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REVOLVING CREDIT AND SECURITY AGREEMENT

Security Agreement

REVOLVING CREDIT AND SECURITY AGREEMENT | Document Parties: PAC-VAN, INC | PNC BANK, NATIONAL ASSOCIATION | PNC CAPITAL MARKETS LLC | WELLS FARGO BANK, NATIONAL ASSOCIATION You are currently viewing:
This Security Agreement involves

PAC-VAN, INC | PNC BANK, NATIONAL ASSOCIATION | PNC CAPITAL MARKETS LLC | WELLS FARGO BANK, NATIONAL ASSOCIATION

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Title: REVOLVING CREDIT AND SECURITY AGREEMENT
Governing Law: New York     Date: 7/22/2010
Industry: Real Estate Operations     Law Firm: Thorp Reed     Sector: Services

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Exhibit 10.1

REVOLVING CREDIT

AND

SECURITY AGREEMENT

 

PNC BANK, NATIONAL ASSOCIATION

(AS LENDER AND AS ADMINISTRATIVE AND COLLATERAL AGENT)

AND

WELLS FARGO BANK, NATIONAL ASSOCIATION (LENDER AND AS SYNDICATION AGENT)

AND

SUCH OTHER LENDERS WHICH ARE NOW OR HEREAFTER A PARTY HERETO

AND

PNC CAPITAL MARKETS LLC (AS SOLE LEAD ARRANGER AND SOLE BOOKRUNNER)

AND

PAC-VAN ASSET TRUST

WITH

PAC-VAN, INC., AN INDIANA CORPORATION AND SUCH OTHER BORROWERS PARTY HERETO

 

(AS BORROWERS)

AND

THE GUARANTORS PARTY HERETO

(AS GUARANTORS)

JULY 16, 2010

 

 

 


 

 

TABLE OF CONTENTS

 

I.

 

DEFINITIONS

 

1

 

 

 

 

 

 

 

 

 

1.1.

 

Accounting Terms

 

1

 

 

1.2.

 

General Terms

 

1

 

 

1.3.

 

Uniform Commercial Code Terms

 

29

 

 

1.4.

 

Certain Matters of Construction

 

29

 

 

 

 

 

 

 

II.

 

ADVANCES, PAYMENTS.

 

30

 

 

 

 

 

 

 

 

 

2.1.

 

Revolving Advances

 

30

 

 

2.2.

 

Procedure for Revolving Advances Borrowing

 

31

 

 

2.3.

 

Disbursement of Advance Proceeds

 

33

 

 

2.4.

 

Maximum Advances.

 

34

 

 

2.5.

 

Repayment of Advances

 

34

 

 

2.6.

 

Repayment of Excess Advances

 

34

 

 

2.7.

 

Statement of Account

 

35

 

 

2.8.

 

Letters of Credit.

 

35

 

 

2.9.

 

Issuance of Letters of Credit

 

35

 

 

2.10.

 

Requirements For Issuance of Letters of Credit

 

36

 

 

2.11.

 

Disbursements, Reimbursement

 

36

 

 

2.12.

 

Repayment of Participation Advances

 

38

 

 

2.13.

 

Documentation

 

38

 

 

2.14.

 

Determination to Honor Drawing Request

 

38

 

 

2.15.

 

Nature of Participation and Reimbursement Obligations

 

39

 

 

2.16.

 

Indemnity

 

40

 

 

2.17.

 

Liability for Acts and Omissions

 

40

 

 

2.18.

 

Additional Payments

 

42

 

 

2.19.

 

Manner of Borrowing and Payment

 

42

 

 

2.20.

 

Mandatory Prepayments

 

43

 

 

2.21.

 

Use of Proceeds

 

44

 

 

2.22.

 

Defaulting Lender

 

44

 

 

2.23.

 

Swing Loans

 

45

 

 

 

 

 

 

 

III.

 

INTEREST AND FEES

 

47

 

 

 

 

 

 

 

 

 

3.1.

 

Interest

 

47

 

 

3.2.

 

Letter of Credit Fees

 

47

 

 

3.3.

 

Facility Fee

 

48

 

 

 

i


 

 

 

 

 

3.4.

 

Fee Letter

 

48

 

 

3.5.

 

Computation of Interest and Fees

 

48

 

 

3.6.

 

Maximum Charges

 

48

 

 

3.7.

 

Increased Costs

 

49

 

 

3.8.

 

Basis For Determining Interest Rate Inadequate or Unfair

 

49

 

 

3.9.

 

Capital Adequacy

 

50

 

 

3.10.

 

Gross Up for Taxes

 

50

 

 

3.11.

 

Withholding Tax Exemption

 

51

 

 

 

 

 

 

 

IV.

 

COLLATERAL: GENERAL TERMS

 

52

 

 

 

 

 

 

 

 

 

4.1.

 

Security Interest in the Collateral

 

52

 

 

4.2.

 

Perfection of Security Interest

 

52

 

 

4.3.

 

Disposition of Collateral

 

53

 

 

4.4.

 

Preservation of Collateral

 

53

 

 

4.5.

 

Ownership of Collateral

 

53

 

 

4.6.

 

Defense of Agent's, Trust's and Lenders' Interests

 

54

 

 

4.7.

 

Books and Records

 

55

 

 

4.8.

 

Financial Disclosure

 

55

 

 

4.9.

 

Compliance with Laws

 

55

 

 

4.10.

 

Inspection of Premises; Appraisals

 

55

 

 

4.11.

 

Insurance

 

56

 

 

4.12.

 

Failure to Pay Insurance

 

57

 

 

4.13.

 

Payment of Taxes

 

57

 

 

4.14.

 

Payment of Leasehold Obligations

 

57

 

 

4.15.

 

Receivables

 

57

 

 

4.16.

 

Inventory

 

60

 

 

4.17.

 

Maintenance of Equipment

 

60

 

 

4.18.

 

Exculpation of Liability

 

60

 

 

4.19.

 

Environmental Matters

 

60

 

 

4.20.

 

Financing Statements

 

62

 

 

4.21.

 

Certificates of Title

 

62

 

 

 

 

 

 

 

V.

 

REPRESENTATIONS AND WARRANTIES

 

64

 

 

 

 

 

 

 

 

 

5.1.

 

Authority

 

64

 

 

5.2.

 

Formation and Qualification

 

64

 

 

5.3.

 

Survival of Representations and Warranties

 

65

 

 

 

ii


 

 

 

 

 

5.4.

 

Tax Returns

 

65

 

 

5.5.

 

Financial Statements

 

65

 

 

5.6.

 

Entity Names

 

66

 

 

5.7.

 

O.S.H.A. and Environmental Compliance

 

66

 

 

5.8.

 

Solvency; No Litigation, Violation, Indebtedness or Default

 

66

 

 

5.9.

 

Patents, Trademarks, Copyrights and Licenses

 

68

 

 

5.10.

 

Licenses and Permits

 

68

 

 

5.11.

 

Default of Indebtedness

 

68

 

 

5.12.

 

No Default

 

68

 

 

5.13.

 

No Burdensome Restrictions

 

69

 

 

5.14.

 

No Labor Disputes

 

69

 

 

5.15.

 

Margin Regulations

 

69

 

 

5.16.

 

Investment Company Act

 

69

 

 

5.17.

 

Disclosure

 

69

 

 

5.18.

 

Swaps

 

69

 

 

5.19.

 

Conflicting Agreements

 

70

 

 

5.20.

 

Application of Certain Laws and Regulations

 

70

 

 

5.21.

 

Business and Property of Loan Parties

 

70

 

 

5.22.

 

Section 20 Subsidiaries

 

70

 

 

5.23.

 

Anti-Terrorism Laws

 

70

 

 

5.24.

 

Trading with the Enemy

 

71

 

 

5.25.

 

Federal Securities Laws

 

71

 

 

5.26.

 

Titled Assets

 

71

 

 

5.27.

 

GFC Debt Documents

 

72

 

 

 

 

 

 

 

VI.

 

AFFIRMATIVE COVENANTS

 

72

 

 

 

 

 

 

 

 

 

6.1.

 

Payment of Fees

 

72

 

 

6.2.

 

Conduct of Business and Maintenance of Existence and Assets

 

72

 

 

6.3.

 

Violations

 

72

 

 

6.4.

 

Government Receivables

 

72

 

 

6.5.

 

Financial Covenants

 

73

 

 

6.6.

 

Execution of Supplemental Instruments

 

73

 

 

6.7.

 

Payment of Indebtedness

 

74

 

 

6.8.

 

Standards of Financial Statements

 

74

 

 

6.9.

 

Federal Securities Laws

 

74

 

 

6.10.

 

Undrawn Availability

 

74

 

 

6.11.

 

Intercompany Receivables

 

74

 

 

 

iii


 

 

 

 

 

 

 

 

 

 

VII.

 

NEGATIVE COVENANTS

 

74

 

 

 

 

 

 

 

 

 

7.1.

 

Merger, Consolidation, Acquisition and Sale of Assets

 

75

 

 

7.2.

 

Creation of Liens

 

75

 

 

7.3.

 

Guarantees

 

75

 

 

7.4.

 

Investments

 

75

 

 

7.5.

 

Loans

 

76

 

 

7.6.

 

Net Capital Expenditures

 

76

 

 

7.7.

 

Dividends/Distributions

 

76

 

 

7.8.

 

Indebtedness

 

76

 

 

7.9.

 

Nature of Business

 

77

 

 

7.10.

 

Transactions with Affiliates

 

77

 

 

7.11.

 

Leases

 

77

 

 

7.12.

 

Subsidiaries

 

78

 

 

7.13.

 

Fiscal Year and Accounting Changes

 

78

 

 

7.14.

 

Pledge of Credit

 

78

 

 

7.15.

 

Amendment of Organizational Documents

 

78

 

 

7.16.

 

Compliance with ERISA

 

78

 

 

7.17.

 

Prepayment of Indebtedness

 

79

 

 

7.18.

 

Anti-Terrorism Laws

 

79

 

 

7.19.

 

Membership/Partnership Interests

 

79

 

 

7.20.

 

Trading with the Enemy Act

 

79

 

 

7.21.

 

Other Agreements

 

80

 

 

7.22.

 

Double Negative Pledge

 

80

 

 

7.23.

 

Rental Fleet Transfers

 

80

 

 

7.24.

 

Losses on Sale of Assets

 

80

 

 

7.25.

 

Nevada State Bank Account

 

80

 

 

 

 

 

 

 

VIII.

 

CONDITIONS PRECEDENT

 

80

 

 

 

 

 

 

 

 

 

8.1.

 

Conditions to Initial Advances

 

80

 

 

8.2.

 

Conditions to Each Advance

 

84

 

 

 

 

 

 

 

IX.

 

INFORMATION AS TO LOAN PARTIES

 

84

 

 

 

 

 

 

 

 

 

9.1.

 

Disclosure of Material Matters

 

85

 

 

9.2.

 

Schedules

 

85

 

 

 

iv


 

 

 

 

 

9.3.

 

Environmental Reports

 

85

 

 

9.4.

 

Litigation

 

86

 

 

9.5.

 

Material Occurrences

 

86

 

 

9.6.

 

Government Receivables

 

86

 

 

9.7.

 

Annual Financial Statements

 

86

 

 

9.8.

 

Quarterly Financial Statements

 

87

 

 

9.9.

 

Monthly Financial Statements

 

87

 

 

9.10.

 

Other Reports

 

87

 

 

9.11.

 

Additional Information

 

87

 

 

9.12.

 

Projected Operating Budget

 

88

 

 

9.13.

 

Variances From Operating Budget

 

88

 

 

9.14.

 

Notice of Suits, Adverse Events

 

88

 

 

9.15.

 

ERISA Notices and Requests

 

88

 

 

9.16.

 

Additional Documents

 

89

 

 

 

 

 

 

 

X.

 

EVENTS OF DEFAULT

 

89

 

 

 

 

 

 

 

 

 

10.1.

 

Nonpayment

 

89

 

 

10.2.

 

Breach of Representation

 

89

 

 

10.3.

 

Financial Information

 

90

 

 

10.4.

 

Judicial Actions

 

90

 

 

10.5.

 

Noncompliance

 

90

 

 

10.6.

 

Judgments

 

90

 

 

10.7.

 

Bankruptcy

 

90

 

 

10.8.

 

Inability to Pay

 

91

 

 

10.9.

 

Affiliate Bankruptcy

 

91

 

 

10.10.

 

Material Adverse Effect

 

91

 

 

10.11.

 

Lien Priority

 

91

 

 

10.12.

 

Cross Default – Indebtedness

 

91

 

 

10.13.

 

Cross Default – Other Agreements

 

91

 

 

10.14.

 

Breach of Guaranty

 

92

 

 

10.15.

 

Change of Ownership or Management

 

92

 

 

10.16.

 

Invalidity

 

92

 

 

10.17.

 

Licenses

 

92

 

 

10.18.

 

Seizures

 

92

 

 

10.19.

 

Operations

 

92

 

 

10.20.

 

Pension Plans

 

93

 

 

 

 

 

 

 

 

 

 

v


 

 

 

XI.

 

LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT

 

93

 

 

 

 

 

 

 

 

 

11.1.

 

Rights and Remedies

 

93

 

 

11.2.

 

Agent's/Trust's Discretion

 

95

 

 

11.3.

 

Setoff

 

95

 

 

11.4.

 

Rights and Remedies not Exclusive

 

95

 

 

11.5.

 

Allocation of Payments After Event of Default

 

95

 

 

 

 

 

 

 

XII.

 

WAIVERS AND JUDICIAL PROCEEDINGS

 

96

 

 

 

 

 

 

 

 

 

12.1.

 

Waiver of Notice

 

96

 

 

12.2.

 

Delay

 

96

 

 

12.3.

 

Jury Waiver

 

96

 

 

 

 

 

 

 

XIII.

 

EFFECTIVE DATE AND TERMINATION

 

97

 

 

 

 

 

 

 

 

 

13.1.

 

Term

 

97

 

 

13.2.

 

Termination

 

97

 

 

 

 

 

 

 

XIV.

 

REGARDING AGENT

 

98

 

 

 

 

 

 

 

 

 

14.1.

 

Appointment

 

98

 

 

14.2.

 

Nature of Duties

 

98

 

 

14.3.

 

Lack of Reliance on Agent and Resignation

 

99

 

 

14.4.

 

Certain Rights of Agent

 

99

 

 

14.5.

 

Reliance

 

99

 

 

14.6.

 

Notice of Default

 

100

 

 

14.7.

 

Indemnification

 

100

 

 

14.8.

 

Agent in its Individual Capacity

 

100

 

 

14.9.

 

Delivery of Documents

 

100

 

 

14.10.

 

Borrowers' Undertaking to Agent

 

101

 

 

14.11.

 

No Reliance on Agent's Customer Identification Program

 

101

 

 

14.12.

 

Other Agreements

 

101

 

 

 

 

 

 

 

XV.

 

BORROWING AGENCY

 

101

 

 

 

 

 

 

 

 

 

15.1.

 

Borrowing Agency Provisions

 

101

 

 

15.2.

 

Waiver of Subrogation

 

102

 

 

 

 

 

 

 

 

 

 

vi


 

 

 

XVI.

 

MISCELLANEOUS

 

102

 

 

 

 

 

 

 

 

 

16.1.

 

Governing Law

 

102

 

 

16.2.

 

Entire Understanding

 

103

 

 

16.3.

 

Successors and Assigns; Participations; New Lenders

 

105

 

 

16.4.

 

Application of Payments

 

107

 

 

16.5.

 

Indemnity

 

108

 

 

16.6.

 

Notice

 

108

 

 

16.7.

 

Survival

 

110

 

 

16.8.

 

Severability

 

111

 

 

16.9.

 

Expenses

 

111

 

 

16.10.

 

Injunctive Relief

 

111

 

 

16.11.

 

Consequential Damages

 

111

 

 

16.12.

 

Captions

 

111

 

 

16.13.

 

Counterparts; Facsimile Signatures

 

112

 

 

16.14.

 

Construction

 

112

 

 

16.15.

 

Confidentiality; Sharing Information

 

112

 

 

16.16.

 

Publicity

 

113

 

 

16.17.

 

Certifications From Banks and Participants; US PATRIOT Act

 

113

 

 

16.18.

 

Limitation of Liability of Trustee

 

113

 

 

 

vii


 

 

LIST OF EXHIBITS AND SCHEDULES

 

Exhibits

 

Exhibit 1.2

 

Borrowing Base Certificate

Exhibit 2.1(a)

 

Revolving Credit Note

Exhibit 2.23

 

Swing Note

Exhibit 5.5(b)

 

Financial Projections

Exhibit 8.1(i)

 

Financial Condition Certificate

Exhibit 16.3

 

Commitment Transfer Supplement

 

 

Schedules

 

Schedule 1.2

 

Permitted Encumbrances

Schedule 4.5

 

Equipment and Inventory Locations

Schedule 4.15(h)

 

Deposit and Investment Accounts

Schedule 4.19

 

Real Property

Schedule 5.1

 

Consents

Schedule 5.2(a)

 

States of Qualification and Good Standing

Schedule 5.2(b)

 

Subsidiaries

Schedule 5.4

 

Federal Tax Identification Number

Schedule 5.6

 

Prior Names

Schedule 5.8(b)

 

Litigation

Schedule 5.8(d)

 

Plans

Schedule 5.9

 

Intellectual Property, Source Code Escrow Agreements

Schedule 5.10

 

Licenses and Permits

Schedule 5.14

 

Labor Disputes

Schedule 5.26

 

Titled Assets

 

 

 

 

 

 

 

viii


 

 

REVOLVING CREDIT

AND

SECURITY AGREEMENT

 

Revolving Credit and Security Agreement dated July 16, 2010, among Pac-Van, Inc., an Indiana corporation (" Pac-Van ") and the other Borrowers (as hereinafter defined), the Guarantors (as hereinafter defined), the financial institutions which are now or which hereafter become a party hereto (collectively, the " Lenders " and individually a Lender "), Pac-Van Asset Trust, a Delaware statutory trust formed under the Delaware Statutory Trust Act (the " Trust ") and PNC Bank, National Association (" PNC "), as administrative and collateral agent for the Lenders (PNC, in such capacity, the " Agent ").

IN CONSIDERATION of the mutual covenants and undertakings herein contained, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, Borrowers, Guarantors, Lenders and Agent hereby agree as follows:

I.   DEFINITIONS .

1.1.   Accounting Terms .

As used in this Agreement, the Other Documents or any certificate, report or other document made or delivered pursuant to this Agreement, accounting terms not defined in Section 1.2 or elsewhere in this Agreement and accounting terms partly defined in Section 1.2 to the extent not defined, shall have the respective meanings given to them under GAAP; provided, however, whenever such accounting terms are used for the purposes of determining compliance with financial covenants in this Agreement, such accounting terms shall be defined in accordance with GAAP as applied in preparation of the audited financial statements of Pac-Van for the fiscal year ended June 30, 2009.

1.2.   General Terms .

For purposes of this Agreement the following terms shall have the following meanings:

" Accountants " shall have the meaning set forth in Section 9.7 hereof.

" Advance Rates " shall mean, collectively, the Receivables Advance Rate, the Rental Fleet Advance Rate (NBV), the Other Inventory Advance Rate (NBV), the Rental Fleet Advance Rate (NOLV), the Other Inventory Advance Rate (NOLV), the Tractor Advance Rate (NBV), the Rolling Stock Equipment Advance Rate (NBV), the Branch-Use Advance Rate (NBV), the Step Inventory Advance Rate (NBV), the Tractor Advance Rate (NOLV), the Rolling Stock Equipment Advance Rate (NOLV) and the Branch-Use Advance Rate (NOLV).

" Advances " shall mean and include the Revolving Advances, the Letters of Credit and the Swing Loans.

" Affiliate " of any Person shall mean (a) any Person which, directly or indirectly, is in control of, is controlled by, or is under common control with such Person, or (b) any Person

 

 

1


 

 

who is a director, managing member, general partner or officer (i) of such Person, (ii) of any Subsidiary of such Person or (iii) of any Person described in clause (a) above.  For purposes of this definition, control of a Person shall mean the power, direct or indirect, (x) to vote twenty-five percent (25%) or more of the Equity Interests having ordinary voting power for the election of directors of such Person or other Persons performing similar functions for any such Person, or (y) to direct or cause the direction of the management and policies of such Person whether by ownership of Equity Interests, contract or otherwise.

" Agent " shall have the meaning set forth in the preamble to this Agreement and shall include its successors and assigns.

" Agreement " shall mean this Revolving Credit and Security Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time.

" Alternate Base Rate " shall mean, for any day, a rate per annum equal to the highest of (i) the Base Rate in effect on such day, (ii) the Federal Funds Open Rate in effect on such day plus one half of one percent (0.5%) and (iii) the Daily LIBOR Rate plus one percent (1%).  For purposes of this definition, " Daily LIBOR Rate " shall mean, for any day, the rate per annum determined by Agent by dividing (x) the Published Rate by (y) a number equal to 1.00 minus the percentage prescribed by the Federal Reserve for determining the maximum reserve requirements with respect to any eurocurrency funding by banks on such day.  For the purposes of this definition, " Published Rate " shall mean the rate of interest published each Business Day in The Wall Street Journal " Money Rates " listing under the caption " London Interbank Offered Rates " for a one month period (or, if no such rate is published therein for any reason, then the Published Rate shall be the eurodollar rate for a one month period as published in another publication determined by Agent).

" Alternate Source " shall have the meaning set forth in the definition of " Federal Funds Open Rate ".

" Alternative Source " shall have the meaning set forth in the definition of " Eurodollar Rate ".

" Anti-Terrorism Laws " shall mean any Applicable Laws relating to terrorism or money laundering, including Executive Order No. 13224, the USA PATRIOT Act, the Applicable Laws comprising or implementing the Bank Secrecy Act, and the Applicable Laws administered by the United States Treasury Department's Office of Foreign Asset Control (as any of the foregoing Applicable Laws may from time to time be amended, renewed, extended, or replaced).

" Applicable Law " shall mean all laws, rules and regulations applicable to the Person, conduct, transaction, covenant, Other Document or contract in question, including all applicable common law and equitable principles; all provisions of all applicable state, federal and foreign constitutions, statutes, rules, regulations, treaties, directives and orders of any Governmental Body, and all orders, judgments and decrees of all courts and arbitrators.

" Authority " shall have the meaning set forth in Section 4.19(d) .

 

 

2


 

 

" Base Rate " shall mean the base commercial lending rate of PNC as publicly announced to be in effect from time to time, such rate to be adjusted automatically, without notice, on the effective date of any change in such rate.  This rate of interest is determined from time to time by PNC as a means of pricing some loans to its customers and is neither tied to any external rate of interest or index nor does it necessarily reflect the lowest rate of interest actually charged by PNC to any particular class or category of customers of PNC.

" Blocked Accounts " shall have the meaning set forth in Section 4.15(h) .

" Blocked Account Bank " shall have the meaning set forth in Section 4.15(h) .

" Blocked Person " shall have the meaning set forth in Section 5.23(b) hereof.

" Borrower " or " Borrowers " shall mean, singularly or collectively, as the context may require,  Pac-Van and each other Person added to this Agreement as a Borrower through a Joinder and shall extend to all permitted successors and assigns of such Persons.

" Borrowers' Account " shall have the meaning set forth in Section 2.7 .

" Borrowing Agent " shall mean Pac-Van.

" Borrowing Base Certificate " shall mean a certificate in substantially the form of Exhibit 1.2 duly executed by the President, Chief Financial Officer, Controller or Vice President of Finance of Borrowing Agent and delivered to Agent, appropriately completed, by which such officer shall certify to Agent the Formula Amount and calculation thereof as of the date of such certificate.

" Branch-Use Advance Rate (NBV) " shall have the meaning set forth in Section 2.1(a) (y)(iii) hereof.

" Branch-Use Advance Rate (NOLV) " shall have the meaning set forth in Section 2.1(a) (y)(iii) hereof.

" Branch-Use Equipment " shall mean and include Equipment which consists of new and used modular buildings, mobile and ground-level offices and storage containers and trailers   used by each Borrower in the conduct of its business at its branch offices and not held for sale or lease.

" Business Day " shall mean any day other than Saturday or Sunday or a legal holiday on which commercial banks are authorized or required by law to be closed for business in East Brunswick, New Jersey and, if the applicable Business Day relates to any Eurodollar Rate Loans, such day must also be a day on which dealings are carried on in the London interbank market.

" Capital Assets " shall mean any fixed assets or improvements, replacements, substitutions or additions thereto which have a useful life of more than one year.

 

 

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" Capital Expenditures " shall mean expenditures made or liabilities incurred for the acquisition of any fixed assets or improvements, replacements, substitutions or additions thereto which have a useful life of more than one year, including the total principal portion of Capitalized Lease Obligations, which, in accordance with GAAP, would be classified as capital expenditures.

" Capitalized Lease Obligation " shall mean any Indebtedness of any Loan Party represented by obligations under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.

" CERCLA " shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. §§9601 et seq.

" Certificate of Title " shall mean a certificate of title, certificate of ownership or other registration certificate issued or required to be issued for any asset under the certificate of title or similar laws of any jurisdiction.

" Change of Ownership or Management " shall mean (a) ten percent (10%) or more of the Equity Interests of GFC are no longer owned or controlled by the Individual Guarantors (including for the purposes of the calculation of percentage ownership, any Equity Interests into which any Equity Interests of GFC held by either Individual Guarantor are convertible or for which any such Equity Interests of GFC or of any other Person may be exchanged and any Equity Interests issuable to either Individual Guarantor upon exercise of any warrants, options or similar rights which may at the time of calculation be held by either Individual Guarantor), (b) one hundred percent (100%) of the Equity Interests of GFN are no longer owned by GFC (including for the purposes of the calculation of percentage ownership, any Equity Interests into which any Equity Interests of GFN held by GFC are convertible or for which any such Equity Interests of GFN or of any other Person may be exchanged and any Equity Interests issuable to GFC upon exercise of any warrants, options or similar rights which may at the time of calculation be held by GFC), (c) one hundred percent (100%) of the Equity Interests of Pac-Van are no longer owned by GFN (including for the purposes of the calculation of percentage ownership, any Equity Interests into which any Equity Interests of Pac-Van held by GFN are convertible or for which any such Equity Interests of Pac-Van or of any other Person may be exchanged and any Equity Interests issuable to GFN upon exercise of any warrants, options or similar rights which may at the time of calculation be held by GFN), (d) one hundred percent (100%) of the Equity Interests of any Person that becomes a Loan Party in accordance with Section 7.1(a) are no longer owned, after the date such Person becomes a Loan Party, by Pac-Van (including for the purposes of the calculation of percentage ownership, any Equity Interests into which any Equity Interests of such Person held by Pac-Van are convertible or for which any such Equity Interests of such Person or of any other Person may be exchanged and any Equity Interests issuable to Pac-Van upon exercise of any warrants, options or similar rights which may at the time of calculation be held by Pac-Van), (e) any merger, consolidation or sale of substantially all of the property or assets of any Loan Party or (f) RFV shall cease to be involved in the day to day operations and management of the business of GFC and the Loan Parties either in his capacity as a senior officer of one of the Loan Parties or as a member of the board of directors of one of the Loan Parties.

 

 

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" Charges " shall mean all taxes, charges, fees, imposts, levies or other assessments, including all net income, gross income, gross receipts, sales, use, ad valorem, value added, transfer, franchise, profits, inventory, capital stock, license, withholding, payroll, employment, social security, unemployment, excise, severance, stamp, occupation and property taxes, custom duties, fees, assessments, liens, claims and charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts, imposed by any taxing or other authority, domestic or foreign (including the Pension Benefit Guaranty Corporation or any environmental agency or superfund), upon the Collateral, any Loan Party or any of such Loan Party's Affiliates.

" CIP Regulations " shall have the meaning set forth in Section 14.11 hereof.

" Closing Date " shall mean July 16, 2010 or such other date as may be agreed to by the parties hereto.

" Code " shall mean the Internal Revenue Code of 1986, as the same may be amended or supplemented from time to time, and any successor statute of similar import, and the rules and regulations thereunder, as from time to time in effect.

" Collateral " shall mean and include:

(a)           all Receivables;

(b)           all Equipment;

(c)           all General Intangibles;

(d)           all Inventory;

(e)           all Investment Property;

(f)           all Subsidiary Stock;

(g)           all of each Loan Party's right, title and interest in and to, whether now owned or hereafter acquired and wherever located, (i) its respective goods and other property including all merchandise returned or rejected by Customers, relating to or securing any of the Receivables; (ii) all of each Loan Party's rights as a consignor, a consignee, an unpaid vendor, mechanic, artisan, or other lienor, including stoppage in transit, setoff, detinue, replevin, reclamation and repurchase; (iii) all additional amounts due to any Loan Party from any Customer relating to the Receivables; (iv) other property, including warranty claims, relating to any goods securing the Obligations; (v) all of each Loan Party's contract rights, rights of payment which have been earned under a contract right, instruments (including promissory notes), documents, chattel paper (including electronic chattel paper), warehouse receipts, deposit accounts, letters of credit and money; (vi) all commercial tort claims (whether now existing or hereafter arising); (vii) if and when obtained by any Loan Party, all real and personal property of third parties in which such Loan Party has been granted a lien or security interest as security for the payment or enforcement of Receivables; (viii) all letter of credit rights (whether or not the respective letter of credit is evidenced by a writing); (ix) all supporting obligations; and (x) any

 

 

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other goods, personal property or real property now owned or hereafter acquired in which any Loan Party has expressly granted a security interest or may in the future grant a security interest to Agent hereunder, or in any amendment or supplement hereto or thereto, or under any other agreement between Agent and any Loan Party;

(h)           all of each Loan Party's ledger sheets, ledger cards, files, correspondence, records, books of account, business papers, computers, computer software (owned by such Loan Party or in which it has an interest, other than with respect to "off the shelf" software agreements commercially available on reasonable terms to the general public which prohibit the granting of a Lien with respect to the same), computer programs, tapes, disks and documents relating to (a), (b), (c), (d), (e), (f) or (g) of this Paragraph; and

(i)           all proceeds and products of (a), (b), (c), (d), (e), (f), (g) and (h) in whatever form, including:  cash, deposit accounts (whether or not comprised solely of proceeds), certificates of deposit, insurance proceeds (including hazard, flood and credit insurance), negotiable instruments and other instruments for the payment of money, chattel paper, security agreements, documents, eminent domain proceeds, condemnation proceeds and tort claim proceeds.

" Commitment Percentage " of any Lender shall mean the percentage set forth below such Lender's name on the signature page hereof as same may be adjusted upon any assignment by a Lender pursuant to Section 16.3(c) or (d) hereof.

" Commitment Transfer Supplement " shall mean a document in the form of Exhibit 15.3 hereto, properly completed and otherwise in form and substance satisfactory to Agent by which the Purchasing Lender purchases and assumes a portion of the obligation of Lenders to make Advances (other than Swing Loans) under this Agreement.

" Compliance Certificate " shall mean a compliance certificate to be signed by the President, Chief Financial Officer or Controller of Borrowing Agent, which shall state that, based on an examination sufficient to permit such officer to make an informed statement, no Default or Event of Default exists, or if such is not the case, specifying such Default or Event of Default, its nature, when it occurred, whether it is continuing and the steps being taken by Loan Parties with respect to such default and, such certificate shall have appended thereto calculations which set forth Loan Parties' compliance with the requirements or restrictions imposed by Sections 6.5 , 7.4 , 7.6 , 7.11 , 7.23 and 7.24 .

" Consents " shall mean all filings and all licenses, permits, consents, approvals, authorizations, qualifications and orders of Governmental Bodies and other third parties, domestic or foreign, material to any Loan Party's business or necessary (including to avoid a conflict or breach under any agreement, instrument, other document, license, permit or other authorization) for the execution, delivery or performance of this Agreement or any Other Documents, including any Consents required under all applicable federal, state or other Applicable Law.

 

 

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" Consigned Inventory " shall mean Inventory of any Loan Party that is in the possession of another Person on a consignment, sale or return, or other basis that does not constitute a final sale and acceptance of such Inventory.

" Controlled Group " shall mean, at any time, each Loan Party and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control and all other entities which, together with any Loan Party, are treated as a single employer under Section 414 of the Code.

" Customer " shall mean and include the account debtor with respect to any Receivable and/or the prospective purchaser of goods, services or both with respect to any contract or contract right, and/or any party who enters into or proposes to enter into any contract or other arrangement with any Loan Party, pursuant to which such Loan Party is to deliver any personal property or perform any services.

" Customs " shall have the meaning set forth in Section 2.10(b) hereof.

" Default" shall mean an event, circumstance or condition which, with the giving of notice or passage of time or both, would constitute an Event of Default.

" Default Rate " shall have the meaning set forth in Section 3.1 hereof.

" Defaulting Lender " shall have the meaning set forth in Section 2.22(a) hereof.

" Deposit Account Control Agreement " shall have the meaning set forth in Section 4.15(h) .

" Depository Accounts " shall have the meaning set forth in Section 4.15(h) hereof.

" Designated Lender " shall have the meaning set forth in Section 16.2(b) hereof.

" Dollar " and the sign "$" shall mean lawful money of the United States of America.

" Domestic Person " shall mean any entity organized under the laws of any state of the United States of America or the District of Columbia.

" Domestic Rate Loan " shall mean any Advance that bears interest based upon the Alternate Base Rate.

" Drawing Date " shall have the meaning set forth in Section 2.11(b) hereof.

" Earnings Before Interest and Taxes " shall mean for any period the sum of (i) net income (or loss) (excluding extraordinary gains), plus (ii) all interest expense, plus (iii) all charges against income for all taxes, in each case of Pac-Van and its Subsidiaries on a consolidated basis for such period in accordance with GAAP.

 

 

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" EBITDA " shall mean for any period the sum of (i) Earnings Before Interest and Taxes plus (ii) depreciation expenses, plus (iii) amortization expenses, plus (iv) reasonable fees and expenses incurred in order to consummate the transactions contemplated by this Agreement and the Other Documents, which are expensed and not capitalized, plus (v) all non-recurring non-cash charges against income to the extent not included in the calculation of Earnings Before Interest and Taxes, plus (vi) non-cash stock option charges against income, minus (vii) all non-recurring non-cash credits to income to the extent not included in the calculation of Earnings Before Interest and Taxes, in each case of Pac-Van and its Subsidiaries on a consolidated basis for such period in accordance with GAAP; provided, however, that for purposes of this definition, with respect to any Permitted Acquisition made pursuant to Section 7.1(a) , at the sole and reasonable discretion of Agent, EBITDA shall be calculated on a pro forma basis in accordance with GAAP utilizing  (i) financial statements furnished with respect to such Person being acquired or related to such assets that are the subject of such Permitted Acquisition and (ii) pro forma financial statements, in each case in form and substance satisfactory to Agent (as if such Permitted Acquisition had been consummated on the first (1st) day of such period).

" Eligible Branch-Use Equipment " shall mean and include Eligible Equipment consisting of Branch-Use Equipment.

" Eligible Equipment " shall mean and include with respect to each Borrower, all Equipment owned and held by such Borrower at one of such Borrower's locations which Agent, in its reasonable discretion, shall not deem ineligible Equipment, based on such considerations as Agent may from time to time deem appropriate including whether the Equipment is subject to a perfected, first priority security interest in favor of Agent and no other Lien (other than a Permitted Encumbrance).  In addition, Equipment shall not be Eligible Equipment if   it is represented (or required to be represented) by a Certificate of Title unless the applicable Borrower has complied with Section 4.21 with respect to such Equipment.

" Eligible Inventory " shall mean and include Inventory with respect to each Borrower which is not, in Agent's opinion, obsolete or unmerchantable and which Agent, in its reasonable discretion, shall not deem ineligible Inventory, based on such considerations as Agent may from time to time deem appropriate including whether the Inventory is subject to a perfected, first priority security interest in favor of Agent and no other Lien (other than a Permitted Encumbrance).  In addition, Inventory shall not be Eligible Inventory if it (i) does not conform to all standards imposed by any Governmental Body which has regulatory authority over such goods or the use or sale thereof, (ii) is in transit, unless such otherwise Eligible Inventory is in transit from (A) a location identified on Schedule 4.5 , with respect to which the owner occupier of such location has executed a Lien Waiver Agreement in favor of Agent or (B) a location at which such Inventory is put to use by a renter or lessee of such Inventory in the ordinary course of business of the applicable Borrower, to (A) a location identified on Schedule 4.5 , with respect to which the owner occupier of such location has executed a Lien Waiver Agreement in favor of Agent or (B) a location at which such Inventory is put to use by a renter or lessee of such Inventory in the ordinary course of business of the applicable Borrower, (iii) is located outside the continental United States or at a location that is not otherwise in compliance with this Agreement, (iv) constitutes Consigned Inventory, (v) is the subject of an Intellectual Property Claim; (vi) is subject to a License Agreement or other agreement that limits, conditions or restricts any Borrower's or Agent's right to sell or otherwise dispose of such Inventory, unless

 

 

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Agent is a party to a Licensor/Agent Agreement with the Licensor under such License Agreement; (vii) other than with respect to Inventory in the possession of a renter or lessee of such Inventory in the ordinary course of business of the applicable Borrower, is situated at a location not owned by the applicable Borrower unless the owner or occupier of such location has executed in favor of Agent a Lien Waiver Agreement; (viii) is represented (or required to be represented) by a Certificate of Title unless the applicable Borrower has complied with Section 4.21 with respect to such Inventory or (ix) is not otherwise satisfactory to Agent as determined in good faith by Agent in the exercise of its discretion in a reasonable manner.  Eligible Inventory shall not include Inventory being acquired pursuant to a trade Letter of Credit to the extent such trade Letter of Credit remains outstanding.

" Eligible Other Inventory " shall mean and include Eligible Inventory consisting of Other Inventory.

" Eligible Receivables " shall mean and include with respect to each Borrower, each Receivable of such Borrower arising in the ordinary course of business and which Agent, in its sole credit judgment, shall deem to be an Eligible Receivable, based on such considerations as Agent may from time to time deem appropriate.  A Receivable shall not be deemed eligible unless such Receivable is subject to Agent's first priority perfected security interest and no other Lien (other than Permitted Encumbrances), and is evidenced by an invoice or other documentary evidence satisfactory to Agent.  In addition, no Receivable shall be an Eligible Receivable if:

(a)           it arises out of a sale made by any Borrower to an Affiliate of any Borrower or to a Person controlled by an Affiliate of any Borrower;

(b)           it is due or unpaid more than ninety (90) days after the original invoice date;

(c)           fifty percent (50%) or more of the Receivables from such Customer are not deemed Eligible Receivables hereunder;

(d)           any covenant, representation or warranty contained in this Agreement with respect to such Receivable has been breached;

(e)           the Customer shall (i) apply for, suffer, or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property or call a meeting of its creditors, (ii) admit in writing its inability, or be generally unable, to pay its debts as they become due or cease operations of its present business, (iii) make a general assignment for the benefit of creditors, (iv) commence a voluntary case under any state or federal bankruptcy laws (as now or hereafter in effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a petition seeking to take advantage of any other law providing for the relief of debtors, (vii) acquiesce to, or fail to have dismissed, any petition which is filed against it in any involuntary case under such bankruptcy laws, or (viii) take any action for the purpose of effecting any of the foregoing;

(f)           the sale is to a Customer outside the continental United States of America, unless the sale is on letter of credit, guaranty or acceptance terms, in each case acceptable to Agent in its sole discretion;

 

 

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(g)           the sale to the Customer is on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment or any other repurchase or return basis or is evidenced by chattel paper;

(h)           Agent believes, in its sole judgment, that collection of such Receivable is insecure or that such Receivable may not be paid by reason of the Customer's financial inability to pay;

(i)           the Customer is the United States of America or any department, agency or instrumentality thereof, or any state contained within the United States of America, unless the applicable Borrower assigns its right to payment of such Receivable to Agent pursuant to the Assignment of Claims Act of 1940, as amended (31 U.S.C. Sub-Section 3727 et seq. and 41 U.S.C. Sub-Section 15 et seq.) or has otherwise complied with other applicable statutes or ordinances; provided that Receivables excluded from this definition of Eligible Receivables pursuant to this clause (i) shall only be excluded to the extent that the aggregate amount of Receivables from such Customers exceeds Five Hundred Thousand and 00/100 Dollars ($500,000.00) in the aggregate;

(j)           the Customer is a municipality or instrumentality of any state contained in the United States of America, unless the applicable Borrower assigns its right to payment of such Receivable to Agent pursuant to any applicable statute or ordinance; provided that so long as no Default or Event of Default has occurred and is continuing under this Agreement, Receivables shall not be excluded from this definition of Eligible Receivables solely because the applicable Borrower has not assigned its right to payment pursuant to such applicable statute or ordinance;

(k)           the goods giving rise to such Receivable have not been delivered to and accepted by the Customer or the services giving rise to such Receivable have not been performed by the applicable Borrower and accepted by the Customer or the Receivable otherwise does not represent a final sale, except for Receivables in respect of unpaid deposits from Customers that have executed contracts to purchase goods in an aggregate amount not to exceed Five Million and 00/100 Dollars ($5,000,000.00) at any time;

(l)           the Receivable arises with respect to a Customer whose aggregate amount of Receivables constitute fifteen percent (15%) or more of the aggregate amount of all Receivables owed to Borrowers to the extent such Receivables exceed such limit;

(m)           the Receivable is subject to any offset, deduction, defense, dispute, or counterclaim, to the extent of such offset, deduction, defense, dispute or counterclaim, the Customer is also a creditor or supplier of a Borrower or the Receivable is contingent in any respect or for any reason;

(n)           the applicable Borrower has made any agreement with any Customer for any deduction therefrom, except for discounts or allowances made in the ordinary course of business for prompt payment, all of which discounts or allowances are reflected in the calculation of the face value of each respective invoice related thereto;

(o)           any return, rejection or repossession of the merchandise has occurred or the rendition of services has been disputed;

 

 

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(p)           such Receivable is not payable to a Borrower; or

(q)           such Receivable is not otherwise satisfactory to Agent as determined in good faith by Agent in the exercise of its discretion in a reasonable manner.

" Eligible Rental Fleet Inventory " shall mean and include Eligible Inventory consisting of Rental Fleet Inventory.

" Eligible Rolling Stock Equipment " shall mean and include all Rolling Stock Equipment of each Borrower which Agent, in its reasonable discretion, shall deem to be Eligible Rolling Stock Equipment, based on such considerations as Agent may from time to time deem appropriate.  Rolling Stock Equipment shall not be deemed eligible unless such Rolling Stock Equipment is subject to Agent's first priority perfected security interest and no other Lien (other than Permitted Encumbrances).  In addition, no Rolling Stock Equipment shall be Eligible Rolling Stock Equipment if:

(a)           it does not meet all applicable safety or regulatory standards applicable to it for the use for which it is intended or for which it is being used;

(b)           it, (i) is not evidenced by a Certificate of Title that has the name of the applicable Borrower noted thereon as the owner of it (other than any Rolling Stock Equipment the ownership of which is not required to be evidenced by a Certificate of Title under the laws applicable to it), (ii) is not otherwise properly registered in one of the States of the United States in accordance with all Applicable Laws or (iii) with respect to which Agent has not received such evidence with respect to (i) and (ii) above as it may reasonably require;

(c)           with respect to such Rolling Stock Equipment (i) the applicable Borrower has not complied with Section 4.21 with respect to such Rolling Stock Equipment (other than any Rolling Stock Equipment the ownership of which is not required to be evidenced by a Certificate of Title under the laws applicable to it), or (ii) is Rolling Stock Equipment to which the applicable Borrower does not have good and marketable title;

(d)           it does not meet all applicable standards of all motor vehicle laws or other statutes and regulations established by any Governmental Body or is subject to any licensing or similar requirement that would limit the right of Agent to sell or otherwise dispose of such Rolling Stock Equipment;

(e)           it is not used or usable in the ordinary course of a Borrower's business or has been damaged in any material respect or in an inoperable condition that continues for any period of more than sixty (60) consecutive days;

(f)           it is a tractor; or

(g)           it is not otherwise satisfactory to Agent as determined in good faith by Agent in the exercise of its discretion in a reasonable manner.

" Eligible Step Inventory " shall mean and include Eligible Inventory consisting of Step Inventory.

 

 

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" Eligible Tractor Equipment " shall mean and include Rolling Stock Equipment consisting of tractors, which meets the requirements for Eligible Rolling Stock Equipment other than the "such Rolling Stock Equipment is a tractor" exclusion in the definition of Eligible Rolling Stock Equipment.

" Environmental Complaint " shall have the meaning set forth in Section 4.19(d) hereof.

" Environmental Laws " shall mean all federal, state and local environmental, land use, zoning, health, chemical use, safety and sanitation laws, statutes, ordinances and codes relating to the protection of the environment and/or governing the use, storage, treatment, generation, transportation, processing, handling, production or disposal of Hazardous Substances and the rules, regulations, policies, guidelines, interpretations, decisions, orders and directives of federal, state and local governmental agencies and authorities with respect thereto.

" Equipment " shall mean and include as to each Loan Party all of such Loan Party's goods (other than Inventory) whether now owned or hereafter acquired and wherever located including all equipment, machinery, apparatus, motor vehicles (including trucks, trailers, tractors, service vehicles, vans, pick-up trucks, forklifts and wheel loaders), fittings, furniture, furnishings, fixtures, parts, accessories and all replacements and substitutions therefor or accessions thereto.

" Equity Interests " of any Person shall mean any and all shares, rights to purchase, options, warrants, general, limited or limited liability partnership interests, member interests, participation or other equivalents of or interest in (regardless of how designated) equity of such Person, whether voting or nonvoting, including common stock, preferred stock, convertible securities or any other "equity security" (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC under the Exchange Act).

" ERISA " shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time and the rules and regulations promulgated thereunder.

" Eurodollar Rate " shall mean for any Eurodollar Rate Loan for the then current Interest Period relating thereto the interest rate per annum (rounded upwards, if necessary, to the nearest one hundredth (1/100) of one percent (1%)) determined by Agent by dividing (i) the rate which appears on the Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that displays rates at which US dollar deposits are offered by leading banks in the London interbank deposit market), or the rate which is quoted by another source selected by Agent which has been approved by the British Bankers' Association as an authorized information vendor for the purpose of displaying rates at which US dollar deposits are offered by leading banks in the London interbank deposit market (an " Alternative Source "), at approximately 11:00 a.m., London time two (2) Business Days prior to the first day of such Interest Period (or if there shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any Alternate Source, a comparable replacement rate determined by Agent at such time (which determination shall be conclusive absent manifest error)) for an amount comparable to such Eurodollar Rate Loan and having a borrowing date and a maturity comparable to such Interest Period by (ii) a number equal to 1.00 minus the Reserve Percentage.

 

 

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The Eurodollar Rate shall be adjusted with respect to any Eurodollar Rate Loan that is outstanding on the effective date of any change in the Reserve Percentage as of such effective date.  Agent shall give prompt notice to Borrowing Agent of the Eurodollar Rate as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error.

" Eurodollar Rate Loan " shall mean an Advance at any time that bears interest based on the Eurodollar Rate.

" Event of Default " shall have the meaning set forth in Article X hereof.

" Exchange Act " shall mean the Securities Exchange Act of 1934, as amended.

" Executive Order No. 13224 " shall mean the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.

" Federal Funds Effective Rate " for any day shall mean the rate per annum (based on a year of three hundred sixty (360) days and actual days elapsed and rounded upward to the nearest one hundredth  (1/100) of one percent (1%)) announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank (or any successor) in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the " Federal Funds Effective Rate " as of the date of this Agreement; provided, if such Federal Reserve Bank (or its successor) does not announce such rate on any day, the " Federal Funds Effective Rate " for such day shall be the Federal Funds Effective Rate for the last day on which such rate was announced.

" Federal Funds Open Rate " for any day shall mean the rate per annum (based on a year of three hundred sixty (360) days and actual days elapsed) which is the daily federal funds open rate as quoted by ICAP North America, Inc. (or any successor) as set forth on the Bloomberg Screen BTMM for that day opposite the caption "OPEN" (or on such other substitute Bloomberg Screen that displays such rate), or as set forth on such other recognized electronic source used for the purpose of displaying such rate as selected by PNC (an " Alternate Source ") (or if such rate for such day does not appear on the Bloomberg Screen BTMM (or any substitute screen) or on any Alternate Source, or if there shall at any time, for any reason, no longer exist a Bloomberg Screen BTMM (or any substitute screen) or any Alternate Source, a comparable replacement rate determined by PNC at such time (which determination shall be conclusive absent manifest error); provided however, that if such day is not a Business Day, the Federal Funds Open Rate for such day shall be the "open" rate on the immediately preceding Business Day.  If and when the Federal Funds Open Rate changes, the rate of interest with respect to any advance to which the Federal Funds Open Rate applies will change automatically without notice to Loan Parties, effective on the date of any such change.

" Fee Letter " shall mean the fee letter dated of even date herewith between Loan Parties and Agent.

 

 

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" Financial Statements " shall have the meaning set forth in Section 5.5(c) .

" Fixed Charge Coverage Ratio " shall mean and include, for any fiscal period, the ratio of (a) EBITDA minus the sum of (i) Net Unfinanced Capital Expenditures made during such period, (ii) cash taxes paid during such period, (iii) dividends and distributions paid in cash as permitted pursuant to Section 7.7 hereof and (iv) management fees paid as permitted pursuant to Section 7.10 (c) hereof, to (b) all Senior Debt Payments during such period, in each case of Pac-Van and its Subsidiaries on a consolidated basis for such period in accordance with GAAP.

" Foreign Subsidiary " of any Person, shall mean any Subsidiary of such Person that is not organized or incorporated in the United States or any State or territory thereof.

" Formula Amount " shall have the meaning set forth in Section 2.1(a) .

" Funded Debt " shall mean, with respect to Pac-Van and its Subsidiaries on a consolidated basis, without duplication, all Indebtedness for borrowed money evidenced by notes, bonds, debentures, or similar evidences of Indebtedness that by its terms matures more than one year from, or is directly or indirectly renewable or extendible at Pac-Van's or any such Subsidiary's option under a revolving credit or similar agreement obligating the lender or lenders to extend credit over a period of more than one year from the date of creation thereof, and specifically including Capitalized Lease Obligations, current maturities of long-term debt, revolving credit and short term debt extendible beyond one year at the option of the debtor, and also including, in the case of Pac-Van and its Subsidiaries, the Obligations and, without duplication, Indebtedness consisting of guaranties of Funded Debt of other Persons.

" GAAP " shall mean generally accepted accounting principles in the United States of America in effect from time to time.

" General Intangibles " shall mean and include as to each Loan Party all of such Loan Party's general intangibles, whether now owned or hereafter acquired, including all payment intangibles, all choses in action, causes of action, corporate or other business records, inventions, designs, patents, patent applications, equipment formulations, manufacturing procedures, quality control procedures, trademarks, trademark applications, service marks, trade secrets, goodwill, copyrights, design rights, software, computer information, source codes, codes, records and updates, registrations, licenses, franchises, customer lists, tax refunds, tax refund claims, computer programs, all claims under guaranties, security interests or other security held by or granted to such Loan Party to secure payment of any of the Receivables by a Customer (other than to the extent covered by Receivables) all rights of indemnification and all other intangible property of every kind and nature (other than Receivables).

" GFC " shall mean General Finance Corporation, a Delaware corporation.

" GFC Debt Agreement " shall mean that certain Investment Agreement, dated of even date herewith, by and among GFC, Laminar and the GFC Debt Lenders, together with all amendments, supplements, modifications, substitutions and replacements thereto and thereof.

" GFC Debt Documents " shall mean the GFC Debt Agreement, the Notes (as defined in the GFC Debt Agreement), the GFC Debt Guaranty Agreement and any and all other

 

 

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agreements, instruments and documents executed in connection therewith, together with all amendments, supplements, modifications, substitutions and replacements thereto and thereof.

" GFC Debt Guaranty Agreement " shall mean that certain Continuing Unconditional Guaranty, dated of even date herewith, made by Pac-Van and GFN  in favor of Laminar.

" GFC Debt Lenders " shall mean each lender party to the GFC Debt Agreement.

" GFC Debt Subordination Agreement " shall mean that certain Subordination and Intercreditor Agreement, dated of even date herewith, by and among Pac-Van, GFN, Agent and Laminar, together with all amendments, supplements, modifications, substitutions and replacements thereto and thereof.

" GFN " shall mean GFN North America Corp., a Delaware corporation.

" GFN Australasia " shall mean GFN U.S. Australasia Holdings, Inc., a Delaware corporation.

" Governmental Acts " shall have the meaning set forth in Section 2.16 .

" Governmental Body " shall mean any nation or government, any state or other political subdivision thereof or any entity, authority, agency, division or department exercising the legislative, judicial, regulatory or administrative functions of or pertaining to a government.

" Guarantor " or " Guarantors " shall mean, singularly or collectively, as the context may require, GFN and any other Person who may hereafter guarantee payment or performance of the whole or any part of the Obligations (other than the Individual Guarantors) and shall extend to all permitted successors and assigns of such Persons.

" Guaranty " shall mean (i) the Guaranty and Suretyship Agreement made by GFN in favor of Agent for its benefit and for the ratable benefit of Lenders, (ii) the Limited Guaranty and Suretyship Agreement made by the Individual Guarantors in favor of Agent for its benefit and for the ratable benefit of Lenders (the " Limited Guaranty "), and (iii) any other guaranty of the obligations of Borrowers executed by a Guarantor in favor of Agent for its benefit and for the ratable benefit of Lenders, in form and substance satisfactory to Agent, in each case together with all amendments, supplements, modifications, substitutions and replacements thereto and thereof, and " Guarantees " means collectively, all such Guarantees.

" Hazardous Discharge " shall have the meaning set forth in Section 4.19(d) hereof.

" Hazardous Substance " shall mean any flammable explosives, radon, radioactive materials, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous materials, Hazardous Wastes, hazardous or Toxic Substances or related materials as defined in CERCLA, the Hazardous Materials Transportation Act, as amended (49 U.S.C. Sections 1801, et  seq.) or any other applicable Environmental Law and in the regulations adopted pursuant thereto.

 

 

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" Hazardous Wastes " shall mean all waste materials subject to regulation under CERCLA, RCRA or applicable state law, and any other applicable Federal and state laws now in force or hereafter enacted relating to hazardous waste disposal.

" Hedge Liabilities " shall have the meaning provided in the definition of " Lender-Provided Interest Rate Hedge ".

" Indebtedness " of a Person at a particular date shall mean all obligations of such Person which in accordance with GAAP would be classified upon a balance sheet as liabilities (except capital stock and surplus earned or otherwise) and in any event, without limitation by reason of enumeration, shall include all indebtedness, debt and other similar monetary obligations of such Person whether direct or guaranteed, and all premiums, if any, due at the required prepayment dates of such indebtedness, and  all indebtedness secured by a Lien on assets owned by such Person, whether or not such indebtedness actually shall have been created, assumed or incurred by such Person.  Any indebtedness of such Person resulting from the acquisition by such Person of any assets subject to any Lien shall be deemed, for the purposes hereof, to be the equivalent of the creation, assumption and incurring of the indebtedness secured thereby, whether or not actually so created, assumed or incurred.

" Individual Guarantor " or " Individual Guarantors " shall mean, singularly or collectively, as the context may require, RFV and LDV.

" Individual Guarantor Account Control Agreement " shall mean that certain Account Control Agreement, dated of even date herewith, by and among the Individual Guarantors, PNC and Agent with respect to the Individual Guarantor Collateral Account, together with all amendments, supplements, modifications, substitutions and replacements thereto and thereof.

" Individual Guarantor Collateral Account shall mean the Account (as such term is defined in the Individual Guarantor Pledge and Security Agreement).

" Individual Guarantor Pledge and Security Agreement " shall mean that certain Pledge and Security Agreement, dated of even date herewith, made by the Individual Guarantors to Agent for the benefit of Lenders, with respect to the Individual Guarantor Collateral Account,  together with all amendments, supplements, modifications, substitutions and replacements thereto and thereof.

" Ineligible Security " shall mean any security which may not be underwritten or dealt in by member banks of the Federal Reserve System under Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as amended.

" Intellectual Property " shall mean property constituting under any Applicable Law a patent, patent application, copyright, trademark, service mark, trade name, mask work, trade secret or license or other right to use any of the foregoing.

" Intellectual Property Claim " shall mean the assertion by any Person of a claim (whether asserted in writing, by action, suit or proceeding or otherwise) that any Loan Party's ownership, use, marketing, sale or distribution of any Inventory, Equipment, Intellectual

 

 

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Property or other property or asset is violative of any ownership of or right to use any Intellectual Property of such Person.

" Interest Period " shall mean the period provided for any Eurodollar Rate Loan pursuant to Section 2.2(b) .

" Interest Rate Hedge " shall mean an interest rate exchange, collar, cap, swap, adjustable strike cap, adjustable strike corridor or similar agreements entered into by any Loan Party or its Subsidiaries in order to provide protection to, or minimize the impact upon, such Loan Party and/or its Subsidiaries of increasing floating rates of interest applicable to Indebtedness.

" Inventory " shall mean and include as to each Loan Party all of such Loan Party's now owned or hereafter acquired goods, merchandise and other personal property, wherever located, to be furnished under any consignment arrangement, contract of service or held for sale or lease, all raw materials, work in process, finished goods and materials and supplies of any kind, nature or description which are or might be used or consumed in such Loan Party's business or used in selling or furnishing such goods, merchandise and other personal property, and all documents of title or other documents representing them.

" Investment Property " shall mean and include as to each Loan Party, all of such Loan Party's now owned or hereafter acquired securities (whether certificated or uncertificated), securities entitlements, securities accounts, commodities contracts and commodities accounts.

" IP Security Agreement " shall mean the Patent, Trademark and Copyright Security Agreement, dated of even date herewith executed and delivered by the Loan Parties in connection with this Agreement, together with all amendments, supplements, modifications, substitutions and replacements thereto and thereof.

" ISP98 Rules " shall have the meaning set forth in Section 2.9(b) .

" Issuer " shall mean any Person who issues a Letter of Credit pursuant to the terms hereof.

" Joinder " shall mean a joinder by a Person as a Borrower or a Guarantor under this Agreement and the Other Documents in form and substance satisfactory to Agent.

" Laminar " shall mean Laminar Direct Capital, L.L.C., a Delaware limited liability company, in its capacity as agent for the GFC Debt Lenders.

" LDV " shall mean Lydia D. Valenta, an individual with a principal residence in the State of California.

" Lender " and " Lenders " shall have the meaning ascribed to such term in the preamble to this Agreement and shall include each Person which becomes a transferee, successor or assign of any Lender.

 

 

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" Lender-Provided Interest Rate Hedge " shall mean an Interest Rate Hedge which is provided by any Lender and with respect to which Agent confirms meets the following requirements: such Interest Rate Hedge (i) is documented in a standard International Swap Dealer Association Agreement or other similar agreement acceptable to Agent in its sole discretion, (ii) provides for the method of calculating the reimbursable amount of the provider's credit exposure in a reasonable and customary manner, and (iii) is entered into for hedging (rather than speculative) purposes.  The liabilities of any Loan Party to the provider of any Lender-Provided Interest Rate Hedge (the " Hedge Liabilities ") shall be " Obligations " hereunder, guaranteed obligations under any Guaranty and otherwise treated as Obligations for purposes of each of the Other Documents. The Liens securing the Hedge Liabilities shall be pari passu with the Liens securing all other Obligations under this Agreement and the Other Documents.

" Letter of Credit Fees " shall have the meaning set forth in Section 3.2 .

" Letter of Credit Borrowing " shall have the meaning set forth in Section 2.11(d) .

" Letter of Credit Sublimit" shall mean Five Million   and 00/100 Dollars ($5,000,000.00).

" Letters of Credit " shall have the meaning set forth in Section 2.8 .

" License Agreement " shall mean any agreement between any Loan Party and a Licensor pursuant to which such Loan Party is authorized to use any Intellectual Property in connection with the manufacturing, marketing, sale or other distribution of any Inventory of such Loan Party or otherwise in connection with such Loan Party's business operations.

" Licensor" shall mean any Person from whom any Loan Party obtains the right to use (whether on an exclusive or non-exclusive basis) any Intellectual Property in connection with such Loan Party's manufacture, marketing, sale or other distribution of any Inventory or otherwise in connection with such Loan Party's business operations.

" Licensor/Agent Agreement " shall mean an agreement between Agent and a Licensor, in form and content satisfactory to Agent, by which Agent is given the unqualified right, vis-a-vis such Licensor, to enforce Agent's Liens with respect to and to dispose of any Loan Party's Inventory with the benefit of any Intellectual Property applicable thereto, irrespective of such Loan Party's default under any License Agreement with such Licensor.

" Lien " shall mean any mortgage, deed of trust, pledge, hypothecation, assignment, security interest, lien (whether statutory or otherwise), Charge, claim or encumbrance, or preference, priority or other security agreement or preferential arrangement held or asserted in respect of any asset of any kind or nature whatsoever including any conditional sale or other title retention agreement, any lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction.

" Lien Waiver Agreement " shall mean an agreement which is executed in favor of Agent by a Person who owns or occupies premises at which any Collateral may be located from time to time and by which such Person shall waive any Lien that such Person may ever have with

 

 

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respect to any of the Collateral and shall authorize Agent from time to time to enter upon the premises to inspect or remove the Collateral from such premises or to use such premises to store or dispose of such Inventory.

" Limited Guaranty " shall have the meaning set forth in the definition of Guaranty.

" Loan Party " or " Loan Parties " shall mean, singularly or collectively, as the context may require, each Borrower and each Guarantor and shall extend to all permitted successors and assigns of each such Person.

" Material Adverse Effect " shall mean a material adverse effect on (a) the condition (financial or otherwise), results of operations, assets, business or properties of the Loan Parties taken as a whole, (b) any Loan Party's ability to duly and punctually pay or perform the Obligations in accordance with the terms thereof, (c) the value of the Collateral, or Agent's Liens on the Collateral or the priority of any such Lien or (d) the practical realization of the benefits of Agent's and each Lender's rights and remedies under this Agreement and the Other Documents.

" Maximum Face Amount" shall mean, with respect to any outstanding Letter of Credit, the face amount of such Letter of Credit including all automatic increases provided for in such Letter of Credit, whether or not any such automatic increase has become effective.

" Maximum Revolving Advance Amount " shall mean Eighty-Five Million and 00/100 Dollars ($85,000,000.00).

" Maximum Undrawn Amount " shall mean with respect to any outstanding Letter of Credit, the amount of such Letter of Credit that is or may become available to be drawn, including all automatic increases provided for in such Letter of Credit, whether or not any such automatic increase has become effective.

" Minimum Utilization Ratio " shall mean and include, with respect to Pac-Van and its Subsidiaries on a consolidated basis as of the end of each calendar month, the ratio of (a) the aggregate gross book value of Rental Fleet Inventory which are then subject to valid, current rental or lease agreements between Pac-Van or any of its Subsidiaries and the renters or lessees thereof that are not an Affiliate of Pac-Van or such Subsidiary or a Person controlled by an Affiliate of Pac-Van or such Subsidiary, to (b) the aggregate gross book value of Rental Fleet Inventory of Pac-Van and its Subsidiaries on a consolidated basis.

" Modified Commitment Transfer Supplement " shall have the meaning set forth in Section 16.3(d) .

" Motor Vehicle Statute " shall have the meaning set forth in Section 4.21(a) hereof.

" Multiemployer Plan " shall mean a "multiemployer plan" as defined in Sections 3(37) and 4001(a)(3) of ERISA.

 

 

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" Multiple Employer Plan " shall mean a Plan which has two or more contributing sponsors (including any Loan Party or any member of the Controlled Group) at least two of whom are not under common control, as such a plan is described in Section 4064 of ERISA.

" Net Orderly Liquidation Value " shall mean, at any time, the aggregate value of Borrowers' Inventory at such time in an orderly liquidation, taking into account all costs, fees and expenses estimated to be incurred by Agent and the Lenders in connection with such liquidation, based upon the most recent appraisal of Borrowers' Inventory conducted by an appraiser selected by Agent.

" Net Capital Expenditures " shall mean, for any period, the difference between (i) the net book value , at the time of such acquisition, of all Capital Assets acquired through Capital Expenditures of any Loan Party, and (ii) the net book value , at the time of such sale or disposal of all Capital Assets sold or disposed of by any Loan Party.

" Net Proceeds " shall mean, with respect to any transaction, an amount equal to the cash proceeds received by a Loan Party from or in respect of such transaction (including, when received, any cash proceeds received as income, other deferred cash proceeds or other cash proceeds of any non-cash proceeds of such transaction), less any expenses or charges (including commissions, fees and taxes paid or payable) reasonably incurred by such Person in respect of such transaction.

" Net Unfinanced Capital Expenditures " shall mean, for any period, the greater of (a) the product of (y) Net Capital Expenditures for such period and (z) the sum of (i) the difference between (1) one hundred percent (100%) minus (2) with respect to each Capital Asset consisting of Rental Fleet Inventory or Other Inventory purchased, the applicable Advance Rate with respect to such Capital Asset, and (ii) the difference between (1) one hundred percent (100%) minus (2) with respect to each Capital Asset consisting of Equipment purchased, the applicable Advance Rate with respect to such Capital Asset, and (b) Zero and 00/100 Dollars ($0.00).

" Note " shall mean each Revolving Credit Note and the Swing Note and " Notes " shall collectively mean all of the Revolving Credit Notes and the Swing Note.

" Obligations " shall mean and include any and all loans, advances, debts, liabilities, obligations, covenants and duties owing by any Loan Party to Lenders or Agent or to any other direct or indirect subsidiary or affiliate of Agent or any Lender of any kind or nature, present or future (including any interest or other amounts accruing thereon after maturity, or after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding relating to any Loan Party, whether or not a claim for post-filing or post-petition interest or other amounts is allowed in such proceeding), whether or not evidenced by any note, guaranty or other instrument, whether arising under any agreement, instrument or document, (including this Agreement and the Other Documents) whether or not for the payment of money, whether arising by reason of an extension of credit, opening of a letter of credit, loan, equipment lease or guarantee, under any interest or currency swap, future, option or other similar agreement, or in any other manner, whether arising out of overdrafts or deposit or other accounts or electronic funds transfers (whether through automated clearing houses or otherwise) or out of

 

 

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Agent's or any Lenders non-receipt of or inability to collect funds or otherwise not being made whole in connection with depository transfer check or other similar arrangements, whether direct or indirect (including those acquired by assignment or participation), absolute or contingent, joint or several, due or to become due, now existing or hereafter arising, contractual or tortious, liquidated or unliquidated, regardless of how such indebtedness or liabilities arise or by what agreement or instrument they may be evidenced or whether evidenced by any agreement or instrument, including any and all of any Loan Party's Indebtedness and/or liabilities under this Agreement, the Other Documents or under any other agreement between Agent or Lenders and any Loan Party and any amendments, extensions, renewals or increases and all costs and expenses of Agent and any Lender incurred in the documentation, negotiation, modification, enforcement, collection or otherwise in connection with any of the foregoing, including reasonable attorneys' fees and expenses and all obligations of any Loan Party to Agent or Lenders to perform acts or refrain from taking any action.

" Order " shall have the meaning set forth in Section 2.17 .

" Other Documents " shall mean the Notes, any Guaranty, any Pledge Agreement, any Lender-Provided Interest Rate Hedge, the IP Security Agreement, any Lien Waiver Agreement, the Fee Letter, the Individual Guarantor Pledge and Security Agreement, the Individual Guarantor Account Control Agreement, the Trust Agreement, the GFC Debt Subordination Agreement, any Deposit Account Control Agreement, the Questionnaire, any Joinder and any and all other agreements, instruments and documents, including guaranties, pledges, powers of attorney, consents, interest or currency swap agreements or other similar agreements and all other writings heretofore, now or hereafter executed by any Loan Party and/or delivered to Agent or any Lender in respect of the transactions contemplated by this Agreement.

" Other Inventory " shall mean and include Inventory of each Borrower consisting of new and used modular buildings, mobile and ground-level offices and storage containers and trailers, but excluding Rental Fleet Inventory.

" Other Inventory Advance Rate (NBV) " shall have the meaning set forth in Section 2.1(a) (y)(ii) hereof.

" Other Inventory Advance Rate (NOLV) " shall have the meaning set forth in Section 2.1(a) (y)(ii) hereof.

" Out-of-Formula Loans " shall have the meaning set forth in Section 16.2(b) .

" Overadvance Threshold Amount " shall have the meaning set forth in Section 16.2(b)

" Pac-Van " shall have the meaning set forth in the preamble to this Agreement.

" Parent " of any Person shall mean a corporation or other entity owning, directly or indirectly at least fifty percent (50%) of the shares of stock or other ownership interests having ordinary voting power to elect a majority of the directors of the Person, or other Persons performing similar functions for any such Person.

 

 

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" Participant " shall mean each Person who shall be granted the right by any Lender to participate in any of the Advances and who shall have entered into a participation agreement in form and substance satisfactory to such Lender.

" Participation Advance " shall have the meaning set forth in Section 2.11(d) .

" Participation Commitment " shall mean each Lender's obligation to buy a participation of the Letters of Credit issued hereunder.

" Payee " shall have the meaning set forth in Section 3.10 .

" Payment Office " shall mean initially Two Tower Center Boulevard, East Brunswick, New Jersey 08816; thereafter, such other office of Agent, if any, which it may designate by notice to Borrowing Agent and to each Lender to be the Payment Office.

" PBGC " shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA or any successor.

" Pension Benefit Plan " shall mean at any time any employee pension benefit plan (including a Multiple Employer Plan, but not a Multiemployer Plan) which is covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code and either (i) is maintained by any member of the Controlled Group for employees of any member of the Controlled Group; or (ii) has at any time within the preceding five years been maintained by any entity which was at such time a member of the Controlled Group for employees of any entity which was at such time a member of the Controlled Group.

" Permitted Acquisition " shall have the meaning set forth in Section 7.1(a) hereof.

" Permitted Encumbrances " shall mean:

(a)  Liens in favor of Agent or the Trust for the benefit of Agent and Lenders;

(b)  Liens for taxes, assessments or other governmental charges not delinquent or being Properly Contested;

(c)  Liens disclosed in the financial statements referred to in Section 5.5 , the existence of which Agent has consented to in writing;

(d)  deposits or pledges to secure obligations under worker's compensation, social security or similar laws, or under unemployment insurance;

(e)  deposits or pledges of cash to secure bids, tenders, contracts (other than contracts for the payment of money), leases, statutory obligations, surety bonds, performance bonds, indemnity bonds and appeal bonds and other obligations of like nature arising in the ordinary course of business not to exceed an aggregate amount of Ten Million and 00/100 Dollars ($10,000,000.00);

 

 

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(f)  Liens arising by virtue of the rendition, entry or issuance against any Loan Party or any Subsidiary, or any property of any Loan Party or any Subsidiary, of any judgment, writ, order, or decree for so long as each such Lien (x) is in existence for less than twenty (20) consecutive days after it first arises or is being Properly Contested and (y) is at all times junior in priority to any Liens in favor of Agent;

(g)  mechanics', workers', materialmen's or other like Liens arising in the ordinary course of business with respect to obligations which are not due or which are being Properly Contested;

(h)  Liens placed upon fixed assets hereafter acquired to secure a portion of the purchase price thereof, provided that (x) any such lien shall not encumber any other property of any Loan Party and (y) the aggregate amount of Indebtedness secured by such Liens incurred as a result of such purchases during any fiscal year shall not exceed the amount provided for in Section 7.8(b) ;

(i)  Liens on property leased by any Loan Party under capital and operating leases securing obligations of such Loan Party to the lessor under such leases; and

(j)  Liens disclosed on Schedule 1.2 ; provided that such Liens shall secure only those obligations which they secure on the Closing Date and shall not subsequently apply to any other property or assets of any Loan Party.

" Person " shall mean any individual, sole proprietorship, partnership, corporation, business trust, joint stock company, trust, unincorporated organization, association, limited liability company, limited liability partnership, institution, public benefit corporation, joint venture, entity or Governmental Body (whether federal, state, county, city, municipal or otherwise, including any instrumentality, division, agency, body or department thereof).

" Plan " shall mean any employee benefit plan within the meaning of Section 3(3) of ERISA (including a Pension Benefit Plan), maintained for employees of any Loan Party or any member of the Controlled Group or any such Plan to which any Loan Party or any member of the Controlled Group is required to contribute on behalf of any of its employees.

" Pledge Agreement " shall mean (i) the Pledge Agreement dated of even date herewith made by GFN to Agent for the benefit of Lenders, with respect to all of the issued and outstanding capital stock of Pac-Van, and (ii) any other Pledge Agreement executed and delivered by any Loan Party to Agent for the benefit of Lenders with respect to the Subsidiary Stock, in each case together with all amendments, supplements, modifications, substitutions and replacements thereto and thereof, and " Pledge Agreements " means collectively, all such Pledge Agreements.

" PNC " shall have the meaning set forth in the preamble to this Agreement and shall extend to all of its successors and assigns.

" Pro Forma Balance Sheet " shall have the meaning set forth in Section 5.5(a) hereof

 

 

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" Pro Forma Financial Statements shall have the meaning set forth in Section 5.5 (b) hereof.

" Projections " shall have the meaning set forth in Section 5.5 (b) hereof.

" Properly Contested " shall mean, in the case of any Indebtedness, Lien or other obligation, as applicable, of any Person (including any taxes) that is not paid as and when due or payable by reason of such Person's bona fide dispute concerning its liability to pay same or concerning the amount thereof, (i) such Indebtedness, Lien or other obligation, as applicable, is being properly contested in good faith by appropriate proceedings promptly instituted and diligently conducted; (ii) such Person has established appropriate reserves as shall be required in conformity with GAAP; (iii) the non-payment of such Indebtedness or other obligation will not have a Material Adverse Effect and will not result in the forfeiture of any assets of such Person; (iv) no Lien is imposed upon any of such Person's assets with respect to such Indebtedness or other obligation unless such Lien is at all times junior and subordinate in priority to the Liens in favor of Agent (except only with respect to property taxes that have priority as a matter of applicable state law) and enforcement of such Lien is stayed during the period prior to the final resolution or disposition of such dispute; (v) if such Indebtedness, Lien or other obligation, as applicable, results from, or is determined by the entry, rendition or issuance against a Person or any of its assets of a judgment, writ, order or decree, enforcement of such judgment, writ, order or decree is stayed pending a timely appeal or other judicial review; and (vi) if such contest is abandoned, settled or determined adversely (in whole or in part) to such Person, such Person forthwith pays such Indebtedness or other obligation and all penalties, interest and other amounts due in connection therewith.

" Purchasing CLO " shall have the meaning set forth in Section 16.3(d) hereof.

" Purchasing Lender " shall have the meaning set forth in Section 16.3(c) hereof.

" Questionnaire " shall mean the Documentation Information Questionnaires and the responses thereto provided by Loan Parties and delivered to Agent.

" RCRA " shall mean the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq., as same may be amended from time to time.

" Real Property " shall mean all of each Loan Party's right, title and interest in and to the owned and leased premises identified on Schedule 4.19 hereto or which is hereafter owned or leased by any Loan Party.

" Receivables " shall mean and include, as to each Loan Party, all of such Loan Party's accounts, contract rights, instruments (including those evidencing indebtedness owed to such Loan Party by its Affiliates), documents, chattel paper (including electronic chattel paper), general intangibles relating to accounts, drafts and acceptances, credit card receivables and all other forms of obligations owing to such Loan Party arising out of or in connection with the sale or lease of Inventory or the rendition of services, all supporting obligations, guarantees and other security therefor, whether secured or unsecured, now existing or hereafter created, and whether or not specifically sold or assigned to Agent hereunder.

 

 

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" Receivables Advance Rate" shall have the meaning set forth in Section 2.1(a) (y)(i) hereof.

" Register " shall have the meaning set forth in Section 16.3(e) .

" Reimbursement Obligation " shall have the meaning set forth in Section 2.11(b) hereof.

" Release " shall have the meaning set forth in Section 5.7(c) (i) hereof.

" Rental Fleet Inventory " shall mean and include Inventory of each Borrower which consists of new and used modular buildings, mobile and ground-level offices and storage containers and trailers held by such Borrower for intended lease or rental by such Borrower to third parties.

" Rental Fleet Advance Rate (NBV) " shall have the meaning set forth in Section 2.1(a) (y)(ii) hereof.

" Rental Fleet Advance Rate (NOLV) " shall have the meaning set forth in Section 2.1(a) (y)(ii) hereof.

" Reportable Event " shall mean a reportable event described in Section 4043(c) of ERISA or the regulations promulgated thereunder.

" Required Lenders " shall mean Lenders holding greater than fifty percent (50%) of the Advances (excluding Swing Loans) and, if no Advances (excluding Swing Loans) are outstanding, shall mean Lenders holding   greater than fifty percent (50%)   of the Commitment Percentages; provided, however, if there are fewer than three (3) Lenders, Required Lenders shall mean all Lenders.

" Reserve Percentage " shall mean as of any day the maximum percentage in effect on such day as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the reserve requirements (including supplemental, marginal and emergency reserve requirements) with respect to eurocurrency funding (currently referred to as " Eurocurrency Liabilities ".

" Revolving Advances " shall mean Advances made other than Letters of Credit.

" Revolving Credit Note " shall mean, collectively, the promissory notes referred to in Section 2.1(a) hereof.

" Revolving Interest Rate " shall mean an interest rate per annum equal to (a) the sum of the Alternate Base Rate plus two and three quarters of one percent (2.75%) with respect to Domestic Rate Loans and (b) the sum of the Eurodollar Rate plus three and three quarters of one percent (3.75%) with respect to Eurodollar Rate Loans.

" RFV " shall mean Ronald F. Valenta, an individual with a principal residence in the State of California.

 

 

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" Rolling Stock Equipment " shall mean and include all Equipment of each Borrower consisting of trucks, trailers, tractors, service vehicles, vans, pick up trucks, forklifts, wheel loaders and other mobile Equipment and other vehicles used by such Borrower to transport Inventory of such Borrower.

" Rolling Stock Equipment Advance Rate (NBV) " shall have the meaning set forth in Section 2.1(a) (y)(iii) hereof.

" Rolling Stock Equipment Advance Rate (NOLV) " shall have the meaning set forth in Section 2.1(a) (y)(iii) hereof.

" SEC " shall mean the Securities and Exchange Commission or any successor thereto.

" Section 20 Subsidiary " shall mean the Subsidiary of the bank holding company controlling PNC, which Subsidiary has been granted authority by the Federal Reserve Board to underwrite and deal in certain Ineligible Securities.

" Securities Act " shall mean the Securities Act of 1933, as amended.

" Senior Debt Payments " shall mean and include all cash actually expended by Pac-Van and its Subsidiaries on a consolidated basis to make (a) interest payments on any Advances hereunder, plus (b) payments for all fees, commissions and charges set forth herein and with respect to any Advances, plus (c) capitalized lease payments, plus (d) payments with respect to any other Indebtedness for borrowed money.

" Senior Funded Debt " shall mean, as of any date of determination, (i) Funded Debt minus (ii) Subordinated Funded Debt.

" Settlement Date " shall mean the Closing Date and thereafter Wednesday or Thursday of each week or more frequently if Agent deems appropriate unless such day is not a Business Day in which case it shall be the next succeeding Business Day.

" Standard & Poor's " shall mean Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc.

" Step Inventory " shall mean Inventory of each Borrower which consists of steps and ramps.

" Step Inventory Advance Rate (NBV) " shall have the meaning set forth in Section 2.1(a) (y)(iii) hereof.

" Subordinated Funded Debt " shall mean any unsecured Funded Debt of Pac-Van and its Subsidiaries on a consolidated basis the terms of which are reasonably satisfactory to Agent and which has been expressly subordinated in right of payment to all Funded Debt of Pac-Van and its Subsidiaries under the Loan Documents (i) by the execution and delivery of a subordination agreement, in form and substance satisfactory to Agent, or (ii) otherwise on terms

 

 

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and conditions (including subordination provisions, payment terms, interest rates, covenants, remedies, defaults and other material terms) satisfactory to Agent.

" Subsidiary " of any Person shall mean a corporation or other entity of whose Equity Interests having ordinary voting power (other than Equity Interests having such power only by reason of the happening of a contingency) to elect a majority of the directors of such corporation, or other Persons performing similar functions for such entity, are owned, directly or indirectly, by such Person.

" Subsidiary Stock " shall mean all of the issued and outstanding Equity Interests of any Subsidiary owned by any Loan Party (not to exceed sixty-five percent (65%) of the Equity Interests of any Foreign Subsidiary).

" Swing Loan Commitment " shall mean PNC's commitment to make Swing Loans to Borrowers pursuant to Section 2.23(a) hereof in an aggregate principal amount up to Eight Million Five Hundred Thousand and 00/100 Dollars ($8,500,000.00).

" Swing Loan Request " shall mean a request for Swing Loans made in accordance with Section 2.23(b) hereof.

" Swing Loans " shall mean collectively and " Swing Loan " shall mean separately all Swing Loans or any Swing Loan made by PNC to Borrowers pursuant to 2.23 hereof.

" Swing Note " shall mean the promissory note referred to in Section 2.23(d) hereof, together with all amendments, restatements, extensions, renewals, replacements, refinancings or refundings thereof in whole or in part.

" Taxes " shall mean all federal, state, municipal and other governmental taxes, levies, charges, claims and assessments which are or may be owed or collected by any Loan Party with respect to its business, operations, Collateral or otherwise.

" Term " shall have the meaning set forth in Section 13.1 hereof.

" Termination Event " shall mean (i) a Reportable Event with respect to any Plan or Multiemployer Plan; (ii) the withdrawal of any Loan Party or any member of the Controlled Group from a Plan or Multiemployer Plan during a plan year in which such entity was a "substantial employer" as defined in Section 4001(a)(2) of ERISA; (iii) the providing of notice of intent to terminate a Plan in a distress termination described in Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to terminate a Plan or Multiemployer Plan; (v) any event or condition (a) which might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan or Multiemployer Plan, or (b) that may result in termination of a Multiemployer Plan pursuant to Section 4041A of ERISA; or (vi) the partial or complete withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of any Loan Party or any member of the Controlled Group from a Multiemployer Plan.

" Titled Assets " shall mean all goods the ownership of which is evidenced by (or required to be evidenced by) a Certificate of Title owned by any Loan Party.

 

 

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" Toxic Substance " shall mean and include any material present on the Real Property which has been shown to have significant adverse effect on human health or which is subject to regulation under the Toxic Substances Control Act (TSCA), 15 U.S.C. §§ 2601 et seq., applicable state law, or any other applicable Federal or state laws now in force or hereafter enacted relating to toxic substances.  " Toxic Substance " includes asbestos, polychlorinated biphenyls (PCBs) and lead-based paints.

" Tractor Advance Rate (NBV) " shall have the meaning set forth in Section 2.1(a) (y)(iii) hereof.

" Tractor Advance Rate (NOLV) " shall have the meaning set forth in Section 2.1(a) (y)(iii) hereof.

" Trading with the Enemy Act " shall mean the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any enabling legislation or executive order relating thereto.

" Transactions " shall have the meaning set forth in Section 5.5(a) hereof.

" Transferee " shall have the meaning set forth in Section 16.3(d) hereof.

" Trust " shall have the meaning set forth in the preamble to this Agreement and shall include its successors and assigns.

" Trust Agent " shall mean PNC in its capacity as Trust Agent on behalf of the Trust.

" Trust Agreement " shall mean that certain Trust Agreement of Pac-Van Asset Trust, dated of even date herewith, by and among Pac-Van, the Trustee and PNC, as trust agent and beneficial owner.

" Trustee " shall mean Wells Fargo Delaware Trust Company, National Association, not in its individual capacity but solely as Trustee of the Trust under the Trust Agreement.

" UCP " shall have the meaning set forth in Section 2.9(b) hereof.

" Undrawn Availability " at a particular date shall mean an amount equal to (a) the lesser of (i) the Formula Amount or (ii) the Maximum Revolving Advance Amount, minus (b) the sum of (i) the outstanding amount of Advances plus (ii) all amounts due and owing to any Borrower's trade creditors which are sixty (60) days or more past due and which are not being Properly Contested, provided that amounts sixty (60) days or more past due being Properly Contested shall be included in this calculation unless Borrowers have delivered information and/or documentation to Agent with respect to such amounts in form and substance satisfactory to Agent, plus (iii) fees and expenses for which Borrowers are liable but which have not been paid or charged to Borrowers' Account.

 

 

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" Uniform Commercial Code " shall have the meaning set forth in Section 1.3 hereof.

" USA PATRIOT Act " shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.

" Week " shall mean the time period commencing with the opening of business on a Wednesday and ending on the end of business the following Tuesday.

1.3.   Uniform Commercial Code Terms .

All terms used herein and defined in the Uniform Commercial Code as adopted in the State of New York from time to time (the " Uniform Commercial Code ") shall have the meaning given therein unless otherwise defined herein.  Without limiting the foregoing, the terms "accounts", "chattel paper", "commercial tort claims", "instruments", "general intangibles", "goods", "payment intangibles", "proceeds", "supporting obligations", "securities", "investment property", "documents", "deposit accounts", "software", "letter of credit rights", "inventory", "equipment" and "fixtures", as and when used in the description of Collateral (including in Section 4.1 hereto) shall have the meanings given to such terms in Articles 8 or 9 of the Uniform Commercial Code.  To the extent the definition of any category or type of collateral is expanded by any amendment, modification or revision to the Uniform Commercial Code, such expanded definition will apply automatically as of the date of such amendment, modification or revision.

1.4.   Certain Matters of Construction .

The terms "herein", "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision.  All references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement.  Any pronoun used shall be deemed to cover all genders.  Wherever appropriate in the context, terms used herein in the singular also include the plural and vice versa.  All references to statutes and related regulations shall include any amendments of same and any successor statutes and regulations.  Unless otherwise provided, all references to any instruments or agreements to which Agent is a party, including references to any of the Other Documents, shall include any and all modifications or amendments thereto and any and all extensions or renewals thereof.  All references herein to the time of day shall mean the time in New York, New York.  Unless otherwise provided, all financial calculations shall be performed with Inventory valued on a first-in, first-out basis.  Whenever the words "including" or "include" shall be used, such words shall be understood to mean "including, without limitation" or "include, without limitation".  A Default or Event of Default shall be deemed to exist at all times during the period commencing on the date that such Default or Event of Default occurs to the date on which such Default or Event of Default is waived in writing pursuant to this Agreement or, in the case of a Default, is cured within any period of cure expressly provided for in this Agreement; and an Event of Default shall "continue" or be "continuing" until such Event of Default has been waived in writing by the Required Lenders.  Any Lien referred to in this Agreement or any of the Other

 

 

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Documents as having been created in favor of Agent, any agreement entered into by Agent pursuant to this Agreement or any of the Other Documents, any payment made by or to or funds received by Agent pursuant to or as contemplated by this Agreement or any of the Other Documents, or any act taken or omitted to be taken by Agent, shall, unless otherwise expressly provided, be created, entered into, made or received, or taken or omitted, for the benefit or account of Agent and Lenders. Wherever the phrase "to the best of Loan Parties' knowledge" or words of similar import relating to the knowledge or the awareness of any Loan Party are used in this Agreement or Other Documents, such phrase shall mean and refer to (i) the actual knowledge of a senior officer of any Loan Party or (ii) the knowledge that a senior officer would have obtained after reasonable inquiry.  All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or otherwise within the limitations of, another covenant shall not avoid the occurrence of a default if such action is taken or condition exists.  In addition, all representations and warranties hereunder shall be given independent effect so that if a particular representation or warranty proves to be incorrect or is breached, the fact that another representation or warranty concerning the same or similar subject matter is correct or is not breached will not affect the incorrectness of a breach of a representation or warranty hereunder.

II.   ADVANCES, PAYMENTS .

2.1.   Revolving Advances .

(a)   Amount of Revolving Advances .  Subject to the terms and conditions set forth in this Agreement including Section 2.1(b) , each Lender, severally and not jointly, will make Revolving Advances to Borrowers in aggregate amounts outstanding at any time equal to such Lender's Commitment Percentage of the lesser of (x) the Maximum Revolving Advance Amount less the sum of (i) the aggregate Maximum Undrawn Amount of outstanding Letters of Credit, plus (ii) the aggregate amount of outstanding Swing Loans and (y) an amount equal to the sum of:

(i)   subject to the provisions of Section 2.1(b) hereof, up to eighty-five percent (85%) (" Receivables Advance Rate ") of Eligible Receivables, plus

(ii)   subject to the provisions of Section 2.1(b) hereof, up to the lesser of (A) the sum of (y) up to eighty percent (80%) (" Rental Fleet Advance Rate (NBV) ") of the net book value of the Eligible Rental Fleet Inventory, and (z) up to eighty percent (80%) (" Other Inventory Advance Rate (NBV) ") of the net book value of the Eligible Other Inventory, and (B) the sum of (y) (I) from the Closing Date through and including June 30, 2011, up to ninety percent (90%), (II) from July 1, 2011 through and including June 30, 2012, up to eighty-five percent (85%), and (III) from July 1, 2012 and thereafter, up to eighty percent (80%) (collectively, the " Rental Fleet Advance Rate (NOLV) ") of the Net Orderly Liquidation Value of the Eligible Rental Fleet Inventory, and (z) (I) from the Closing Date through and including June 30, 2011, up to ninety percent (90%), (II) from July 1, 2011 through and including June 30, 2012, up to eighty-five percent (85%), and (III) from July 1, 2012 and thereafter, up to eighty percent (80%) (collectively, the " Other Inventory Advance Rate (NOLV) ") of the Net Orderly Liquidation Value of the Eligible Other Inventory , plus

 

 

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(iii)   subject to the provisions of Section  2.1(b) hereof, up to the least of (A) the sum of (w) up to fifty percent (50%) (" Tractor Advance Rate (NBV) ") of the net book value of Eligible Tractor Equipment, (x) up to fifty percent (50%) (" Rolling Stock Equipment Advance Rate (NBV) ") of the net book value of Eligible Rolling Stock Equipment, (y) up to fifty percent (50%) (" Branch-Use Advance Rate (NBV) ") of the net book value of Eligible Branch-Use Equipment, and (z) up to fifty percent (50%) (" Step Inventory Advance Rate (NBV) ") of the net book value of Eligible Step Inventory, (B) the sum of (x) up to eighty-five percent (85%) (" Tractor Advance Rate (NOLV) ") of the Net Orderly Liquidation Value of Eligible Tractor Equipment, (y) up to eighty-five (85%) (" Rolling Stock Equipment Advance Rate (NOLV) ") of the Net Orderly Liquidation Value of Eligible Rolling Stock Equipment and (z) up to eighty-five (85%) (" Branch-Use Advance Rate (NOLV) ") of the Net Orderly Liquidation Value of Branch-Use Equipment, and (C) Two Million and 00/100 Dollars ($2,000,000.00), minus

(iv)   the aggregate Maximum Undrawn Amount of all outstanding Letters of Credit, minus

(v)   the aggregate amount of outstanding Swing Loans, minus

(vi)   such reserves as Agent may reasonably deem proper and necessary from time to time.

The amount derived from (x) the sum of Sections 2.1(a) (y)(i), (ii) and (iii), minus (y) Section 2.1(a) (y)(iv), (v) and (vi), at any time and from time to time shall be referred to as the " Formula Amount ".  The Revolving Advances shall be evidenced by one or more secured promissory notes (collectively, the " Revolving Credit Note ") substantially in the form attached hereto as Exhibit 2.1(a) .

(b)   Discretionary Rights .  The Advance Rates may be increased or decreased by Agent at any time and from time to time in the exercise of its reasonable discretion.  Each Borrower consents to any such increases or decreases and acknowledges that decreasing the Advance Rates or increasing or imposing reserves may limit or restrict Advances requested by Borrowing Agent.  The rights of Agent under this subsection are subject to the provisions of Section 16.2(b) .

2.2.   Procedure for Revolving Advances Borrowing .

(a)   Borrowing Agent on behalf of any Borrower may notify Agent prior to 1:00 p.m. on a Business Day of a Borrower's request to incur, on that day, a Revolving Advance hereunder.  Should any amount required to be paid as interest hereunder, or as fees or other charges under this Agreement or any other agreement with Agent or Lenders, or with respect to any other Obligation, become due, same shall be deemed a request for a Revolving Advance maintained as a Domestic Rate Loan as of the date such payment is due, in the amount required to pay in full such interest, fee, charge or Obligation under this Agreement or any other agreement with Agent or Lenders, and such request shall be irrevocable.

(b)   Notwithstanding the provisions of subsection (a) above, in the event any Borrower desires to obtain a Eurodollar Rate Loan, Borrowing Agent shall give Agent written notice by no later than 11:00 a.m. on the day which is three (3) Business Days prior to the date

 

 

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such Eurodollar Rate Loan is to be borrowed, specifying (i) the date of the proposed borrowing (which shall be a Business Day), (ii) the type of borrowing and the amount on the date of such Advance to be borrowed, which amount shall be in an aggregate principal amount that is not less than One Million and 00/100 Dollars ($1,000,000.00) and integral multiples of Five Hundred Thousand   and 00/100 Dollars ($500,000.00)   in excess thereof, and (iii) the duration of the first Interest Period therefor.  Interest Periods for Eurodollar Rate Loans shall be for one (1), two (2) or three (3) months; provided, if an Interest Period would end on a day that is not a Business Day, it shall end on the next succeeding Business Day unless such day falls in the next succeeding calendar month in which case the Interest Period shall end on the next preceding Business Day.  No Eurodollar Rate Loan shall be made available to any Borrower during the continuance of a Default or an Event of Default.  After giving effect to each requested Eurodollar Rate Loan, including those which are converted from a Domestic Rate Loan under Section 2.2(d) , there shall not be outstanding more than four (4) Eurodollar Rate Loans, in the aggregate.

(c)   Each Interest Period of a Eurodollar Rate Loan shall commence on the date such Eurodollar Rate Loan is made and shall end on such date as Borrowing Agent may elect as set forth in subsection (b) (iii) above provided that the exact length of each Interest Period shall be determined in accordance with the practice of the interbank market for offshore Dollar deposits and no Interest Period shall end after the last day of the Term.

Borrowing Agent shall elect the initial Interest Period applicable to a Eurodollar Rate Loan by its notice of borrowing given to Agent pursuant to Section 2.2(b) or by its notice of conversion given to Agent pursuant to Section 2.2(d) , as the case may be.  Borrowing Agent shall elect the duration of each succeeding Interest Period by giving irrevocable written notice to Agent of such duration not later than 11:00 a.m. on the day which is three (3) Business Days prior to the last day of the then current Interest Period applicable to such Eurodollar Rate Loan.  If Agent does not receive timely notice of the Interest Period elected by Borrowing Agent, Borrowing Agent shall be deemed to have elected to convert to a Domestic Rate Loan subject to Section 2.2(d) herein below.

(d)   Provided that no Event of Default shall have occurred and be continuing, Borrowing Agent may, on the last Business Day of the then current Interest Period applicable to any outstanding Eurodollar Rate Loan, or on any Business Day with respect to Domestic Rate Loans, convert any such loan into a loan of another type in the same aggregate principal amount provided that any conversion of a Eurodollar Rate Loan shall be made only on the last Business Day of the then current Interest Period applicable to such Eurodollar Rate Loan.  If Borrowing Agent desires to convert a loan, Borrowing Agent shall give Agent written notice by no later than 10:00 a.m. (i) on the day which is three (3) Business Days' prior to the date on which such conversion is to occur with respect to a conversion from a Domestic Rate Loan to a Eurodollar Rate Loan, or (ii) on the day which is one (1) Business Day prior to the date on which such conversion is to occur with respect to a conversion from a Eurodollar Rate Loan to a Domestic Rate Loan, specifying, in each case, the date of such conversion, the loans to be converted and if the conversion is from a Domestic Rate Loan to any other type of loan, the duration of the first Interest Period therefor.

(e)   At its option and upon written notice given prior to 11:00 a.m. at least three (3) Business Days' prior to the date of such prepayment, any Borrower may prepay the

 

 

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Eurodollar Rate Loans in whole at any time or in part from time to time with accrued interest on the principal being prepaid to the date of such repayment.  Such Borrower shall specify the date of prepayment of Advances which are Eurodollar Rate Loans and the amount of such prepayment.  In the event that any prepayment of a Eurodollar Rate Loan is required or permitted on a date other than the last Business Day of the then current Interest Period with respect thereto, such Borrower shall indemnify Agent and Lenders therefor in accordance with Section 2.2(f) hereof.

(f)   Each Borrower shall indemnify Agent and Lenders and hold Agent and Lenders harmless from and against any and all losses or expenses that Agent and Lenders may sustain or incur as a consequence of any prepayment, conversion of or any default by any Borrower in the payment of the principal of or interest on any Eurodollar Rate Loan or failure by any Borrower to complete a borrowing of, a prepayment of or conversion of or to a Eurodollar Rate Loan after notice thereof has been given, including any interest payable by Agent or Lenders to lenders of funds obtained by it in order to make or maintain its Eurodollar Rate Loans hereunder.  A certificate as to any additional amounts payable pursuant to the foregoing sentence submitted by Agent or any Lender to Borrowing Agent shall be conclusive absent manifest error.

(g)   Notwithstanding any other provision hereof, if any Applicable Law, or any change therein or in the interpretation or application thereof, shall make it unlawful for any Lender (for purposes of this subsection (g) , the term " Lender " shall include any Lender and the office or branch where any Lender or any corporation or bank controlling such Lender makes or maintains any Eurodollar Rate Loans) to make or maintain its Eurodollar Rate Loans, the obligation of Lenders to make Eurodollar Rate Loans hereunder shall forthwith be cancelled and Borrowers shall, if any affected Eurodollar Rate Loans are then outstanding, promptly upon request from Agent, either pay all such affected Eurodollar Rate Loans or convert such affected Eurodollar Rate Loans into loans of another type.  If any such payment or conversion of any Eurodollar Rate Loan is made on a day that is not the last day of the Interest Period applicable to such Eurodollar Rate Loan, Borrowers shall pay Agent, upon Agent's request, such amount or amounts as may be necessary to compensate Lenders for any loss or expense sustained or incurred by Lenders in respect of such Eurodollar Rate Loan as a result of such payment or conversion, including any interest or other amounts payable by Lenders to lenders of funds obtained by Lenders in order to make or maintain such Eurodollar Rate Loan.  A certificate as to any additional amounts payable pursuant to the foregoing sentence submitted by Lenders to Borrowing Agent shall be conclusive absent manifest error.

2.3.   Disbursement of Advance Proceeds .

All Advances shall be disbursed from whichever office or other place Agent may designate from time to time and, together with any and all other Obligations of Borrowers to Agent or Lenders, shall be charged to Borrowers' Account on Agent's books.  During the Term, Borrowers may use the Revolving Advances by borrowing, prepaying and re-borrowing, all in accordance with the terms and conditions hereof.  The proceeds of each Revolving Advance requested by Borrowing Agent on behalf of any Borrower or deemed to have been requested by any Borrower under Section 2.2 hereof shall, with respect to requested Revolving Advances to the extent Lenders make such Revolving Advances, be made available to the applicable Borrower on the day so requested by way of credit to such Borrower's operating account at PNC,

 

 

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or such other bank as Borrowing Agent may designate following notification to Agent, in immediately available federal funds or other immediately available funds or, with respect to Revolving Advances deemed to have been requested by any Borrower, be disbursed to Agent to be applied to the outstanding Obligations giving rise to such deemed request.

2.4.   Maximum Advances .

The aggregate balance of Revolving Advances outstanding and Swing Loans outstanding at any time shall not exceed the lesser of (a) the Maximum Revolving Advance Amount or (b) the Formula Amount less, in each case, the aggregate Maximum Undrawn Amount of all issued and outstanding Letters of Credit.

2.5.   Repayment of Advances .

(a)   The Revolving Advances shall be due and payable in full on the last day of the Term subject to earlier prepayment as herein provided.

(b)   Each Borrower recognizes that the amounts evidenced by checks, notes, drafts or any other items of payment relating to and/or proceeds of Collateral may not be collectible by Agent on the date received.  In consideration of Agent's agreement to conditionally credit Borrowers' Account as of the next Business Day following Agent's receipt of those items of payment, each Borrower agrees that, in computing the charges under this Agreement, all items of payment shall be deemed applied by Agent on account of the Obligations one (1) Business Day after (i) the Business Day Agent receives such payments via wire transfer or electronic depository check or (ii) in the case of payments received by Agent in any other form, the Business Day such payment constitutes good funds in Agent's account.  Agent is not, however, required to credit Borrowers' Account for the amount of any item of payment which is unsatisfactory to Agent and Agent may charge Borrowers' Account for the amount of any item of payment which is returned to Agent unpaid.

(c)   All payments of principal, interest and other amounts payable hereunder, or under any of the Other Documents shall be made to Agent at the Payment Office not later than 1:00 P.M. on the due date therefor in lawful money of the United States of America in federal funds or other funds immediately available to Agent.  Agent shall have the right to effectuate payment on any and all Obligations due and owing hereunder by charging Borrowers' Account or by making Advances as provided in Section 2.2 hereof.

(d)   Borrowers shall pay principal, interest, and all other amounts payable hereunder, or under any related agreement, without any deduction whatsoever, including any deduction for any setoff or counterclaim.

2.6.   Repayment of Excess Advances .

The aggregate balance of Advances outstanding at any time in excess of the maximum amount of Advances permitted hereunder shall be immediately due and payable without the necessity of any demand, at the Payment Office, whether or not a Default or Event of Default has occurred.

 

 

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2.7.   Statement of Account .

Agent shall maintain, in accordance with its customary procedures, a loan account (" Borrowers' Account ") in the name of Borrowers in which shall be recorded the date and amount of each Advance made by Agent and the date and amount of each payment in respect thereof; provided, however, the failure by Agent to record the date and amount of any Advance (and not any payment in respect thereof) shall not adversely affect Agent or any Lender.  Each month, Agent shall send to Borrowing Agent a statement showing the accounting for the Advances made, payments made or credited in respect thereof, and other transactions between Agent and Borrowers during such month.  The monthly statements shall be deemed correct and binding upon Borrowers in the absence of manifest error and shall constitute an account stated between Lenders and Borrowers unless Agent receives a written statement of Borrowers' specific exceptions thereto within thirty (30) days after such statement is received by Borrowing Agent.  The records of Agent with respect to the loan account shall be conclusive evidence absent manifest error of the amounts of Advances and other charges thereto and of payments applicable thereto.

2.8.   Letters of Credit .

Subject to the terms and conditions hereof, Agent shall issue or cause the issuance of standby and/or trade letters of credit (" Letters of Credit ") for the account of any Borrower; provided, however, that Agent will not be required to issue or cause to be issued any Letters of Credit to the extent that the issuance thereof would then cause the sum of (i) the outstanding Revolving Advances plus (ii) Maximum Undrawn Amount of outstanding Letters of Credit plus (iii) the outstanding Swing Loans to exceed the lesser of (x) the Maximum Revolving Advance Amount or (y) the Formula Amount.  The Maximum Undrawn Amount of outstanding Letters of Credit shall not exceed in the aggregate at any time the Letter of Credit Sublimit.  All disbursements or payments related to Letters of Credit shall be deemed to be Domestic Rate Loans consisting of Revolving Advances and shall bear interest at the Revolving Interest Rate for Domestic Rate Loans; Letters of Credit that have not been drawn upon shall not bear interest.

2.9.   Issuance of Letters of Credit .

(a)   Borrowing Agent, on behalf of Borrowers, may request Agent to issue or cause the issuance of a Letter of Credit by delivering to Agent at the Payment Office, prior to 1:00 p.m., at least five (5)  Business Days' prior to the proposed date of issuance, Agent's form of Letter of Credit Application (the " Letter of Credit Application ") completed to the satisfaction of Agent; and, such other certificates, documents and other papers and information as Agent may reasonably request.  Borrowing Agent, on behalf of Borrowers, also has the right to give instructions and make agreements with respect to any application, any applicable letter of credit and security agreement, any applicable letter of credit reimbursement agreement and/or any other applicable agreement, any letter of credit and the disposition of documents, disposition of any unutilized funds, and to agree with Agent upon any amendment, extension or renewal of any Letter of Credit.

(b)   Each Letter of Credit shall, among other things, (i) provide for the payment of sight drafts, other written demands for payment, or acceptances of usance drafts

 

 

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when presented for honor thereunder in accordance with the terms thereof and when accompanied by the documents described therein and (ii) have an expiry date not later than twenty-four (24) months after such Letter of Credit's date of issuance and in no event later than the last day of the Term.  Each standby Letter of Credit shall be subject either to the Uniform Customs and Practice for Documentary Credits as  most recently published by the International Chamber of Commerce at the time a Letter of Credit is issued (the " UCP ") or the International Standby Practices (ISP98 International Chamber of Commerce Publication Number 590) (the " ISP98 Rules ")), and any subsequent revision thereof at the time a standby Letter of Credit is issued, as determined by Agent, and each trade Letter of Credit shall be subject to the UCP.

(c)   Agent shall use its reasonable efforts to notify Lenders of the request by Borrowing Agent for a Letter of Credit hereunder.

2.10.   Requirements For Issuance of Letters of Credit .

(a)   Borrowing Agent shall authorize and direct any Issuer to name the applicable Borrower as the " Applicant " or " Account Party " of each Letter of Credit.  If Agent is not the Issuer of any Letter of Credit, Borrowing Agent shall authorize and direct the Issuer to deliver to Agent all instruments, documents, and other writings and property received by the Issuer pursuant to the Letter of Credit and to accept and rely upon Agent's instructions and agreements with respect to all matters arising in connection with the Letter of Credit or the application therefor.

(b)   In connection with all Letters of Credit issued or caused to be issued by Agent under this Agreement, each Borrower hereby appoints Agent, or its designee, as its attorney, with full power and authority if an Event of Default shall have occurred and be continuing, (i) to sign and/or endorse such Borrower's name upon any warehouse or other receipts, letter of credit applications and acceptances, (ii) to sign such Borrower's name on bills of lading; (iii) to clear Inventory through the United States of America Customs Department (" Customs ") in the name of such Borrower or Agent or Agent's designee, and to sign and deliver to Customs officials powers of attorney in the name of such Borrower for such purpose; and (iv) to complete in such Borrower's name or Agent's, or in the name of Agent's designee, any order, sale or transaction, obtain the necessary documents in connection therewith, and collect the proceeds thereof.  Neither Agent nor its attorneys will be liable for any acts or omissions nor for any error of judgment or mistakes of fact or law, except for Agent's or its attorney's willful misconduct.  This power, being coupled with an interest, is irrevocable as long as (y) any Letters of Credit remain outstanding and (z) the applicable Event of Default continues.

2.11.   Disbursements, Reimbursement .

(a)   Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from Agent a participation in such Letter of Credit and each drawing thereunder in an amount equal to such Lender's Commitment Percentage of the Maximum Face Amount of such Letter of Credit and the amount of such drawing, respectively.

 

 

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(b)   In the event of any request for a drawing under a Letter of Credit by the beneficiary or transferee thereof, Agent will promptly notify Borrowing Agent.  Provided that Borrowing Agent shall have received such notice, Borrowers shall reimburse (such obligation to reimburse Agent shall sometimes be referred to as a " Reimbursement Obligation ") Agent prior to 12:00 Noon on each date that an amount is paid by Agent under any Letter of Credit (each such date, a " Drawing Date ") in an amount equal to the amount so paid by Agent.  In the event Borrowers fail to reimburse Agent for the full amount of any drawing under any Letter of Credit by 12:00 Noon on the Drawing Date, Agent will promptly notify each Lender thereof, and Borrowers shall be deemed to have requested that a Revolving Advance maintained as a Domestic Rate Loan be made by Lenders to be disbursed on the Drawing Date under such Letter of Credit, subject to the amount of the unutilized portion of the lesser of Maximum Revolving Advance Amount or the Formula Amount and subject to Section 8.2 hereof.  Any notice given by Agent pursuant to this Section 2.11(b) may be oral if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

(c)   Each Lender shall upon any notice pursuant to Section 2.11(b) make available to Agent an amount in immediately available funds equal to its Commitment Percentage of the amount of the drawing, whereupon the participating Lenders shall (subject to Section 2.11(d) ) each be deemed to have made a Revolving Advance maintained as a Domestic Rate Loan to Borrowers in that amount.  If any Lender so notified fails to make available to Agent the amount of such Lender's Commitment Percentage of such amount by no later than 2:00 p.m. on the Drawing Date, then interest shall accrue on such Lender's obligation to make such payment, from the Drawing Date to the date on which such Lender makes such payment (i) at a rate per annum equal to the Federal Funds Effective Rate during the first three days following the Drawing Date and (ii) at a rate per annum equal to the rate applicable to Revolving Advances maintained as a Domestic Rate Loans on and after the fourth day following the Drawing Date.  Agent will promptly give notice of the occurrence of the Drawing Date, but failure of Agent to give any such notice on the Drawing Date or in sufficient time to enable any Lender to effect such payment on such date shall not relieve such Lender from its obligation under this Section 2.11(c) , provided that such Lender shall not be obligated to pay interest as provided in Section 2.11(c) (i) and (ii) until and commencing from the date of receipt of notice from Agent of a drawing.

(d)   With respect to any unreimbursed drawing that is not converted into a Revolving Advance maintained as a Domestic Rate Loan to Borrowers in whole or in part as contemplated by Section 2.11(b) , because of Loan Parties' failure to satisfy the conditions set forth in Section 8.2 (other than any notice requirements) or for any other reason, Borrowers shall be deemed to have incurred from Agent a borrowing (each a " Letter of Credit Borrowing ") in the amount of such drawing. Such Letter of Credit Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the rate per annum applicable to a Revolving Advance maintained as a Domestic Rate Loan.  Each Lender's payment to Agent pursuant to Section 2.11(c) shall be deemed to be a payment in respect of its participation in such Letter of Credit Borrowing and shall constitute a " Participation Advance " from such Lender in satisfaction of its Participation Commitment under this Section 2.11 .

 

 

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(e)   Each Lender's Participation Commitment shall continue until the last to occur of any of the following events:  (x) Agent ceases to be obligated to issue or cause to be issued Letters of Credit hereunder; (y) no Letter of Credit issued or created hereunder remains outstanding and uncancelled and (z) all Persons (other than Loan Parties) have been fully reimbursed for all payments made under or relating to Letters of Credit.

2.12.   Repayment of Participation Advances .

(a)   Upon (and only upon) receipt by Agent for its account of immediately available funds from Borrowers (i) in reimbursement of any payment made by Agent under the Letter of Credit with respect to which any Lender has made a Participation Advance to Agent, or (ii) in payment of interest on such a payment made by Agent under such a Letter of Credit, Agent will pay to each Lender, in the same funds as those received by Agent, the amount of such Lender's Commitment Percentage of such funds, except Agent shall retain the amount of the Commitment Percentage of such funds of any Lender that did not make a Participation Advance in respect of such payment by Agent.

(b)   If Agent is required at any time to return to any Borrower, or to a trustee, receiver, liquidator, custodian, or any official in any insolvency proceeding, any portion of the payments made by Borrowers to Agent pursuant to Section 2.12(a) in reimbursement of a payment made under the Letter of Credit or interest or fee thereon, each Lender shall, on demand of Agent, forthwith return to Agent the amount of its Commitment Percentage of any amounts so returned by Agent plus interest at the Federal Funds Effective Rate.

2.13.   Documentation .

Each Borrower agrees to be bound by the terms of the Letter of Credit Application and by Agent's interpretations of any Letter of Credit issued on behalf of such Borrower and by Agent's written regulations and customary practices relating to letters of credit, though Agent's interpretations may be different from such Borrower's own.  In the event of a conflict between the Letter of Credit Application and this Agreement, this Agreement shall govern.  It is understood and agreed that, except in the case of gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final non-appealable judgment), Agent shall not be liable for any error, negligence and/or mistakes, whether of omission or commission, in following Borrowing Agent's or any Borrower's instructions or those contained in the Letters of Credit or any modifications, amendments or supplements thereto.

2.14.   Determination to Honor Drawing Request .

In determining whether to honor any request for drawing under any Letter of Credit by the beneficiary thereof, Agent shall be responsible only to determine that the documents and certificates required to be delivered under such Letter of Credit have been delivered and that they comply on their face with the requirements of such Letter of Credit and that any other drawing condition appearing on the face of such Letter of Credit has been satisfied in the manner so set forth.

 

 

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2.15.   Nature of Participation and Reimbursement Obligations .

Each Lender's obligation in accordance with this Agreement to make the Revolving Advances or Participation Advances as a result of a drawing under a Letter of Credit, and the obligations of Borrowers to reimburse Agent upon a draw under a Letter of Credit, shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Section 2.15 under all circumstances, including the following circumstances:

(i)   any set-off, counterclaim, recoupment, defense or other right which such Lender may have against Agent, any Loan Party or any other Person for any reason whatsoever;

(ii)   the failure of any Loan Party or any other Person to comply, in connection with a Letter of Credit Borrowing, with the conditions set forth in this Agreement for the making of a Revolving Advance, it being acknowledged that such conditions are not required for the making of a Letter of Credit Borrowing and the obligation of Lenders to make Participation Advances under Section 2.10 ;

(iii)   any lack of validity or enforceability of any Letter of Credit;

(iv)   any claim of breach of warranty that might be made by any Borrower or any Lender against the beneficiary of a Letter of Credit, or the existence of any claim, set-off, recoupment, counterclaim, cross-claim, defense or other right which any Borrower or any Lender may have at any time against a beneficiary, any successor beneficiary or any transferee of any Letter of Credit or the proceeds thereof (or any Persons for whom any such transferee may be acting), Agent or any Lender or any other Person, whether in connection with this Agreement, the transactions contemplated herein or any unrelated transaction (including any underlying transaction between any Borrower and the beneficiary for which any Letter of Credit was procured);

(v)   the lack of power or authority of any signer of (or any defect in or forgery of any signature or endorsement on) or the form of or lack of validity, sufficiency, accuracy, enforceability or genuineness of any draft, demand, instrument, certificate or other document presented under or in connection with any Letter of Credit, or any fraud or alleged fraud in connection with any Letter of Credit, or the transport of any property or provisions of services relating to a Letter of Credit, in each case even if Agent or any of Agent's Affiliates has been notified thereof;

(vi)   payment by Agent under any Letter of Credit against presentation of a demand, draft or certificate or other document which does not comply with the terms of such Letter of Credit;

(vii)   the solvency of, or any acts or omissions by, any beneficiary of any Letter of Credit, or any other Person having a role in any transaction or obligation relating to a Letter of Credit, or the existence, nature, quality, quantity, condition, value or other characteristic of any property or services relating to a Letter of Credit;

 

 

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(viii)   any failure by Agent or any of Agent's Affiliates to issue any Letter of Credit in the form requested by Borrowing Agent, unless Agent has received written notice from Borrowing Agent of such failure within three (3) Business Days after Agent shall have furnished Borrowing Agent a copy of such Letter of Credit and such error is material and no drawing has been made thereon prior to receipt of such notice;

(ix)   any Material Adverse Effect on any Loan Party;

(x)   any breach of this Agreement or any Other Document by any party thereto;

(xi)   the occurrence or continuance of an insolvency proceeding with respect to any Loan Party;

(xii)   the fact that a Default or Event of Default shall have occurred and be continuing;

(xiii)   the fact that the Term shall have expired or this Agreement or the Obligations hereunder shall have been terminated; and

(xiv)   any other circumstance or happening whatsoever, whether or not similar to any of the foregoing.

2.16.   Indemnity .

In addition to amounts payable as provided in Section 16.5 , each Loan Party hereby agrees to protect, indemnify, pay and save harmless Agent and any of Agent's Affiliates that have issued a Letter of Credit from and against any and all claims, demands, liabilities, damages, taxes, penalties, interest, judgments, losses, costs, charges and expenses (including reasonable fees, expenses and disbursements of counsel) which Agent or any of Agent's Affiliates may incur or be subject to as a consequence, direct or indirect, of the issuance of any Letter of Credit, other than as a result of (A) the gross negligence or willful misconduct of Agent as determined by a final and non-appealable judgment of a court of competent jurisdiction or (b) the wrongful dishonor by Agent or any of Agent's Affiliates of a proper demand for payment made under any Letter of Credit, except if such dishonor resulted from any act or omission, whether rightful or wrongful, of any present or future de jure or de facto Governmental Body (all such acts or omissions herein called " Governmental Acts ").

2.17.   Liability for Acts and Omissions .

As between Loan Parties and Agent and Lenders, each Loan Party assumes all risks of the acts and omissions of, or misuse of the Letters of Credit by, the respective beneficiaries of such Letters of Credit.  In furtherance and not in limitation of the respective foregoing, Agent shall not be responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for an issuance of any such Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged (even if Agent shall have been notified thereof); (ii) the validity or sufficiency of any instrument transferring or assigning

 

 

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or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) the failure of the beneficiary of any such Letter of Credit, or any other party to which such Letter of Credit may be transferred, to comply fully with any conditions required in order to draw upon such Letter of Credit or any other claim of any Borrower against any beneficiary of such Letter of Credit, or any such transferee, or any dispute between or among any Borrower and any beneficiary of any Letter of Credit or any such transferee; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, facsimile, telex or otherwise, whether or not they be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any consequences arising from causes beyond the control of Agent, including any governmental acts, and none of the above shall affect or impair, or prevent the vesting of, any of Agent's rights or powers hereunder. Nothing in the preceding sentence shall relieve Agent from liability for Agent's gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final non-appealable judgment) in connection with actions or omissions described in such clauses (i) through (viii) of such sentence.  In no event shall Agent or Agent's Affiliates be liable to any Loan Party for any indirect, consequential, incidental, punitive, exemplary or special damages or expenses (including attorneys' fees), or for any damages resulting from any change in the value of any property relating to a Letter of Credit.

Without limiting the generality of the foregoing, Agent and each of its Affiliates (i) may rely on any oral or other communication believed in good faith by Agent or  such Affiliate to have been authorized or given by or on behalf of the applicant for a Letter of Credit, (ii) may honor any presentation if the documents presented appear on their face substantially to comply with the terms and conditions of the relevant Letter of Credit; (iii) may honor a previously dishonored presentation under a Letter of Credit, whether such dishonor was pursuant to a court order, to settle or compromise any claim of wrongful dishonor, or otherwise, and shall be entitled to reimbursement to the same extent as if such presentation had initially been honored, together with any interest paid by Agent or its Affiliates; (iv) may honor any drawing that is payable upon presentation of a statement advising negotiation or payment, upon receipt of such statement (even if such statement indicates that a draft or other document is being delivered separately), and shall not be liable for any failure of any such draft or other document to arrive, or to conform in any way with the relevant Letter of Credit; (v) may pay any paying or negotiating bank claiming that it rightfully honored under the laws or practices of the place where such bank is located; and (vi) may settle or adjust any claim or demand made on Agent or its Affiliate in any way related to any order issued at the applicant's request to an air carrier, a letter of guarantee or of indemnity issued to a carrier or any similar document (each an " Order ") and honor any drawing in connection with any Letter of Credit that is the subject of such Order, notwithstanding that any drafts or other documents presented in connection with such Letter of Credit fail to conform in any way with such Letter of Credit.

In furtherance and extension and not in limitation of the specific provisions set forth above, any action taken or omitted by Agent under or in connection with the Letters of Credit issued by it or any documents and certificates delivered thereunder, if taken or omitted in

 

 

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good faith and without gross negligence (as determined by a court of competent jurisdiction in a final non-appealable judgment), shall not put Agent under any resulting liability to any Loan Party or any Lender.

2.18.   Additional Payments .

Any sums expended by Agent or any Lender due to any Loan Party's failure to perform or comply with its obligations under this Agreement or any Other Document including any Loan Party's obligations under Sections 4.2 , 4.4 , 4.12 , 4.13 , 4.14 and 6.1 hereof, may be charged to Borrowers' Account as a Revolving Advance and added to the Obligations.

2.19.   Manner of Borrowing and Payment .

(a)   Each borrowing of Revolving Advances shall be advanced according to the applicable Commitment Percentages of Lenders.

(b)   Each payment (including each prepayment) by any Borrower on account of the principal of and interest on the Revolving Advances, shall be applied to the Revolving Advances pro rata according to the applicable Commitment Percentages of Lenders.  Except as expressly provided herein, all payments (including prepayments) to be made by any Borrower on account of principal, interest and fees shall be made without set off or counterclaim and shall be made to PNC with respect to Swing Loans and to Agent on behalf of Lenders with respect to Revolving Advances to the Payment Office, in each case on or prior to 1:00 P.M. in Dollars and in immediately available funds.

(c)   (i)           Notwithstanding anything to the contrary contained in Sections 2.19(a) and (b) hereof, commencing with the first Business Day following the Closing Date, each borrowing of Revolving Advances shall be advanced by Agent and each payment by any Borrower on account of Revolving Advances shall be applied first to those Revolving Advances advanced by Agent.  On or before 1:00 P.M. on each Settlement Date commencing with the first Settlement Date following the Closing Date, Agent and Lenders shall make certain payments as follows: (I) if the aggregate amount of new Revolving Advances made by Agent during the preceding Week (if any) exceeds the aggregate amount of repayments applied to outstanding Revolving Advances during such preceding Week, then each Lender shall provide Agent with funds in an amount equal to its applicable Commitment Percentage of the difference between (w) such Revolving Advances and (x) such repayments and (II) if the aggregate amount of repayments applied to outstanding Revolving Advances during such Week exceeds the aggregate amount of new Revolving Advances made during such Week, then Agent shall provide each Lender with funds in an amount equal to its applicable Commitment Percentage of the difference between (y) such repayments and (z) such Revolving Advances.

(ii)           Each Lender shall be entitled to earn interest at the applicable Revolving Interest Rate on outstanding Advances (other than Swing Loans) which it has funded.

(iii)           Promptly following each Settlement Date, Agent shall submit to each Lender a certificate with respect to payments received and Advances (other than Swing Loans) made during the Week immediately preceding such Settlement Date.  Such certificate of Agent shall be conclusive in the absence of manifest error.

 

 

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(d)   If any Lender or Participant (a " Benefited Lender ") shall at any time receive any payment of all or part of its Advances (other than Swing Loans), or interest thereon, or receive any Collateral in respect thereof (whether voluntarily or involuntarily or by set-off) in a greater proportion than any such payment to and Collateral received by any other Lender, if any, in respect of such other Lender's Advances (other than Swing Loans), or interest thereon, and such greater proportionate payment or receipt of Collateral is not expressly permitted hereunder, such Benefited Lender shall purchase for cash from the other Lenders a participation in such portion of each such other Lender's Advances (other than Swing Loans), or shall provide such other Lender with the benefits of any such Collateral, or the proceeds thereof, as shall be necessary to cause such Benefited Lender to share the excess payment or benefits of such Collateral or proceeds ratably with each of the other Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest.  Each Lender so purchasing a portion of another Lender's Advances (other than Swing Loans) may exercise all rights of payment (including rights of set-off) with respect to such portion as fully as if such Lender were the direct holder of such portion.

(e)   Unless Agent shall have been notified by telephone, confirmed in writing, by any Lender that such Lender will not make the amount which would constitute its applicable Commitment Percentage of the Advances (other than Swing Loans) available to Agent, Agent may (but shall not be obligated to) assume that such Lender shall make such amount available to Agent on the next Settlement Date and, in reliance upon such assumption, make available to Borrowers a corresponding amount.  Agent will promptly notify Borrowing Agent of its receipt of any such notice from a Lender.  If such amount is made available to Agent on a date after such next Settlement Date, such Lender shall pay to Agent on demand an amount equal to the product of (i) the daily average Federal Funds Rate (computed on the basis of a year of three hundred sixty (360) days) during such period as quoted by Agent, times (ii) such amount, times (iii) the number of days from and including such Settlement Date to the date on which such amount becomes immediately available to Agent.  A certificate of Agent submitted to any Lender with respect to any amounts owing under this paragraph (e) shall be conclusive, in the absence of manifest error.  If such amount is not in fact made available to Agent by such Lender within three (3) Business Days after such Settlement Date, Agent shall be entitled to recover such an amount, with interest thereon at the rate per annum then applicable to such Revolving Advances hereunder, on demand from Borrowers; provided, however, that Agent's right to such recovery shall not prejudice or otherwise adversely affect Borrowers' rights (if any) against such Lender.

2.20.   Mandatory Prepayments .

(a)   Subject to Section 4.3 and Section 7.1(b) hereof, when any Loan Party sells or otherwise disposes of any Collateral other than Inventory in the ordinary course of business, Borrowers shall repay the Advances in an amount equal to the Net Proceeds of such sale, such repayments to be made promptly but in no event more than three (3) Business Days following receipt of such Net Proceeds and, until the date of payment, such proceeds shall be held in trust for Agent (for its benefit and the benefit of the Lenders).  The foregoing shall not be deemed to be implied consent to any such sale otherwise prohibited by the terms and conditions hereof.

 

 

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(b)   When any Loan Party receives any (i) insurance or condemnation proceeds, and (ii) proceeds of Indebtedness incurred by any of the Loan Parties other than Indebtedness permitted under Section 7.8 , Borrowers shall repay the Advances in an amount equal to the Net Proceeds of the foregoing, such repayments to be made promptly but in no event more than three (3) Business Days following receipt of such net proceeds and, until the date of payment, such proceeds shall be held in trust for Agent (for its benefit and the benefit of the Lenders).  The foregoing shall not be deemed to be implied consent to any such receipt of insurance or condemnation proceeds or incurrence or Indebtedness otherwise prohibited by the terms and conditions hereof.

(c)   When any Loan Party receives any funds resulting from additional Equity Interests being issued by any of the Loan Parties or any of their Subsidiaries, Borrowers shall repay the Advances in an amount equal to the Net Proceeds of the foregoing, such repayments to be made promptly but in no event more than three (3) Business Days following receipt of such Net Proceeds and, until the date of payment, such proceeds shall be held in trust for Agent (for its benefit and the benefit of the Lenders).  The foregoing shall not be deemed to be implied consent to any such issuance of Equity Interests otherwise prohibited by the terms and conditions hereof.

(d)   All prepayments required pursuant to this Section 2.20 shall be applied to the Advances in such order as Agent may determine subject to Borrowers' ability to re-borrow Revolving Advances in accordance with the terms hereof.

2.21.   Use of Proceeds .

(a)   Borrowers shall apply the proceeds of Advances to (i) repay existing indebtedness owed to Bank of America, N.A., (ii) pay fees and expenses relating to this transaction, and (iii) provide for its working capital needs and reimburse drawings under Letters of Credit.

(b)   Without limiting the generality of Section 2.21(a) above, neither Borrowers, the Guarantors, the Individual Guarantors nor any other Person which may in the future become party to this Agreement or the Other Documents as a Borrower or Guarantor, intends to use nor shall they use any portion of the proceeds of the Advances, directly or indirectly, for any purpose in violation of the Trading with the Enemy Act.

2.22.   Defaulting Lender .

(a)   Notwithstanding anything to the contrary contained herein, in the event any Lender (x) has refused (which refusal constitutes a breach by such Lender of its obligations under this Agreement) to make available its portion of any Advance (other than a Swing Loan) or (y) notifies either Agent or Borrowing Agent that it does not intend to make available its portion of any Advance (other than a Swing Loan) (if the actual refusal would constitute a breach by such Lender of its obligations under this Agreement) (each, a " Lender Default "), all rights and obligations hereunder of such Lender (a " Defaulting Lender ") as to which a Lender Default is in effect and of the other parties hereto shall be modified to the extent of the express provisions of this Section 2.22 while such Lender Default remains in effect.

 

 

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(b)   Advances (other than Swing Loans) shall be incurred pro rata from Lenders (the " Non-Defaulting Lenders ") which are not Defaulting Lenders based on their respective Commitment Percentages, and no Commitment Percentage of any Lender or any pro rata share of any Advances (other than Swing Loans) required to be advanced by any Lender shall be increased as a result of such Lender Default.  Amounts received in respect of principal of any type of Advances (other than Swing Loans) shall be applied to reduce the applicable Advances (other than Swing Loans) of each Lender (other than any Defaulting Lender) pro rata based on the aggregate of the outstanding Advances (other than Swing Loans) of that type of all Lenders at the time of such application; provided, that, Agent shall not be obligated to transfer to a Defaulting Lender any payments received by Agent for the Defaulting Lender's benefit, nor shall a Defaulting Lender be entitled to the sharing of any payments hereunder (including any principal, interest or fees).  Amounts payable to a Defaulting Lender shall instead be paid to or retained by Agent.  Agent may hold and, in its discretion, re-lend to a Borrower the amount of such payments received or retained by it for the account of such Defaulting Lender.  Notwithstanding any of the foregoing, each borrowing, payment or prepayment by any Borrower of principal, interest, fees or other am


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