject to conversion after the Drawdown Date thereof in accordance with §2.7. If the Term Loan is not advanced by the Term Loan Lenders on or within fourteen (14) days following the Closing Date, the obligations of the Term Loan Lenders to make the Term Loan shall terminate.

2.2. Commitment Fee . The Borrower agrees to pay to the Administrative Agent for the accounts of the Revolving Credit Lenders in accordance with their respective Commitment Percentages a commitment fee (the “ Commitment Fee ”) calculated at the rate per annum of the Applicable Margin with respect to the Commitment Fee as in effect from time to time on the actual daily amount during each calendar quarter or portion thereof from the Closing Date to the Maturity Date by which the Total Commitment minus the sum of the Maximum Drawing Amount and all Unpaid Reimbursement Obligations exceeds the outstanding amount of Revolving Credit Loans (excluding Swing Line Loans) during such calendar quarter. The Commitment Fee shall be payable quarterly in arrears on the last Business Day of each calendar quarter for such calendar quarter commencing on the first such date following the Closing Date, with a final payment on the Maturity Date or any earlier date on which the Commitments shall terminate.

 

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2.3. Reduction of Total Commitment . The Borrower shall have the right at any time and from time to time upon five (5) Business Days prior written notice to the Administrative Agent to reduce by $500,000 or an integral multiple thereof or to terminate entirely the Total Commitment, whereupon the Commitments of the Revolving Credit Lenders shall be reduced pro rata in accordance with their respective Commitment Percentages of the amount specified in such notice or, as the case may be, terminated. Promptly after receiving any notice of the Borrower delivered pursuant to this §2.3, the Administrative Agent will notify the Revolving Credit Lenders of the substance thereof. Upon the effective date of any such reduction or termination, the Borrower shall pay to the Administrative Agent for the respective accounts of the Revolving Credit Lenders the full amount of any Commitment Fee then accrued on the amount of the reduction. No reduction or termination of the Commitments may be reinstated. If, after giving effect to any reduction of the Total Commitments, the Letter of Credit Sublimit or the Swing Line Sublimit exceeds the amount of the Total Commitments, such Letter of Credit Sublimit or Swingline Sublimit, as applicable, shall be automatically reduced by the amount of such excess.

2.4. Evidence of Debt. (a) The Loans made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Loans made by the Lenders to the Borrower and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a promissory note of the Borrower (i) in substantially the form of Exhibit B-1 hereto (each a “ Revolving Credit Note ”), which shall evidence such Lender’s Revolving Credit Loans and/or (ii) in substantially the form of Exhibit B-2 hereto (each a “ Term Loan Note ”), which shall evidence such Lender’s portion of the Term Loan, in each case, in addition to such accounts or records. Each Lender may attach schedules to its Note(s) and endorse thereon the date, amount, interest rate and maturity of such Lender’s Loans and payments with respect thereto.

(b) In addition to the accounts and records referred to in subsection (a) above, each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swing Line Loans. In the event of any conflict between the accounts and records maintained by the

 

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Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

2.5. Interest . Except as otherwise provided in §5.10,

(a) Each Revolving Credit Loan which is a Base Rate Loan shall bear interest for the period commencing with the Drawdown Date thereof and ending on the last day of the Interest Period with respect thereto at the rate per annum equal to the Base Rate plus the Applicable Margin with respect to Base Rate Loans as in effect from time to time; provided , however , in the event that the interest rate per annum applicable to Base Rate Loans is less than the Eurodollar Rate then applicable for an Interest Period of one month plus the Applicable Margin with respect to Eurodollar Rate Loans in effect at such time, each Revolving Credit Loan which is a Base Rate Loan shall bear interest at the rate per annum equal to the Eurodollar Rate then applicable for an Interest Period of one month plus the Applicable Margin with respect to Eurodollar Rate Loans in effect at such time.

(b) Each Revolving Credit Loan which is a Eurodollar Rate Loan shall bear interest for the period commencing with the Drawdown Date thereof and ending on the last day of the Interest Period with respect thereto at the rate per annum equal to the Eurodollar Rate determined for such Interest Period plus the Applicable Margin with respect to Eurodollar Rate Loans as in effect from time to time.

(c) Each Swing Line Loan shall bear interest from the applicable Drawdown Date thereof at the rate per annum equal to the Base Rate plus the Applicable Margin with respect to Base Rate Loans as in effect from time to time; provided , however , that in the event the interest rate per annum applicable to Swing Line Loans is less than the Eurodollar Rate then applicable for an Interest Period of one month plus the Applicable Margin with respect to Eurodollar Rate Loans in effect at such time, each Swing Line Loan shall bear interest at the rate per annum equal to the Eurodollar Rate then applicable for an Interest Period of one month plus the Applicable Margin with respect to Eurodollar Rate Loans in effect at such time.

(d) Any portion of the Term Loan which is a Base Rate Loan shall bear interest for the period commencing with the Drawdown Date thereof and ending on the last day of the Interest Period with respect thereto at the rate per annum equal to (i) at all times prior to the second anniversary of the Closing Date, the Base Rate plus the Applicable Margin with respect to Base Rate Loans as in effect from time to time plus 0.25%, and (ii) at all other times, the Base Rate plus the Applicable Margin with respect to Base Rate Loans as in effect from time to time; provided , however , in the event that the interest rate per annum applicable to Base Rate Loans is less than the Eurodollar Rate then applicable for an Interest

 

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Period of one month plus the Applicable Margin with respect to Eurodollar Rate Loans in effect at such time, any portion of the Term Loan which is a Base Rate Loan shall bear interest at the rate per annum equal to (i) at all times prior to the second anniversary of the Closing Date, the Eurodollar Rate then applicable for an Interest Period of one month plus the Applicable Margin with respect to Eurodollar Rate Loans in effect at such time plus 0.25% and (ii) at all other times, the Eurodollar Rate then applicable for an Interest Period of one month plus the Applicable Margin with respect to Eurodollar Rate Loans in effect at such time.

(e) Any portion of the Term Loan which is a Eurodollar Rate Loan shall bear interest for the period commencing with the Drawdown Date thereof and ending on the last day of the Interest Period with respect thereto at the rate per annum equal to (i) at all times prior to the second anniversary of the Closing Date, the Eurodollar Rate determined for such Interest Period plus the Applicable Margin with respect to Eurodollar Rate Loans as in effect from time to time plus 0.25% and (ii) at all other times, the Eurodollar Rate determined for such Interest Period plus the Applicable Margin with respect to Eurodollar Rate Loans as in effect from time to time.

The Borrower promises to pay interest on each Revolving Credit Loan, the Term Loan (and any portion thereof) and each Swing Line Loan in arrears on each Interest Payment Date with respect thereto.

2.6. Requests for Revolving Credit Loans. The Borrower shall give to the Administrative Agent written notice in the form of Exhibit C hereto (or telephonic notice confirmed in a writing in the form of Exhibit C hereto) of each Revolving Credit Loan requested hereunder (a “ Loan Request ”) no less than (a) two (2) Business Days prior to the proposed Drawdown Date of any Base Rate Loan and (b) four (4) Eurodollar Business Days prior to the proposed Drawdown Date of any Eurodollar Rate Loan. Each such notice shall specify (i) the principal amount of the Revolving Credit Loan requested, (ii) the proposed Drawdown Date of such Revolving Credit Loan, (iii) the Interest Period for such Revolving Credit Loan and (iv) the Type of such Revolving Credit Loan. Promptly upon receipt of any such notice, the Administrative Agent shall notify each of the Lenders thereof. Each Loan Request shall be irrevocable and binding on the Borrower and shall obligate the Borrower to accept the Revolving Credit Loan requested from the Lenders on the proposed Drawdown Date. Each Loan Request relating to a Base Rate Loan shall be in a minimum aggregate amount of $500,000 and each Loan Request relating to a Eurodollar Rate Loan shall be in a minimum aggregate amount of $1,000,000.

2.7. Conversion Options .

2.7.1. Conversion to Different Type of Loan . The Borrower may elect from time to time to convert any outstanding Loan to a Loan of another Type, provided that (a) with respect to any such conversion of a Eurodollar Rate Loan to

 

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a Base Rate Loan, the Borrower shall give the Administrative Agent at least three (3) Business Days prior written notice of such election; (b) with respect to any such conversion of a Base Rate Loan to a Eurodollar Rate Loan, the Borrower shall give the Administrative Agent at least four (4) Eurodollar Business Days prior written notice of such election; (c) with respect to any such conversion of a Eurodollar Rate Loan into a Base Rate Loan, such conversion shall only be made on the last day of the Interest Period with respect thereto and (d) no Loan may be converted into a Eurodollar Rate Loan when any Default or Event of Default has occurred and is continuing. On the date on which such conversion is being made each Lender shall take such action as is necessary to transfer its Commitment Percentage or Term Loan Percentage, as the case may be, of such Loans to its Domestic Lending Office or its Eurodollar Lending Office, as the case may be. All or any part of outstanding Loans of any Type may be converted into a Loan of another Type as provided herein, provided that any partial conversion shall be in an aggregate principal amount of at least $500,000, in the case of conversion to Base Rate Loans, and $1,000,000 in the case of conversion to Eurodollar Rate Loans. Each Conversion Request relating to the conversion of a Loan to a Eurodollar Rate Loan shall be irrevocable by the Borrower.

2.7.2. Continuation of Type of Loan . A Loan of any Type may be continued as a Loan of the same Type upon the expiration of an Interest Period with respect thereto by compliance by the Borrower with the notice provisions contained in §2.7.1; provided that no Eurodollar Rate Loan may be continued as such when any Default or Event of Default has occurred and is continuing, but shall be automatically converted to a Base Rate Loan on the last day of the first Interest Period relating thereto ending during the continuance of any Default or Event of Default of which officers of the Administrative Agent active upon the Borrower’s account have actual knowledge. In the event that the Borrower fails to provide any such notice with respect to the continuation of any Eurodollar Rate Loan as such, then such Eurodollar Rate Loan shall be automatically converted to a Base Rate Loan on the last day of the first Interest Period relating thereto. The Administrative Agent shall notify the Lenders promptly when any such automatic conversion contemplated by this §2.7 is scheduled to occur.

2.7.3. Eurodollar Rate Loans . Any conversion to or from Eurodollar Rate Loans shall be in such amounts and be made pursuant to such elections so that, after giving effect thereto, the aggregate principal amount of all Eurodollar Rate Loans having the same Interest Period shall not be less than $1,000,000. No more than five (5) Eurodollar Rate Loans having different Interest Periods may be outstanding at any time.

2.8. Funds for Loans .

2.8.1. Funding Procedures . Not later than 1:00 p.m. (Boston time) on the proposed Drawdown Date of any Revolving Credit Loans, each of the Lenders will make available to the Administrative Agent, at the Administrative Agent’s