AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 6, 1996
REGISTRATION NO. 333-06205
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
AMENDMENT NO. 4
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
INTERPOOL LIMITED
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
BARBADOS 7359, 6159 13-2622821
(State or other jurisdiction of (Primary standard industrial (I.R.S. employer
incorporation or organization) classification code number) identification
number)
</TABLE>
-------------------
211 COLLEGE ROAD EAST
PRINCETON, NEW JERSEY 08540
(609) 452-8900
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
-------------------
MARTIN TUCHMAN
CHAIRMAN OF THE BOARD OF DIRECTORS
AND CHIEF EXECUTIVE OFFICER
INTERPOOL LIMITED
211 COLLEGE ROAD EAST
PRINCETON, NEW JERSEY 08540
(609) 452-8900
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-------------------
COPIES TO:
<TABLE>
<S> <C>
STROOCK & STROOCK & LAVAN SKADDEN, ARPS, SLATE, MEAGHER & FLOM
SEVEN HANOVER SQUARE 919 THIRD AVENUE
NEW YORK, NEW YORK 10004 NEW YORK, NEW YORK 10022
ATTN: JEFFREY S. LOWENTHAL, ESQ. ATTN: MARK C. SMITH, ESQ.
(212) 806-5400 (212) 735-3000
</TABLE>
-------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
-------------------
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
-------------------
CALCULATION OF REGISTRATION FEE
<TABLE><CAPTION>
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED SHARE(1) PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, no par value.... 8,797,500 shares(2) $16.00 $140,760,000 $48,539(3)
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933.
(2) Includes 1,147,500 shares of Common Stock subject to an over-allotment
option granted to the Underwriters.
(3) The registration fee was paid upon filing of the initial registration
statement on June 18, 1996.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INTERPOOL LIMITED
CROSS REFERENCE SHEET
(PURSUANT TO ITEM 501(B) OF REGULATION S-K)
<TABLE>
<CAPTION>
ITEM NUMBER
IN FORM S-1 ITEM CAPTION IN FORM S-1 LOCATION OF CAPTION IN PROSPECTUS
- ----------- --------------------------------------- ---------------------------------------
<C> <S> <C>
1. Forepart of the Registration Statement
and Outside Front Cover Page of
Prospectus........................... Outside Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover
Pages of Prospectus.................. Inside Front and Outside Back Cover
Pages of Prospectus; Comparison of
United States and Barbados Corporate
Laws
3. Summary Information and
Risk Factors......................... Outside Front Cover Page of Prospectus;
Prospectus Summary; Risk Factors
4. Use of Proceeds........................ Use of Proceeds
5. Determination of Offering Price........ Underwriting
6. Dilution............................... Dilution
7. Selling Security Holders............... Not Applicable
8. Plan of Distribution................... Outside and Inside Front Cover Pages of
Prospectus; Underwriting
9. Description of Securities to
be Registered........................ Prospectus Summary; Description of
Capital Stock
10. Interests of Named Experts
and Counsel.......................... Legal Matters; Certain Relationships
and Related Transactions
11. Information with Respect to the
Registrant........................... Outside Front Cover Page; Prospectus
Summary; Risk Factors; The Company;
Recent Developments;
Recapitalization; Dividend Policy;
Capitalization; Selected Consolidated
Financial and Operating Data;
Management's Discussion and Analysis
of Financial Condition and Results of
Operations; Certain U.S. Federal
Income Tax Considerations; Certain
Barbados Income Tax Considerations;
Business; Management; Principal
Stockholder; Certain Relationships
and Related Transactions; Description
of Capital Stock; Shares Eligible For
Future Sale; Additional Information;
Consolidated Financial Statements
12. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities.......................... Not Applicable
</TABLE>
<PAGE>
EXPLANATORY NOTE
This Amendment No. 4 to the Registration Statement is being filed solely for
the purpose of filing certain exhibits to the Registration Statement.
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following sets forth the estimated fees and expenses in connection with
the issuance and distribution of the Registrant's securities being registered
hereby, other than underwriting discounts and commissions, all of which will be
borne by the Registrant:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee.............. $48,539
National Association of Securities Dealers, Inc. filing fee...... 14,576
New York Stock Exchange listing fee.............................. *
Printing and engraving expenses.................................. *
Legal fees and expenses.......................................... *
Accounting fees and expenses..................................... *
Blue Sky fees and expenses....................................... *
Transfer Agent's fees............................................ *
Miscellaneous expenses........................................... *
-------
Total........................................................ $ *
-------
-------
</TABLE>
- ------------
* To be completed by Amendment
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subject to the limitations provided by the laws of Barbados, the Company's
Articles and Bylaws provide that the Company shall indemnify a director or
officer of the Company, a former director or officer of the Company or a person
who acts or acted at the Company's request as a director or officer of a body
corporate of which the Company is or was a shareholder or creditor, and his
personal representatives, against all costs, charges and expenses, including an
amount to settle an action or satisfy a judgement, reasonably incurred by him in
respect of any civil, criminal or administrative action or proceeding to which
he is made a party by reason of being or having been a director or officer of
such Company, if: (i) he acted honestly and in good faith with a view to the
best interests of the Company; and (ii) in the case of a criminal or
administrative action or proceeding that is enforced by a monetary penalty, he
had reasonable grounds for believing that his conduct was lawful.
The Registrant maintains directors' and officers' liability insurance with
policy amounts of $15,000,000.
The Company has entered into agreements to indemnify its outside directors
which are intended to provide the maximum indemnification permitted by Barbados
law. These agreements, among other things, indemnify each of the Company's
outside directors for certain expenses (including attorneys' fees), judgments,
fines and settlement amounts incurred by such director in any action or
proceeding, including any action by or in the right of the Company, on account
of such director's service as a director of the Company.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits.
<TABLE>
<C> <S>
1.1 --Underwriting Agreement among the Parent, the Company and the Underwriters.
3.1 --Restated Articles of Incorporation of the Company.
3.2 --Amended By-Laws of the Company.
</TABLE>
II-1
<PAGE>
<TABLE>
<C> <S>
4.1 --Form of Certificate representing Common Stock.
5.1** --Opinion of David King & Co. as to the validity of the securities being
registered.
8.1** --Opinion of Baker & McKenzie regarding federal income tax considerations.
10.1* --Form of Management Services Agreement between Interpool, Inc. and the Company.
10.2* --Form of Registration Rights Agreement between Interpool, Inc. and the Company.
10.3* --Form of Promissory Note dated December 31, 1995 between Interpool, Inc. and the
Company.
10.4* --Form of Sublease dated March 5, 1993 between the Company and Trac Lease, Inc.
10.5* --Form of Agreement dated August 20, 1990 among The Ivy Group, MCS Chassis, Inc.
and the Company.
10.6* --Form of Indemnification Agreement between the Company and Interpool, Inc.
10.7* --Form of Indemnity between the Company and its directors.
10.8* --Form of Indemnification Agreement between the Company and Interpool, Inc.
10.9* --Form of Stock Option Plan for Executive Officers and Directors.
10.10* --Form of NonQualified Stock Option Plan for Non-Employee, Non-Officer Directors.
10.11* --Employment Agreement between Eric Beerlandt and the Company.
10.12 --Note Purchase Agreement between the Company and the Collateral Agent, for the
Purchasers listed therein--dated November 30, 1993 (the "November 30, 1993 Note
Purchase Agreement") (Confidential Treatment Requested).
10.13* --Form of Series A Note in connection with the November 30, 1993 Note Purchase
Agreement.
10.14* --Form of Series B Note in connection with the November 30, 1993 Note Purchase
Agreement.
10.15 --Form of Security Agreement in connection with the November 30, 1993 Note
Purchase Agreement.
10.16 --Note Purchase Agreement between the Company and the Collateral Agent, for the
Purchasers listed therein--dated October 27, 1994 (the "October 27, 1994 Note
Purchase Agreement") (Confidential Treatment Requested).
10.17* --Form of Note in connection with the October 27, 1994 Note Purchase Agreement.
10.18 --Form of Security Agreement in connection with the October 27, 1994 Note
Purchase Agreement.
10.19 --Note Purchase Agreement between the Company and the Collateral Agent, for the
Purchasers listed therein--dated April 28, 1995 (the "April 28, 1995 Note
Purchase Agreement") (Confidential Treatment Requested).
10.20* --Form of Note in connection with the April 28, 1995 Note Purchase Agreement.
10.21 --Form of Security Agreement in connection with the April 28, 1995 Note Purchase
Agreement.
10.22 --Amendment to the Credit Agreement dated July 10, 1995, the Credit Agreement
dated May 29, 1995 and the General Conditions of the Lender, each between the
Lender and the Company (Confidential Treatment Requested).
10.23 --Note Purchase Agreement between the Company and the Collateral Agent, for the
Purchasers listed therein dated July 25, 1995 (the "July 25, 1995 Note Purchase
Agreement") (Confidential Treatment Requested).
10.24* --Form of Note in connection with the July 25, 1995 Note Purchase Agreement.
10.25 --Form of Security Agreement in connection with the July 25, 1995 Note Purchase
Agreement.
10.26* --Second Amended and Restated Senior Loan and Security Agreement dated November
30, 1995, among the Company, the Agent, and the Lenders named therein (the
"Loan and Security Agreement") (Confidential Treatment Requested).
</TABLE>
II-2
<PAGE>
<TABLE>
<C> <S>
10.27* --Form of Note in connection with the Loan and Security Agreement (Confidential
Treatment Requested).
10.28 --Note Purchase Agreement between the Company and the Collateral Agent, for the
Purchases listed therein dated December 12, 1995 (the "December 12, 1995 Note
Purchase Agreement") (Confidential Treatment Requested).
10.29* --Form of Note in connection with the December 12, 1995 Note Purchase Agreement.
10.30 --Form of Security Agreement in connection with the December 12, 1995 Note
Purchase Agreement.
10.31 --Term Loan Agreement among the Company, the Banks party thereto and the Agent,
dated March 28, 1996 (the "March 28, 1996 Term Loan Agreement") and Amendment
No. 1 to the Term Loan Agreement (Confidential Treatment Requested).
10.32* --Form of Term Note in connection with the March 28, 1996 Term Loan Agreement.
10.33* --Form of Security Agreement in connection with the March 28, 1996 Term Loan
Agreement (Confidential Treatment Requested).
10.34 --Amendment Number Two to the November 30, 1993 Note Purchase Agreement dated as
of June 28, 1996 (Confidential Treatment Requested).
10.35 --Amendment Number Two to the October 27, 1994 Note Purchase Agreement dated as
of June 28, 1996 (Confidential Treatment Requested).
10.36 --Amendment Number Three to the April 28, 1995 Note Purchase Agreement dated as
of June 28, 1996 (Confidential Treatment Requested).
10.37 --Amendment Number One to the July 25, 1995 Note Purchase Agreement dated as of
June 28, 1996 (Confidential Treatment Requested).
10.38 --Letter of Waiver of Certain Conditions to the Loan and Security Agreement dated
August 2, 1996 (Confidential Treatment Requested).
10.39 --Amendment Number One to the December 12, 1995 Note Purchase Agreement dated as
of June 28, 1996 (Confidential Treatment Requested).
10.40 --Amendment Number Two to the March 28, 1996 Term Loan Agreement dated as of June
27, 1996 (Confidential Treatment Requested).
21.1* --Subsidiaries of the Company.
23.1** --Consent of Arthur Andersen LLP with respect to consolidated financial
statements of the Company.
23.2** --Consent of Stroock & Stroock & Lavan.
23.3** --Consent of David King & Co. (included in Exhibit 5.1).
23.4** --Consent of Baker & McKenzie (included in Exhibit 8.1).
24.1* --Power of attorney (included on signature page of this Registration Statement).
27.1 --Financial Data Schedule.
</TABLE>
- ------------
* Previously filed.
** To be filed by Amendment.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions in Item 14, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
II-3
<PAGE>
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 4 to this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of New
York, State of New York, on August 6, 1996.
INTERPOOL LIMITED
By: /s/ MARTIN TUCHMAN
..................................
Martin Tuchman
Chairman of the Board of Directors
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 4 to this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------- ------------------------------------- ---------------
<S> <C> <C>
/s/ * Chairman of the Board of Directors August 6, 1996
..................................... and Chief Executive Officer
Martin Tuchman (Principal Executive Officer), and
United States Authorized
Representative
/s/ * President, Chief Operating Officer, August 6, 1996
..................................... Chief Financial Officer and
Raoul J. Witteveen Director (Principal Financial
Officer)
/s/ * Vice President and Controller August 6, 1996
..................................... (Principal Accounting Officer)
William Geoghan
/s/ * Director August 6, 1996
.....................................
Warren L. Serenbetz
/s/ * Director August 6, 1996
.....................................
Ernst Baenziger
/s/ * Managing Director (Barbados) and August 6, 1996
..................................... Director
Frank Sellier
/s/ * Director August 6, 1996
.....................................
David N. King
/s/ * Director August 6, 1996
.....................................
Eric Beerlandt
</TABLE>
- ------------
* Martin Tuchman hereby signs this Amendment No. 4 to the Registration Statement
on August 6, 1996 on his own behalf and on behalf of each of the indicated
persons for whom he is attorney-in-fact pursuant to a power of attorney filed
herewith.
August 6, 1996
/s/ MARTIN TUCHMAN
......................................
Martin Tuchman
Attorney-in-fact
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No.
- -----------
<C> <S>
1.1 --Underwriting Agreement among the Parent, the Company and the Underwriters.
3.1 --Restated Articles of Incorporation of the Company.
3.2 --Amended By-Laws of the Company.
4.1 --Form of Certificate representing Common Stock.
5.1** --Opinion of David King & Co. as to the validity of the securities being
registered.
8.1** --Opinion of Baker & McKenzie regarding federal income tax considerations.
10.1* --Form of Management Services Agreement between Interpool, Inc. and the Company.
10.2* --Form of Registration Rights Agreement between Interpool, Inc. and the Company.
10.3* --Form of Promissory Note dated December 31, 1995 between Interpool, Inc. and the
Company.
10.4* --Form of Sublease dated March 5, 1993 between the Company and Trac Lease, Inc.
10.5* --Form of Agreement dated August 20, 1990 among The Ivy Group, MCS Chassis, Inc.
and the Company.
10.6* --Form of Indemnification Agreement between the Company and Interpool, Inc.
10.7* --Form of Indemnity between the Company and its directors.
10.8* --Form of Indemnification Agreement between the Company and Interpool, Inc.
10.9* --Form of Stock Option Plan for Executive Officers and Directors.
10.10* --Form of NonQualified Stock Option Plan for Non-Employee, Non-Officer Directors.
10.11* --Employment Agreement between Eric Beerlandt and the Company.
10.12 --Note Purchase Agreement between the Company and the Collateral Agent, for the
Purchasers listed therein--dated November 30, 1993 (the "November 30, 1993 Note
Purchase Agreement") (Confidential Treatment Requested).
10.13* --Form of Series A Note in connection with the November 30, 1993 Note Purchase
Agreement.
10.14* --Form of Series B Note in connection with the November 30, 1993 Note Purchase
Agreement.
10.15 --Form of Security Agreement in connection with the November 30, 1993 Note
Purchase Agreement.
10.16 --Note Purchase Agreement between the Company and the Collateral Agent, for the
Purchasers listed therein--dated October 27, 1994 (the "October 27, 1994 Note
Purchase Agreement") (Confidential Treatment Requested).
10.17* --Form of Note in connection with the October 27, 1994 Note Purchase Agreement.
10.18 --Form of Security Agreement in connection with the October 27, 1994 Note
Purchase Agreement.
10.19 --Note Purchase Agreement between the Company and the Collateral Agent, for the
Purchasers listed therein--dated April 28, 1995 (the "April 28, 1995 Note
Purchase Agreement") (Confidential Treatment Requested).
10.20* --Form of Note in connection with the April 28, 1995 Note Purchase Agreement.
10.21 --Form of Security Agreement in connection with the April 28, 1995 Note Purchase
Agreement.
10.22 --Amendment to the Credit Agreement dated July 10, 1995, the Credit Agreement
dated May 29, 1995 and the General Conditions of the Lender, each between the
Lender and the Company (Confidential Treatment Requested).
</TABLE>
<PAGE>
<TABLE>
<C> <S>
10.23 --Note Purchase Agreement between the Company and the Collateral Agent, for the
Purchasers listed therein dated July 25, 1995 (the "July 25, 1995 Note Purchase
Agreement") (Confidential Treatment Requested).
10.24* --Form of Note in connection with the July 25, 1995 Note Purchase Agreement.
10.25 --Form of Security Agreement in connection with the July 25, 1995 Note Purchase
Agreement.
10.26* --Second Amended and Restated Senior Loan and Security Agreement dated November
30, 1995, among the Company, the Agent, and the Lenders named therein (the
"Loan and Security Agreement") (Confidential Treatment Requested).
10.27* --Form of Note in connection with the Loan and Security Agreement (Confidential
Treatment Requested).
10.28 --Note Purchase Agreement between the Company and the Collateral Agent, for the
Purchases listed therein dated December 12, 1995 (the "December 12, 1995 Note
Purchase Agreement") (Confidential Treatment Requested).
10.29* --Form of Note in connection with the December 12, 1995 Note Purchase Agreement.
10.30 --Form of Security Agreement in connection with the December 12, 1995 Note
Purchase Agreement.
10.31 --Term Loan Agreement among the Company, the Banks party thereto and the Agent,
dated March 28, 1996 (the "March 28, 1996 Term Loan Agreement") and Amendment
No. 1 to the Term Loan Agreement (Confidential Treatment Requested).
10.32* --Form of Term Note in connection with the March 28, 1996 Term Loan Agreement.
10.33* --Form of Security Agreement in connection with the March 28, 1996 Term Loan
Agreement (Confidential Treatment Requested).
10.34 Amendment Number Two to the November 30, 1993 Note Purchase Agreement dated as of
June 28, 1996 (Confidential Treatment Requested).
10.35 Amendment Number Two to the October 27, 1994 Note Purchase Agreement dated as of
June 28, 1996 (Confidential Treatment Requested).
10.36 Amendment Number Three to the April 28, 1995 Note Purchase Agreement dated as of
June 28, 1996 (Confidential Treatment Requested).
10.37 Amendment Number One to the July 25, 1995 Note Purchase Agreement dated as of
June 28, 1996 (Confidential Treatment Requested).
10.38 Letter of Waiver of Certain Conditions to the Loan and Security Agreement dated
August 2, 1996 (Confidential Treatment Requested).
10.39 Amendment Number One to the December 12, 1995 Note Purchase Agreement dated as of
June 28, 1996 (Confidential Treatment Requested).
10.40 Amendment Number Two to the March 28, 1996 Term Loan Agreement dated as of June
27, 1996 (Confidential Treatment Requested).
21.1* --Subsidiaries of the Company.
23.1** --Consent of Arthur Andersen LLP with respect to consolidated financial
statements of the Company.
23.2** --Consent of Stroock & Stroock & Lavan.
23.3** --Consent of David King & Co. (included in Exhibit 5.1).
23.4** --Consent of Baker & McKenzie (included in Exhibit 8.1).
24.1* --Power of attorney (included on signature page of this Registration Statement).
27.1 --Financial Data Schedule.
</TABLE>
- ------------
* Previously filed.
** To be filed by amendment.
Exhibit 1.1
7,650,000 Shares
INTERPOOL LIMITED
Common Stock
(no par value)
UNDERWRITING AGREEMENT
----------------------
August __, 1996
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SMITH BARNEY INC.
FURMAN SELZ LLC
As representatives of the
several underwriters
named in Schedule I hereto
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Dear Sirs:
Interpool Limited, a Barbados corporation (the "Company"), a wholly-
owned subsidiary of Interpool, Inc. (the "Parent"), proposes to sell an aggre-
gate of 7,650,000 shares of the Company's common stock, no par value (the "Firm
Shares"), to the several underwriters named in Schedule I hereto (the "Under-
writers"). The Company also proposes to issue and sell to the several Under-
writers not more than 1,147,500 additional shares of common stock of the Company
(the "Additional Shares"), if requested by the Underwriters as provided in
Section 2 hereof. The Firm Shares and the Additional Shares are herein collec-
tively called the "Shares." The shares of common stock of the Company to be
outstanding after giving effect to the sales contemplated hereby are hereinafter
referred to as the "Common Stock."
1. Registration Statement and Prospectus. The Company has prepared
-------------------------------------
and filed with the Securities
<PAGE>
and Exchange Commission (the "Commission") in accordance with the provisions of
the Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively called the "Act"), a registration statement
on Form S-1 (File No. 333-06205) including a prospectus relating to the Shares,
which may be amended. The registration statement as amended at the time when it
becomes effective, including a registration statement (if any) filed pursuant to
Rule 462(b) under the Act increasing the size of the offering registered under
the Act and information (if any) deemed to be part of the registration statement
at the time of effectiveness pursuant to Rule 430A or Rule 434 under the Act, is
hereinafter referred to as the "Registration Statement"; and the prospectus
(including any prospectus subject to completion and any term sheet meeting the
requirements of Rule 434(b) under the Act, taken together to meet the require-
ments of section 10(a) of the Act) in the form first used to confirm sales of
Shares is hereinafter referred as the "Prospectus."
2. Agreements to Sell and Purchase. On the basis of the representa-
-------------------------------
tions and warranties contained in this Agreement, and subject to its terms and
conditions, (i) the Company agrees to issue and sell 7,650,000 Firm Shares and
(ii) each Underwriter agrees, severally and not jointly, to purchase from the
Company at a price per share of $ (the "Purchase Price") the number of
----------
Firm Shares set forth opposite the name of such Underwriter in Schedule I
hereto.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, (i) the Company agrees to
issue and sell up to 1,147,500 Additional Shares and (ii) the Underwriters shall
have the right to purchase, severally and not jointly, up to an aggregate of
1,147,500 Additional Shares from the Company at the Purchase Price. Additional
Shares may be purchased solely for the purpose of covering over-allotments made
in connection with the offering of the Firm Shares. The Underwriters may exer-
cise their right to purchase Additional Shares in whole or in part from time to
time by giving written notice thereof to the Company within 30 days after the
date of this Agreement. You shall give any such notice on behalf of the Under-
writers and such notice shall specify the aggregate number of Additional Shares
to be purchased
2
<PAGE>
pursuant to such exercise and the date for payment and delivery thereof. The
date specified in any such notice shall be a business day (i) no earlier than
the Closing Date (as hereinafter defined), (ii) no later than ten business days
after such notice has been given and (iii) no earlier than two business days
after such notice has been given. If any Additional Shares are to be purchased,
each Underwriter, severally and not jointly, agrees to purchase from the Company
the number of Additional Shares (subject to such adjustments to eliminate
fractional shares as you may determine) which bears the same proportion to the
total number of Additional Shares to be purchased from the Company as the number
of Firm Shares set forth opposite the name of such Underwriter in Schedule I
bears to the total number of Firm Shares.
The Company and the Parent agree, jointly and severally, not to offer,
sell, contract to sell, grant any option to purchase, or otherwise dispose of
any common stock of the Company or any securities convertible into or exercis-
able or exchangeable for such common stock or in any other manner transfer all
or a portion of the economic consequences associated with the ownership of any
such common stock, except to the Underwriters pursuant to this Agreement, and
the Parent agrees not to exercise any of its registration rights relating to
such common stock pursuant to the Registration Rights Agreement between the
Company and the Parent dated __________, 1996, in each case for a period of 180
days after the date of the Prospectus without the prior written consent of
Donaldson, Lufkin & Jenrette Securities Corporation. Notwithstanding the
foregoing, during such period the Company may grant stock options pursuant to
the Company's 1996 Stock Option Plan for Executive Officers and Directors and
the Company's Non-Qualified Stock Option Plan for Non-Employee, Non-Officer
Directors.
3. Terms of Public Offering. The Company is advised by you that the
------------------------
Underwriters propose (i) to make a public offering of their respective portions
of the Shares as soon after the effective date of the Registration Statement as
in your judgment is advisable and (ii) initially to offer the Shares upon the
terms set forth in the Prospectus.
4. Delivery and Payment. Delivery to the Underwriters of and
--------------------
payment for the Firm Shares shall be
3
<PAGE>
made at 10:00 A.M., New York City time, on August __, 1996 (the "Closing Date"),
at such place as you shall designate. The Closing Date and the location of
delivery of and the form of payment for the Firm Shares may be varied by
agreement between you and the Company.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at such place as you shall
designate at 10:00 A.M., New York City time, on the date specified in the
applicable exercise notice given by you pursuant to Section 2 (an "Option
Closing Date"). Any such Option Closing Date and the location of delivery of
and the form of payment for such Additional Shares may be varied by agreement
between you and the Company.
Certificates for the Shares shall be registered in such names and
issued in such denominations as you shall request in writing not later than two
full business days prior to the Closing Date or an Option Closing Date, as the
case may be. Such certificates shall be made available to you for inspection
not later than 9:30 A.M., New York City time, on the business day next preceding
the Closing Date or an Option Closing Date, as the case may be. Certificates in
definitive form evidencing the Shares shall be delivered to you on the Closing
Date or an Option Closing Date, as the case may be, with any transfer taxes
thereon duly paid by the Company, for the respective accounts of the several
Underwriters, against payment of the Purchase Price therefor by certified or
official bank check or wire transfer payable in same day funds to the order of
the Company.
5. Agreements of the Company. The Company agrees with you:
-------------------------
(a) To, if necessary, file an amendment to the Registration
Statement including, if necessary pursuant to Rule 430A under the Act, a
post-effective amendment to the Registration Statement, in each case as
soon as practicable after the execution and delivery of this Agreement, and
to use its best efforts to cause the Registration Statement or such post-
effective amendment to become effective at the earliest possible time. The
Company will comply fully and in a timely manner with the applicable
provisions of Rule 424 and Rule 430A under the Act.
4
<PAGE>
(b) To advise you promptly and, if requested by you, to confirm
such advice in writing, (i) when the Registration Statement has become
effective and when any post-effective amendment to it becomes effective, if
and when the Prospectus is sent for filing pursuant to Rule 424 under the
Act and when any post-effective amendment to it becomes effective, (ii) of
any request by the Commission for amendments to the Registration Statement
or amendments or supplements to the Prospectus or for additional informa-
tion, (iii) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction, or
the initiation of any proceeding for such purposes, and (iv) of the
happening of any event during the period referred to in paragraph (e) below
which makes any statement of a material fact made in the Registration
Statement or the Prospectus untrue or which requires the making of any
additions to or changes in the Registration Statement or the Prospectus in
order to make the statements therein not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to
obtain the withdrawal or lifting of such order at the earliest possible
time.
(c) To furnish to you, without charge, four (4) signed copies of
the Registration Statement as first filed with the Commission and of each
amendment to it, including all exhibits, and to furnish to you and each
Underwriter designated by you such number of conformed copies of the
Registration Statement as so filed and of each amendment to it, without
exhibits, as you may reasonably request.
(d) Not to file any amendment or supplement to the Registration
Statement, whether before or after the time when it becomes effective, or
to make any amendment or supplement to the Prospectus (including the
issuance or filing of any term sheet within the meaning of Rule 434 under
the Act) of which you shall not previously have been advised or to which
you shall reasonably object; and to prepare and file with the Commission,
promptly upon your
5
<PAGE>
reasonable request, any amendment to the Registration Statement or supple-
ment to the Prospectus (including the issuance or filing of any term sheet
within the meaning of Rule 434 under the Act) which may be necessary or
advisable in connection with the distribution of the Shares by you, and to
use its best efforts to cause the same to become promptly effective.
(e) Promptly after the Registration Statement becomes effective,
and from time to time thereafter for such period as in the opinion of
counsel for the Underwriters a prospectus is required by law to be deliv-
ered in connection with sales by an Underwriter or a dealer, to furnish to
each Underwriter and dealer as many copies of the Prospectus (and of any
amendment or supplement to the Prospectus) as such Underwriter or dealer
may reasonably request.
(f) If during the period specified in paragraph (e) any event
shall occur as a result of which, in the opinion of counsel for the
Underwriters it becomes necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if it
is necessary to amend or supplement the Prospectus to comply with any law,
forthwith to prepare and file with the Commission an appropriate amendment
or supplement to the Prospectus so that the statements in the Prospectus,
as so amended or supplemented, will not in the light of the circumstances
when it is so delivered, be misleading, or so that the Prospectus will
comply with law, and to furnish to each Underwriter and to such dealers as
you shall specify, such number of copies thereof as such Underwriter or
dealers may reasonably request.
(g) Prior to any public offering of the Shares, to cooperate
with you and counsel for the Underwriters in connection with the registra-
tion or qualification of the Shares for offer and sale by the several
Underwriters and by dealers under the state securities or Blue Sky laws of
such jurisdictions as you may request, to continue such qualification in
effect so long as required for distribu
6
<PAGE>
tion of the Shares and to file such consents to service of process or other
documents as may be necessary in order to effect such registration or
qualification.
(h) To mail and make generally available to its stockholders as
soon as reasonably practicable an earnings statement covering a period of
at least twelve months after the "effective date" (as defined in Rule 158
under the Act) of the Registration Statement (but in no event commencing
later than 90 days after such date) which shall satisfy the provisions of
Section 11(a) of the Act and Rule 158 promulgated thereunder, and to advise
you in writing when such statement has been so made available.
(i) During the period of five years after the date of this
Agreement, (i) to mail as soon as reasonably practicable after the end of
each fiscal year to the record holders of its Common Stock a financial
report of the Company and its subsidiaries on a consolidated basis (and a
similar financial report of all unconsolidated subsidiaries, if any), all
such financial reports to include a consolidated balance sheet, a consoli-
dated statement of operations, a consolidated statement of cash flows and a
consolidated statement of shareholders' equity as of the end of and for
such fiscal year, together with comparable information as of the end of and
for the preceding year, certified by independent certified public accoun-
tants, and (ii) to mail and make generally available as soon as practicable
after the end of each quarterly period (except for the last quarterly
period of each fiscal year) to such holders, a consolidated balance sheet,
a consolidated statement of operations and a consolidated statement of cash
flows (and similar financial reports of all unconsolidated subsidiaries, if
any) as of the end of and for such period, and for the period from the
beginning of such year to the close of such quarterly period, together with
comparable information for the corresponding periods of the preceding year.
(j) During the period referred to in paragraph (i), to furnish
to you as soon as available a copy of each report or other publicly avail
7
<PAGE>
able information of the Company mailed to the holders of Common Stock or
filed with the Commission and such concerning the Company and its subsid-
iaries as you may reasonably request.
(k) Whether or not the transactions contemplated hereby are
consummated or this Agreement becomes effective or is terminated, to pay
all costs, expenses, fees and taxes incident to (i) the preparation,
printing, filing and distribution under the Act of the Registration
Statement (including financial statements and exhibits), each preliminary
prospectus and all amendments and supplements to any of them prior to or
during the period specified in paragraph (e), (ii) the printing and deliv-
ery of the Prospectus and all amendments or supplements to it during the
period specified in paragraph (e), (iii) the printing and delivery of this
Agreement, the Preliminary and Supplemental Blue Sky Memoranda and all
other agreements, memoranda, correspondence and other documents printed and
delivered in connection with the offering of the Shares (including in each
case any disbursements of counsel for the Underwriters relating to such
printing and delivery), (iv) the registration or qualification of the
Shares for offer and sale under the securities or Blue Sky laws of the
several states (including in each case the fees and disbursements of
counsel for the Underwriters relating to such registration or qualification
and memoranda relating thereto), (v) filings and clearance with the Nation-
al Association of Securities Dealers, Inc. in connection with the offering,
(vi) the registration of the shares of Common Stock under the Exchange Act
of 1934, as amended, including the rules and regulations thereunder
(collectively, the "Exchange Act"), (vii) the listing of the Shares on the
New York Stock Exchange, (viii) furnishing such copies of the Registration
Statement, the Prospectus and all amendments and supplements thereto as may
be requested for use in connection with the offering or sale of the Shares
by the Underwriters or by dealers to whom Shares may be sold and (ix) the
performance by the Company or the Parent of their other obligations under
this Agreement.
8
<PAGE>
(l) To use its best efforts to effect and, for a period of five
years after the effective date of the Registration Statement, to maintain,
the listing of the Common Stock on the New York Stock Exchange.
(m) To timely complete all required filings and otherwise comply
in all material respects in a timely manner with all provisions of the
Securities Exchange Act, in connection with the registration of the Shares
thereunder.
(n) To take all actions necessary and advisable to restructure
the organization, operation and/or ownership of each of its subsidiaries
(including Interpool Finance Corp., a company incorporated in the Cayman
Islands, the "Cayman Subsidiary") in order to insure that no U.S. Investor
(as defined in the Registration Statement, a "U.S. Investor") will be sub-
ject to the gross income inclusion rule of Section 551 of the Internal
Revenue Code of 1986, as amended (the "Code"), with respect to any such
subsidiary (assuming for this purpose that Treasury regulations pursuant to
Section 551(f), which would attribute a subsidiary's undistributed foreign
personal holding company income to U.S. Investors, are in effect).
(o) To use its best efforts to insure that, for the current
taxable year and all taxable years hereafter: (i) less than 60% of the ad-
justed ordinary gross income (within the meaning of Section 542(a)(1) of
the Code) of the Company (and each of its subsidiaries that satisfies the
stock ownership requirement of Section 542(a) (2) of the Code) is personal
holding company income within the meaning of Section 543 of the Code; (ii)
less than 60% of the gross income (within the meaning of section 555 of the
Code) of the Company (and each of its subsidiaries that satisfies the stock
ownership requirement of Section 552(a)(2) of the Code on or after the date
the Company's shares are sold pursuant to this Agreement) is foreign per-
sonal holding company income within the meaning of Section 553 of the Code;
(iii) less than 75% of the Company's gross income is passive income within
the meaning of Section 1296(a)(1) of the Code; and (iv) the average
9
<PAGE>
percentage of the Company's assets that produce passive income or that are
held for the production of passive income is less than 50% within the mean-
ing of Section 1296(a)(2) of the Code.
(p) To use its best efforts to insure that the Cayman Subsidiary
will not incur any amount of U.S. Federal, state or local income tax that
is material to the income, assets or operations of the Company and its
subsidiaries, taken as a whole.
(q) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by the
Company and the Parent prior to the Closing Date or any Option Closing
Date, as the case may be, and to satisfy all conditions precedent to the
delivery of the Shares.
6. Representations and Warranties of the Company and the Parent.
------------------------------------------------------------
The Company and the Parent represent and warrant to each Underwriter that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceeding for such purpose is pending before or threatened
by the Commission.
(b)(i) Each part of the Registration Statement, when such part
became effective, did not contain and each such part, as amended or supple-
mented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) the Registra-
tion Statement and the Prospectus comply and, as amended or supplemented,
if applicable, will comply in all material respects with the Act and (iii)
the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph
(b)
10
<PAGE>
do not apply to statements or omissions in the Registration Statement or
the Prospectus based upon information relating to any Underwriter furnished
to the Company in writing by such Underwriter through you expressly for use
therein. The Company and the Parent each acknowledge for all purposes
under this Agreement that the statements set forth in the last paragraph on
the cover page and the fifth paragraph under the caption "Underwriting" in
the Prospectus (or any amendment or supplement), constitute the only writ-
ten information furnished to the Company by any Underwriter expressly for
use in the Registration Statement or the Prospectus (or any amendment or
supplement to them).
(c) Each preliminary prospectus filed as part of the registra-
tion statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 or Rule 462 under the Act, complied when so
filed in all material respects with the Act; and did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(d) Each of the Company's subsidiaries is listed on Schedule II
hereto. Each of the Parent, the Company and each of its subsidiaries has
been duly incorporated, is validly existing as a corporation in good stand-
ing under the laws of its jurisdiction of incorporation and has the corpo-
rate power and authority to carry on its business as it is currently being
conducted and to own, lease and operate its properties, and each is duly
qualified and is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where
the failure to be so qualified would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole. The Company is duly
licensed under the International Business Companies Act, 1991 of Barbados.
(e) All of the outstanding shares of capital stock of, or other
ownership interest in,
11
<PAGE>
each of the Company's subsidiaries have been duly authorized and validly
issued and are fully paid and non-assessable, and are owned by the Company,
free and clear of any security interest, claim, lien, encumbrance or
adverse interest of any nature.
(f) All the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid, non-
assessable and are not subject to any preemptive or similar rights; and the
Shares to be issued and sold by the Company hereunder have been duly
authorized and, when issued and delivered to the Underwriters against
payment therefor as provided by this Agreement, will be validly issued,
fully paid and non-assessable, and the issuance of such Shares will not be
subject to any preemptive or similar rights.
(g) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or liens
related to or entitling any person to purchase or otherwise to acquire any
shares of the capital stock of, or other ownership interest in, the Company
or its subsidiaries except as otherwise disclosed in the Registration
Statement.
(h) The authorized capital stock of the Company, including the
Common Stock, conforms as to legal matters to the description thereof
contained in the Prospectus.
(i) Neither the Company nor any of its subsidiaries is in viola-
tion of its respective charter or by-laws or in default in the performance
of any obligation, agreement or condition contained in any bond, debenture,
note or any other evidence of indebtedness or in any other agreement,
indenture or instrument to which the Company or any of its subsidiaries is
a party or by which it or any of its subsidiaries or their respective prop-
erty is bound, except where any such default would not have a material
adverse effect on the Company and the subsidiaries, taken as a whole.
(j) The execution, delivery and performance of this Agreement,
compliance by the Company
12
<PAGE>
and the Parent with all the provisions hereof, and the consummation of the
transactions contemplated hereby, will not require any consent, approval,
authorization or other order of any court, regulatory body, administrative
agency or other governmental body (except as such may be required under the
securities or Blue Sky laws of the various states) and will not conflict
with or constitute a breach of any of the terms or provisions of, or a
default under, (a) the charter or by-laws of the Parent or the Company or
any of its subsidiaries or (b) any agreement, indenture or other instrument
to which the Company or the Parent or any of their subsidiaries is a party
or by which either of them or their respective property is bound, except
where the effect of such breach or default singly or in the aggregate would
not have a material adverse effect on the Company and its subsidiaries,
taken as a whole, or (c) violate or conflict with any laws, administrative
regulations or rulings or court decrees applicable to the Parent or the
Company or any of its subsidiaries or their respective property, except
where the effect of such violation or conflict singly or in the aggregate
would not have a material adverse effect on the Company and its subsidiar-
ies, taken as a whole.
(k) Except as otherwise set forth in the Prospectus, there are
no material legal or governmental proceedings pending to which the Company
or any of its subsidiaries is a party or of which any of their respective
property is the subject, and, to the best of the Company's knowledge, no
such proceedings are threatened or contemplated. No contract or document
of a character required to be described in the Registration Statement or
the Prospectus or to be filed as an exhibit to the Registration Statement
is not so described or filed as required.
(l) Neither the Company nor any of its subsidiaries has violated
any foreign, federal, state or local law or regulation relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), nor any federal or state law relating to discrimina
13
<PAGE>
tion in the hiring, promotion or pay of employees nor any applicable
federal or state wages and hours laws, nor any provisions of the Employee
Retirement Income Security Act or the rules and regulations promulgated
thereunder, which in each case might result in any material adverse change
in the business, prospects, financial condition or results of operation of
the Company and its subsidiaries, taken as a whole.
(m) Except as disclosed in the Prospectus, there are no business
relationships or related party transactions required to be disclosed
therein by Item 404 of Regulation S-K of the Commission.
(n) The Company has received, subject to notice of issuance,
approval to have the Shares listed on the New York Stock Exchange, Inc. and
the Company knows of no reason or set of facts which is likely to adversely
affect such approval.
(o) The Company and each of its subsidiaries has such permits,
licenses, franchises and authorizations of governmental or regulatory
authorities ("permits"), including, without limitation, under any applica-
ble Environmental Laws, as are necessary to own, lease and operate its
respective properties and to conduct its business (other than any such
permits the absence of which would not reasonably be expected to have a
material adverse effect on the Company and its subsidiaries, taken as a
whole); the Company and each of its subsidiaries has fulfilled and per-
formed all of its material obligations with respect to such permits and no
event has occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any other material
impairment of the rights of the holder of any such permit, except for any
failure to fulfill or perform such obligations or any revocation, termina-
tion or impairment that would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(p) All material tax returns required to be filed by the Company
in any jurisdiction have been filed, other than those filings being
contested
14
<PAGE>
in good faith, and all material taxes, including withholding taxes, penal-
ties and interest, assessments, fees and other charges due pursuant to such
returns or pursuant to any assessment received by the Company have been
paid, other than those being contested in good faith and for which adequate
reserves have been provided.
(q) Except as otherwise set forth in the Prospectus or such as
are not material to the business, prospects, financial condition or results
of operation of the Company and its subsidiaries, taken as a whole, the
Company and each of its subsidiaries has good and marketable title, free
and clear of all liens, claims, encumbrances and restrictions except liens
for taxes not yet due and payable, to all property and assets described in
the Registration Statement as being owned by it. In addition, all of the
outstanding shares of capital stock of the Company are owned by the Parent,
and the Parent has good and marketable title, free and clear of all liens,
claims, encumbrances and restrictions to such capital stock of the Company.
All leases to which the Company or any of its subsidiaries are a party are
valid and binding and no default has occurred or is continuing thereunder,
which might result in any material adverse change in the business, pros-
pects, financial condition or results of operation of the Company and its
subsidiaries taken as a whole, and the Company and its subsidiaries enjoy
peaceful and undisturbed possession under all such leases to which any of
them is a party as lessee with such exceptions as do not materially
interfere with the use made by the Company or such subsidiary.
(r) The Company and each of its subsidiaries maintain insurance
which it believes is reasonably adequate for its business.
(s) Arthur Andersen LLP are independent public accountants with
respect to the Company as required by the Act.
(t) The financial statements, together with related schedules
and notes forming part of the Registration Statement and the Prospectus
(and any
15
<PAGE>
amendment or supplement thereto), present fairly the consolidated financial
position, results of operations and changes in financial position of the
Company and its subsidiaries on the basis stated in the Registration
Statement at the respective dates or for the respective periods to which
they apply; such statements and related schedules and notes (other than the
pro forma financial data) have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein; and the other financial and statis-
tical information and data set forth in the Registration Statement and the
Prospectus (and any amendment or supplement thereto) is, in all material
respects, accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company; and the pro
forma financial data of the Company, and the related notes thereto, set
forth in the Registration Statement, have been prepared in conformity with
the requirements of the Act and present fairly the information shown there-
in; and the pro forma adjustments included in such pro forma financial data
have been properly applied on the basis described in the related notes
thereto.
(u) No action has been taken and no statute, rule or regulation
or order has been enacted, adopted or issued by any governmental agency or
body which suspends the effectiveness of the Registration Statement,
prevents or suspends the use of any preliminary prospectus or suspends the
sale of the Shares in any jurisdiction referred to in Section 5(g) hereof;
no injunction, restraining order or order of any nature by a Federal or
state court of competent jurisdiction has been issued with respect to the
Company which would prevent or suspend the sale of the Shares, the effec-
tiveness of the Registration Statement, or the use of any preliminary
prospectus in any jurisdiction referred to in Section 5(g) hereof; and no
action, suit or proceeding is pending against or, to the Company's knowl-
edge, threatened against the Company by any governmental body, agency or
official, domestic or foreign, which, if adversely determined, would in
16
<PAGE>
any manner draw into question the validity of this Agreement or the Shares.
(v) The Company has filed a registration statement pursuant to
Section 12(b) of the Exchange Act to register the Common Stock.
(w) Any term sheet and prospectus subject to completion provided
by the Company to the Underwriters for use in connection with the Offering
and sale of the Shares pursuant to Rule 434 under the Act, taken together,
are not materially different from the prospectus included in the Registra-
tion Statement at the time of its effectiveness or an effective post-
effective amendment thereto (exclusive of any information deemed to be a
part thereof by virtue of Rule 434(d) under the Act).
(x) Neither the Company nor any of its subsidiaries constitutes
or has ever constituted a personal holding company under Section 542 of the
Code (except for the Cayman Subsidiary), a foreign personal holding company
under Section 552 of the Code (except for the Cayman Subsidiary) or a pas-
sive foreign investment company under Section 1296 of the Code (except for
the Cayman Subsidiary).
(y) The Cayman Subsidiary has not been subject to tax pursuant
to Section 541 of the Code.
(z) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Invest-
ment Company Act of 1940, as amended.
(aa) No holder of any security of the Company, other than the
Parent, has any right to require registration of shares of Common Stock or
any other security of the Company.
(ab) The Company has complied with all provisions of Section
517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
(ac) Neither the Company and the Parent, nor any of their
affiliates or subsidiaries does
17
<PAGE>
business with the government of Cuba or with any person located in Cuba.
7. Indemnification. (a) The Company and the Parent, jointly and
---------------
severally, agree to indemnify and hold harmless (i) each Underwriter, (ii) each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (any of the persons referred to in this clause (ii) being
hereinafter referred to as a "controlling person") and (iii) the respective
officers, directors, partners, employees, representatives and agents of any of
the Underwriters or any controlling person (any person referred to in clause
(i), (ii) or (iii) may hereinafter be referred to as an "Indemnified Person") to
the fullest extent lawful, from and against any and all losses, claims, damages,
liabilities, judgments, actions and expenses (including without limitation and
as incurred, reimbursement of all reasonable costs of investigating, preparing,
pursuing or defending against any claim or action, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, includ-
ing the reasonable fees and expenses of counsel to any Indemnified Person)
directly or indirectly caused by, related to, based upon, or arising out of or
in connection with any untrue statement or alleged untrue statement of a materi-
al fact contained in the Registration Statement (or any amendment thereto), in-
cluding the information deemed to be a part of the Registration Statement pursu-
ant to Rule 430A(b) promulgated under the Act, if applicable, or the Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto) or any preliminary prospectus, or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein (in the case of the Prospec-
tus, in the light of the circumstances under which they were made) not mislead-
ing, except insofar as such losses, claims, damages, liabilities or judgments
are caused or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages, liabilities or judgments are caused by
any such untrue statement or omission or alleged untrue statement or omission
(i) based upon information relating to any Underwriters furnished in writing to
the Company by or on behalf of any Underwriter through you expressly for use
therein or
18
<PAGE>
(ii) made in any preliminary prospectus if a copy of the Prospectus (as then
amended or supplemented) was not sent or given by or on behalf of the Underwrit-
ers to the person asserting any such loss, claim, damage, liability or expense,
if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares and the Prospectus (as then amended or
supplemented) would have completely corrected such untrue statement or omission.
The Company shall notify the Representatives promptly of the institution, threat
or assertion of any claim, proceeding (including any governmental investigation)
or litigation in connection with the matters addressed by this Agreement which
involves the Company, the Parent or an Indemnified Person. Notwithstanding any
other provision of this Section 7(a), the indemnification obligations of the
Parent shall be limited to $41,400,000.
(b) In case any action shall be brought against any Indemnified
Person, based upon any preliminary prospectus, the Registration Statement or the
Prospectus or any amendment or supplement thereto and with respect to which
indemnity may be sought against the Company or the Parent, the Underwriters
shall promptly notify the Company and the Parent in writing and the Company
and/or the Parent shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to such Underwriter and payment of all reason-
able fees and expenses. Such Indemnified Person shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such Indemni-
fied Person unless (i) the employment of such counsel has been specifically
authorized in writing by the Company or the Parent, (ii) the Company and the
Parent shall have failed to assume the defense and employ counsel reasonably
satisfactory to the Underwriters within a reasonable time after notice of the
commencement of such action or (iii) the named parties to any such action (in-
cluding any impleaded parties) include both an Indemnified Person and the
Company or the Parent, as the case may be, and such Indemnified Person shall
have been advised by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
Company or the Parent (in which case the Company or the Parent shall not have
the right to assume the defense of such action on
19
<PAGE>
behalf of such Indemnified Person). Under circumstances in which clause (i),
(ii) or (iii) of the preceding sentence applies, the Company and the Parent
shall not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all such Indemnified Persons, which firm shall be designated in writing by
Donaldson, Lufkin & Jenrette Securities Corporation, and the Company or the
Parent shall reimburse all reasonable fees and expenses of such counsel as they
are billed. The Company or the Parent shall not be liable for any settlement of
any such action effected without the written consent of the Company or the Par-
ent, which consent will not be unreasonably withheld, but if settled with the
written consent of the Company and the Parent, the Company and the Parent each
agrees to indemnify and hold harmless any Indemnified Person from and against
any loss, claim, damage, liability or reasonable expense by reason of such set-
tlement. Notwithstanding the immediately preceding sentence, if in any case
where the fees and expenses of counsel are at the expense of the indemnifying
party and an indemnified party shall have requested the indemnifying party to
reimburse the indemnified party for such fees and expenses of counsel as
incurred, such indemnifying party agrees that it shall be liable for any settle-
ment of any action effected without its written consent if (i) such settlement
is entered into more than thirty business days after the receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall have failed to reimburse the indemnified party in accordance with such
request for reimbursement prior to the date of such settlement. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the Regis-
tration State
20
<PAGE>
ment, the Parent or any other person controlling the Company or the Parent
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Parent and Company to each
Underwriter but only with reference to information relating to such Underwriter
furnished in writing by or on behalf of such Underwriter through you expressly
for use in the Registration Statement, the Prospectus or any preliminary pros-
pectus. In case any action shall be brought against the Company, any of its
directors, any such officer, the Parent or any person controlling the Company or
the Parent based on the Registration Statement, the Prospectus or any prelim-
inary prospectus and in respect of which indemnity may be sought against any
Underwriter, the Underwriter shall have the rights and duties given to the
Company and the Parent (except that if the Company or Parent shall have assumed
the defense thereof such Underwriter shall not be required to do so, but may
employ separate counsel therein and participate in the defense thereof but the
fees and expenses of such counsel shall be at the expense of such Underwriter),
and the Company, its directors, any such officers, the Parent and any person
controlling the Company or the Parent shall have the rights and duties given to
the Underwriter, by Section 7(b) hereof.
(d) If the indemnification provided for in this Section 7 is unavail-
able to an indemnified party in respect of any losses, claims, damages, liabili-
ties or expenses referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities and expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Parent, on the one hand, and
of the Underwriters, on the other hand, from the offering of the Shares or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company and the Parent, on the one hand, and the Underwriters, on the other
hand, in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefit received by the Company, on
21
<PAGE>
the one hand, and any of the Underwriters, on the other hand, shall be deemed to
be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by such Underwriter, in each case as set
forth in the table on the cover page of the Prospectus. The relative benefit
received by the Parent, on the one hand, and any of the Underwriters, on the
other hand, shall be deemed to be in the same proportion as the total amount of
indebtedness of the Parent that was repaid by the Company from the net proceeds
from the offering bears to the total underwriting discounts and commissions re-
ceived by such Underwriter, in each case as set forth in the table on the cover
page of the Prospectus. The relative fault of the Company and the Parent, on
the one hand, and the Underwriters, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission to state a material fact relates to informa-
tion supplied by the Company, the Parent or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The indemnity and contribution obligations
of the Company and the Parent set forth herein shall be in addition to any
liability or obligation the Company or the Parent may otherwise have to any
Indemnified Person.
The Company, the Parent and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 7(d) were deter-
mined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or judgments referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, none of the
Underwriters (and their related Indemnified Persons) shall be required to con-
tribute, in the aggregate, any amount in excess of the amount by which the total
price at which the Shares underwritten by
22
<PAGE>
it and distributed to the public were offered to the public exceeds the amount
of any damages which such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the mean-
ing of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The Underwrite-
rs' obligations to contribute pursuant to this Section 7(d) are several in
proportion to the respective number of Shares purchased by each of the Under-
writers hereunder and not joint.
(e) By the execution and delivery of this Agreement, the Company (i)
acknowledges that it has, by separate written instrument, irrevocably designated
and appointed Interpool Inc., 211 College Road East, Princeton, New Jersey
98540, attention: General Counsel, as its authorized agent upon which process
may be served in any suit or proceeding arising out of or relating to the Shares
or this Agreement that may be instituted in any federal or New York state court,
and acknowledges that Interpool Inc. has accepted such designation, (ii) submits
to the jurisdiction of any such court in any such suit or proceeding, and (iii)
agrees that service of process upon Interpool Inc. and written notice of said
service to the Company (mailed or delivered to the Company's Secretary at its
principal office in Princeton, New Jersey as specified in Section 10 hereof),
shall be deemed in every respect effective service of process upon the Company
in any such suit or proceeding. The Company further agrees to take any and all
action, including the execution and filing of any and all such documents and
instruments, as may be necessary to continue such designation and appointment of
Interpool Inc. in full force and effect so long as this Agreement shall be in
full force and effect.
To the extent that the Company has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, the
Company hereby irrevocably waives such immunity in respect of its obligations
under this Agreement and the Shares, to the extent permitted by law.
23
<PAGE>
8. Conditions of Underwriters' Obligations. The several obligations
---------------------------------------
of the Underwriters to purchase the Firm Shares under this Agreement are subject
to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company and the
Parent contained in this Agreement shall be true and correct in all
material respects on the Closing Date with the same force and effect as if
made on and as of the Closing Date. The Company shall have performed or
complied with all of its obligations and agreements herein contained and
required to be performed or complied with by it at or prior to the Closing
Date.
(b) The Registration Statement shall have become effective not later
than 5:00 P.M. (and, in the case of a Registration Statement filed under
Rule 462(b) of the Act, not later than 10:00 P.M.), New York City time, on
the date of this Agreement or at such later date and time as you may
approve in writing, and at the Closing Date no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or contemplated by the Commission.
(c)(i) Since the date of the latest balance sheet included in the
Registration Statement and the Prospectus, there shall not have been any
material adverse change, or any development involving a prospective mate-
rial adverse change, in the condition, financial or otherwise, or in the
earnings, affairs or business prospects, whether or not arising in the
ordinary course of business, of the Company, (ii) since the date of the
latest balance sheet included in the Registration Statement and the
Prospectus there shall not have been any change, or any development
involving a prospective material adverse change, in the capital stock or in
the long-term debt of the Company from that set forth in the Registration
Statement and Prospectus and (iii) the Company and its subsidiaries shall
have no liability or obligation, direct or contingent, which is material to
the Company and its subsidiaries, taken as a whole, other than those
reflected in the Registration Statement and the Prospectus.
24
<PAGE>
(d) On the Closing Date you shall have received certificates dated
the Closing Date, signed by (i) Martin Tuchman and Raoul J. Witteveen, in
their capacities as the Chief Executive Officer and as the President, Chief
Operating Officer and Chief Financial Officer of the Company, confirming
the matters set forth in paragraphs (a), (b) and (c) of this Section 8 and
(ii) Martin Tuchman and Raoul J. Witteveen, in their capacities as the
Chief Executive Officer and as the President, Chief Operating Officer and
Chief Financial Officer of the Parent, confirming the matters set forth in
paragraph (a) of this Section 8.
(e) You shall have received on the Closing Date an opinion (satisfac-
tory to you and counsel for the Underwriters), dated the Closing Date, of
David King & Co., special Barbados counsel for the Company, to the effect
that:
(i) the Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of Barbados and has
the corporate power and authority required to carry on its business as
it is currently being conducted, and to own, lease and operate its
properties;
(ii) all the outstanding shares of Common Stock have been duly
authorized and validly issued and are fully paid, non-assessable and
are not subject to any preemptive or similar rights;
(iii) the Shares to be issued and sold by the Company hereunder
have been duly authorized, and when issued and delivered to the
Underwriters against payment therefor as provided by this Agreement,
will have been validly issued and will be fully paid and non-assess-
able, and the issuance of such Shares is not subject to any preemptive
or similar rights;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company;
25
<PAGE>
(v) the authorized capital stock of the Company, including the
Common Stock, conforms in all material respects as to legal matters to
the description thereof contained in the Prospectus;
(vi) the statements throughout the Prospectus and Items 14 of
Part II of the Registration Statement insofar as such statements con-
stitute a summary of legal matters relating to Barbados law, are a
fair presentation of such legal matters;
(vii) the execution, delivery and performance of this Agreement
by the Company, compliance by the Company with all the provisions
hereof and the consummation of the transactions contemplated hereby
will not require any consent, approval, authorization or other order
of any court, regulatory body, administrative agency or other govern-
mental body of Barbados or violate or conflict with the articles or
bylaws of the Company or any material laws, administrative regulations
or rulings or court decrees of Barbados applicable to the Company or
its property;
(viii) after due inquiry, such counsel does not know of any
legal or governmental proceeding pending or threatened by any govern-
mental body of Barbados to which the Company is a party or to which
any of its property is subject;
(ix) the Company has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities ("permits"),
including, without limitation, under any applicable Environmental
Laws, as are necessary to own, lease and operate its respective
properties and to conduct its business in Barbados; to the best of
such counsel's knowledge, after due inquiry, the Company has fulfilled
and performed all of its material obligations with respect to such
permits and no event has occurred which allows, or after notice or
lapse of time would allow, revocation or termination
26
<PAGE>
thereof or results in any other material impairment of the rights of
the holder of any such permit; and, except as described in the
Prospectus, such permits contain no restrictions that are materially
burdensome to the Company or any of its subsidiaries;
(x) The Company is a resident of Barbados under the United
States/Barbados Income Tax Convention and is entitled to all applica-
ble benefits thereunder.
The opinion of David King & Co. described in paragraph (e) above shall
be rendered to you at the request of the Company and shall so state there-
in.
(f) You shall have received on the Closing Date an opinion (satisfac-
tory to you and counsel for the Underwriters), dated the Closing Date, of
Stroock & Stroock & Lavan, counsel for the Company and the Parent, to the
effect that:
(i) the Company is duly qualified and is in good standing as a
foreign corporation authorized to do business in each State in which
its ownership or leasing of real property requires such qualification
and the Parent and each of the Company's United States subsidiaries
has been duly organized, is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation and has
the requisite corporate power and authority to carry on its business
as it is currently being conducted and to own, lease and operate its
properties, and is duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction in which
its ownership or leasing of property requires such qualification,
except where the failure of the Company or any such subsidiary to be
so qualified or in good standing would not have a material adverse ef-
fect on the Company and its subsidiaries, taken as a whole;
(ii) this Agreement has been duly executed and delivered by the
Company, to the extent that execution and delivery is a matter
27
<PAGE>
of New York law, and has been duly authorized, executed and delivered
by the Parent and is a valid and binding agreement of each of the
Company and the Parent, enforceable in accordance with its terms (ex-
cept as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or similar laws now or hereafter in
effect relating to or affecting creditors' rights generally and court
decisions with respect thereto and to the application of equitable
principles in any proceeding, whether at law or in equity and except
as to rights to indemnity and contribution hereunder may be limited by
applicable law or the public policy underlying such laws);
(iii) the Registration Statement has become effective under the
Act, to the knowledge of such counsel, no stop order suspending its
effectiveness has been issued and no proceedings for that purpose are
pending before or contemplated by the Commission;
(iv) the statements in the Registration Statement and the
Prospectus concerning the provisions of contracts filed as exhibits to
the Registration Statement are accurate in all material respects and
fairly summarize in all material respects the information required to
be set forth by the Act and the Regulations;
(v) to the best of such counsel's knowledge after due inquiry,
neither the Company nor any of its subsidiaries is in default in the
performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any
other agreement, indenture or instrument material to the conduct of
the business of the Company and its subsidiaries, taken as a whole, to
which the Company or any of its subsidiaries is a party or by which it
or any of its subsidiaries or their respective property is bound;
(vi) the execution, delivery and performance of this Agreement
by the Company and the Parent, compliance by the Company and the Par
28
<PAGE>
ent with all the provisions hereof and the consummation of the trans-
actions contemplated hereby (i) will not require any consent, approv-
al, authorization or other order of any court, regulatory body,
administrative agency or other governmental body (except as such may
be required under the Act, the Exchange Act or other securities or
Blue Sky laws) and (ii) will not conflict with or constitute a breach
of any of the terms or provision of, or a default under, (A) the char-
ter or bylaws of the Parent or the Company or (B) any agreement, in-
denture or other instrument known to such counsel to which the Parent
or the Company or any of its subsidiaries is a party or by which the
Parent or the Company or any of its subsidiaries or their respective
properties is bound (except for such conflicts, breaches, violations
or defaults that would not have a ,material adverse effect on the
Parent or the Company or any of its subsidiaries, taken as a whole),
or (iii) violate or conflict with any laws, administrative regulations
or any rulings or court decrees applicable to the Parent or the
Company or any of its subsidiaries or their respective properties;
(vii) after due inquiry, such counsel does not know of any legal
or governmental proceeding pending or threatened to which the Company
or any of its subsidiaries is a party or to which any of their respec-
tive property is subject which is required to be described in the
Registration Statement or the Prospectus and is not so described, or
of any contract or other document which is required to be described in
the Registration Statement or the Prospectus or is required to be
filed as an exhibit to the Registration Statement which is not de-
scribed or filed as required;
(viii) to the best of such counsel's knowledge, after due
inquiry, neither the Company nor any of its subsidiaries has violated
any federal or New York Environmental Laws, which might result in any
material adverse change in the business, prospects, financial
29
<PAGE>
condition or results of operation of the Company and its subsidiaries,
taken as a whole;
(ix) the Company and each of its subsidiaries has such permits,
licenses, franchises and authorizations of federal or New York gov-
ernmental or regulatory authorities ("permits"), including, without
limitation, under any applicable Environmental Laws, as are necessary
to own, lease and operate its respective properties and to conduct its
business in the manner described in the Prospectus; to the best of
such counsel's knowledge, after due inquiry, the Company and each of
its subsidiaries has fulfilled and performed all of its material obli-
gations with respect to such permits and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the holder of any such permit, subject in each case to such
qualification as may be set forth in the Prospectus; and, except as
described in the Prospectus, such permits contain no restrictions that
are materially burdensome to the Company or any of its subsidiaries;
(x) the Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended;
(xi) to such counsel's knowledge, after due inquiry, no holder
of any security of the Company other than the Parent, has any right to
require registration of shares of Common Stock or any other security
of the Company;
(xii) the Registration Statement and the Prospectus and any
supplement or amendment thereto (except for financial statements as to
which no opinion need be expressed) comply as to form in all material
respects with the Act.
In addition, such counsel shall state that nothing has come to such
counsel's attention that causes such counsel to believe that (except for finan-
cial statements,
30
<PAGE>
as aforesaid) the Registration Statement, at the time the Registration Statement
became effective, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, as amended or sup-
plemented, if applicable (except for financial statements, as aforesaid), as of
its date and as of the date hereof, contained or contains any untrue statement
of a material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading;
In making such statement with respect to the matters covered by the
preceding paragraph, such counsel may state that their belief is based upon
their participation in the preparation of the Registration Statement and
Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification except as specified.
The opinion of Stroock & Stroock & Lavan described in paragraph (f)
above shall be rendered to you at the request of the Company and the
Parent, and shall so state therein.
(g) You shall have received on the Closing Date opinions, dated the
Closing Date, of (i) Skadden, Arps, Slate, Meagher & Flom, United States counsel
for the Underwriters and (ii) Clarke & Co., Barbados counsel for the Underwrit-
ers, each in form and substance reasonably satisfactory to you.
(h) You shall have received a letter on and as of the Closing Date,
in form and substance satisfactory to you, from Arthur Andersen LLP, independent
public accountants, with respect to the financial statements and certain fi-
nancial information contained in the Registration Statement and the Prospectus
and substantially in the form and substance of the letter delivered to you by
Arthur Andersen LLP on the date of this Agreement.
(i) The Shares shall have been authorized for listing on the New York
Stock Exchange, Inc., subject to official notice of issuance.
31
<PAGE>
(j) The Company shall have taken all actions necessary and advisable
to insure that no U.S. Investor will be subject to the gross inclusion rule of
Section 551 of the Code with respect to the Cayman Subsidiary (assuming for this
purpose that Treasury regulations pursuant to Section 551(f), which would
attribute the Cayman Subsidiary's undistributed foreign personal holding company
income to U.S. Investors, are in effect).
(k) Prior to the Closing Date, the Company shall have furnished to
the Representatives and to counsel to the Underwriters such further information,
certificates and documents as the Representatives and counsel for the Underwrit-
ers may reasonably request.
The several obligations of the Underwriters to purchase any Additional
Shares hereunder are subject to the delivery to you on the applicable Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of such
Additional Shares and other matters related to the issuance of such Additional
Shares, including without limitation, bringdowns of the certificates, letter or
opinions referred to in paragraphs (d), (e), (f), (g) and (h).
9. Effective Date of Agreement and Termination. This Agreement
-------------------------------------------
shall become effective upon the later of (i) execution of this Agreement and
(ii) when notification of the effectiveness of the Registration Statement has
been released by the Commission.
This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Company and the Parent if any of the following
has occurred: (i) since the respective dates as of which information is given
in the Registration Statement and the Prospectus, any material adverse change or
development involving a prospective material adverse change in the condition,
financial or otherwise, of the Company and its subsidiaries, taken as a whole,
or the earnings, affairs, or business prospects of the Company and its subsid-
iaries, taken as a whole, whether or not arising in the ordinary course of busi-
ness, which would, in your judgment, make it impracticable to market the Shares
on the terms and in the manner contemplated in the Prospectus, (ii) any outbreak
or escalation of hostilities or
32
<PAGE>
other national or international calamity or crisis or change in general economic
conditions or in the financial markets of the United States or elsewhere that,
in your judgment, is material and adverse and would, in your judgment, make it
impracticable to market the Shares on the terms and in the manner contemplated
in the Prospectus, (iii) the suspension or material limitation of trading in
securities on the New York Stock Exchange, the American Stock Exchange or the
NASDAQ National Market System or a limitation on prices for securities on any
such exchange or National Market system, (iv) the enactment, publication, decree
or other promulgation of any federal or state statute, regulation, rule or order
of any court or other governmental authority which in your opinion materially
and adversely affects, or will materially and adversely affect, the business or
operations of the Company or any subsidiary, (v) the declaration of a banking
moratorium by either federal or New York State authorities or (vi) the taking of
any action by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in your opinion has a material adverse effect
on the financial markets in the United States.
If on the Closing Date or on an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Shares or Additional Shares, as the case may be, which it or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting Under-
writer or Underwriters, as the case may be, agreed but failed or refused to
purchase is not more than one-tenth of the total number of Shares to be pur-
chased on such date by all Underwriters, each non-defaulting Underwriter shall
be obligated severally, in the proportion which the number of Firm Shares set
forth opposite its name in Schedule I bears to the total number of Firm Shares
which all the non-defaulting Underwriters, as the case may be, have agreed to
purchase, or in such other proportion as you may specify, to purchase the Firm
Shares or Additional Shares, as the case may be, which such defaulting Under-
writer or Underwriters, as the case may be, agreed but failed or refused to
purchase on such date; provided that in no event shall the number of Firm Shares
--------
or Additional Shares, as the case may be, which any Underwriter has agreed to
purchase pursuant to Section 2
33
<PAGE>
hereof be increased pursuant to this Section 9 by an amount in excess of one-
ninth of such number of Firm Shares or Additional Shares, as the case may be,
without the written consent of such Underwriter. If on the Closing Date or an
Option Closing Date, as the case may be, any Underwriter or Underwriters shall
fail or refuse to purchase Firm Shares, or Additional Shares, as the case may
be, and the aggregate number of Firm Shares or Additional Shares as the case may
be, with respect to which such default occurs is more than one-tenth of the
aggregate number of Shares to be purchased on such date by all Underwriters and
arrangements satisfactory to you and the Company for purchase of such Shares are
not made within 48 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter and the Company.
In any such case which does not result in termination of this Agreement, either
you or the Company shall have the right to postpone the Closing Date or the
applicable Option Closing Date, as the case may be, but in no event for longer
than seven days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of any such
Underwriter under this Agreement.
10. Miscellaneous. Notices given pursuant to any provision of this
-------------
Agreement shall be addressed as follows: (a) if to the Company, to Interpool
Limited, 211 College Road East, Princeton, New Jersey 08540, Attention: Arthur
L. Burns, (b) if to the Parent, to Interpool, Inc., 211 College Road East,
Princeton, New Jersey 08540, Attention: Arthur L. Burns and (c) if to any Under-
writer or to you, to you c/o Donaldson, Lufkin & Jenrette Securities Corpora-
tion, 277 Park Avenue, New York, New York 10172, Attention: Syndicate Depart-
ment, or in any case to such other address as the person to be notified may have
requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Parent, the Company, its officers and
directors and of the several Underwriters set forth in or made pursuant to this
Agreement shall remain operative and in full force and effect, and will survive
delivery of and
34
<PAGE>
payment for the Shares, regardless of (i) any investigation, or statement as to
the results thereof, made by or on behalf of any Underwriter or by or on behalf
of the Company, the officers or directors of the Company or the Parent or any
controlling person of the Company or the Parent, (ii) acceptance of the Shares
and payment for them hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriters because of
any failure or refusal on the part of the Company or the Parent to comply with
the terms or to fulfill any of the conditions of this Agreement, the Company and
the Parent agree to reimburse the several Underwriters for all out-of-pocket
expenses (including the fees and disbursements of counsel) reasonably incurred
by them.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Underwrit-
ers, the Parent or any controlling persons referred to herein and their respec-
tive successors and assigns, all as and to the extent provided in this Agree-
ment, and no other person shall acquire or have any right under or by virtue of
this Agreement. The term "successors and assigns" shall not include a purchaser
of any of the Shares from any of the several Underwriters merely because of such
purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York without regard to conflicts of laws principles.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
35
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Parent and the several Underwriters.
Very truly yours,
INTERPOOL LIMITED
By______________________________
Name:
Title:
INTERPOOL, INC.
By______________________________
Name:
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SMITH BARNEY INC.
FURMAN SELZ LLC
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By__________________________
36
<PAGE>
SCHEDULE I
----------
Number of Firm Shares
Underwriters to be Purchased
------------ ---------------------
Donaldson, Lufkin & Jenrette
Securities Corporation
Smith Barney Inc.
Furman Selz LLC
______________________
Total
37
<PAGE>
SCHEDULE II
-----------
List of Subsidiaries
Interpool N.V.
Interpool B.V.
Interpool (Hong Kong) Ltd.
Interpool (UK) Limited
CTC Container Trading (UK) Limited
CTC Equipment A.G.
Interpool (S) PTE Singapore
Interpool Containers N.V.
Interpool Benelux B.V.
Interpool Containers Inc.
Interpool Finance Corp.
Interpool Funding Corp.
38
Exhibit 3.1
[Seal]
COMPANIES ACT OF BARBADOS
(Section 205)
RESTATED ARTICLES OF INCORPORATION
- --------------------------------------------------------------------------------
1. Name of Company: 2. Company No.
INTERPOOL LIMITED 6249
- --------------------------------------------------------------------------------
3. The classes and any maximum number of shares that the company is authorized
to issue.
The annexed Schedule 1 is incorporated in this form.
- --------------------------------------------------------------------------------
4. Restrictions if any on share transfers.
No transfer shall be made which would disqualify the Company as an
International Business Company under the International Business Companies
Act, 1991-24.
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5. Number of minimum and maximum number of directors.
The annexed Schedule 2 is incorporated in this form.
- --------------------------------------------------------------------------------
6. Restrictions if any on business the company may carry on.
No business may be carried on which would disqualify the Company as an
International Business Company under the International Business Companies
Act 1991-24.
- --------------------------------------------------------------------------------
7. Other provisions if any.
The annexed Schedule 3 is incorporated in this form.
- --------------------------------------------------------------------------------
The foregoing restated articles of incorporation correctly set out, without
substantive change the corresponding provisions of the articles of
incorporation as amended and supersede the original articles of
incorporation.
- --------------------------------------------------------------------------------
8. Date Signature Title
- --------------------------------------------------------------------------------
David N King Director
- --------------------------------------------------------------------------------
For Ministry use only
- --------------------------------------------------------------------------------
Company No. Filed
<PAGE>
THE COMPANIES ACT CAP 308 OF BARBADOS
Company No: 6249
Schedule 1 To The Restated Articles of Incorporation of
INTERPOOL LIMITED
1. The Classes and any maximum number of shares that the Company is authorised
to issue are as follows:
(i) 100 million Common Shares, without par value, of one or more Classes
or Series
(ii) 2 million Preferred Shares, without par value, of one or more Classes
or Series, initially designated as:-
a) Series 'A' Special Voting Preferred Shares
b) Series 'B' Preferred Shares
subject to the provisions of Item 2 below.
2. The Board of Directors of the Company is authorised to issue one or more
series of Common and/or Preferred Shares and to fix the number of shares in each
series and to determine the designation, rights, privileges, restrictions and
conditions attaching thereto.
3. The Shares of the Company shall carry and be subject to the following rights,
privileges, restrictions and conditions:
3.1 COMMON SHARES
(a) Voting
Each holder of the Common Shares shall be entitled to receive
notice of and to attend all meetings of shareholders, and at all
such meetings shall be entitled to one vote in respect of each
Common Share held.
(b) Rights to Dividends
The Common Shares shall rank equally and the holders of the
Common Shares shall be equally entitled to receive such
<PAGE>
dividends or other distributions of the Company as may be
declared by the Board of Directors in their absolute discretion
out of the funds of the Company legally available therefor after
payment of any declared dividends to the holders of the Preferred
Shares.
(c) Rights on Winding-Up
In the event of any liquidation, dissolution or winding-up of the
Company, the holders of the Common Shares shall be entitled to
share equally in all distributions of the assets of the Company
as are available for distribution to the shareholders after
creditors and holders of the Preferred Shares have been paid.
3.2 PREFERRED SHARES
3.3 Series A Special Voting Preferred Shares
(a) Voting
(i) Each holder of the Series A Special Voting Preferred Shares
shall be entitled to receive notice of and to attend all
meetings of shareholders, and be entitled to vote in respect
of any Series A Special Voting Preferred Shares held on all
matters on which holders of Common Shares are entitled to
vote.
(ii) The holders of the Series A Special Voting Preferred Shares
shall be entitled to vote as a separate Class on any
amendment to these Articles of Incorporation which adversely
affects the rights of the Series A Special Voting Preferred
Shares.
(iii) Subject to paragraph 3.3(a)(i) above, on any matter on
which the holders of the Series A Special Voting Preferred
Shares and the holders of the Common Shares are entitled to
vote, both classes entitled to vote shall vote together as a
single class, and each holder of any Series A Special Voting
Preferred Share shall be entitled to 235 (two hundred and
thirty-five) votes for each Series A Special Voting
Preferred Share held except as otherwise provided by law.
<PAGE>
(b) Rights to Dividends
If and to the extent that the Board of Directors of the Company
in their absolute discretion declare dividends on the Common
Shares during any fiscal year, the holders of the Series A
Special Voting Preferred Shares shall be entitled to receive such
dividends in the same amount per share as may be payable to the
holders of the Common Shares.
(c) Rights on Wind-up
In the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the Company, the holders of the
Series A Special Voting Preferred Shares then outstanding shall
be entitled to participate in priority to the holders of the
Common Shares in all distributions of the assets of the Company
as are available for distribution to the shareholders, and each
holder of Series A Special Voting Preferred Shares shall be
entitled to receive in any such distributions, the greater of (i)
an amount in cash equal to US$20.00 plus an amount in cash equal
to all unpaid dividends thereon at the date of such event and
(ii) the same amount of cash or other property as is
distributable upon such event in respect to each Common Share.
3.4 SERIES B PREFERRED SHARES
(a) Voting
Each holder of the Series B Preferred Shares shall be entitled to
such voting rights as may be determined by the Board of Directors
of the Company in its absolute discretion, except that the
holders of such Series B Preferred Shares shall be entitled to
vote as a separate Class on any amendment to these Articles of
Incorporation which adversely affects the rights of the Series B
Preferred Shares.
(b) Rights to Dividends
If and to the extent that the Board of Directors of the Company
in their absolute discretion declare dividends during any fiscal
year, the holders of the Series B Preferred Shares shall, subject
to these Articles of Incorporation and in particular the
provisions of
<PAGE>
paragraph 3.1(b) above, be entitled to such dividends as may be
fixed by the Board of Directors.
(c) Rights of Winding-up
In the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the Company, the holders of the
Series B Preferred Shares shall be entitled to be paid, in
priority to the holders of the Common Shares, such amount in
respect of each Series B Preferred Share held as may be
determined by the Board of Directors of the Company out of
distributions of the assets of the Company as may be available
for distribution to the shareholders.
4. No shares in the capital of the Company may be issued which would disqualify
the Company as an International Business Company under the International
Business Companies Act 1991-24 or as amended.
- --------------------------------------------------------------------------------
Date Signature Title
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
THE COMPANIES ACT CAP 308 OF BARBADOS
Company No: 6249
Schedule 2 To The Restated Articles of Incorporation of
INTERPOOL LIMITED
MANAGEMENT OF THE COMPANY
1. Number of Directors
1.1 There shall be a minimum of three (3) and a maximum of nine (9)
Directors at least two (2) of whom shall be neither officers nor
employees of the Company or its affiliates. The exact number of
directors within the parameters set forth in the preceding
sentence shall be fixed from time to time by the Board of
Directors.
2. Appointment and Tenure
2.1 (a) The directors of the Company shall be classified with respect
to the time they severally hold office into three classes, as
nearly equal in number as possible, designated Class I, Class II
and Class III. The directors first appointed to Class I will hold
office for a term expiring at the annual meeting of shareholders
of the Company to be held in 1997. The directors first appointed
to Class II will hold office for a term expiring at the annual
meeting of shareholders of the Company to be held in 1998. The
directors first appointed to Class III will hold office for a
term expiring at the annual meeting of shareholders of the
Company to be held in 1999. The directors of each class shall
hold office until their successors are elected and are qualified
to so serve.
2.2 At each succeeding annual meeting of the shareholders of the
Company, the successors of the class of directors whose terms
expire at that meeting shall be elected by majority vote of all
the votes cast at such meeting to serve as director for a term
expiring at the annual meeting of shareholders held in the third
year following the year of their election and shall hold office
until their successors are elected and are qualified to serve.
<PAGE>
2.3 Election of directors of the Company need not be by written
ballot unless requested by the Chairman of the Board of Directors
or by the holders of a majority of the then outstanding shares in
the capital of the Company entitled to vote in the election of
directors and present in person or represented by proxy at a
meeting of the shareholders at which directors are to be elected.
3. Filling a Vacancy
3.1 Subject to the rights of any of the holders of the Preferred Shares,
the power to fill vacancies on the Board of Directors, except in such
a manner as to change the minimum or maximum number of Directors shall
be vested solely in the Board of Directors who may by an affirmative
vote of a quorum of the directors fill such vacancies. A director
appointed or elected to fill a vacancy shall hold office for the
unexpired term of his predecessor until that director's successor
shall be elected and is qualified to serve. No decrease in the number
of directors constituting the Board of Directors may shorten the term
of any incumbent director.
4. Removal
4.1 Subject to the rights of the holders of the Preferred Shares to elect
additional directors or to remove directors, a duly elected director
of the Company may be removed from such position only by the
affirmative vote of the holders of not less than a majority of the
then outstanding shares in the capital of the Company entitled to vote
in the election of director, voting as a single class.
5. Indemnity
5.1 To the fullest extent permitted by law as it exists on the date hereof
or as it may hereinafter be amended to permit the limitation or
elimination of liability of directors, no directors of the Company
shall be personally liable to the Company or its shareholders for
monetary damages for breach of fiduciary duty as a director.
Notwithstanding the foregoing, a director shall be liable to the
extent provided by applicable law (1) for any breach of the director's
duty of loyalty to the Company or to its shareholders (2) for acts or
omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, or
<PAGE>
for any transaction from which the director derived any improper
personal benefit. The provisions of this Article are not intended to,
and shall not limit, supersede or modify any other defence available
to a director under applicable law. Neither the amendment or repeal of
this Article, nor the adoption of any provision inconsistent with this
Article, shall adversely affect any right or protection of a director
of the Company existing at the time of such amendment, repeal or
adoption. The Company shall, to the fullest extent permitted by law,
indemnify any and all persons whom it shall have power to indemnify
from and against any and all expenses and liabilities incurred in
relation to the Company. The Company shall advance expenses to the
fullest extent permitted by law. Such right to indemnification and
advancement of expenses shall continue as to a person who ceased to be
a director, officer, employee or agent and shall inure to the benefit
of the heirs, executors and administrators of such person. The
indemnification and advancement of expenses provided for herein shall
not be deemed exclusive of any other rights which any person may have
or hereafter acquire under any statute, By-law, agreement, vote of
shareholders it disinterested directors or otherwise. Without limiting
the generality or the effect of the foregoing, the Company may enter
into one or more agreements with any person which provide for
indemnification greater than or different from that provided in these
Articles. Neither the amendment or repeal of this Article shall
adversely affect any right or protection of any person existing at the
time of such amendment, repeal or a subsequent adoption of any
provision inconsistent with the rights and protections herein granted.
6. Determination as to Best Interest of the Company
6.1 The Board of Directors of the Company, in determining whether the
interests of the Company, its subsidiaries and its shareholders will
be served by any offer of another person to
(i) make a tender or exchange offer for any equity security of
the Company or any subsidiary of the Company,
(ii) merge or consolidate the Company or any of its subsidiaries
of the Company,
<PAGE>
(iii) merge or consolidate the Company or any of its subsidiaries
with or into another institution, or
(iv) purchase or otherwise acquire all or substantially all of
the properties and assets of the Company or any of its
subsidiaries,
may take into account factors in addition to potential economic
benefits to the shareholders. Such factors may include (a) comparison
of the proposed consideration to be received by shareholders in
relation to the then current market price of the capital stock, the
estimated current value of the Company in a freely negotiated
transaction, and the estimated future value of the Company as an
independent entity; (b) the impact of such a transaction on the
customers, suppliers and employees of the Company, and its effect on
the communities in which the Company conducts business; and (c) the
ability of the Company to fulfil its objectives under applicable
statutes and includes every offer to buy or acquire, solicitation of
an offer to sell, tender offer for, or request or invitation for
tender of a security or interest in a security for value.
- --------------------------------------------------------------------------------
Date Signature Title
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
THE COMPANIES ACT CAP 308 OF BARBADOS
Company No: 6249
Schedule 3 To The Restated Articles of Incorporation of
INTERPOOL LIMITED
1. Meetings of Shareholders
1.1 Meetings of the shareholders shall be held in New York, New York, or
Princeton, New Jersey, USA or elsewhere, in the sole discretion of and
by resolution of a majority of the Board of Directors.
1.2 Special meetings of the shareholders of the Company for any purpose
may be called at any time by the Board of Directors. Subject to the
rights of holders of not less than five percent of the voting shares
to requisition a meeting pursuant to the Act, special meetings may not
be called by any other person or persons.
1.3 At any annual or special meeting of the shareholders of the Company,
only such business shall be conducted or considered as shall have been
properly brought before the meeting. Except as otherwise provided
herein, in order to have been properly brought before the meeting,
such business must have been either (a) specified in the written
notice of the meeting, or any supplement thereto, given to the
shareholders of the record date for such meeting by or at the
direction of the Board of Directors (b) brought before the meeting at
the direction of the Chairman of the Board, the President or the Board
of Directors; or (c) specified in a written notice given by or on
behalf of a shareholder of record on the record date for such meeting
entitled to vote thereat or by a duly authorised proxy for such
shareholder, in accordance with all requirements set forth in this
Schedule.
1.4 A notice referred to in paragraph 1.3(a) above must be delivered
personally to, or mailed to and received at, the principal executive
office of the Company, addressed to the attention of the Secretary or
Assistant Secretary, no less than 120 days in advance of the
anniversary date of the Company's proxy statement released in
connection with the previous annual meeting of shareholders. Such
notice referred to in paragraph 1.3(a) above shall set forth; (i) a
full description of each such
<PAGE>
item of business proposed to be brought before the meeting; (ii) the
name and address of the person proposing to bring such business before
the meeting; (iii) the class and number of shares held of record, held
beneficially and represented by proxy by such person as of the record
date for the meeting (if such date has then been made publicly
available) and as of the date of such notice; (iv) if any item of such
business involves a nomination for directors, all information
regarding each such nominee that would be required to set forth in a
definitive proxy statement, and the written consent of each nominee to
serve if elected; (v) any material interest of the shareholder in such
item of business.
1.5 No business shall be brought before any meeting of shareholders of the
Company otherwise than as provided in this Schedule.
1.6 The Board of directors may a proposed nominee for director to furnish
such other information as may be required to be set forth in a
Shareholder's notice of nomination which pertains to the nominee or
which may be reasonably required to determine the eligibility of such
proposed nominee to serve as a director of the Company. The Company
may, if the facts warrant, determine that a nomination or Shareholder
proposal was not made in accordance with the foregoing procedure, and
if the Company should so determine, the Company shall notify the
shareholder submitting the proposal within ten (10) days after
receiving the proposal of its intention to omit the proposal from the
management proxy statement including reasons for refusal and the
defective nomination or proposal shall be disregarded.
1.7 Subject to the provisions of the Act, a majority of not less than 75%
of the votes cast by the shareholders who vote in respect of that
resolution shall be required to effect an amendment to the following
provisions of the Articles:
(i) Schedule 2, Clauses 1.1, 2.1, 3.1 and 5.1
(ii) Schedule 3, Clauses 1.2, 1.3, 1.4, 1.7
- --------------------------------------------------------------------------------
Date Signature Title
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Exhibit 3.2
BARBADOS
AMENDED
BY-LAWS
of
INTERPOOL LIMITED
BEING BY-LAWS NO. 3
Incorporated on the 28th day of November, 1968
David King & Co.
Attorneys-at-Law
Bridgetown
Barbados
<PAGE>
THE COMPANIES ACT 1982
INTERPOOL LIMITED
By-Laws No. 3
By resolution of the directors of the Company passed on the _____ day of
__________, 1995 and confirmed by resolution at a General Meeting of the Company
held on the ______ day of __________ 19__.
1. INTERPRETATION
1.1 In these and all other by-laws of the Company, unless the context otherwise
required:
(a) "Act" means the Companies Act 1982 as from time to time amended and
every statute substituted therefor and, in the case of such substitution, any
references in the by-laws of the Company to provisions of the Act shall be read
as references to the substituted provisions therefor in the new statute or
statutes;
(b) "Regulations" means any Regulations made under the Act, and every
regulation substituted therefor and, in the case of such substitution, any
references in the by-laws of the Company to provisions of the Regulations shall
be read as references to the substituted provisions therefor in the new
regulations;
(c) "By-laws" means any by-law of the Company from time to time in force;
(d) all terms contained in the by-laws and defined in the Act or the
Regulations shall have the meanings given to such terms in the Act or the
Regulations; and
(e) the singular includes the plural and the plural includes the singular;
the masculine gender includes the feminine and neuter genders; the word "person"
includes bodies corporate, companies, partnerships, syndicates, trusts and any
association of persons; and the word "individual" means a natural person.
-1-
<PAGE>
Business of 1.2 This Company has been continued under 356.1 of the Act
Company and to the intent that it shall qualify as an exempted
Restrictions International Business Company under the provisions of the
thereon International Business Companies Act 1991-24 of the Laws of
Barbados and any statutory modification thereof or
substitution therefor from time to time subsisting and
accordingly nothing shall be done or permitted to be done in
about or concerning the business or affairs of the Company
which shall be contrary to such intent or shall contravene
such provisions and anything so done or permitted to be done
shall be null and void and of no effect or shall in any way
prohibit or endanger such qualification and in particular
but without in any way affecting the generality of the
foregoing:
(i) the Company shall not carry on the
business of buying or selling of goods
or services in, or originating in
Barbados;
(ii) no allotment of shares shall be made and
no transfer of shares shall be
registered, if such allotment or
transfer would disqualify the Company
from being an International Business
Company as aforesaid and any such
allotment or registration shall be null
and void and of no effect; provided;
further, but not in limitation of the
foregoing, that not more than 10% of all
shares of the Company may be held by
persons who are residents of the Caricom
region.
1.3 Nothing contained in these Articles of Incorporation
shall preclude the settlement of a transaction entered
through the facilities of the New York Stock Exchange.
2. REGISTERED OFFICE
2.1 The Registered Office of the Company shall be in
Barbados at such address as the directors may fix from time
to time by resolution.
3. SEAL
3.1 The common seal of the Company shall be such as the
directors may by resolution from time to time adopt. The
directors may by resolution approve and official seal for
use in any place or district situated outside of
-2-
<PAGE>
Barbados provided such seal complies with the requirements
of Section 25 of the Act.
4. DIRECTORS
Powers 4.1 The business and affairs of the Company shall be managed
by the directors.
Number 4.2 There shall be a minimum of three (3) directors and a
maximum of nine (9) directors.
Election 4.3 The directors, other than those who may be elected by
the holders of any series of Preferred Shares, will be
classified with respect to the time for which they severally
hold office in accordance with the Articles. At the annual
meeting of shareholders, the shareholders will elect by a
majority vote the directors to succeed those whose terms
expire at such meeting.
Tenure 4.4 Unless his tenure is sooner determined, a director shall
hold office from the date on which he is elected or
appointed until the close of the annual meeting of the
shareholders next following but he shall be eligible for
re-election if qualified.
Ceasing to be 4.5 A director shall cease to be a director
Director
(a) if he becomes bankrupt or compounds with his
creditors or is declared insolvent;
(b) if he is found to be of unsound mind; or
(c) if by notice in writing to the Company he
resigns his office and any such resignation shall
be effective at the time it is sent to the Company
or at the time specified in the notice whichever
is earlier.
Removal of 4.6 The shareholders of the Company, may by ordinary
Director resolution passed at a special meeting of the shareholders,
remove any
-3-
<PAGE>
director from office and a vacancy created by the removal of
a director may be filled at the meeting of the shareholders
at which the director is removed.
Vacancy 4.7 Subject to the provisions of Section 72 of the Act a
vacancy among the directors of the Company may be filled by
a quorum of directors and any director so appointed shall
hold office for the unexpired term of his predecessor.
Alternate 4.8 Subject to authorization by the shareholders in
Director accordance with Section 66A of the Act, any director may by
notice in writing signed by him and deposited with the
Company appoint an alternate director to act on his behalf.
Such alternate director must be either a director of the
Company or a person approved by all the directors for the
time being of the Company. Every alternate director shall
during the period of his appointment be entitled to notice
of meetings of directors and in the absence of the directors
appointing him to attend and vote thereat accordingly, but
his appointment shall immediately cease and determine if and
when the director appointing him ceases to hold office as a
director. An alternative Director so appointed shall not be
entitled to receive any remuneration as a director from the
Company but shall otherwise be subject to the provisions
contained herein with regard to Directors. A director who is
also an alternate director shall be entitled to a separate
vote on behalf of the director he is representing in
addition to his own vote.
Committee of 4.9 The directors may appoint from among their number a
Directors committee of directors and subject to Section 80(2) of the
Act may delegate to such committee any of the powers of the
directors.
4.10 All acts done by any meeting of the Directors, or of a
committee of Directors or by any person acting as a
Director, shall, notwithstanding that it afterwards be
discovered that there was some defect in the election of any
such Director or persons acting as aforesaid or that they or
any of them were or was disqualified, be as valid as
-4-
<PAGE>
though every such person had been duly elected and was
qualified to be a Director.
Audit 4.11 The directors shall establish an Audit Committee. Upon
Committee the election of two additional outside directors, a majority
of the members of the Audit Committee will be independent
directors. Such Committee Audit Committee shall ratify all
contracts made i) under paragraph 11.1 and ii) all
borrowings, loans, guarantees, mortgages, charges,
pledges or other security interests given or made under
paragraph 5.1 and made in favor of Interpool, Inc. or any
other parent, any officer, director, or any business
controlled by any officer or director of the Company, or
any family member of any officer or director, or any
business controlled by a family member of any officer or
director.
5. BORROWING POWERS OF DIRECTORS
5.1 The directors may from time to time subject to paragraph
4.11 hereof;
(a) borrow money upon the credit of the Company;
(b) issue, reissue, sell or pledge debentures of
the Company;
(c) subject to Section 53 of the Act, give a
guarantee on behalf of the Company to secure
performance of an obligation of any person; and
(d) mortgage, charge, pledge or otherwise create a
security interest in all or any property of the
Company, owned or subsequently acquired, to secure
any obligation of the Company.
5.2 The directors may from time to time by resolution
delegate to any officer of the Company all or any of the
powers conferred on the directors by paragraph 5.1 hereof to
the full extent thereof or such lesser extent as the
directors may in any such resolution provide.
5.3 The powers conferred by paragraph 5.1 hereof shall be in
supplement of and not in substitution for any powers to
borrow money
-5-
<PAGE>
for the purpose of the Company possessed by its directors or
officers independently of a borrowing by-law.
6. MEETING OF DIRECTORS
Place of 6.1 Meetings of the directors and of any committee of the
Meeting directors may be held within or outside Barbados.
Notice 6.2 A meeting of the directors may be convened at any time
by any director or the Secretary, when directed or
authorized by any director. Subject to sub-section (1) of
Section 76 of the Act Notice of any such meeting need not
specify the purpose of or the business to be transacted at
the meeting. Notice of any such meeting shall be served in
the manner specified in paragraph 21 hereof not less than
two days (exclusive of the day on which the notice is
delivered or sent but inclusive of the day for which notice
is given) before the meeting is to take place. A director
may in any manner waive notice of a meeting of the directors
and attendance of a director at a meeting of directors shall
constitute a waiver of notice of the meeting except where a
director attends a meeting for the express purpose of
objecting to the transaction of any business on the grounds
that the meeting is not lawfully called.
6.2.1 It shall not be necessary to give notice of a meeting
of the directors to a newly elected or appointed director
for a meeting held immediately following the election of
directors by the shareholders or the appointment to fill a
vacancy among the directors.
Quorum for 6.3 A majority of the Whole Board shall constitute a quorum
Directors' except when a vacancy or vacancies prevents such majority,
Meetings whereupon a majority of the directors in office shall
constitute a quorum, provided that such majority shall
constitute at least one-third (1/3) of the Whole Board. The
term "Whole Board" herein refers to the total number of
directors which the Company would have if there were no
vacancies. Such quorum may exercise all the powers of the
directors. No
-6-
<PAGE>
business shall be transacted at a meeting of directors
unless a quorum is present.
Meeting by 6.3.1 A director may, if all the directors consent,
Telephone participate in a meeting of directors of any committee of
the directors by means of such telephone or other
communications facilities as permit all other persons
participating in the meeting to hear each other and a
director participating in such a meeting by such means is
deemed to be present at that meeting. Where the number of
resident directors at such meeting equals or exceeds the
number of non-resident directors such meeting shall be
deemed to be held in Barbados.
Voting 6.4 Questions arising at any meeting of the directors shall
be decided by a majority of votes. In the case of an
equality of votes the Chairman of the meeting in addition to
his original vote shall have a second or casting vote.
Resolution in 6.5 Notwithstanding any of the foregoing provisions of this
Writing by-law a resolution in writing signed by all the directors
entitled to vote on that resolution at a meeting of the
directors or any other committee of the directors is as
valid as if it had been passed at a meeting of the directors
or any committee of the directors.
Appointments, 6.6 The directors shall cause minutes to be duly entered in
Minutes, etc. books provided for the purpose:
(a) of all appointments of officers
(b) of the names of the directors present at each
meeting of the directors and of any committee of
directors
(c) of all orders made by the directors and
committees of directors
(d) of all resolutions and proceedings of general
meetings and of meetings of the directors and
committees;
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And any such minutes of any meeting of the directors, or of
any committee or of the Company, if purporting to be signed
by the Chairman of the meeting or of the next succeeding
meeting, shall be receivable as prima facie evidence of the
matters stated in such minutes.
7. REMUNERATION OF DIRECTORS
7.1 The remuneration to be paid to the directors shall be
such as the directors may from time to time determine and
such remuneration may be in addition to the salary paid to
any officer or employee of the Company who is also a
director. The directors may also award special remuneration
to any director undertaking any special services on the
Company's behalf other than the routine work ordinarily
required of a director and the confirmation of any such
resolution or resolutions by the shareholder shall not be
required. The directors shall also be entitled to be paid
their travelling and other expenses properly incurred by
them in connection with the affairs of the Company.
8. DUTIES AND LIABILITIES OF DIRECTORS
Restrictions 8.1 No director or officer of the Company shall be liable to
on Liability the Company for:
(a) the acts, receipts, neglects or defaults of
any other director or officer or employee or for
joining in any receipt or act for conformity;
(b) any loss, damage or expense incurred by the
Company through the insufficiency or deficiency of
title to any property acquired by the Company or
for or on behalf of the Company;
(c) the insufficiency or deficiency of any
security in or upon which any of the moneys of or
belonging to the Company shall be placed out or
invested;
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(d) any loss or damage arising from the
bankruptcy, insolvency or tortuous act of any
person, including any person with whom any moneys,
securities or effects shall be lodged or
deposited;
(e) any loss, conversion, misapplication or
misappropriation of or any damage resulting from
any dealings with any moneys, securities or other
assets belonging to the Company;
(f) any other loss, damage or misfortune whatever
which may happen in the execution of the duties of
his respective office or trust or in relation
thereto;
unless the same happens by or through his failure to
exercise the powers and to discharge the duties of his
office honestly and in good faith with a view to the best
interests of the Company and in connection therewith to
exercise the care, diligence and skill that a reasonably
prudent person would exercise in comparable circumstances.
Duty to Comply 8.2 Nothing herein contained shall relieve a director or
with the Act officer from the duty to act in accordance with the Act or
regulations made thereunder or relieve him from liability
for a breach thereof.
8.2.1 The directors for the time being of the Company shall
not be under any duty or responsibility in respect of any
contract, act or transaction whether or not made, done or
entered into in the name or on behalf of the Company, except
such as are submitted to and authorized or approved by the
directors.
Remuneration 8.2.2 If any director or officer of the Company is employed
for services by or performs services for the Company otherwise than as a
other than as director or officer or is a member of a firm or a
Director shareholder, director or officer of a body corporate which
is employed by or performs services for the Company, the
fact of his being a shareholder, director or officer of the
Company shall not disentitle such director
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or officer or such firm or body corporate, as they may be,
from receiving proper remuneration for such services.
9. INDEMNITIES TO DIRECTORS AND OFFICERS
9.1 Subject to Section 97 of the Act except in respect of an
action by or on behalf of the Company to obtain a judgement
in its favour, the Company shall indemnify a director or
officer of the Company or a person who acts or acted at the
Company's request as a director or officer of a body
corporate of which the Company is or was a shareholder or
creditor, and his personal representatives, against all
costs, charges and expenses, including an amount to settle
an action or satisfy a judgement, reasonably incurred by him
in respect of any civil, criminal or administrative action
or proceeding to which he is made a party by reason of being
or having been a director or officer of such Company; if:
(a) he acted honestly and in good faith with a
view to the best interests of the Company; and
(b) in the case of criminal or administrative
action or proceeding that is enforced by a
monetary penalty, he had reasonable grounds for
believing that his conduct was lawful.
The indemnification provided for in this Article 9 shall not
be deemed exclusive of any other rights which any person may
have or hereafter acquire under any statute, the Articles, a
by-law of the Company, agreement, vote of shareholders or
disinterested directors or otherwise.
10. SUBMISSION OF CONTRACTS OR TRANSACTIONS FOR SHAREHOLDERS
APPROVAL
10.1 The directors in their discretion may submit any
contract, act of transaction for approval or ratification at
any annual meeting of the shareholders called for the
purpose of considering the same and, subject
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to the provisions of Section 89 of the Act, any such
contract, act or transaction that is approved or ratified or
confirmed by a resolution passed by a majority of the votes
cast at any such meeting (unless any different or additional
requirement is imposed by the Act or by the Company's
articles or any other by-law) shall be as valid and as
binding upon the Company and upon all the shareholders as
though it had been approved, ratified or confirmed by every
shareholder of the Company.
11. CONTRACTUAL INTEREST OF DIRECTORS AND OFFICERS
Contractual 11.1 No director or officer of the Company shall be
Interest disqualified by his office from contracting with the Company
nor shall any material contract between the Company and one
or more of its directors or officers or between the Company
and another body of which a director or officer of the
Company is a director or officer or in which he has a
material interest be void or voidable provided that
disclosure of the interest of the director or officer in the
contract has been given to the Company at the time and in
the manner provided for by Section 89 of the Act and the
contract was approved by the directors or shareholders and
was ratified by the Audit Committee pursuant to paragraph
4.11 and was reasonable and fair to the Company at the time
it was approved.
11.2 Where a director or officer has given general notice
that he is a director or officer or has a material interest
in any body and is to be regarded as interested in any
contract or transaction with that body such notice shall
constitute sufficient declaration of his interest in
relation to any such contract.
Right to Vote 11.3 A director or officer of the Company shall have the
right to vote on any resolution to approve a contract in
which he has an interest to the extent permitted by and
subject to the provisions of Section 89(5) of the Act.
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12. OFFICERS
Appointment 12.1 The directors shall as often as may be required appoint
as Secretary and, if deemed advisable, may as often as may
be required appoint any or all of the following officers: a
Chairman, a Deputy Chairman, a President, one or more
Vice-Presidents, a Treasurer, a Secretary, one or more
Assistant Secretaries or one or more Assistant Treasurers. A
director may be appointed to any office of the Company but
none of the officers except the Chairman, the Deputy
Chairman and the President need be a director. Two or more
of the aforesaid offices may be held by the same person,
except that no person may at the same time be both the
President and the Secretary. In case and whenever the same
person holds the offices of Secretary and Treasurer he may
but need not be known as the Secretary-Treasurer. The
directors may from time to time appoint such other officers
and agents as they deem necessary who shall have such
authority and shall perform such duties as may from time to
time be prescribed by the directors. The directors shall
designate from among such elected officers a chief executive
officer, a chief operating officer, a chief financial
officer and a principal accounting officer, and may from
time to time make, or provide for, other designations it
deems appropriate.
Remuneration 12.2 The remuneration of all officers appointed by the
directors shall be determined from time to time by
resolution of the directors. The fact that any officer or
employee is a director or shareholder of the Company shall
not disqualify him from receiving such remuneration as may
be determined.
Powers and 12.3 All officers shall sign such contracts, documents or
Duties instruments in writing as require their respective
signatures and shall respectively have and perform all
powers and duties incident to their respective offices and
such other powers and duties respectively as may from time
to time be assigned to them by the directors.
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Delegation 12.4 In case of the absence or inability to act of any
officer of the Company or for any other reason that the
directors may deem sufficient the directors may delegate all
or any of the powers of such officer to any other officer or
to any director.
Chairman 12.5 A Chairman shall, when present, preside at all meetings
of the directors, and any committee of directors or the
shareholders.
Deputy 12.6 If the Chairman is absent or is unable or refuses to
Chairman act, the Deputy Chairman (if any) shall, when present,
preside at all meetings of the directors, and any committee
of the directors, or the shareholders.
President 12.7 Unless another person is the Chief Executive Officer or
the Managing Director of the Company, a President shall be
the Chief Executive Officer and Managing Director of the
Company and shall exercise such powers and have such
authority as may be delegated to him by the directors in
accordance with the provisions of Section 80 of the Act. He
shall be vested with and may exercise all the powers and
shall perform all the duties of a Chairman and Deputy
Chairman if none be appointed or if the Chairman and the
Deputy Chairman are absent or are unable or refuse to act.
Vice-President 12.8 A Vice-President or, if more than one, the Vice
Presidents, in order of seniority, shall be vested with all
the powers and shall perform all the duties of the President
in the absence or inability or refusal to act of the
President.
Secretary 12.9 The Secretary shall give or cause to be given notices
for all meetings of the directors, of any committee of the
directors and of the shareholders when directed to do so and
shall have charge of the minute books and seal of the
Company and of the records (other than accounting records)
referred to in Section 170 of the Act.
Treasurer 12.10 Subject to the provisions of any resolution of the
directors, a Treasurer shall have the care and custody of
all the funds and securities of the Company and shall
deposit
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the same in the name of the Company in such bank or banks or
with such other depository or depositories as the directors
may direct. He shall keep or cause to be kept the accounting
records referred to in Section 172 of the Act. He may be
required to give such bond for the faithful performance of
his duties as the directors in their uncontrolled discretion
may require but no director shall be liable for failure to
require any such bond or for the insufficiency of any such
bond or for any loss by reason of the failure of the Company
to receive any indemnity thereby provided.
Assistant 12.11 The Assistant Secretary or, if more than one, the
Secretary and Assistant Secretaries in order of seniority, and the
Treasurer Assistant Treasurer or, if more than one, the Assistant
Treasurers in order of seniority, shall respectively perform
all the duties of the Secretary and the Treasurer,
respectively, in the absence or inability or refusal to act
of the Secretary or the Treasurer, as the case may be.
Managing 12.12 The directors may from time to time appoint a Managing
Director Director of the Company either for a fixed term or without
any limitation as to the period for which he is to hold such
office and may from time to time remove or dismiss him from
office and appoint another in his place and may delegate to
him full power to manage and direct the business and affairs
of the Company (except such matters and duties as by law
must be transacted or performed by the directors or by the
shareholders) and to employ and discharge agents and
employees of the Company or may delegate to him any lesser
authority. A Managing Director shall conform to all lawful
orders given to him by the directors of the Company and
shall at all reasonable times give to the directors or any
of them all information they may require regarding the
affairs of the Company. Any agent or employee appointed by
the Managing Director may be discharged by the directors.
The Directors as they think fit may confer such powers for
such time and to be exercised for such objects and purposes
and upon such terms and conditions and with such
restrictions as they think expedient and they may confer
such powers either collaterally with, or to the exclusion
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of and in substitution for all or any of the power of the
Directors in that behalf; and may from time to time revoke,
withdraw or vary all or any such powers.
Vacancies 12.13 If the office of any officer of the Company becomes
vacant by reason of death, resignation, disqualification or
otherwise, the directors by resolution shall, in the case of
the Secretary, and may, in the case of any other office,
appoint a person to fill such vacancy.
13. SHARES
Allotment and 13.1 Subject to the Act and the Articles, shares in the
Issuance capital of the Company may be allotted and issued by
resolution of the directors at such times and on such
conditions and to such persons or class of persons as the
directors determine. No share may be allotted or issued as
would result in more than one-tenth of the issued shares in
the capital of the Company being held by or for the benefit
of individuals resident in the Caricom region or as would
otherwise result in contravention of the definition of
"international business company" as contained in Section
3(1) of the International Business Companies Act 1991-24 or
any amendment thereof.
Share Register 13.2 A register of shares issued by the Company shall be
kept at the registered office of the Company or at such
other place within or outside of Barbados as may from time
to time be designated by resolution of the directors.
Certificates 13.3 Every holder of shares in the capital of the Company
shall be entitled to have a certificate signed by, or in the
name of, the Company by the Chairman of the Board, if any,
or by the President or a Vice President and by the Treasurer
or an Assistant Treasurer or the Secretary or an Assistant
Secretary of the Company, representing the number of shares
owned by such person in the Company, any such signature on
the certificate may be a facsimile. If such certificate is
countersigned by a transfer agent other than the Company or
its employee or by a registrar other than the Company or its
employee, any
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other signature on the certificate may be a facsimile. In
case any officer, transfer agent, or registrar who has
signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer
agent or registrar before such certificate is issued, it may
be issued by the Company with the same effect as if such
person were such officer, transfer agent or registrar at the
date of issue.
Whenever the Company shall be authorized to issue more
than one class of shares or more than one series of any
class of shares, the certificates representing shares of any
such class or series shall set forth thereon the statements
prescribed by the laws of Barbados. Any restrictions on the
transfer or registration of transfer of any shares of any
class or series shall be noted conspicuously on the
certificate representing such shares.
Lost 13.3.1 The directors or any agent designated by the
Certificates directors may in their or his discretion direct the issuance
of a new share or other such certificate in lieu of and upon
cancellation of a certificate that has been mutilated or in
substitution for a certificate claimed to have been lost,
destroyed or wrongfully taken, on payment of such reasonable
fee and on such terms as to indemnity, reimbursement of
expenses and evidence of loss and of title as the directors
may from time to time prescribe, whether generally or in any
particular case.
Share Register 13.3.2 The certificates of shares registered in the names of
two or more persons shall be delivered to the person first
named on the register, or to his written order.
Commission on 13.4 The directors may authorize the Company to pay a
share purchase commission to any person in consideration of his purchasing
or agreeing to purchase shares of the Company from the
Company or from any other person, or procuring purchasers
for any such shares.
Ownership of 13.5 The first person named upon the register, shall as
Shares regards voting, proxy and service of notices, be deemed the
sole owner
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of any share held jointly. Any one or more joint holders may
give effectual receipts for any dividends payable in respect
of such share, and upon death of a registered joint holder
the surviving registered joint owners or owner shall be
deemed by the Company to be absolutely entitled to the
share, and the first named of such surviving joint owners
shall, for the purposes first mentioned in this article, be
deemed the sole owner of such share.
13.5.1 If several persons are registered as joint holders of
any shares they shall be severally as well as jointly liable
for any liability in respect of such shares, but service of
notices on the first names upon the Register shall, be
deemed proper services to all joint holders.
13.5.2 For the purposes of a quorum joint holders of any
shares shall be considered as one number.
13.6 Subject to the Act no person shall exercise any rights
of a member until his name shall have been entered in the
register of members.
14. TRANSFER OF SHARES
Transfer 14.1 The instrument of transfer of any share shall be signed
by the transferor and shall name the transferee, and the
transferor shall be deemed to remain the holder of such
share until the name of the transferee is entered in the
register in respect thereof.
Instrument of 14.2 Upon compliance with provisions restricting the
Transfer transfer or registration of transfer of shares, if any,
transfers or registration of transfers of shares of the
Company shall be made only on the share register of the
Company on surrender of the certificate or certificates for
such shares properly endorsed by the registered holder
thereof, or by such person's attorney thereunto authorized
by power of attorney duly executed and filed with the
Secretary of the Company or with a transfer agent or a
registrar, if any, and the payment of all taxes due thereon.
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15. INCREASE AND ALTERATION OF CAPITAL
Creation of 15.1 Subject to the Articles and Section 202 of the Act the
Shares Company may by special resolution change any maximum number
of shares the Company is authorized to issue and may create
new classes of shares and change the designation of all or
any of the Company's shares.
Rights 15.2 The new shares shall be issued upon such terms with
attaching to such preferential, deferred, qualified or special rights,
Shares privileges or conditions as the general meeting resolving
upon creating the same shall direct, and if no direction be
given, as the directors shall determine, and in particular
such shares may be issued with a preferential or qualified
right to dividends, and in the distribution of assets of the
Company, and with a special right of voting or without any
right of voting, but so that in either case no preferential
rights shall be given to any new capital as against the
holders of the preference shares then already issued unless
the same is sanctioned by the holders of the said preference
shares in accordance with the provisions of paragraph 15.3.
Modification 15.3 Whenever the capital, by reason of the issue of
of Rights preference shares or otherwise, is divided into different
classes of shares, all or any of the rights and privileges
attached to each class may be modified, commuted, affected,
abrogated or dealt with
(i) by a special resolution of the company, and
(ii) by a special resolution of the holders of the
issued shares of that class,
and all the provisions hereinafter contained as to general
meetings shall, mutatis mutandis, apply to every such
meeting, but so that the quorum thereof shall be members
holding or representing by proxy one-fifth of the nominal
amount of the issued shares of the class.
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Reduction of 15.4 The Company may reduce its capital in the manner
Capital authorized by the Act.
16. DIVIDENDS
16.1 The directors may from time to time by resolution
declare and the Company may pay dividends on the issued and
outstanding shares in the capital of the Company subject to
the provisions (if any) of the articles and Sections 51 and
52 of the Act.
16.1.1 In case several persons are registered as the joint
holders of any shares, any one of such persons may give
effectual receipts for all dividends and payments on account
of dividends.
16.1.2 Any dividend may be paid by cheque or warrant sent
through the post, or by any other means regularly used by
the Company's transfer agents in its ordinary course of
business, to the registered address of the member entitled,
or in the case of joint holders to the registered address of
that one whose name stands first on the register in respect
of the joint holding, and every cheque or warrant so sent
shall be made payable to the order of the person to whom it
is sent.
16.1.3 All dividends unclaimed for one year after having
been declared may be invested or otherwise made use of by
the directors for the benefit of the Company until claimed,
and all dividends unclaimed for six years after having been
declared may be forfeited by the directors for the benefit
of the Company.
16.2 The Company may pay a dividend by issuing fully paid
shares of the Company.
17. SHAREHOLDERS' MEETINGS
Annual Meeting 17.1 Subject to the provisions of Section 105 of the Act,
the annual meeting of the shareholders shall be held on such
day in each year and at such time as the directors may by
resolution determine at any place within Barbados or, if all
the shareholders entitled to vote at such meeting so agree,
outside Barbados; provided, however, an annual meeting of
the shareholders of the Corporation shall
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be held within 150 days after the end of each fiscal year of
the Corporation, commencing with the fiscal year ending
December 31, 1996, for the purpose of electing directors and
transacting such other business as may properly come before
the meeting.
Special 17.2 Special meetings of the shareholders may be convened by
Meeting order of the Chairman, or by the Secretary of the Company
within ten calendar days after receipt of a written request
from a majority of the total number of directors which the
Company would have if there were no vacancies at any date
and time and at any place within Barbados or, if all the
shareholders entitled to vote at such meeting so agree,
outside Barbados.
Requisitioned 17.2.1 The directors shall, on the requisition of the holder
Meeting of not less than five percent of the issued shares of the
Company that carry a right to vote at the meeting
requisitioned, forthwith convene a meeting of shareholders,
and in the case of such requisition the following provisions
shall have effect:
(1) The requisition must state the purposes of the
meeting and must be signed by the requisitionists
and sent to each director of the Company and
deposited at the Registered Office, and may
consist of several documents in like form each
signed by one or more of the requisitionists.
(2) If the directors do not, within twenty-one
days from the date of the requisition being so
deposited, proceed to convene a meeting, the
requisitionists or any of them may themselves
convene the meeting, but any meeting so convened
shall not be held after three months from the date
of such deposit.
(3) Unless sub-section (3) of Section 129 of the
Act applies, the directors shall be deemed not to
have duly convened the meeting if they do not give
such notice as is required by the Act within
fourteen days from the deposit of the requisition.
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(4) Any meeting convened under this paragraph
hereof by the requisitionists shall be called as
nearly as possible in the manner in which meetings
are to be called pursuant to the by-laws and
Divisions E and F of Part I of the Act.
(5) A requisition by joint holders of shares must
be signed by all such holders.
Notice 17.3 A printed, written or typewritten notice stating the
day, hour and place of meeting shall be given by serving
such notice on each shareholder entitled to vote at such
meeting, on each director and on the auditor of the Company
in the manner specified in paragraph 21.1 hereof, not less
than twenty-one days or more than fifty days (in each case
exclusive of the day for which the notice is delivered or
sent and of the day for which notice is given) before the
date of the meeting. Notice of a meeting at which special
business is to be transacted shall state (a) the nature of
that business in sufficient detail to permit the shareholder
to form a reasoned judgement thereon, and (b) the text of
any special resolution to be submitted to the meeting.
Waiver of 17.4 A shareholder and any other person entitled to attend a
Notice meeting of shareholders may in any manner waive notice of a
meeting of shareholders and attendance of any such person at
a meeting of shareholders shall constitute a waiver of
notice of the meeting except where such person attends a
meeting for the express purpose of objecting to the
transaction of any business on the grounds that the meeting
is not lawfully called.
Omission of 17.5 The accidental omission to give notice of any meeting
Notice or any irregularity in the notice of any meeting or the
non-receipt of any notice by any shareholder, director or
the auditor of the Company shall not invalidate any
resolution passed or any proceedings taken at any meeting of
the shareholders.
Appointment of 17.6 When the Chairman, the Deputy Chairman, the President
Chairman and the Vice President
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are absent, the persons who are present and entitled to vote
shall choose another director as Chairman of the meeting,
but if no director is present or all the directors present
decline to take the chair, the persons who are present and
entitled to vote shall choose one of their number to be
Chairman.
Votes 17.7 Subject to the Articles, each shareholder entitled to
vote in accordance with the terms of the Articles and of
these by-laws, or, with respect to the issuance of preferred
stock, in accordance with the terms of a resolution or
resolutions of the Board of Directors, shall be entitled to
one vote, in person or by proxy, for each share entitled to
vote held by such shareholder. In the election of directors,
a majority of the votes present at the meeting shall elect.
Any other action shall be authorized by a majority of the
votes cast except where the Act, the Articles or these
by-laws prescribe a different percentage of votes and/or a
different exercise of voting power. Voting by ballot shall
not be required for corporate action except as otherwise
provided by the Act or by the Articles.
17.7.1 If two or more persons hold shares jointly, one of
those holders present at a meeting of shareholders may, in
the absence of the other, vote the shares; but if two or
more of those persons who are present, in person or by proxy
vote, they must vote as one on the shares jointly held by
them.
Proxies 17.8 Every shareholder may authorize another person or
persons to act for such shareholder by proxy in all matters
in which a shareholder is entitled to participate, whether
by waiving notice of any meeting, voting or participating at
a meeting. Every proxy must be signed by the shareholder or
by such person's attorney-in-fact. No proxy shall be voted
or acted upon after three years from its date unless such
proxy provides for a longer period. A duly executed proxy
shall be irrevocable if it states that it is irrevocable
and, if, and only as long as, it is coupled with an interest
sufficient in law to support an irrevocable power. A proxy
may be made irrevocable regardless of whether the
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interest with which it is coupled is an interest in shares
or an interest in the Company generally.
Adjournment 17.9 The Chairman of any meeting may with the consent of the
meeting adjourn the same from time to time to a fixed time
and place and no notice of such adjournment need be given to
the shareholders unless the meeting is adjourned by one or
more adjournments for an aggregate of thirty days or more in
which case notice of the adjourned meeting shall be given as
for an original meeting. Any business that might have been
brought before or dealt with at the original meeting in
accordance with the notice calling the same may be brought
before or dealt with at any adjournment meeting for which no
notice is required.
Quorum 17.10 Subject to the provisions of these by-laws, the
Articles and any provision of the Act as to the vote that is
required for a specified action, the presence in person or
by proxy of the holders of a majority of the outstanding
shares of the Company entitled to vote at any meeting of
shareholders shall constitute a quorum for the transaction
of business, and the vote in person or by proxy of the
holders of a majority of the shares constituting such quorum
shall be binding on all shareholders of the Company. A
majority of the shares present in person or by proxy and
entitled to vote may, regardless of whether or not they
constitute a quorum, adjourn the meeting to another time and
place. Any business which might have been transacted at the
original meeting may be transacted at any adjourned meeting
at which a quorum is present. When a quorum is present to
organize a meeting, it is not broken by the subsequent
withdrawal of any shareholders.
Resolution in 17.11 Notwithstanding any of the foregoing provisions of
lieu of this by-law a resolution in writing signed by all the
Meeting shareholders entitled to vote on that resolution at a
meeting of the shareholders is, subject to Section 128 of
the Act, as valid as if it had been passed at a meeting of
the shareholders.
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18. ACCOUNTS AND AUDIT
Financial 18.1 At every annual meeting of the Company the directors
Statements shall lay before the shareholders the comparative financial
statements required by Section 147 of the Act, the auditors
report (if any) and any further information respecting the
financial position of the Company required by the Articles
of the Company or these by-laws. All such financial
statements, reports and information shall be made in
accordance with U.S. generally accepted accounting
principles and generally accepted auditing standards, as
applicable.
Directors 18.2 The directors of the Company must approve the financial
Approval statements and such approval must be evidenced by the
signature of at least one director.
Copies to 18.3 A copy of the financial statements together with the
Shareholders other documents referred to in paragraph 17.1 shall not less
than twenty-one days before each annual meeting be sent to
each shareholder except to a shareholder who has informed
the Company in writing that he does not wish a copy of these
statements and documents.
Copy at 18.4 A copy of the financial statements of the Company and
Registered of any of its subsidiary bodies corporate the accounts of
Office which are consolidated in the financial statements shall be
kept at the registered office of the Company.
Auditor 18.5.1 At each annual meeting of the Company the
shareholders shall by ordinary resolution appoint an
auditor.
Term of Office 18.5.2 An auditor appointed at an annual meeting shall,
unless he is removed under Section 158 of the Act, continue
in office until the close of the next annual meeting. If an
auditor is not appointed at an annual meeting the incumbent
auditor shall remain in office until his successor is
appointed.
Vacancy 18.5.3 Where an auditor ceases to hold office by reason of
death or resignation, the directors, subject to Section
159(2), shall forthwith appoint an auditor to fill the
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<PAGE>
vacancy and such appointee shall hold office for the
unexpired term of his predecessor.
Remuneration 18.5.4 The remuneration of the auditor may be fixed by
ordinary resolution of the shareholders or, if not so fixed,
it may be fixed by the directors.
19. INFORMATION AVAILABLE TO SHAREHOLDERS
19.1 Except as provided by the Act, no shareholder shall be
entitled to any information respecting any details or
conduct of the Company's business which in the opinion of
the directors it would be inexpedient in the interests of
the Company to communicate to the public.
19.2 The directors may from time to time, subject to rights
conferred by the Act, determine whether and to what extent
and at what time and place and under what conditions or
regulations the documents, books and registers and
accounting records of the Company or any of them shall be
open to the inspection of shareholders and no shareholder
shall have any right to inspect any document or book or
register or accounting record of the Company except as
conferred by statute or authorized by the directors or by a
resolution of the shareholders.
20. VOTING IN OTHER COMPANIES
20.1 All shares or debentures carrying voting rights in any
other body corporate that are held from time to time by the
Company may be voted at any and all meetings of
shareholders, debenture holders (as the case may be) of such
other body corporate and in such manner and by such person
or persons as the directors of the Company shall from time
to time determine. The officers of the Company may for and
on behalf of the Company from time to time:
(a) execute and deliver proxies; and
(b) arrange for the issuance of voting
certificates or other evidence of the right to
vote;
-25-
<PAGE>
in such names as they may determine without the necessity of
a resolution or other action by the directors.
21. NOTICES
Method of 21.1 Any notice or other document required by the Act, the
giving Regulations, the Articles or the by-laws to be sent to any
Notice shareholder, debenture holder, director or auditor may be
delivered personally or sent by prepaid mail, cable, telex
or telecopier to any such person at his latest address as
shown in the records of the Company or its transfer agent
and to any such director at his latest address as shown in
the records of the Company or in the latest notice filed
under Section 66 or 74 or the Act, and to the auditor at
this business address.
Waiver of 21.2 Notice may be waived or the time for the notice may be
Notice waived or abridged at any time with the consent in writing
of the person entitled thereto.
Undelivered 21.3 If a notice or document is sent to a shareholder or
Notices debenture holder by prepaid mail in accordance with this
paragraph and the notice or document is returned on three
consecutive occasions because the shareholder or debenture
holder cannot be found, it shall not be necessary to send
any further notices or documents to the shareholder or
debenture holder until he informs the Company in writing of
his new address.
Notice to 21.4 All notices or other documents with respect to any
first shares or debentures registered in more than one name shall
named be given to whichever of such persons is named first in the
records of the Company and any notice or other document so
given shall be sufficient notice or delivery to all the
holders of such share or debentures.
Notice binding 21.5 Subject to Section 184 of the Act, every person who by
on successors operation of law, transfer or by any other means whatsoever
in title becomes entitled to any share is bound by every notice or
other document in respect of such share that, previous to
his name and address being entered in the records of the
Company, is duly
-26-
<PAGE>
given to the person from whom he derives his title to such
share.
Deceased 21.6 Subject to Section 184 of the Act, any notice or other
document delivered or sent by prepaid mail, cable, telex or
telecopier, or left at the address of any shareholder as the
same appears in the records of the Company shall,
notwithstanding that such shareholder is deceased, and
whether or not the Company has notice of his death, be
deemed to have been duly served in respect of the shares
held by him (whether held solely or with any other person)
until some other person is entered in his stead in the
records of the Company as the holder or one of the holders
thereof and such service shall for all purposes be deemed a
sufficient service of such notice or document on his
personal representatives and on all persons, if any,
interested with him in such shares.
Signature 21.7 The signature of any director or officer of the Company
to Notice to any notice or document to be given by the Company may be
written, stamped, typewritten or printed or partly written,
stamped, typewritten or printed.
Computation 21.8 Where a notice extending over a number of days or other
of Time period is required under any provisions of the Articles or
the by-laws the day of sending the notice shall, unless it
is otherwise provided, be counted in such number of days or
other period.
Proof of 21.9 Where a notice required under paragraph 21.1 hereof is
Service delivered personally to the person to whom it is addressed
or delivered to his address as mentioned in paragraph 21.1
hereof, service shall be deemed to be at the time of
delivery of such notice.
21.9.1 Where such notice is sent by post, service of notice
shall be deemed to be effected forty-eight hours after
posting if the notice was properly addressed and posted by
prepaid mail.
21.9.2 Where the notice is sent by cable, telex or
telecopier, service is deemed to be
-27-
<PAGE>
effected on the date on which the notice is so sent.
21.9.3 A certificate of an officer of the Company in office
at the time of the making of the certificate or of any
transfer agent of shares of any class of the Company as to
facts in relation to the delivery of sending of any notice
shall be conclusive evidence of those facts.
22. CHEQUES, DRAFTS AND NOTES
22.1 All cheques, drafts or orders for the payment of money
and all notes and acceptances and bills of exchange shall be
signed by such officers or persons and in such manner as the
directors may from time to time designate by resolution.
23. EXECUTION OF INSTRUMENTS
23.1 Contracts, documents or instruments in writing
requiring the signature of the Company may be signed by a
Chairman, a Deputy Chairman, a Chief Executive Officer, a
President or a Vice-President together with the Secretary,
Assistant Secretary or the Treasurer and all contracts,
documents and instruments in writing so signed shall be
binding upon the Company without any further authorization
or formality. The directors shall have power from time to
time by resolution to appoint any officers or persons on
behalf of the Company either to sign certificates for shares
in the Company and contracts, documents and instruments in
writing generally or to sign specific contracts, documents
or instruments in writing.
23.1.1 The common seal of the Company may be affixed to
contracts, documents and instruments in writing signed as
aforesaid or by any officers or persons specified in
paragraph 23.1 hereof.
23.1.2 Subject to Section 134 of the Act, a Chairman, a
Deputy Chairman, a Chief Executive Officer, a President or a
Vice-President together with the Secretary, Assistant
Secretary or the Treasurer shall have
-28-
<PAGE>
authority to sign and execute (under the seal of the Company
or otherwise) all the instruments that may be necessary for
the purpose of selling, transferring, exchanging, converting
or conveying any such shares, stocks, bonds, debentures,
rights, warrants or other securities.
24. SIGNATURES
24.1 The signature of a Chairman, a Deputy Chairman, a
President, a Vice President, the Secretary, the Treasurer,
an Assistant Secretary or an Assistant Treasurer or any
director of the Company or of any officer or person,
appointed pursuant to paragraph 21.1 hereof by resolution of
the directors may, if specifically authorized by resolution
of directors, be printed, engraved, lithographed or
otherwise mechanically reproduced upon any certificate for
shares in the Company or contract, document or instrument in
writing, bond, debenture or other security of the Company
executed or issued by or on behalf of the Company. Any
document or instrument in writing on which the signature of
any such officer or person is so reproduced shall be deemed
to have been manually signed by such officer or person whose
signature is so reproduced and shall be as valid to all
intents and purposes as if such document or instrument in
writing had been signed manually and notwithstanding that
officer or person whose signature is so reproduced has
ceased to hold office at the date on which such document or
instrument in writing is delivered or issued.
25. FINANCIAL YEAR
25.1 The directors may from time to time by resolution
establish the financial year of the company.
ENACTED this _____ day of ________________ 19__.
- ------------------------- -------------------------
Chairman Assistant Secretary
-29-
EXHIBIT 4.1
COMMON STOCK COMMON STOCK
INCORPORATED UNDER THE LAWS CUSIP P5744 10 2
OF BARBADOS SEE REVERSE FOR CERTAIN DEFINITIONS
NUMBER SHARES
INTERPOOL LIMITED
THIS CERTIFIES THAT
IS THE OWNER OF
CERTIFICATE OF STOCK
fully paid and non-assessable shares of the common stock of Interpool Limited,
no par value, transferable on the books of the Corporation by the holder hereof
in person or by duly authorized attorney, upon surrender of this certificate
properly endorsed.
This certificate is not valid until countersigned by the Transfer Agent and
registered by the Registrar. Witness the facsimile seal of the Corporation and
the facsimile signatures of its duly authorized officers.
Dated:
COUNTERSIGNED AND REGISTERED:
AMERICAN STOCK TRANSFER & TRUST COMPANY
TRANSFER AGENT AND REGISTRAR
By: AUTHORIZED SIGNATURE
/s/ Arthur L. Burns /s/ Martin Tuchman
--------------------- ---------------------------------
SECRETARY CHAIRMAN OF THE BOARD OF DIRECTORS
AND CHIEF EXECUTIVE OFFICER
[SEAL]
<PAGE>
The shares of Common Stock represented by this certificate are subject to
restrictions on transfer. In order to maintain the Company's status as a
Barbados International Business Company, not more than 10% of the capital stock
of the Company may be held by persons who are residents of the Caricom region,
which includes Barbados and 11 other island nations in the Caribbean. No
allotment or transfer of shares of Common Stock shall be made and no transfer of
shares shall be registered, if such allotment or transfer would disqualify the
Company from being a Barbados International Business Company, and any such
allotment or registration is deemed to be null and valid.
A full statement of the terms and conditions as to voting powers and
of the limitations, conditions, preferences, qualifications and special and
relative rights with respect to each class of stock of the Corporation will be
furnished by the Corporation, without charge to any stockholder who so requests,
upon application to the Transfer Agent named on the Face hereof or to the office
of the Corporation, attention Secretary.
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common
UNIF GIFT MIN ACT - __________Custodian__________
(Cust) (Minor)
under Uniform Gifts to Minors
Act__________________________
(State)
Additional Abbreviations may also be used though not in the above list.
For Value Received, ______ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
________________________________________________________________________________
________________________________________________________________________________
__________________________________________________________________________Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
________________________________________________________________________Attorney
to transfer the said stock on the Books of the within named Corporation with
full power of substitution in the premises.
Dated_________________________
_____________________________________________
Signature(s) Guaranteed:
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKER, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM PURSUANT TO
S.E.C. RULE 17 AD-15.
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the Certificate, in every particular, without
alteration or enlargement or any change whatever.
EXHIBIT 10.12
INTERPOOL, INC.
INTERPOOL LIMITED
TRAC LEASE, INC.
$43,000,000 6.15%
GUARANTEED SECURED NOTES SERIES A
DUE NOVEMBER 30, 2003
$15,000,000 5.80%
GUARANTEED SECURED NOTES SERIES B
DUE NOVEMBER 30, 1998
===============================
NOTE PURCHASE AGREEMENT
===============================
Dated November 30, 1993
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. AUTHORIZATION OF ISSUE OF NOTES . . . . . . . . . . . . . . . 1
1.1 Issuance of Notes . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Series A Notes . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Series B Notes . . . . . . . . . . . . . . . . . . . . . . . . 1
1.4 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Interest Rate Calculation . . . . . . . . . . . . . . . . . . 2
SECTION 2. PURCHASE AND SALE OF NOTES; USE OF PROCEEDS . . . . . . . . . 2
2.1 Purchase and Sale of Notes . . . . . . . . . . . . . . . . . . 2
2.2 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 3. THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 4. CONDITIONS OF CLOSING . . . . . . . . . . . . . . . . . . . . 3
4.1 Transaction Documents . . . . . . . . . . . . . . . . . . . . 3
4.2 Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . . 3
4.3 Representations and Warranties, No Default . . . . . . . . . . 3
4.4 Evidence of Title to Collateral, Absence of Liens on
Collateral and Collateral Certificate . . . . . . . . . . . . 4
4.5 Corporate Proceedings and Documents . . . . . . . . . . . . . 4
4.6 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.7 UCC Financing Statements; Applications to Note Liens on
Certificates of Title; Railcar Security Agreement . . . . . . 5
4.8 Purchase Permitted By Applicable Laws . . . . . . . . . . . . 5
4.9 Sale of Notes to Other Purchasers . . . . . . . . . . . . . . 5
4.10 Other Documents . . . . . . . . . . . . . . . . . . . . . . . 5
4.11 Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . 5
4.12 Legality . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.13 Information Certificate; Standard & Poor's Rating; Private
Placement Number . . . . . . . . . . . . . . . . . . . . . . . 6
4.14 Placement Agent Letters . . . . . . . . . . . . . . . . . . . 6
4.15 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.16 Compliance with This Agreement . . . . . . . . . . . . . . . . 7
SECTION 5. REPAYMENT; PREPAYMENT; ASSUMPTION OF NOTES;
RELEASE OF COLLATERAL . . . . . . . . . . . . . . . . . . . 7
5.1 Repayment of Principal and Interest on the Notes . . . . . . . 7
5.2 Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.3 Method of Payment . . . . . . . . . . . . . . . . . . . . . . 8
5.4 Registration of Notes; Transfer and Exchange of Notes . . . . 8
5.5 Optional Prepayments . . . . . . . . . . . . . . . . . . . . . 10
5.6 Interpool's Assumption of Notes; Pledge of Equipment . . . . . 11
5.7 Termination of Collateral . . . . . . . . . . . . . . . . . . 14
i
<PAGE>
Page
----
SECTION 6. RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE COLLATERAL . . . . . . . . . . . . . . . 18
6.1 Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.2 Payment of Moneys Received With Respect to the Collateral . . 18
SECTION 7. REPRESENTATIONS AND WARRANTIES OF ISSUERS . . . . . . . . . . 18
7.1 Organization and Power . . . . . . . . . . . . . . . . . . . . 18
7.2 Trademarks, Licenses, etc. . . . . . . . . . . . . . . . . . . 19
7.3 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.4 Business . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.5 Financial Statements . . . . . . . . . . . . . . . . . . . . . 19
7.6 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7.7 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7.8 Title, Liens . . . . . . . . . . . . . . . . . . . . . . . . . 20
7.9 Consent, Approval . . . . . . . . . . . . . . . . . . . . . . 20
7.10 Compliance with Other Instruments . . . . . . . . . . . . . . 21
7.11 Corporate Existence; Place of Business; Books and Records . . 21
7.12 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.13 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . 22
7.14 Governmental Licenses . . . . . . . . . . . . . . . . . . . . 22
7.15 Event of Default . . . . . . . . . . . . . . . . . . . . . . . 22
7.16 Offering of the Notes . . . . . . . . . . . . . . . . . . . . 22
7.17 Margin Securities . . . . . . . . . . . . . . . . . . . . . . 23
7.18 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . 23
7.19 Liabilities; Business . . . . . . . . . . . . . . . . . . . . 23
7.20 Investment Company Act . . . . . . . . . . . . . . . . . . . . 23
7.21 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.22 Foreign Assets Control Regulations . . . . . . . . . . . . . . 24
7.23 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.24 Financed Equipment . . . . . . . . . . . . . . . . . . . . . . 24
7.25 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 8. REPRESENTATIONS AND WARRANTIES OF PURCHASERS . . . . . . . . . 24
8.1 Purchase for Investment . . . . . . . . . . . . . . . . . . . 24
8.2 Taxpayer Status . . . . . . . . . . . . . . . . . . . . . . . 24
8.3 Source of Funds . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 9. COVENANTS OF ISSUERS . . . . . . . . . . . . . . . . . . . . . 26
9.1 Maintenance of Corporate Existence . . . . . . . . . . . . . . 26
9.2 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.3 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.4 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.5 Preservation of Assets . . . . . . . . . . . . . . . . . . . . 27
9.6 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.7 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.8 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.9 Line of Business . . . . . . . . . . . . . . . . . . . . . . . 29
ii
<PAGE>
Page
----
9.10 Chief Offices; Places of Business . . . . . . . . . . . . . . 29
9.11 Financial Statements . . . . . . . . . . . . . . . . . . . . . 29
9.12 Books and Records . . . . . . . . . . . . . . . . . . . . . . 31
9.13 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.14 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
9.15 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . 32
9.16 Further Assurances . . . . . . . . . . . . . . . . . . . . . . 32
9.17 Government Contracts . . . . . . . . . . . . . . . . . . . . . 32
9.18 Sell, Merge, Consolidate, etc. . . . . . . . . . . . . . . . . 33
9.19 Financial Covenants . . . . . . . . . . . . . . . . . . . . . 34
9.20 Payment of Obligations . . . . . . . . . . . . . . . . . . . . 35
9.21 Notice of Default . . . . . . . . . . . . . . . . . . . . . . 35
9.22 Lock Box . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
9.23 Additional Costs . . . . . . . . . . . . . . . . . . . . . . . 36
9.24 Transactions with Related Parties . . . . . . . . . . . . . . 37
9.25 Permitted Investments . . . . . . . . . . . . . . . . . . . . 37
9.26 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
9.27 Acquisition of Notes . . . . . . . . . . . . . . . . . . . . . 39
9.28 Private Offering . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 10. DEFAULT; REMEDIES OF THE PURCHASERS . . . . . . . . . . . . . 39
10.1 Occurrence of Event of Default . . . . . . . . . . . . . . . . 39
10.2 Action Upon Event of Default . . . . . . . . . . . . . . . . . 41
10.3 Authorized to Execute Bills of Sale . . . . . . . . . . . . . 43
10.4 Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . 43
10.5 Discontinuance of Proceedings . . . . . . . . . . . . . . . . 44
10.6 Agreements with respect to Remedies and Defaults . . . . . . . 44
10.7 Waiver of Existing Defaults . . . . . . . . . . . . . . . . . 44
10.8 Rights of Purchasers to Receive Payment . . . . . . . . . . . 45
SECTION 11. EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 12. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 13. PURCHASERS AND NOTES . . . . . . . . . . . . . . . . . . . . . 46
13.1 Withholding Taxes; Information Reporting . . . . . . . . . . . 46
13.2 Satisfaction and Discharge of Agreement; Termination of
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 47
13.3 Amendments to This Agreement With Consent of
Purchasers . . . . . . . . . . . . . . . . . . . . . . . . . . 47
13.4 Notification on or Exchange of Notes . . . . . . . . . . . . . 48
SECTION 14. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 48
14.1 Oral Modification, Termination, etc. . . . . . . . . . . . . . 48
14.2 Successors and Assigns . . . . . . . . . . . . . . . . . . . . 48
14.3 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
14.4 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 48
14.5 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
14.6 Governing Law; Severability . . . . . . . . . . . . . . . . . 49
14.7 WAIVER OF JURY TRIAL; SUBMISSION TO JURISDICTION . . . . . . . 49
SECTION 15. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 50
iii
<PAGE>
LIST OF EXHIBITS
----------------
Exhibit A-1 Form of Series A Note
Exhibit A-2 Form of Series B Note
Exhibit B Form of Agency Agreement
Exhibit C Form of Collateral Certificate
Exhibit D Form of Guaranty
Exhibit E Form of Railcar Security Agreement
Exhibit F Form of Security Agreement
Exhibit G Form of Assumption Agreement
Exhibit H Form of Information Certificate
iv
<PAGE>
LIST OF SCHEDULES
-----------------
Schedule 1 -- Purchasers Schedules
Schedule 2 -- Issuers Schedule
Schedule 3 -- Names, Addresses of and
Wiring Instructions for Each Purchaser
Schedule 7.1 -- Issuers' Jurisdictions of
Incorporation; Other Jurisdictions where
Issuers are Qualified to do Business;
Chief Offices of Issuers and Locations
of Issuers' Books and Records;
Subsidiaries of Issuers; Capital Stock
of Issuers
Schedule 7.5 -- Indebtedness of Issuers
Schedule 8.2 -- Taxpayer Status of Purchasers
v
<PAGE>
NOTE PURCHASE AGREEMENT
November 30, 1993
To Each of the Purchasers Named in the
Purchaser Schedule Attached Hereto as
Schedule 1
Ladies and Gentlemen:
Interpool, Inc., a Delaware corporation ("Interpool"), Interpool Limited,
a Barbados corporation ("Ltd.") and Trac Lease, Inc., a Delaware corporation
("Trac" and together with Interpool and Ltd., each, an "Issuer" and
collectively, the "Issuers"), hereby agree with the purchasers named in Schedule
1 attached hereto (the "Purchasers") as follows:
SECTION 1. AUTHORIZATION OF ISSUE OF NOTES.
-------------------------------
1.1 Issuance of Notes. (a) The Issuers will authorize the issuance and
-----------------
sale to the Purchasers of secured promissory notes in the aggregate principal
amount of $58,000,000.00, in two series (Series A and Series B) (the "Series")
pursuant to Section 1.2 and Section 1.3 and as indicated on Schedule 1 attached
----------- -----------
hereto, each of which Notes is to be dated the Closing Date and (b) Interpool
will authorize the assumption by Interpool of any or all the Notes.
1.2 Series A Notes. Interpool will issue Series A Notes in the
--------------
aggregate principal amount of $11,862,068.96; Ltd. will issue Series A Notes in
the aggregate principal amount of $19,275,862.08; and Trac will issue Series A
Notes in the aggregate principal amount of $11,862,068.96, which Notes shall be
in the aggregate principal amount of $43,000,000.00, shall mature on the tenth
(10th) anniversary of the Closing Date, shall bear interest on the unpaid
balance thereof from the Closing Date until the principal thereof shall become
due and payable at the rate of 6.15% per annum quarterly in arrears commencing
on February 28, 1994 and on overdue payments at the rate specified therein, and
shall be substantially in the form of Exhibit A-1 attached hereto (hereinafter
referred to as "Series A Notes").
1.3 Series B Notes. Interpool will issue Series B Notes in the
--------------
aggregate principal amount of $4,137,931.04; Ltd. will issue Series B Notes in
the aggregate principal amount of $6,724,137.92; and Trac will issue Series B
Notes in the aggregate principal amount of $4,137,931.04, which Notes shall be
in the aggregate principal amount of $15,000,000.00, shall mature on the fifth
(5th)
<PAGE>
anniversary of the Closing Date, shall bear interest on the unpaid balance
thereof from the Closing Date until the principal thereof shall become due and
payable at the rate of 5.80% per annum quarterly in arrears commencing on
February 28, 1994 and on overdue payments at the rate specified therein, and
shall be substantially in the form of Exhibit A-2 attached hereto (hereinafter
referred to as "Series B Notes").
1.4 Notes. The term "Notes" as used herein shall include each such
-----
Series A Note and Series B Note delivered pursuant to any provision of this
Agreement and each such Series A Note and Series B Note delivered in
substitution or exchange for any other Note pursuant to any such provision.
1.5 Interest Rate Calculation. Interest shall be calculated on the
-------------------------
basis of a 360-day year of twelve 30-day months.
SECTION 2. PURCHASE AND SALE OF NOTES; USE OF PROCEEDS.
-------------------------------------------
2.1 Purchase and Sale of Notes. Each of the Issuers hereby agrees to
--------------------------
sell to each Purchaser and, subject to the terms and conditions herein set
forth, each Purchaser agrees to purchase from such Issuer one or more Series A
Notes or Series B Notes each in the respective principal amount set forth
opposite such Issuer's and Purchaser's respective name on Schedule 1 attached
hereto at 100% of such aggregate principal amount. Each purchase is a separate
and several purchase.
2.2 Use of Proceeds. The proceeds of the Notes will be used by the
---------------
Issuers (i) to repay up to $10,000,000.00 of indebtedness secured by Used
Equipment, (ii) to acquire New Equipment and (iii) for the Issuers' general
corporate purposes.
SECTION 3. THE CLOSING. The closing (the "Closing") of the issuance and
-----------
sale of the Notes to be purchased by the Purchasers shall take place at the
offices of Rogers & Wells, 200 Park Avenue, New York, New York, commencing at
9:00 a.m., New York time, on November 30, 1993 or such other date and time as
shall be agreed between the Issuers and the Majority in Interest (the "Closing
Date"). At the Closing, each Issuer will deliver to each Purchaser or a nominee
designated by such Purchaser and set forth in Schedule 3 attached hereto (each a
"Nominee" and, collectively, the "Nominees") one or more Notes as specified in
Section 1.2 and Section 1.3 and on Schedule 1 attached hereto registered on the
- ----------- -----------
books of such Issuer in such Purchaser's name or in the name of such Nominee
specifying the Series of each Note and evidencing the aggregate principal amount
of such Purchaser's Commitment in respect of the Series of which such Note is a
part against payment by such Purchaser of the purchase price for each such Note
to be purchased by such Purchaser by wire transfer thereof in immediately
-2-
<PAGE>
available funds to account number 0170-9644 for Interpool; account number
0174-3180 for Ltd.; and account number 0170-9660 for Trac at Corestates Bank,
N.A., Philadelphia, Pennsylvania 19178, ABA # 031-000-011, on the Closing
Date. If at the Closing any Issuer shall fail to tender to any Purchaser the
relevant Notes, as provided herein, or any of the conditions specified in
Section 4 shall not have been fulfilled to the reasonable satisfaction of
- ---------
each of the Purchasers, each Purchaser shall, at its option, be relieved of
its obligations under this Agreement, without thereby waiving any other
rights such Purchasers may have by reason of such failure or nonfulfillment.
If at the Closing each Purchaser does not provide the purchase price for its
respective Note(s), then the other Purchasers may, but shall not be obligated
to, purchase the Notes to be issued to it by wiring funds to the respective
Issuer.
SECTION 4. CONDITIONS OF CLOSING. The obligation of each of the
---------------------
Purchasers to purchase and pay for the Notes being purchased by such Purchaser
hereunder is subject to the satisfaction, on or before the Closing Date, of the
following conditions:
4.1 Transaction Documents. The Purchasers and the Collateral Agent
---------------------
shall have received a fully executed counterpart of each of the Transaction
Documents, each of which shall be in full force and effect and no term or condi-
tion thereof shall have been amended, modified or waived, and the transactions
contemplated therein to be consummated hereunder and thereunder (including the
payment of all fees and other charges) on or prior to the Closing shall have
been consummated.
4.2 Legal Opinions. The Purchasers and the Collateral Agent shall have
--------------
received a legal opinion from each of (a) DeCampo, Diamond & Ash, special
counsel to the Issuers and the Guarantor; (b) Arthur Burns, Esq., general
counsel to the Issuers and the Guarantor; (c) David King, Esq., special Barbados
counsel to Ltd.; (d) Rogers & Wells, special counsel to the Purchasers; and
(e) Ray, Quinney & Nebeker, counsel to the Collateral Agent (with a copy of such
opinion to be delivered to the Issuers), all of which legal opinions shall be in
form and substance satisfactory to the Purchasers.
4.3 Representations and Warranties, No Default. The representations and
------------------------------------------
warranties contained in Section 7 shall be true and correct and the conditions
---------
set forth in this Section 4 shall have been satisfied on and as of the Closing
---------
Date as if restated at and as of the Closing Date, there shall exist on the
Closing Date no Default or Event of Default, and each of the Issuers shall have
delivered to the Purchasers an Officer's Certificate, dated the Closing Date, to
each such effect.
-3-
<PAGE>
4.4 Evidence of Title to Collateral, Absence of Liens on Collateral and
-------------------------------------------------------------------
Collateral Certificate.
- ----------------------
(a) The Purchasers shall have received true, correct and complete
copies of the certificates of title for the Chassis manufactured after 1974
included in the Collateral.
(b) The Purchasers, shall have received: (i) to the extent
reasonably available, evidence of title to the Containers included in the
Collateral showing that the relevant Issuer has good and marketable title to
such Containers; (ii) search reports of the records of the applicable offices
where UCC financing statements, Federal tax liens and judgments are filed
showing that such Containers are free and clear of liens of record; (iii) an
affidavit executed by an officer of the relevant Issuer of such Issuer's good
and marketable title to such Containers free and clear of liens of record, which
affidavit shall be in form and substance satisfactory to the Purchasers and
their special counsel; and (iv) a legal opinion of Arthur Burns, Esq., general
counsel to the Issuers, in form and substance satisfactory to the Purchasers and
their special counsel, as to the relevant Issuer's having good and marketable
title to such Containers free and clear of liens of record.
(c) The Purchasers shall have received search reports of the
records of the Interstate Commerce Commission that the relevant Issuers have
good and marketable title to the Railcars included in the Collateral free and
clear of liens of record.
(d) The Purchasers shall have received a Collateral Certificate
executed by an officer of each Issuer with respect to all the Collateral
referred to in paragraphs (a), (b) and (c) above.
4.5 Corporate Proceedings and Documents. Each Issuer shall have taken
-----------------------------------
all necessary corporate action to authorize the transactions contemplated by the
Transaction Documents to the reasonable satisfaction of the Purchasers and their
counsel, and the Purchasers and their counsel shall have received evidence of
such proceedings, together with such other corporate documents and certificates
reasonably requested by the Purchasers and their special counsel including,
without limitation, charter documents, certificates of good standing and
certificates of incumbency of officers, in form and substance satisfactory to
the Purchasers and their counsel.
4.6 Taxes. All Taxes, fees and other charges payable in connection with
-----
the execution, delivery, recording, publishing and filing of the Transaction
Documents, and the issue, sale and delivery of the Notes to be delivered on the
Closing Date shall
-4-
<PAGE>
have been paid in full by the Issuers and the Purchasers and their special
counsel shall have received evidence of any such payment or arrangements for any
such payment satisfactory to the Purchasers and their counsel.
4.7 UCC Financing Statements; Applications to Note Liens on Certificates
--------------------------------------------------------------------
of Title; Railcar Security Agreement. All UCC financing statements, naming the
- ------------------------------------
relevant Issuer, as debtor, and the Collateral Agent, as secured party, all
certificates of title applications to note the Lien of the Collateral Agent in
any Collateral covered by certificates of title, the Railcar Security Agreement
and all other documents and instruments required under other applicable laws,
shall have been duly executed and delivered to special counsel to the Purchasers
and the Collateral Agent, in appropriate form for filing together with the
applicable filing fees with respect thereto, in all jurisdictions that the
Purchasers deem necessary or desirable in order to perfect the Liens of the
Collateral Agent on behalf of the Purchasers in the Collateral.
4.8 Purchase Permitted By Applicable Laws. The purchase of and payment
-------------------------------------
for each of the Notes to be purchased by the relevant Purchasers on the Closing
Date on the terms and conditions herein provided (including the use of the
proceeds of such Notes by the Issuers pursuant to Section 2.2) shall not violate
-----------
any law or governmental regulation in any jurisdiction to which any Purchaser is
subject and shall not subject any Purchaser or the Collateral Agent to any Tax,
penalty, liability or to jurisdiction as a domiciliary or resident of or other
onerous condition under or pursuant to any applicable law or governmental
regulation in any jurisdiction, and such Purchaser shall have received such
certificates, legal opinions or other evidence as it or its special counsel may
request to establish compliance with this condition.
4.9 Sale of Notes to Other Purchasers. Simultaneously with the purchase
---------------------------------
of and payment for Notes by each Purchaser, all of the other Notes to be issued
to, and purchased and paid for by, the other Purchasers, as set forth on
Schedule 1 attached hereto, shall be issued to, and purchased and paid for by,
such other Purchasers.
4.10 Other Documents. The Purchasers and the Collateral Agent shall have
---------------
received all such other agreements, documents, instruments and certificates and
evidence that all action shall have been taken as is reasonably requested by the
Purchasers or their special counsel in order to effect the transactions
contemplated hereby and by the other Transaction Documents.
4.11 Legal Matters. All legal matters incident to the purchase of the
-------------
Notes, the Collateral and the transactions relating thereto shall be
satisfactory to counsel for the Purchasers and the Collateral Agent.
-5-
<PAGE>
4.12 Legality. The Notes shall on the Closing Date qualify as a legal
--------
investment for insurance companies under applicable insurance law (without
recourse to laws permitting limited investments by insurance companies without
restriction as to the character of the particular investment) and the Purchasers
shall have received a certificate from the Issuers as to factual matters as the
Purchasers or their counsel may reasonably request, to establish compliance with
this condition.
4.13 Information Certificate; Standard & Poor's Rating;
--------------------------------------------------
Private Placement Number.
------------------------
(a) Information Certificate. The Issuers shall have completed and
-----------------------
delivered to the Purchasers the information certificate in the form of Exhibit H
attached hereto, with a copy of the Issuers' most recent audited annual
financial statements attached thereto, which certificate and statements the
Purchasers have informed the Issuers may be used as a basis for filings which
the Purchasers may be required to make with certain regulatory bodies and with
the National Association of Insurance Commissioners (the "NAIC").
(b) Standard & Poor's Rating. The Purchasers and their special
------------------------
counsel shall have received evidence satisfactory to the Purchasers and their
special counsel that the Notes shall have been rated PPR2+ or better by Standard
& Poor's.
(c) Private Placement Number. The Notes shall each have received
------------------------
a private placement number from Standard & Poor's Corporation CUSIP Service
Bureau.
4.14 Placement Agent Letters. The Issuers, Issuers' counsel, the
-----------------------
Purchasers and the Purchasers' special counsel shall have received letters from
SBCI Swiss Bank Corporation Investment banking Inc. and Furman Selz Incorporated
(the "Placement Agents"), placement agents with respect to the Notes, which
letter shall be in form and substance satisfactory to the addressees thereof, to
the effect that the offering of the Notes has been a private offering as set
forth in Section 7.16.
------------
4.15 Expenses. At the Closing, upon presentation of invoices therefor,
--------
the Issuers shall pay all fees and expenses relating to this Agreement, all
other Transaction Documents or the transactions contemplated hereunder and
thereunder including but not limited to:
(a) the reasonable fees and disbursements of all the Purchasers'
and the Collateral Agent's special counsel;
-6-
<PAGE>
(b) all costs and expenses relating to this Agreement, all other
Transaction Documents, the transactions contemplated hereunder and thereunder
and the cost of the issuance, purchase and delivery of the Notes;
(c) any broker's fees or finder's fees and placement costs of the
Placement Agents and any other Persons who acted as broker or placement agent
for or on behalf of an Issuer or who was retained by an Issuer to so act
relating to the sale of the Notes hereunder; and
(d) all costs and expenses associated with obtaining a private
placement number for the Notes.
4.16 Compliance with This Agreement. The Issuers shall have performed
------------------------------
and complied with all agreements and conditions contained herein or in the other
Transaction Documents which are required to be performed or complied with by the
Issuers before or at the Closing Date to the satisfaction of the Purchasers and
their special counsel.
SECTION 5. REPAYMENT; PREPAYMENT; ASSUMPTION OF NOTES;
RELEASE OF COLLATERAL.
-------------------------------------------
5.1 Repayment of Principal and Interest on the Notes.
------------------------------------------------
(a) Each of the Issuers shall pay (i) principal of the Series A
Notes issued by it in quarterly installments on the dates and in the amounts set
forth in Schedule 1 attached to such Series A Notes, in arrears, and
(ii) principal of the Series B Notes issued by it in full on the fifth
anniversary of the Closing Date.
(b) The Issuers shall pay interest on the outstanding principal
balance of each Note issued by it on the dates, and at the rates, set forth in
such Note.
(c) If the date that any payment under the Notes is due is other
than a Business Day, the amount of principal and interest otherwise payable on
such date shall be payable on the next succeeding Business Day together with
interest accrued on the unpaid principal through such next succeeding Business
Day.
5.2 Maturity.
--------
(a) The entire unpaid principal amount of the Series A Notes,
together with accrued and any remaining unpaid interest thereon, shall be due
and payable on the tenth (10th) anniversary of the Closing Date, subject to
acceleration or prepayment as hereinafter provided.
-7-
<PAGE>
(b) The entire unpaid principal amount of the Series B Notes,
together with any remaining accrued and unpaid interest thereon, shall be due
and payable on the fifth (5th) anniversary of the Closing Date, subject to
acceleration or prepayment as hereinafter provided.
5.3 Method of Payment. All payments (including optional prepayments
-----------------
pursuant to Section 5.5) by the Issuers on account of the Notes shall be payable
-----------
by wire transmittal thereof in immediately available funds to the Purchasers'
accounts set forth on Schedule 3 attached hereto or as the Purchasers shall
specify in writing to the Issuers from time to time. Each of the Purchasers
agrees that in the event it shall sell or transfer such Note(s) (a) it shall,
prior to the delivery of such Note(s) (unless it shall have already done so),
make a notation thereon of all principal, if any, prepaid on such Note(s) and
shall also note thereon the date, if any, to which interest shall have been paid
on such Note(s) and (b) it shall promptly notify the Issuers of the name and
address of the transferee of any such Note(s) so transferred.
5.4 Registration of Notes; Transfer and Exchange of Notes.
-----------------------------------------------------
(a) Each Issuer shall cause to be kept at its office, maintained
pursuant to Section 9.10, a register (each, a "Register") for the registration
------------
and transfer of Notes. The name and address of each holder of one or more
Notes, each transfer thereof and the name and address of each transferee of such
Notes shall be registered in each Register. The Person in whose name any Note
shall be registered shall be deemed and treated as the owner and holder thereof
for all purposes of this Agreement.
(b) A Purchaser intending to transfer a Note shall surrender such
Note duly endorsed, or accompanied by a duly executed written instrument of
transfer, together with a written request for the issuance of a new Note, and
the name and address of the intended transferee and shall provide such further
information relating to such transferee and such transfer as the relevant Issuer
shall reasonably request. The Notes have not been registered under the
Securities Act and may not be resold or transferred except as provided in this
Section 5.4. The Notes shall not be transferred to any Person whose principal
- -----------
business is operating or leasing chassis, railcars or containers. No transfer
of the Notes may be made unless pursuant to an effective registration statement
under the Securities Act or unless exempt from the registration requirements
under the Securities Act. No Issuer shall be obligated to register the Notes
under the Securities Act or any other securities law. The Notes will not be
offered or sold in, nor will any offering material relating to the Notes be
distributed in Canada nor will any resale or other transfer in Canada be made
except in compliance with applicable
-8-
<PAGE>
securities laws of the dominions or provinces of Canada (including any
exemptions thereunder).
In connection with the transfer of any Note pursuant to the
foregoing and upon surrender of any Note at the office of the Issuer maintained
pursuant to Section 9.10, such Issuer, at the request of the holder thereof,
------------
shall execute and deliver, at such Issuer's expense (except as provided below),
new Notes in exchange therefor, in denominations of at least $100,000 (except as
may be necessary to reflect any principal amount not evenly divisible by
$100,000), in an aggregate principal amount equal to the unpaid principal amount
of the surrendered Note. Each such new Note shall be payable to such transferee
and shall be substantially in the form of the Note set out in Exhibit A-1 or
Exhibit A-2 to this Agreement, as applicable. Each such new Note shall be dated
and bear interest from the date to which interest shall have been paid on the
surrendered Note or dated the date of the surrendered Note if no interest shall
have been paid thereon. Simultaneously with the transfer of any Note issued by
Ltd. or Trac to a transferee pursuant to the foregoing provisions of this
Section 5.4(b), upon the request of the transferee or the Purchaser transferor,
- --------------
Interpool shall issue a Guaranty to and in favor of such transferee and all
other obligations of Ltd. or Trac to such transferee, as the case may be, which
Guaranty shall be in the form of Exhibit D hereto and shall be secured by the
Collateral granted by Interpool pursuant to the Security Agreement and the
Railcar Security Agreement executed and delivered by Interpool to the Collateral
Agent provided that the failure of the transferee or the Purchaser transferor to
request such a Guaranty shall not affect or limit Interpool's Obligations in
favor of such Purchaser transferor under its Guaranty or under this Agreement or
the other Transaction Documents which shall inure to the benefit of such
transferee.
(c) Upon receipt by the Issuer of evidence reasonably satisfactory
to it of (i) the ownership and (ii) the loss, theft, destruction or mutilation,
of any Note, and
(A) in the case of loss, theft or destruction, an indemnity
reasonably satisfactory to it (provided that if the holder of
the Note is an institutional investor which is a "Qualified
Institutional Buyer" such institutional investor's own
agreement of indemnity shall be deemed to be satisfactory), or
(B) in the case of mutilation, upon surrender and cancellation
thereof,
the Issuer shall execute and deliver, in lieu thereof, a new Note of like tenor,
dated and bearing interest from the date to which
-9-
<PAGE>
interest shall have been paid on such lost, stolen, destroyed or mutilated Note
or dated the date of such lost, stolen, destroyed or mutilated Note if no
interest shall have been paid thereon.
5.5 Optional Prepayments.
--------------------
(a) Prepayment. Each Issuer shall have the right to prepay the
----------
principal of Notes issued by such Issuer at any time and from time to time in
whole or in part together with a Make Whole Premium. The proceeds of any such
prepayment of the relevant Notes shall be applied ratably over all Notes issued
by such Issuer and then applied to the prepayment of each Series of Notes on a
pro rata basis in inverse order of maturity thereof without priority of any one
- --- ----
such Note over any other in accordance with the terms of this Agreement.
(b) Notice of Optional Prepayments; Officers' Certificate. Each
-----------------------------------------------------
Issuer will give each Purchaser written notice of each optional prepayment under
Section 5.5(a) not less than thirty (30) days and not more than sixty (60) days
- --------------
prior to the date fixed for such prepayment, in each case specifying such date,
the aggregate principal amount of the Notes to be prepaid, the principal amount
of each Note held by such Purchaser to be prepaid, the aggregate accrued and
unpaid interest due thereon calculated to but not including the date of
prepayment, an estimate of the aggregate Make Whole Premium due with respect to
such prepayment, calculations showing how such estimated Make Whole Premium was
calculated and the pro rata amounts of principal, accrued interest and Make
Whole Premium to be received by each Purchaser in connection with such
prepayment. Each Purchaser shall receive on the Business Day immediately
preceding the date scheduled for any such prepayment, an Officer's Certificate
of the Issuers certifying that all conditions of such prepayment have been
fulfilled and specifying the particulars of such fulfillment, and, setting forth
the calculations used in computing the amount of the Make Whole Premium and, a
copy of the market data used in determining the Treasury Yield in accordance
with the terms of this Agreement. In the event that there shall have been a
partial prepayment of the Notes under Section 5.5(a), such Issuer shall promptly
--------------
give notice to the Purchasers, accompanied by an officers' certificate setting
forth the principal amount of each of the Notes that was prepaid and specifying
how each such amount was determined, and if some but not all of the Series A
Notes or Series B Notes, as the case may be, were prepaid, setting forth the
reduced amount of each required payment thereafter becoming due with respect to
each of the Series A Notes and Series B Notes under Section 5.1(a), and
--------------
certifying that such reduction has been computed in accordance with such
Section.
-10-
<PAGE>
(c) Making of Prepayment. On or before the Prepayment Date, such
--------------------
Issuer (or any Persons on behalf of such Issuer) shall pay or cause to be paid
to the relevant Purchaser by 12:00 noon (New York City time) on the Prepayment
Date in immediately available funds the amount to be prepaid with respect to the
Notes in accordance with Section 5.3.
-----------
(d) Notes Payable on Prepayment Date. If notice of prepayment has
--------------------------------
been given in accordance with Section 5.5(b), the amount of the prepayment of
--------------
such Notes to be prepaid in accordance with the notice described in Section
-------
5.5(b) shall, on the Prepayment Date, become due and payable at the principal
- ------
offices of the respective Purchasers at the addresses set forth in Schedule 3
attached hereto. If the amount of the prepayment of the Notes to be prepaid in
accordance with the notice described in Section 5.5(b) shall not be so prepaid,
--------------
the amount of such prepayment shall, until paid, continue to bear interest from
the applicable Prepayment Date at the Overdue Rate through the date upon which
such Notes are so prepaid.
(e) If there is more than one Purchaser, the aggregate principal
amount of each partial optional prepayment of the Notes shall be allocated in
units of One Thousand Dollars ($1,000) or multiples thereof among the Purchasers
at the time outstanding, in proportion, as nearly as practicable, to the
respective unpaid principal amounts of the Notes then outstanding, with
adjustments, to the extent practicable, to equalize for any prior partial
optional prepayments not in such proportion.
(f) Upon any partial prepayment of any Note, such Note may, at the
option of the Purchasers, be (i) surrendered to the relevant Issuer pursuant to
Section 5.4(b) in exchange for a new Note in a principal amount equal to the
- --------------
principal amount then remaining unpaid on the surrendered Note, (ii) made
available to the relevant Issuer for notation thereon of the portion of the
principal so prepaid or (iii) noted thereon by the holder thereof as to the
portion of the principal so prepaid. In case the entire principal amount of any
Note is prepaid, such Note shall be surrendered to the relevant Issuer promptly
after such prepayment for cancellation and shall not be reissued, and no Note
shall be issued in lieu of the prepaid principal amount of any Note.
5.6 Interpool's Assumption of Notes; Pledge of Equipment.
----------------------------------------------------
(a) At any time and from time to time (but in the case of a
partial assumption not more often than once during any calendar quarter) Inter-
pool may assume the Obligations of Trac or Ltd., in whole or in part, as the
case may be, including, but not limited to, their Notes, pursuant to an
assumption agreement in the form of Exhibit G attached hereto, provided that (i)
Interpool's
-11-
<PAGE>
Collateral Value shall not be less than an amount equal to 125% of the aggregate
outstanding principal amount of the Notes issued or assumed by Interpool after
giving effect to such assumption and (ii) no Default or Event of Default exists
(unless such Default shall be cured by the assumption by Interpool) and the
Purchasers shall have received an Officer's Certificate of Interpool to such
effect. If Interpool assumes any Obligations of either Trac or Ltd., Trac or
Ltd., as the case may be, will be released from its Obligations hereunder to the
extent such Obligations shall have been assumed by Interpool and under the other
Transaction Documents except that the representations, warranties and
indemnities of Trac or Ltd., as the case may be, shall survive the release of
its other Obligations.
(b) Any Issuer shall have the right to add Collateral to, or
obtain the partial release by the Collateral Agent of Collateral from, the Lien
created under the relevant Security Agreement at any time or from time to time
by the execution and delivery to the Collateral Agent with copies to the
Purchasers and special counsel to the Purchasers, at least ten (10) Business
Days prior to the proposed effective date of any addition or partial release of
Collateral of an appropriate Security Agreement Supplement indicating
specifically the Collateral to be added or released from such lien provided,
that no Default or Event of Default exists (other than a Default which would be
cured by such addition or release), or would arise as a result of or after
giving effect to, such addition or release of Collateral and the Purchasers
shall have received an Officer's Certificate of such Issuer to such effect. The
Collateral Agent shall countersign such Security Agreement Supplement pursuant
to instructions by the Purchasers to do so which the Purchasers shall issue upon
then being satisfied that the conditions set forth herein have been fulfilled
whereupon such Security Agreement Supplement shall become effective.
(c) At any time or from time to time Interpool shall have the
right, for the benefit of Ltd. or Trac, as the case may be, in order to enable
Trac or Ltd. to avoid the occurrence of an Event of Default under the provisions
of Section 10.1(k), to add Collateral to the Lien created by the relevant
---------------
Security Agreement executed by Interpool in favor of the Collateral Agent by the
execution and delivery to the Collateral Agent with copies to the Purchasers and
special counsel to the Purchasers, at least five (5) Business Days prior to the
proposed effective date of any addition of Collateral, of an appropriate
Security Agreement Supplement provided that (A) such Security Agreement
Supplement indicates specifically the Collateral being added to such Lien;
(B) such Security Agreement Supplement or an Officer's Certificate delivered in
connection therewith specifically provides that such Collateral is being added
for the benefit of Ltd. or Trac, as the case may be,
-12-
<PAGE>
to avoid the occurrence of an Event of Default under the provisions of Section
-------
10.1(k) and that such Collateral shall secure all the Obligations of Interpool
- -------
(including Obligations of Interpool under the Guaranty) and the Obligations of
Ltd. and Trac; and (C) no Default or Event of Default exists (unless such
Default shall be cured by the addition of such Collateral) and the Purchasers
shall have received an Officer's Certificate of Interpool to such effect. The
Collateral Agent shall countersign such Security Agreement Supplement pursuant
to instructions by the Purchasers to do so which the Purchasers shall issue upon
their being satisfied that the conditions set forth in this Section 5.6(c) shall
--------------
have been fulfilled whereupon such Security Agreement Supplement shall become
effective.
(d) In lieu of adding Collateral to the Lien created by the
relevant Security Agreement executed by an Issuer in favor of the Collateral
Agent, such Issuer shall have the right to grant to the Collateral Agent for the
ratable benefit of the Purchasers a first Lien on Cash Collateral by the
execution and delivery to the Collateral Agent with copies to the Purchasers and
special counsel to the Purchasers, at least ten (10) Business Days prior to the
proposed effective date of any such grant, of a security and pledge agreement in
form and substance satisfactory to the Purchasers and their special counsel and
such Issuer and its counsel covering such Cash Collateral provided that (i) such
security and pledge agreement specifically designates the Issuer for whose
benefit such Cash Collateral is being granted and (ii) no Default or Event of
Default exists (unless such Default shall be cured by the grant of such Cash
Collateral) and the Purchasers shall have received an Officer's Certificate of
such Issuer to such effect. Such Issuer may thereafter add Collateral to its
Security Agreement pursuant to and in compliance with the provisions of
subsection (b) or (c) above and upon such addition of Collateral becoming
- -------------- ---
effective, such Issuer may request the release of Cash Collateral corresponding
to the Collateral so added and upon the Purchasers having been satisfied that
(x) such Collateral has been added to the relevant Security Agreement pursuant
to and in compliance with the provisions of subsection (b) or (c) above and
-------------- ---
(y) no Event of Default or Default exists and the Purchasers have received an
Officer's Certificate of such Issuer that no Event of Default or Default exists,
the Purchasers shall instruct the Collateral Agent to execute and deliver to
such Issuer a release of such Cash Collateral and the Collateral Agent shall
execute and deliver such release to such Issuer.
(e) In the event that Interpool determines that the Collateral
Value of the Collateral granted by it pursuant to its Security Agreement (and
not theretofore released) exceeds 125% of the sum of the aggregate outstanding
principal amount
-13-
<PAGE>
of the Notes issued by Interpool and the aggregate outstanding principal amount
of Notes issued by Ltd. or Trac, as the case may be, and assumed by Interpool,
then Interpool shall have the right, for the benefit of Ltd. or Trac, as the
case may be, in order to enable Trac or Ltd. to avoid the occurrence of an
Event of Default under the provisions of Section 10.1(k), to notify the
---------------
Purchasers, the Collateral Agent and their special counsel at least ten (10)
business days prior to the effective date thereof of its designation that the
Collateral representing such excess Collateral Value shall inure to the benefit
of Trac or Ltd., as the case may be, to avoid the occurrence of such an Event of
Default, which notice shall be accompanied by (i) a Collateral Certificate
specifically calculating such excess and indicating specifically the Collateral
representing such excess Collateral Value and (ii) an Officer's Certificate of
Interpool that no Event of Default or Default exists (unless such Default shall
be cured by such designation by Interpool of excess Collateral Value). Upon
their satisfaction that the conditions referred to above shall have been
fulfilled, the Purchasers shall instruct the Collateral Agent to countersign
such notice and designation and the Collateral Agent shall so countersign such
notice and designation, whereupon such designation by Interpool shall become
effective.
(f) All assumptions, additions, releases or substitutions of
Collateral and Cash Collateral pursuant to the provisions of this Section 5.6
-----------
shall be accompanied by all such agreements, instruments, documents,
certificates, UCC financing statements, notations of Liens on certificates of
title or applications therefor and other lien instruments and the taking of all
such action (including the filing and recording of any of the foregoing and
searches of public records) as the Purchasers, the Collateral Agent and their
special counsel shall reasonably require and all fees and expenses with respect
thereto (including the fees and expenses of special counsel to the Purchasers
and the Collateral Agent) shall be paid promptly by the Issuers upon
presentation of invoices therefor.
5.7 Termination of Collateral.
-------------------------
(a) If (i) based upon the financial statements and the related
certificates delivered to the Purchasers pursuant to Section 9.11 each of the
------------
financial conditions set forth in paragraph (b) below have been met by the
Issuers for the most recent six consecutive quarters as applied at the end of
each quarter and (ii) Interpool receives a private rating for the Notes on an
unsecured basis of PPR2, its equivalent rating or higher from either Moody's,
Duff & Phelps or Standard & Poor's and (iii) the holders of at least 80% of
Interpool's outstanding recourse Funded Debt other than the Obligations
(excluding capitalized leases) consent in writing to the release of the
collateral securing such Funded Debt, Interpool may request that the Purchasers
waive the
-14-
<PAGE>
requirement that the Obligations be secured by the Collateral and cause the
Collateral Agent to release the Liens of the Collateral Agent created by the
Transaction Documents. Upon (A) receipt of such consent from the holders of at
least 60% of the outstanding principal amount of the Notes, which consent the
Purchasers agree shall not be unreasonably withheld (it being understood that
such consent may be reasonably withheld even if the financial conditions set
forth in paragraph (b) have been met) and (B) the release by the holders of 80%
of Interpool's outstanding Funded Debt other than the Obligations (excluding
capitalized leases) of the collateral securing such Funded Debt, the Purchasers
shall instruct the Collateral Agent and the Collateral Agent shall take any and
all steps necessary to terminate the Liens created under the Transaction
Documents.
(b) The financial conditions referred to in paragraph (a) above
shall be as follows:
(i) Funded Debt did not exceed 300% of Tangible Net Worth;
(ii) the sum of Fixed Charges for Interpool and its Restricted
Subsidiaries would have been covered by at least 1.75 times
the sum of Earnings Available for Fixed Charges for
Interpool and its Restricted Subsidiaries for the sum of the
four (4) fiscal quarters preceding the date of
determination; and
(iii) Tangible Net Worth exceeded $125,000,000;
(c) In the event that the Liens of the Collateral Agent shall have
been terminated in accordance with the provisions of Section 5.7(a), then at all
--------------
times thereafter unless and until the Obligations become secured pursuant to the
provisions of Section 5.7(d), neither Interpool nor any Restricted Subsidiary
--------------
will cause, incur or suffer to be incurred or to exist any Lien on any of its or
their property or assets other than:
(i) Permitted Liens;
(ii) judgment Liens contested with execution stayed on appeal;
(iii) Liens securing indebtedness between Interpool and the
Restricted Subsidiaries;
(iv) Liens existing on property as at the date of such
termination of Collateral after the release of collateral
referred to in Section 5.7(a)
--------------
-15-
<PAGE>
(iii) and clause B of Section 5.7(a) which Liens were not
--------------
prohibited under this Agreement at such date;
(v) Liens incurred subsequent to the date of such release of
Collateral on property acquired after such date securing up
to 100% of the lower of cost or fair market value; Liens
existing on property at the time of acquisition; and Liens
on the property of a corporation at the time such
corporation becomes a Restricted Subsidiary;
(vi) Subject to the provisions of Section 9.19(b), other Liens if
---------------
the amount of indebtedness secured by such Liens when added
to Funded Debt incurred subsequent to the date of such
release of collateral, does not exceed 20% of Tangible Net
Worth; and
(vii) extensions, renewals and refundings of the Liens and
indebtedness referred to in clauses (i), (ii), (iii), (iv),
(v) and (vi) above.
In the event that Interpool shall cause, incur or suffer to be incurred or
to exist any Lien upon any of its property or assets, or the property or assets
of any of its Restricted Subsidiaries, whether now owned or hereafter acquired,
in violation of the provisions of subdivisions (i) through (vii) of this Section
-------
5.7(c), it will promptly cause the Obligations to be secured by an equivalent
- ------
amount of Collateral equally and ratably with any and all other Funded Debt
thereby secured so long as such other Funded Debt shall be so secured. Such
action taken by Interpool pursuant to the immediately preceding sentence shall
have the effect of curing any Default or Event of Default arising out of the
causing or incurrence of a Lien in violation of subdivisions (i) through (vii)
of Section 5.7(c).
--------------
(d) In the event that following the release of Collateral pursuant
to Section 5.7(a) the Issuers determine that they may be unable to continue to
--------------
meet the financial conditions referred to in Section 9.19(e), they may notify
---------------
the Purchasers that they will no longer be able to comply with the financial
conditions of Section 9.19(e) but that they will continue to comply with the
---------------
financial conditions as set forth in Section 9.19(a), (b) and (c) then from and
----------------------------
after the twentieth (20th) Business Day following such notice such financial
conditions as set forth in Section 9.19(a), (b) and (c) shall become applicable
----------------------------
to the Issuers, provided that on or prior to the twentieth (20th) Business Day
-------- ----
following such notice (i) the Issuers shall each grant to the
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<PAGE>
Collateral Agent a first priority perfected security interest in the Collateral
in accordance with the provisions of this Agreement and the other Transaction
Documents having a Collateral Value of at least 125% of the aggregate
outstanding principal amount of the Notes pursuant to Security Agreements and a
Railcar Security Agreement executed and delivered by the Issuers to the
Purchasers, the Collateral Agent and their special counsel; (ii) the Issuers
shall have executed and delivered to the Purchasers, the Collateral Agent and
their special counsel all such legal opinions, agreements, documents,
instruments, certificates, UCC financing statements and other lien instruments
and take all such actions (including notations on certificates of title) as the
Purchasers, their Collateral Agent and their special counsel shall reasonably
require in connection therewith; (iii) no Default or Event of Default shall
exist (other than a Default which would be cured by such reinstatement of the
original provisions of Section 9.19(a), (b) and (c)) and the Purchasers shall
----------------------------
have received an Officer's Certificate of the Issuers to the foregoing effect;
(iv) no lowering in any rating of the Notes by Standard & Poor's or the NAIC
shall have occurred; and (v) the Issuers shall be able to effect such reversion
of the financial conditions from Section 9.19(e) to the original provisions of
---------------
Section 9.19(a), (b) and (c) only once during the term of this Agreement. All
- ----------------------------
reasonable fees and expenses relating to the foregoing (including the fees and
expenses of special counsel to the Purchasers and the Collateral Agent) shall be
paid by the Issuers promptly upon presentation of invoices therefor.
(e) If (i) the Collateral Value of an Issuer is greater than 125%
of the outstanding aggregate principal amount of the Notes issued or assumed by
such Issuer or, in the case of Interpool, subject to a designation pursuant to
Section 5.6(c), as evidenced by a Collateral Certificate delivered to the
- --------------
Purchasers and the Collateral Agent and (ii) no Default or Event of Default
exists (other than a Default which would be cured by a release of Collateral
referred to below), then an Issuer may request the Purchasers to instruct the
Collateral Agent to partially release Collateral (including Cash Collateral) to
the extent of the excess of the Collateral Value over 125% of the aggregate
principal amount of such Notes and upon receipt of such instructions the
Collateral Agent shall partially release such Collateral from the Lien created
by the relevant Security Agreement in accordance with the provisions of Section
2(b)(ii)(A) of such Security Agreement; provided that after giving effect to
such partial release the Collateral Value of such Issuer is not less than 125%
of the outstanding principal amount of the Notes issued or assumed by such
Issuer or, in the case of Interpool, subject to a designation pursuant to
Section 5.6(c).
- --------------
-17-
<PAGE>
SECTION 6. RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE COLLATERAL.
-------------------------------------
6.1 Collateral. The payment and performance of the Obligations shall be
----------
secured by the Collateral. Notwithstanding any other provision hereof or any
provision of any other Transaction Document to the contrary, no Collateral of
Ltd. or Trac shall secure the Obligations of any other Issuer.
6.2 Payment of Moneys Received With Respect to the Collateral. Each of
---------------------------------------------------------
the Issuers hereby irrevocably covenants and agrees to cause all amounts payable
or realized in respect of the Collateral to be paid to the Collateral Agent on
behalf of the Purchasers if and to the extent required by any of the Transaction
Documents. Pursuant to Section 12 of the Agency Agreement, the Collateral
Agent, on behalf of the Purchasers, shall pay to the Purchasers all such
amounts. Except as otherwise provided in this Agreement or the other
Transaction Documents, if an Event of Default shall have occurred and be
continuing moneys received by the Purchasers pursuant to this Section 6.2, shall
-----------
be applied, first, to the payment of accrued interest (including any default
-----
interest) on the Notes on a pro rata basis to the due date of such payments and
--- ----
any Make Whole Premium, and second, to the payment of the principal amount of
------
the Notes pro rata based upon the outstanding principal amounts thereof and
--- ----
third, to the other Obligations in such order as the Purchasers shall determine.
- -----
Prior to the occurrence of an Event of Default the Issuers may continue to
collect and receive such monies. All payments with respect to each Series of
Notes shall be applied to such Notes on a pro rata basis in inverse order of
--- ----
maturities thereof.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF ISSUERS.
-----------------------------------------
Each of the Issuers hereby represents and warrants to the Purchasers as
follows:
7.1 Organization and Power. Each of the Issuers (a) (i) is a
----------------------
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of incorporation and qualified to do business in the
jurisdictions set forth in Schedule 7.1 attached hereto for each Issuer,
(ii) there are no other jurisdictions in which the character of the properties
owned or leased or the business transacted by such Issuer makes qualification as
a foreign corporation necessary, where the failure to so qualify would have a
material adverse effect on such Issuer, its business operations or its property
and (iii) has its chief executive office and chief place of business at the
respective Chief Office set forth on Schedule 7.1 attached hereto; and (b) has
all requisite corporate power and authority and all necessary licenses and
permits to enter into and perform this Agreement and
-18-
<PAGE>
the other Transaction Documents to which such Issuer is a party and to issue and
deliver its Notes. This Agreement, the Notes and the other Transaction Docu-
ments to which such Issuer is a party have been duly authorized, executed and
delivered by such Issuer and, assuming the due authorization, execution and
delivery thereof by the other parties thereto, such documents constitute the
legal, valid and binding obligations of such Issuer, enforceable against such
Issuer in accordance with their respective terms.
7.2 Trademarks, Licenses, etc. Each of the Issuers possesses, in full
--------------------------
force and effect, all necessary franchises, patents, licenses, trademarks,
trademark rights, trade names, trade name rights, fictitious name authorizations
or certificates and copyrights material to conduct its business as now being
conducted, without any conflict, to its knowledge, with the franchises, patents,
licenses, trademarks, trademark rights, trade name, trade name rights,
fictitious name authorizations or certificates and copyrights of others.
7.3 Subsidiaries. Each of the Issuers has no Subsidiaries, other than
------------
those set forth in Schedule 7.1 attached hereto.
7.4 Business. Each of the Issuers is engaged principally in the
--------
businesses of leasing, financing or managing containers, chassis, railcars or
other transportation equipment and business related to the foregoing. In
addition, a Subsidiary of one of the Issuers is engaged in the business of
leasing micro computers and related accessories and businesses related to the
foregoing.
7.5 Financial Statements. Interpool has furnished to the Purchasers
--------------------
balance sheets of Interpool and its consolidated subsidiaries as of December 31,
1991 and December 31, 1992, and the related statements of income, statements of
cash flows and statements of the stockholders' equity, for the years ended
December 31, 1990, December 31, 1991 and December 31, 1992, respectively, all of
which were audited by Arthur Andersen & Co. and the unaudited consolidated
balance sheet of Interpool and its consolidated subsidiaries as of September 30,
1993, and the related statements of income, stockholders' equity and cash flows
for the nine (9) months ended September 30, 1993, certified by the chief
financial officer, president, chief operating officer or chief executive officer
of Interpool. Trac has furnished to the Purchasers balance sheets of Trac as of
December 31, 1991 and December 31, 1992, and the related statements of
operations and statements of cash flows, as of December 31, 1990, December 31,
1991 and December 31, 1992, all of which were audited by Arthur Andersen & Co.
All such financial statements present fairly, in all material respects, the
financial position, stockholders' equity, results of operations and cash flows
of the entities covered thereby for the periods involved. Since the date of
such
-19-
<PAGE>
financial statements, there has been no material and adverse change in the
financial position of any Issuer not reflected in the financial statements as of
that date, and, since such date, the business of each Issuer has not been
materially and adversely affected by any occurrence, whether or not insured
against. Except as otherwise disclosed on Schedule 7.5 attached hereto, the
Issuers have issued no other indebtedness for borrowed money which is still
outstanding on the date hereof, except indebtedness which is reflected in the
financial statements referred to above or restructuring or refinancing thereof.
7.6 Taxes. All tax returns of the Issuers which are due have been duly
-----
filed and are correct in all material respects, and all Taxes and other
governmental charges upon the Issuers which are shown to be due and payable
thereon have been paid.
7.7 Litigation. There are no outstanding judgments against any Issuer
----------
or any actions, proceedings, claims or investigations pending or, to any
Issuer's knowledge, threatened before any court or governmental body which, if
adversely determined, would materially and adversely affect the business,
properties, prospects, operations or affairs of any Issuer or impair any
Issuer's ability to perform its Obligations under this Agreement and the other
Transaction Documents.
7.8 Title, Liens. Each of the Issuers has good and marketable title to
------------
all of the Collateral included in the Collateral Value relating to such Issuer,
and there are no Liens on the Collateral of any Issuer other than those Liens
created pursuant to this Agreement and the other Transaction Documents and
except for Permitted Liens. The Liens granted in the Security Agreements and
the Railcar Security Agreements constitute valid first priority perfected Liens
on the Collateral subject to no other mortgage, Lien or security interest. The
law of Barbados does not necessitate, require or provide for the recording,
registration or filing of any mortgage or Lien in any of the Equipment, Leases
or any other types or items of property or proceeds thereof which are included
in the Collateral covered by or provided for in the Transaction Documents
executed and delivered by Ltd.
7.9 Consent, Approval. No consent or approval of any Person,
-----------------
shareholder, landlord or mortgagee, no waiver of any Lien or right of distraint
or other similar right, and no consent, license, approval or authorization of or
registration, qualification, designation, declaration or filing (except any
recordations required in connection with the perfection of the Liens granted in
the Security Agreements and any required filings or notices under applicable
securities laws, rules or regulations or the rules of the New York Stock
Exchange) with or payment of any
-20-
<PAGE>
withholding or other tax to any governmental authority by or on the part of the
Issuers is required in connection with the execution, delivery and performance
of this Agreement or any other Transaction Document, the issuance and sale or
payment of the Notes or the consummation of any other transactions contemplated
hereby or thereby.
7.10 Compliance with Other Instruments. None of the Issuers is a party
---------------------------------
to any contract, commitment or agreement or subject to any restriction or to any
order, rule, regulation, writ, injunction or decree of any court or governmental
authority or to any statute which materially and adversely affects its business,
property, prospects, operations, assets or financial condition as now conducted
or as proposed to be conducted. Neither the execution, delivery or performance
by any Issuer of this Agreement, the Notes or the other Transaction Documents to
be delivered by such Issuer nor compliance herewith or therewith (a) conflicts
with or results in a breach of (i) any law, statute, rule or regulation in
effect as of the date of delivery of this Agreement, (ii) any order, writ,
injunction or decree of any court or other governmental authority, or (b) re-
sults or will result in the creation or imposition of any Lien, charge or
encumbrance upon its property pursuant to such agreement or instrument, except
for Liens created hereunder and Permitted Liens. Neither the execution,
delivery or performance by any Issuer of this Agreement, the Notes or the other
Transaction Documents nor compliance by any Issuer herewith or therewith
conflicts or will conflict with the certificate of incorporation, by-laws or
other organizational document of any Issuer or results or will result in a
breach of or constitutes or will constitute a default under any agreement or
instrument to which any Issuer is a party or by which it is bound.
7.11 Corporate Existence; Place of Business; Books and Records. Except
---------------------------------------------------------
as disclosed in Schedule 7.1 attached hereto, none of the Issuers has at any
time within the last five (5) years, (i) changed its name; (ii) used any
fictitious name, (iii) been the surviving corporation of a merger or
consolidation, or (iv) acquired all or substantially all of the assets of any
Person. The Chief Offices, all other offices of the Issuers and the only places
of business of each of the Issuers where commercial affairs are conducted and
books and records are maintained are set forth on Schedule 7.1 attached hereto.
None of the Issuers is in violation of any charter instrument or by-law, and
none of the Issuers is in violation in any material respect of any term in any
agreement or other instrument to which it is a party or by which it or any of
its property may be bound which violation could have a material adverse effect
on any Issuer or its business, assets, operations, leaseholds and equipment.
-21-
<PAGE>
7.12 ERISA.
-----
(a) No Reportable Event has occurred with respect to any Plan
maintained for employees of (i) any Issuer or (ii) any member of a Controlled
Group of which any Issuer is a part.
(b) None of the Issuers is entering into the Transaction Documents
or any other transaction contemplated hereby, directly or indirectly, in
connection with any arrangement in any way involving any employee benefit plan
or fund or trust which holds assets of any employee benefit plan with respect to
which it in its individual capacity is a party-in-interest, all within the
meaning of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and the Internal Revenue Code of 1986, as amended (the "Code").
7.13 Capital Stock. All of the issued and outstanding capital stock of
-------------
Trac and Ltd. is owned and registered as set forth in Schedule 7.1 attached
hereto.
7.14 Governmental Licenses. Each of the Issuers has been issued all
---------------------
required federal, state, local and foreign licenses, certificates or permits
relating to, and each of the Issuers and its facilities, business, assets,
property, prospects, operations, leaseholds and equipment are in compliance in
all respects with, all applicable federal, state, local and foreign laws, rules
and regulations relating to air emissions, water discharge, noise emissions,
solid or liquid disposal, hazardous waste or materials, or other environmental
health or safety matters, where the failure to so comply could have a material
adverse effect on any Issuer or its business, assets, operations, leaseholds and
equipment.
7.15 Event of Default. No Event of Default or Default has occurred and
----------------
is continuing.
7.16 Offering of the Notes. Neither the Issuers nor anyone acting on
---------------------
their behalf has offered, directly or indirectly, the Notes or any part thereof
or any similar security for sale to, solicited offers to buy any thereof from or
otherwise approached or negotiated with anyone other than the Purchasers and the
institutional investors listed in the letters of the Placement Agents delivered
pursuant to Section 4.14. In connection with the sale of the Notes hereunder,
------------
none of the Issuers has engaged in general solicitation or advertising. Neither
the Issuers nor anyone on their behalf will sell or offer the Notes or any part
thereof or any similar security for sale to, solicit any offers to buy any
thereof from or otherwise approach or negotiate in respect thereof with any
other Person or Persons so as thereby to require registration of the Notes under
Section 5 of the Securities Act.
-22-
<PAGE>
7.17 Margin Securities.
-----------------
(a) None of the Issuers will, directly or indirectly, apply any
part of the proceeds of the Notes for the purpose (whether immediate, incidental
or ultimate) of purchasing or carrying any "margin stock" as defined in
Regulation G of the Federal Reserve Board (12 C.F.R. 207) or any security issued
by any investment company registered pursuant to Section 8 of the Investment
Company Act of 1940 or for the purpose of repaying any indebtedness originally
incurred for such purpose.
(b) None of the Issuers is, in any way, engaged in the business of
extending credit for the purpose of purchasing or carrying Margin Stock; nor has
any Issuer secured the payment of the Notes by an assignment of any stock (as
such term is defined in Regulation U) or by any arrangement under which any
Issuer's right or ability to sell, pledge or otherwise dispose of stock owned by
it is in any way restricted or under which the exercise of such right, whether
by written agreement or otherwise, is or may be cause for acceleration of the
Notes.
7.18 Use of Proceeds. None of the Issuers is, directly or indirectly,
---------------
applying any part of the proceeds of the Notes for any purpose other than for
the purposes described in Section 2.2.
-----------
7.19 Liabilities; Business. None of the Issuers has any liabilities or
---------------------
obligations which are material to its business, property, prospects, operations,
assets or financial condition as now conducted or as proposed to be conducted
which are prohibited by this Agreement and by the other Transaction Documents to
which it is a party. None of the Issuers' assets are less than its liabilities,
both determined in accordance with GAAP, and each of the Issuers is solvent.
7.20 Investment Company Act. None of the Issuers is, and is not directly
----------------------
or indirectly controlled by or acting on behalf of any Person which is, an
"investment company" within the meaning of the Investment Company Act of 1940.
7.21 Disclosure. Neither this Agreement nor any other Transaction
----------
Document nor any other document, certificate or instrument delivered to the
Purchasers by or on behalf of any Issuer in connection with the transactions
contemplated by this Agreement contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
contained in this Agreement, any other Transaction Document and in such other
documents, certificates or instruments not misleading. There is no fact known
to any Issuer which materially and adversely affects or in the future may (so
far as any Issuer can now reasonably foresee) materially and adversely affect
the business,
-23-
<PAGE>
prospects, operations, affairs, condition (financial or otherwise), properties
or assets of any Issuer which has not been set forth in the financial statements
or in this Agreement, any other Transaction Document or the other documents,
certificates and instruments delivered to the Purchasers by or on behalf of any
Issuer specifically for use in connection with the transactions contemplated by
this Agreement.
7.22 Foreign Assets Control Regulations. Neither the issuance and sale
----------------------------------
by any Issuer of the Notes under this Agreement nor its use of the proceeds
thereof will violate the Foreign Assets Control Regulations, the Foreign Funds
Control Regulations, the Transaction Control Regulations, the Cuban Assets
Control Regulations, or the Iranian Assets Control Regulations of the Office of
Foreign Assets Control, United States Department of the Treasury (31 C.F.R.,
Chapter V, Subpart B, as amended) or any other order, regulation or ruling
thereunder or pursuant thereto.
7.23 Leases. The Leases which are in effect on the date of this
------
Agreement each constitute legal, valid and binding obligations of such relevant
Issuer and, to the best of the Issuers' knowledge, each of the respective
lessees thereunder, enforceable in accordance with their respective terms.
7.24 Financed Equipment. As of the date hereof no Person has a Lien on
------------------
any Financed Equipment which represents a replacement or a substitution of
equipment.
7.25 Insurance. Each of the Issuers is, as of the date of this
---------
Agreement, in compliance with the provisions of Section 9.6.
-----------
SECTION 8. REPRESENTATIONS AND WARRANTIES OF PURCHASERS.
--------------------------------------------
8.1 Purchase for Investment. Each Purchaser represents and warrants it
-----------------------
is purchasing the Notes being purchased by it for its own account, and that each
such Note is being purchased for the purpose of investment and not with a view
to the distribution thereof, subject, nevertheless, to any requirement of law
that the disposition of its property shall be at all times within such
Purchaser's control. Such Purchaser will not, in any event, make any sale or
other disposition of such Notes except in accordance with the Securities Act and
the rules and regulations of the Securities and Exchange Commission thereunder,
or pursuant to an exemption under such Securities Act and rules and regulations
and of the terms of this Agreement. Each Purchaser represents and warrants it
is an "insurance company" as defined in Section 2(13) of the Securities Act.
8.2 Taxpayer Status. Each Purchaser represents and warrants that it is
---------------
a United States person within the meaning of
-24-
<PAGE>
Section 7701(a)(30) of the Code except as disclosed on Schedule 8.2 attached
hereto.
8.3 Source of Funds. At least one of the following statements is an
---------------
accurate representation as to the source of funds to be used by such Purchaser
to pay the purchase price of the Notes purchased by such Purchaser:
(a) if such Purchaser is an insurance company, no part of such
funds constitutes assets allocated to any separate account maintained by it in
which any employee benefit plan (or its related trust) has any interest; or
(b) if such Purchaser is an insurance company, to the extent that
any part of such funds constitutes assets allocated to any separate account
maintained by it, (x) such separate account is a "pooled separate account"
within the meaning of Prohibited Transaction Class Exemption 90-1, in which case
such Purchaser has complied and will continue to comply with the conditions set
forth in Part III thereof and such Purchaser has disclosed in writing to the
relevant Issuer the names of each employee benefit plan whose assets in such
separate account exceed 10% of the total assets of such account as of the date
of such purchase (and for the purposes of this paragraph (b) all employee
benefit plans maintained by the same employer or employee organization are
deemed to be a single plan), or (y) such separate account contains only the
assets of a specific employee benefit plan, complete and accurate information as
to the identity of which such Purchaser has delivered to the Issuers by separate
letter; or
(c) if such Purchaser is a "qualified professional asset manager"
or "QPAM" (within the meaning of Part V of Prohibited Transaction Class
Exemption 84-14 (the "QPAM Exemption")), all of such funds constitute assets of
an "investment fund" (within the meaning of Part V of the QPAM Exemption)
managed by such Purchaser, no employee benefit plan's assets which are combined
with the assets of all other employee benefit plans established or maintained by
the same employer or by an affiliate of such employer or by the same employee
organization and managed by such Purchaser, exceed 20% of the total client
assets managed by such Purchaser, the conditions of Part I(g) of the QPAM
Exemption are satisfied and such Purchaser has disclosed to the Issuers the
names of all employee benefit plans whose assets are included in such investment
fund; or
(d) if such Purchaser is other than an insurance company, all or a
portion of such funds consists of funds which do not constitute assets of any
employee benefit plan (other than a governmental plan exempt from the coverage
of ERISA) and the remaining portion, if any, of such funds consists of funds
which
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<PAGE>
may be deemed to constitute assets of one or more specific employee benefit
plans, complete and accurate information as to the identity of each of which
such Purchaser has delivered to the Issuers in writing by separate letter.
As used in this Section 8.3, the terms "employee benefit plan",
-----------
"governmental plan" and "separate account" shall have the respective meanings
assigned to such terms in Section 3 of ERISA and the term "assets" shall have
the meaning assigned to such term in Department of Labor regulations Section
2510.3-101.
SECTION 9. COVENANTS OF ISSUERS.
--------------------
Each of the Issuers hereby covenants and agrees that from the date of this
Agreement and so long as any Obligations or other amounts under the Notes and
hereunder are outstanding, such Issuers will comply with the following
covenants:
9.1 Maintenance of Corporate Existence. Each of the Issuers shall
----------------------------------
preserve and keep in full force and effect its corporate existence and all
franchises, rights and privileges necessary to the proper conduct of its
business, including, without limitation, all necessary franchises, patents,
licenses, trademarks, trademark rights, trade names, trade name rights,
fictitious name authorizations or certificates and copyrights, without any
unlawful conflict with franchises, patents, licenses, trademarks, trademark
rights, trade names, trade name rights, fictitious name authorizations or
certificates and copyrights of others which conflict may materially and
adversely affect such Issuer or interfere with the conduct of such Issuers'
business or may result in an action brought against such Issuer for such
violation which action may materially and adversely affect such Issuer or
interfere with the conduct of such Issuer's business.
9.2 Amendments. Each of the Issuers shall (a) promptly deliver to the
----------
Purchasers and the Collateral Agent copies of any amendments or modifications to
its certificate of incorporation, bylaws and organizational documents and/or
other documents of formation, as the case may be, certified, with respect to the
certificate of incorporation, by the Secretary of State of the jurisdiction of
incorporation, or by the appropriate official of its jurisdiction of formation,
as the case may be, and, with respect to the bylaws, by the secretary of such
Issuer and (b) on a quarterly basis deliver to the Purchasers and the Collateral
Agent a certificate of the incumbency of its officers.
9.3 Compliance. Each of the Issuers shall comply with all laws,
----------
ordinances, rules and regulations of any foreign, federal, state or local
government or any instrumentality or agency thereof, applicable to it,
including, without limitation, the Fair Labor
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<PAGE>
Standards Act, now or hereafter in effect, and all international laws,
ordinances, rules and regulations, the failure to comply with which may have a
materially adverse effect on any Issuer or on its ability to perform its
Obligations under any of the Transaction Documents, any material agreement,
document or instrument to which it is a party, or on the Collateral or on the
Purchasers or the Collateral Agent in enforcing their rights hereunder against
any Issuer or the Collateral.
9.4 Taxes. Each of the Issuers shall pay and discharge, as they become
-----
due, all Taxes, assessments, debts, claims and other governmental or non-
governmental charges lawfully imposed upon it or incurred by it or its
properties and assets, except Taxes, assessments, debts, claims and charges
contested in good faith in appropriate proceedings and for which any Issuer
shall have set aside adequate reserves for the payment of such Tax, assessment,
debts, claims or charges. Such Issuer shall provide the Collateral Agent, upon
the Collateral Agent's request, evidence of payment of such Taxes, assessments,
debts, claims and charges. If such Issuer fails to pay such Taxes, assessments,
debts, claims or charges when due, and is not contesting the same in good faith
or has not set aside adequate reserves for the payment thereof, the Collateral
Agent may discharge the same, and any amounts so advanced by the Collateral
Agent for such purposes shall be added to the Obligations of such Issuer secured
by the Collateral and shall bear interest at the overdue rate set forth in such
Notes relating to such Taxes, assessments, debts, claims or charges.
9.5 Preservation of Assets. Each of the Issuers shall maintain,
----------------------
preserve and keep or cause to be maintained, preserved and kept, all its
properties, Equipment and assets, including the Collateral, in accordance with
industry standards, and make, or cause to be made, all necessary or appropriate
repairs, renewals, replacements, substitutions, additions, betterments and
improvements thereto so that efficiency of all such property and assets shall at
all times be properly preserved and maintained in accordance with industry
standards.
9.6 Insurance. Each of the Issuers shall maintain, with financially
---------
sound and reputable insurance companies, such insurance on its properties,
businesses and assets, including, without limitation, the Collateral, against
casualty, general liability, worker's compensation and such other insurable
interests and in such amounts as is consistent with practices generally followed
in the container industry for companies of comparable size. The all risk
insurance policies with respect to the Collateral shall initially cover
$3,500,000 in physical damage in respect of any one occurrence, shall name the
Collateral Agent for the benefit of the Purchasers and the Purchasers as
additional insureds and loss payees, and the liability insurance policies with
respect to the
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<PAGE>
Collateral shall initially cover $50,000,000 any one occurrence and in the
aggregate and shall name the Collateral Agent and the Purchasers, as additional
insureds. All such policies of insurance shall provide for at least thirty (30)
days' advance notice in writing to the Collateral Agent of any cancellation or
modification thereof and, with respect to all risk casualty insurance only,
contain a "breach of warranty clause" whereby the insurer agrees that a breach
of the insuring conditions or any negligence by any Issuer, or any other Person,
shall not invalidate the insurance as to the Collateral Agent, the Purchasers
and their respective successors and assigns. If any Issuer fails to pay the
premiums on any such insurance or maintain such insurance in effect, the
Collateral Agent shall have the right (but shall be under no duty) to pay such
premiums for such Issuer's account and take all such action (at such Issuer's
expense) as the Collateral Agent deems necessary to keep such insurance in
effect. Such Issuer shall repay to the Collateral Agent any sums which the
Collateral Agent shall have so paid, together with interest thereon at the rate
payable by such Issuer, at the time of payment by the Collateral Agent. Such
Issuer, upon the Collateral Agent's request, shall (a) deliver to the Collateral
Agent a detailed list of insurance then in effect, stating the names of the
insurance companies, the amounts and rates of the insurance, dates of expiration
thereof and the properties and risks covered thereby; (b) obtain, within thirty
(30) days after notice from the Collateral Agent, such additional insurance as
described in this Section 9.6 which is reasonably required by the Collateral
-----------
Agent and which is consistent with practices generally followed in the container
industry for companies of comparable size; (c) provide to the Collateral Agent
and Purchasers copies of all insurance policies relating to its properties,
business and assets; and (d) assign to the Collateral Agent all rights to
receive proceeds of any such insurance with respect to the Collateral and direct
all insurers to pay all proceeds directly to the Collateral Agent. Each of the
Issuers hereby authorizes the Collateral Agent to endorse any draft for such
proceeds. Notwithstanding anything contained herein, each of the Issuers shall
have the option to (i) use all said proceeds received by the Collateral Agent
with respect to the Collateral to pay down the outstanding amount of its Notes
with respect to each Series of Notes on a pro rata basis in inverse order of
--- ----
maturity thereof, or (ii) receive said proceeds from the Collateral Agent;
provided, that (a) no Default or Event of Default shall have occurred and be
- -------- ----
continuing and (b) such Issuer shall provide the Purchasers with substitute
Collateral if it is necessary to ensure that the Collateral Value of such Issuer
is greater than 125% of the aggregate outstanding principal amount of the Notes
issued by such Issuer which Collateral may be purchased with the proceeds of
such insurance, provided said substitute Collateral shall be the subject of a
valid first perfected Lien in favor of the Collateral Agent for the benefit of
the Purchasers subject to no other Liens.
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9.7 Liens. None of the Issuers shall, directly or indirectly, (a)
-----
permit to exist any Liens with respect to the Collateral other than Liens in
favor of the Purchasers or the Collateral Agent or Permitted Liens; nor (b)
pledge any shares owned by it in Restricted Subsidiaries.
9.8 Litigation. The Issuers shall promptly notify all of the Purchasers
----------
and, with respect to the Collateral, the Collateral Agent of any litigation,
actions, proceedings, claims or investigations (collectively, "Claims") pending
or threatened against any Issuer wherein claimant seeks to recover in excess of
$2,000,000 and of the entry of any judgment in excess of $1,000,000 against it,
which Claims or judgments are not fully covered by insurance (subject to
deductibles) in respect of which the carrier has not disclaimed liability or any
of the Collateral becoming subject to any Liens securing or relating to Claims,
judgments or indebtedness in excess of $500,000, other than Liens in favor of
the Purchasers or the Collateral Agent.
9.9 Line of Business. None of the Issuers shall materially change its
----------------
present lines of business as described in Section 7.4 nor will Interpool permit
-----------
any Restricted Subsidiary to engage in any business other than such present
lines of business or any other business related thereto.
9.10 Chief Offices; Places of Business. The Issuers shall notify the
---------------------------------
Collateral Agent in writing at least thirty (30) days in advance of (a) any
change of location of its Chief Office and (b) the change, elimination or
opening of any chief executive office of any Issuer.
9.11 Financial Statements. The Issuers shall deliver to the Purchasers
--------------------
the following:
(a) Within forty-five (45) days after the end of each quarterly
fiscal period of Interpool, with the exception of its last fiscal quarter
(commencing with the quarterly period in which this Agreement is executed and
continuing until all of the Obligations under this Agreement and the other
Transaction Documents are satisfied), company prepared unaudited consolidated
financial statements for Interpool and its consolidated subsidiaries in
comparative form showing the corresponding figures for the preceding year
prepared in accordance with GAAP, along with a certificate by an authorized
officer of Interpool which shall include an attestation by such officer briefly
stating he has reviewed such unaudited consolidated financial statements and
that he has reviewed the relevant provisions of this Agreement and stating
whether his examination has disclosed the existence of any Default or Event of
Default and, if so, specifying the nature and
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<PAGE>
period of existence thereof and actions management proposes to undertake to cure
the same.
(b) Within ninety (90) days after the end of each fiscal year of
each Issuer, a consolidated balance sheet of each Issuer and its consolidated
subsidiaries as of the end of such year and the related consolidated statements
of income, statements of cash flows and statements of shareholders' equity for
such year (or with respect to Trac financial statements reviewed by Interpool's
auditors so long as Trac is not the obligor in respect of more than 33 1/3% of
the aggregate outstanding principal amount of the Notes) audited, without
qualification, by Arthur Andersen & Co. or another independent "Big Six"
certified public accounting firm, in comparative form the corresponding figures
as at the end of and for the preceding financial year. In addition, such
accountants shall issue a statement in connection with their audit as to
whether anything has come to their attention that would cause them to believe
that the Issuers were not in compliance with any of the terms, covenants or
conditions of Sections 9.19 or 9.25 of this Agreement it being understood
---------------------
that their audit was not directed primarily to obtaining knowledge of such
non-compliance and if any such non-compliance is indicated, specifying the
nature and period of existence thereof, together with a certificate of an
authorized officer with respect to such financial statements covering the same
matters referred to in the first three quarter's attestation delivered pursuant
to Section 9.11(a) and actions management proposes to undertake to cure the
---------------
same.
(c) (i) Within sixty (60) days after the end of each calendar
quarter until all of the Obligations outstanding are satisfied, a Collateral
Certificate, an equipment status report sent to the Collateral Agent for
Collateral (indicating the Collateral located at depots or under lease) and an
aging of all accounts receivable (including lease receivables covering the
Equipment and other equipment) of Interpool and its consolidated subsidiaries,
as at the end of such calendar quarter, in form and substance reasonably
satisfactory to the Purchasers.
(ii) Within forty five (45) days after the end of each
calendar quarter until all the Obligations are satisfied, an Equipment
utilization report (showing the percentage of Equipment under lease) with
respect to Equipment owned and managed by Interpool and its consolidated
subsidiaries.
(d) Copies of all formal, written notices or reports, if any,
furnished to an Issuer by its independent certified public accountants in
connection with each fiscal year audit of the financial statements of such
Issuer made by such accountants.
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<PAGE>
(e) Such additional financial information with respect to the
Issuers and information with respect to the Collateral as the Purchasers may
from time to time reasonably require.
(f) Promptly after the filing thereof, copies of all financial
statements and reports (including all exhibits or schedules annexed thereto or
filed therewith) which are material to any Issuer and which such Issuer may file
with the Securities and Exchange Commission of the United States or any public
body succeeding to the functions of that Commission and which are generally
available to the public.
9.12 Books and Records. Each of the Issuers shall, at all times and in
-----------------
accordance with GAAP keep complete and accurate books and records concerning its
business, affairs and operations and concerning its properties and assets,
including, without limitation, the Collateral, and shall deliver, or cause to be
delivered to the Collateral Agent promptly upon the Collateral Agent's request,
from time to time, with respect to the Collateral (i) after an Event of Default
occurs, to the extent in its possession, all instruments and chattel paper
(including all executed copies thereof, representing or evidencing the
Collateral or proceeds of the Collateral; (ii) after an Event of Default occurs,
to the extent in its possession or control, all original invoices, original
bills of lading, documents of title, all Leases covering Financed Equipment
included in the Collateral, original contracts, chattel paper, instruments, and
any other writings relating to the Collateral; and (iii) such other information
to the extent in its possession or control with respect to any of the Collateral
as the Collateral Agent may, in its sole discretion, deem to be necessary or
effectual to evidence the transactions contemplated hereby or to evidence,
enforce or perfect the Collateral Agent's Lien in the Collateral, or to carry
into effect the provisions and intent of this Agreement or other Transaction
Documents delivered pursuant hereto, all at the sole expense of the Issuers.
9.13 Inspection. The Issuers shall, from time to time and during normal
----------
business hours, on reasonable notice, permit the Purchasers or the Collateral
Agent to inspect or examine the properties and assets of the Issuers, including,
without limitation, the Collateral, to the extent the Collateral is in the
possession or control of the Issuers or could be so inspected or examined under
the terms of applicable Leases with respect thereto, and further to examine,
check, make copies of, or extracts from, any of the Issuers' books, records,
journals, receipts, orders, correspondence, other data, or orders and accounts
receivable of the Issuers and to permit the Purchasers and the Collateral Agent
to hold discussions with the Issuers' officers and auditors and the
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<PAGE>
Issuers shall instruct such officers and request such auditors to hold such
discussions. If a Default or Event of Default has occurred and is continuing
(a) all of the foregoing shall be at the Issuers' expense, (b) the Purchasers or
the Collateral Agent may independently verify the orders and accounts receivable
of the Issuers at the Issuers' expense, and (c) the Purchasers shall have the
right to audit (or cause to be audited by certified public accountants) all of
the foregoing items of the Issuers at the Issuers' expense).
9.14 ERISA. Each of the Issuers shall furnish to the Purchasers and,
-----
with respect to the Collateral, the Collateral Agent (a) as soon as possible and
in any event within thirty (30) days after such Issuer or a duly appointed
administrator of a Plan knows or has reason to believe that any Reportable Event
has occurred with respect to any Plan, a statement of the principal financial
officer of such Issuer setting forth details as to such Reportable Event and the
action which such Issuer proposes to take with respect thereto, together with a
copy of the notice of such Reportable Event given to the PBGC or a statement
that said notice will be filed with the annual report to the United States
Department of Labor with respect to such Plan if required under applicable
regulations; (b) promptly after receipt thereof, a copy of any notice an Issuer
or any other member of a Controlled Group may receive from the United States
Department of Labor, the Internal Revenue Service or the PBGC with respect to
any deficiency with respect to any Plan; (c) in the event any stock of any
Issuer is ever offered pursuant to a registration statement filed with the
Securities and Exchange Commission, promptly after the sending of, making
available or filing of the same, copies of any proxy statements and financial
statements which such Issuer shall send or make available to all of its
stockholders, and any registration statements and any reports which such Issuer
shall file with the Securities and Exchange Commission; and (d) promptly after
receipt thereof, a copy of any notice an Issuer may receive indicating an actual
or potential violation of any environmental law or regulation.
9.15 Use of Proceeds. The Issuers shall use the proceeds of the Notes
---------------
solely in accordance with the provisions of Section 2.2.
-----------
9.16 Further Assurances. The Issuers shall procure, execute and deliver
------------------
to the Collateral Agent any security agreement, financing statement, or other
writing and take all such other actions as the Collateral Agent may reasonably
require to evidence, preserve, protect or enforce the Collateral Agent's rights
and interests to or in the Collateral.
9.17 Government Contracts. If any of the Collateral consists of Financed
--------------------
Equipment covered by contracts with the United
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<PAGE>
States or any other governmental entity or any of their respective departments,
agencies or instrumentalities, the Issuers shall notify the Collateral Agent and
execute any writings and take all such other actions as the Collateral Agent may
require in order that all money due or to become due under such contracts shall
be assigned to the Collateral Agent and proper notice of the assignment given
under the Federal Assignment of Claims Act or other applicable law.
9.18 Sell, Merge, Consolidate, etc. None of the Issuers shall:
------------------------------
(a) Sell, abandon, or otherwise dispose of all or any substantial
part (which shall be deemed to constitute an amount in excess of 20% of the
consolidated assets of Interpool and its Restricted Subsidiaries), of its
properties or assets in any 12 month period unless (i) it either (A) reinvests
the proceeds from such transactions in excess of 20% of such consolidated assets
in its principal businesses as described in Section 7.4 or other investments
permitted hereunder provided that such investments are fully liquidated and the
proceeds thereof are invested in such principal businesses within twelve (12)
months from the date of such transaction, and/or (B) prepays the Notes for each
Series on a pro rata basis in inverse order of maturity in the amount of such
--- ----
excess of 20% of such consolidated assets together with a Make Whole Premium or
(iii) such transaction occurs entirely among the Issuers.
(b) Consolidate with or merge into any Person or permit any merger
of any other Person into any Issuer or acquire all or substantially all the
assets of any Person, unless such Issuer is the surviving corporation (and if
one of the Issuers involved in such transaction is Interpool, Interpool is the
surviving corporation) or the survivor expressly assumes the Obligations of such
Issuer and following and giving effect to such merger, consolidation or
acquisition, no Default or Event of Default exists or shall result under any
Transaction Document, the Collateral Agent continues to have a first perfected
security interest in the Collateral under the UCC, reflected on the certificates
of title or through a filing with the Interstate Commerce Commission, as
applicable to the relevant Collateral subject to no other Liens, other than
Permitted Liens and the Issuers, including the surviving corporation, may issue
at least $1.00 of additional Funded Debt without any Default or Event of Default
resulting hereunder.
(c) Alter the existing capital stock structure of any Issuer such
that Interpool owns less than 100% of the common stock of Ltd. and 87.5% of the
common stock of Trac.
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(d) Sell, assign, transfer, discount or otherwise dispose of any
Lease, or any interest therein, with or without recourse, except in the ordinary
course of its business as presently conducted.
9.19 Financial Covenants. So long as the Obligations remain outstanding
-------------------
under any of the Transaction Documents (subject to the provisions of Section
-------
9.19(e)):
- -------
(a) Interpool shall cause Tangible Net Worth to be greater than
$75,000,000 for the period commencing on the Closing Date to December 31, 1993;
$100,000,000 for the period commencing on January 1, 1994 to December 31, 1995;
and $125,000,000 at all times from and after January 1, 1996.
(b) Neither Interpool nor any of its Restricted Subsidiaries shall
incur any Funded Debt unless after giving effect to such incurrence of Funded
Debt (i) the ratio of Funded Debt to Tangible Net Worth is not greater than 4 to
1; and (ii) the sum of Pro-Forma Fixed Charges for Interpool and its Restricted
Subsidiaries would have been covered by at least 1.5 times the sum of Earnings
Available for Fixed Charges for Interpool and its Restricted Subsidiaries for
the most recent four (4) fiscal quarters preceding the date of determination.
(c) Interpool shall not permit the ratio of (i) the sum of
Earnings Available for Fixed Charges plus Depreciation for Interpool and its
Restricted Subsidiaries for the sum of the four (4) fiscal quarters immediately
preceding the date of determination to (ii) the sum of Fixed Charges for
Interpool and its Restricted Subsidiaries for the sum of the four (4) fiscal
quarters immediately preceding the date of determination to be less than 1.5 to
1.
(d) Neither Interpool nor its Restricted Subsidiaries shall make
any Restricted Payments if the aggregate amount of all Restricted Payments made
subsequent to June 30, 1993 would exceed the sum of $5,000,000 plus 75% of the
sum of (i) Net Earnings of Interpool and its Restricted Subsidiaries (minus 100%
of any net loss) subsequent to June 30, 1993 and (ii) the net cash proceeds
received after June 30, 1993 from the sales (other than to Interpool or its
Subsidiaries) of shares of common stock and preferred stock of Interpool or any
Restricted Subsidiary which does not provide for mandatory redemption thereof or
sinking fund payments with respect thereto.
(e) If the Collateral is terminated pursuant to Section 5.7(a)
--------------
then, from and after the date of such termination up to and until such time, if
any, as the Issuers again secure the Obligations with Collateral in accordance
with Section 5.7(d), the
--------------
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<PAGE>
Issuers shall not be required to comply with the financial covenants set forth
in Sections 9.19(a), (b) and (c) and shall, instead be required to comply with
-------------
the following financial covenants:
(i) Interpool shall cause Tangible Net Worth to be greater
than $125,000,000;
(ii) Neither Interpool nor any of its Restricted Subsidiaries
shall incur any Funded Debt unless after giving effect to such incurrence of
Funded Debt (A) the ratio of Funded Debt to Tangible Net Worth is not greater
than 3 to 1; and (B) the sum of Pro-Forma Fixed Charges for Interpool and its
Restricted Subsidiaries would have been covered by at least 1.75 times the sum
of Earnings Available for Fixed Charges for Interpool and its Restricted
Subsidiaries for the most recent four (4) fiscal quarters preceding the date of
determination;
(iii) Interpool shall not permit the ratio of (i) the sum of
Earnings Available for Fixed Charges plus Depreciation for Interpool and its
Restricted Subsidiaries for the sum of the four (4) fiscal quarters immediately
preceding the date of determination to (ii) the sum of the Fixed Charges for
Interpool and its Restricted Subsidiaries for the sum of the four (4) fiscal
quarters immediately preceding the date of determination to be less than 1.75 to
1.
9.20 Payment of Obligations. Each Issuer shall pay all obligations
----------------------
material to its business when due (taking into account any grace periods granted
in respect thereof) other than those disputed by it in good faith, if failure to
pay might have a material adverse affect on the business, conditions (financial
or otherwise), prospects or creditworthiness of an Issuer.
9.21 Notice of Default. Each Issuer shall promptly but in any event
-----------------
within three (3) Business Days after obtaining knowledge thereof furnish the
Collateral Agent and the Purchasers with a statement of the occurrence of any
Event of Default or Default, specifying the nature and period of existence
thereof and what action management of such Issuer proposes to take with respect
thereto. If an Issuer receives a notice of Default from any creditor or Person
other than the Collateral Agent and the Purchasers, such Issuer shall deliver to
the Collateral Agent and the Purchasers a copy of such notice of Default,
immediately upon receipt thereof. In the event that the Issuers have cured such
Default within any applicable cure period provided therefor, such cure shall
have the effect of remedying any failure of the Issuers to give notice relating
to such Default.
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9.22 Lock Box. Upon the occurrence of an Event of Default and at the
--------
request of the Majority In Interest or the Collateral Agent acting on the
instructions of the Majority In Interest, the Issuers will establish a lock box
in respect of the Collateral and all proceeds thereof at a location satisfactory
to the Purchasers and the Collateral Agent, and take all such action and execute
all agreements, documents, letters and instruments which the Collateral Agent
deems appropriate in its sole discretion to establish and maintain said lock
box.
9.23 Additional Costs. (a) In the event of any change in or adoption of
----------------
any applicable law, regulation or guideline, or any interpretation thereof by
any governmental authority charged with the administration thereof, not
published on or prior to the date hereof, subjects a Purchaser to any Tax of any
kind whatsoever with respect to the Notes issued to such Purchaser, or changes
the basis of taxation of payments to such Purchaser of any fees, principal or
interest payable on such Notes (except for changes in the rate of tax based
solely on the overall net income of such Purchaser) or imposes, modifies or
deems applicable any reserve requirement against assets held by, or other
liabilities in or for the account of, or loans by, such Purchaser, or imposes on
such Purchaser, directly or indirectly, any of the conditions affecting the
relevant Notes, and the result of any of the foregoing is to increase the cost
to such Purchaser of purchasing or holding the relevant Notes by an amount which
such Purchaser deems to be material, then upon demand by such Purchaser made
promptly upon such event, the Issuers will pay to such Purchaser, upon its
demand, the additional amount or amounts necessary to compensate such Purchaser
for such additional cost. Absent manifest error, such Purchaser's statement
shall be conclusive as to any additional amount to be paid. Such Purchaser
shall supply the Issuers with such information related to any such Taxes,
taxation or reserve requirement as is available to such Purchaser and is not
confidential. In the event that any such additional cost arises and is demanded
by a Purchaser from an Issuer, the Issuer shall have the right to prepay the
Notes of such Purchaser, together with payment of any Make Whole Premium.
The Issuers shall pay to the Purchasers all principal of, and interest on,
the amount outstanding on the Notes and all their other Obligations under the
Transaction Documents free and clear of and without deduction or withholding for
any present or future license, registration or other fees, taxes or other
amounts for or on account of levies, imposts, duties, deductions, withholdings
or other charges assessed by any governmental or taxing authority, excluding
income and franchise taxes imposed on a Purchaser by a jurisdiction under which
such Purchaser is organized or operating in connection with this Agreement or
any political subdivision thereof (the "Taxes"). In the event any Issuer is or
may become
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required to pay any such costs, such Issuer may elect to prepay the Notes,
together with accrued interest thereon, Make Whole Premium, and any additional
costs associated with such prepayment.
(b) If an Issuer shall be required to withhold or deduct Taxes
from any sum payable hereunder, (i) the sum payable shall be increased as may be
necessary so that the amount received is equal to the sum which would have been
received had no withholdings or deductions been made, (ii) such Issuer shall
make such necessary withholdings and deductions, and (iii) such Issuer shall pay
the full amount withheld or deducted to the relevant authority according to
applicable law so that any Purchaser shall not be required to make any deduction
or payment of Taxes.
9.24 Transactions with Related Parties. The Issuers will not and will
---------------------------------
not permit any Restricted Subsidiary to enter into any transaction or
arrangement with any Related Party, including the purchase from, sale to or
exchange of property with the lessee of Financed Equipment (either as lessee or
lessor) or rendering of any service by or for, any Related Party, except in the
ordinary course of business and pursuant to the reasonable requirement of the
Issuers and a Restricted Subsidiary and upon fair and reasonable terms no less
favorable than would be obtained in a comparable arm's length transaction with a
Person other than a Related Party.
9.25 Permitted Investments. Neither Interpool nor any of its Restricted
---------------------
Subsidiaries shall make cash or cash equivalent investments in, loans or
advances to or guarantee the obligations of, any Person except the following
("Permitted Investments"):
(a) Purchases of obligations of the United States Government and
its agencies, U.S. dollar denominated obligations of the Canadian Government and
AAA-rated by Standard & Poor's or Moody's "obligations of supranationals" which
includes government issued securities and World Bank securities, that are rated
at least AAA, all having maturities not in excess of five (5) years;
(b) Purchases of prime commercial paper rated A1/P1 by Standard &
Poor's or Moody's or higher maturing in 270 days or less;
(c) Purchases of certificates of deposit or bankers' acceptances
issued by a bank with capital, surplus and undivided profits of at least
$100,000,000, having a term of one year or less;
(d) Investments in or advances to Restricted Subsidiaries or any
legal entity which after such investments or advances would become a Restricted
Subsidiary;
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(e) Advances to employees for expenses incurred by such employees
in the ordinary course of the Issuers' business;
(f) Carrying lease or notes receivable arising from transactions
with customers and suppliers in the normal course of the Issuers' business;
(g) Guarantees of obligations of Unrestricted Subsidiaries
provided that such guarantees would be permitted under Section 9.19(b);
---------------
(h) Other Investments subject to the limitations set forth in
Section 9.19(d);
- ---------------
(i) Purchases of corporate debt securities rated A3/A- or higher
by Moody's or Standard & Poor's and which mature within five (5) years after the
date of acquisition in an amount not to exceed 15% of the sum of cash and
marketable securities as reflected on the Issuers' quarterly financial
statements of the most recently completed fiscal quarter;
(j) Purchases of tax exempt securities which are rated Aa3/AA- or
higher by Moody's or Standard & Poor's and which mature within five (5) years
from the date of acquisition; and
(k) Any other investments up to an aggregate of $10,000,000 at any
one time outstanding.
To the extent the Issuers have Permitted Investments and prior to any investment
by any Issuers in marketable securities with maturities greater than one year,
or investments described in subsections (h) and (k) above, the Issuers shall
have caused the greater of (i) 5% of Tangible Net Worth and (ii) $10,000,000.00
to have been invested in investments described in subsections (a), (b), (c), (i)
or (j) above with final maturities not exceeding one year.
The foregoing provisions of this Section 9.25 shall not be deemed to limit
------------
the transactions in which the Issuers are permitted to engage in accordance with
the provisions of Section 9.18.
------------
9.26 Leases. At all times following the occurrence and during the
------
continuance of an Event of Default and upon the lock box provided for in Section
-------
9.22 being established, the Issuers shall immediately notify the Collateral
- ----
Agent of the cancellation of any Lease with a term of one (1) year or more or
any master lease.
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<PAGE>
9.27 Acquisition of Notes.
--------------------
No Issuer shall, nor shall such Issuer permit any Subsidiary or any
Affiliate to, directly or indirectly, acquire or make any offer to acquire any
Notes unless such Issuer or such Subsidiary or Affiliate shall have offered to
acquire Notes, pro rata, from all of the Purchasers and upon the same terms. In
--- ----
case an Issuer, or any Subsidiary or Affiliate, acquires any Notes, such Notes
shall thereafter be cancelled and no Notes shall be issued in substitution
thereof.
9.28 Private Offering.
----------------
The Issuers agree that none of the Issuers nor anyone acting on such
Issuers' behalf shall offer the Notes or any part thereof or any similar
securities for issue or sale to, or solicit any offer to acquire any of the same
from, any Person so as to bring the issuance and sale of the Notes within the
provisions of Section 5 of the Securities Act.
SECTION 10. DEFAULT; REMEDIES OF THE PURCHASERS.
-----------------------------------
10.1 Occurrence of Event of Default. Any one of the following events or
------------------------------
conditions shall constitute an Event of Default:
(a) any Issuer's failure to pay, when due, at maturity (whether as
stated or by acceleration) or otherwise, any payment of principal, interest,
fees, Make Whole Premium or other charges or amounts due and owing to the
Purchasers with respect to the Obligations, and such failure shall continue for
five (5) Business Days or more; or
(b) any Issuer shall fail to observe or perform the covenants set
forth in Sections 9.6, 9.18, 9.19, 9.21 or 9.25; or
--------------------------------------
(c) any Issuer shall fail to observe or perform any other covenant
or agreement of such Issuer in this Agreement or any other Transaction Document
which shall remain unremedied for thirty (30) days; or
(d) any representation or warranty made by any Issuer hereunder,
under any Transaction Document or in any other document to any Purchaser or the
Collateral Agent shall be incorrect as at the date made in any material respect;
or
(e) if any Issuer shall (i) file, or consent by answer or
otherwise to the filing against it of, a petition for relief or reorganization
or arrangement or any other petition in bankruptcy, for liquidation or to take
advantage of any bankruptcy or insolvency law of any jurisdiction or if there
shall be
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<PAGE>
commenced against any Issuer any such proceeding and such action or proceeding
remains undismissed for a period of sixty (60) days, (ii) make an assignment for
the benefit of its creditors, (iii) consent to the appointment of a custodian,
receiver, trustee or other officer with similar powers for itself or any
substantial part of its property, (iv) be adjudicated a bankrupt or insolvent,
or (v) take any action for the purpose of any of the foregoing; or
(f) if a court or governmental authority of competent jurisdiction
shall enter an order appointing, without consent by any Issuer, a custodian,
receiver, trustee or other officer with similar powers with respect to it or
with respect to any substantial part of its property, or constituting an order
for relief or approving a petition for relief or reorganization or any other
petition in bankruptcy or for liquidation or to take advantage of any bankruptcy
or insolvency law of any jurisdiction, or ordering its dissolution, winding-up
or liquidation and such order shall not have been stayed or dismissed within
sixty (60) days; or
(g) if any Lien (other than a Lien in favor of the Purchasers or
the Collateral Agent or a Permitted Lien) or attachment, levy or garnishment
exists or is issued against the Collateral or any property of any Issuer
securing any of the Obligations in respect of indebtedness or obligations of
$2,000,000 or more in the case of Ltd. or $1,000,000 or more in the case of
Interpool or Trac and is not released, discharged, dismissed, stayed or fully
bonded within a period of thirty (30) days after its creation, attachment, issue
or levy or if any such Lien, attachment, levy or garnishment against the
Collateral or any property of any Issuer securing Obligations shall have
priority over the security interest of the Collateral Agent in the Collateral,
such Lien, attachment, levy or garnishment is not released, discharged,
dismissed, stayed or fully bonded within a period of fifteen (15) days after its
creation, attachment, issue or levy; or
(h) if any judgment or tax lien is entered against any Issuer and
remains unsatisfied after thirty (30) days, unless said judgment or tax lien is
being contested in good faith by appropriate proceedings and is stayed in the
interim; or
(i) a Person or outside group of related Persons which is not
listed on Schedule 7.1 attached hereto obtains voting control of fifty one
percent (51%) or more of the voting securities of Interpool; or
(j) any Issuer (as principal, guarantor or other surety) defaults
in the payment of any principal or interest of any indebtedness for borrowed
money in excess of $4,000,000.00 with
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<PAGE>
respect to Interpool and in excess of $1,000,000.00 with respect to Ltd. or Trac
(including any indebtedness of Interpool, Ltd. or Trac to the Purchasers other
than the Obligations) beyond the period of grace, if any specified therefor or
any other default in respect of such indebtedness which give the holder of any
such indebtedness the right to cause the acceleration of such indebtedness
including any grace period provided to such holder; or
(k) if the Collateral Value for an Issuer shall be less than 125%
of the aggregate outstanding principal amount of the Notes issued by such Issuer
by (i) an amount of $2,000,000 or more in respect of Ltd. or of $1,000,000 or
more for Interpool or Trac or (ii) an amount less than $2,000,000 for Ltd. or
less than $1,000,000 for Interpool or Trac and such deficiency shall not have
been fully eliminated (A) in the case of the deficiency described in clause (i)
hereof within fifteen (15) days from the date that such deficiency arises or (B)
in the case of the deficiency described in clause (ii) hereof within fifteen
(15) days following the date that the next Collateral Certificate is required to
be delivered pursuant to Section 9.11(c), by the prepayment of Notes pursuant to
---------------
Section 5.5 or the assumption of Notes by Interpool pursuant to Section 5.6(a)
- ----------- --------------
or the grant of additional Collateral pursuant to Section 5.6(b) or Section
-------------- -------
5.6(c) or the grant of Cash Collateral pursuant to Section 5.6(d) or the
- ------ --------------
designation by Interpool of Collateral in respect of excess Collateral Value of
Interpool for the benefit of Ltd. or Trac pursuant to Section 5.6(e).
--------------
10.2 Action Upon Event of Default.
----------------------------
(a) Declaration of Acceleration of Each Note. If an Event of
----------------------------------------
Default under Section 10.1(a) occurs and is continuing, any of the Purchasers
---------------
may by notice to the Issuers, declare the principal of its Notes to be
immediately due and payable together with accrued interest thereon and a Make
Whole Premium with respect thereto. At any time after such acceleration, and
prior to the sale or disposition of any of the Collateral, such Purchaser may
rescind such a declaration or automatic acceleration, as the case may be, and
thereby annul its consequences if (i) the Issuers pay an amount sufficient to
pay all principal of, Make Whole Premium, if any, and interest on such Note, to
the extent each such amount is due or past due without regard to the
acceleration hereof, if any, in respect of the outstanding Note otherwise than
by reason of such acceleration and all sums due and payable to such Purchaser or
the Collateral Agent, (ii) the rescission would not conflict with any judgment
or decree and (iii) all existing Events of Default relating to such Note have
been cured or waived except nonpayment of principal of, Make Whole Premium or
interest on the Note that has become due solely because of such acceleration.
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<PAGE>
(b) Declaration of Acceleration of All Notes. If an Event of
----------------------------------------
Default occurs and is continuing, the Majority In Interest may by notice to the
Issuers, declare the principal of all Notes to be immediately due and payable
together with accrued interest thereon and a Make Whole Premium with respect
thereto; provided that the Notes will automatically become due and payable
--------
together with accrued interest thereon and a Make Whole Premium with respect
thereto without any action of the Purchasers in the case of an Event of Default
under Section 10.1(e) or Section 10.1(f). At any time after such acceleration,
--------------- ---------------
and prior to the sale or disposition of any of the Collateral, the Majority In
Interest may rescind such a declaration or automatic acceleration, as the case
may be, and thereby annul its consequences if (i) the Issuers pay an amount
sufficient to pay all principal of, Make Whole Premium, if any, and interest on
the Notes, to the extent each such amount is due or past due without regard to
the acceleration hereof, if any, in respect of the outstanding Notes otherwise
than by reason of such acceleration and all sums due and payable to the
Purchasers or the Collateral Agent, (ii) the rescission would not conflict with
any judgment or decree and (iii) all existing Events of Default have been cured
or waived except nonpayment of principal of, Make Whole Premium or interest on
the Notes that has become due solely because of such acceleration.
(c) Payments after Acceleration of Notes. All payments received
------------------------------------
and all amounts held or realized by the Purchasers after the outstanding princi-
pal of any of the Notes shall have been declared to be due and payable pursuant
to Section 10.2(a) or Section 10.2(b), and all payments or amounts then held or
--------------- ---------------
thereafter received by the Purchasers hereunder, shall be applied by each such
Purchaser in the following order of priority:
First, to reimburse the Purchasers for any costs and expenses not reim-
-----
bursed by the Issuers;
Second, so much of such payments or amounts remaining as shall be required
------
to pay in full any interest at the Overdue Rate, the accrued but unpaid interest
on the Notes to the date of distribution and any Make Whole Premium;
Third, so much of such amounts remaining as shall be required to pay in
-----
full the aggregate unpaid principal amount of the Notes on a pro rata basis for
--- ----
all the Notes for each Issuer and then applied to each Series of Notes in
inverse order of maturity thereof and all other amounts payable hereunder;
Fourth, so much of such amounts remaining as shall be required to pay in
------
full all other outstanding Obligations; and
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<PAGE>
Fifth, the balance, if any, of such payments or amounts remaining
-----
thereafter shall be distributed to each of the relevant Issuers, upon its
written direction or to any other Person entitled thereto as a matter of law.
All payments and proceeds received by the Collateral Agent or the Purchasers
shall be applied to the Obligations secured thereby pursuant to the applicable
Security Agreement, Railcar Security Agreement or security and pledge agreement
in respect of Cash Collateral.
(d) Other Remedies. The Issuers agree, to the full extent that
--------------
they lawfully may, that if one or more Events of Default shall have occurred and
be continuing, then, and in every such case the Purchasers or upon the
instructions of the Majority In Interest the Collateral Agent on behalf of the
Purchasers pursuant to the Agency Agreement, as secured party, mortgagee or
collateral assignee hereunder or under the Collateral Documents, or otherwise,
may exercise any or all of the rights and powers and pursue any and all of the
remedies available to the Purchasers hereunder or under any of the Transaction
Documents or with respect to the Collateral Agent, under the Collateral
Documents.
10.3 Authorized to Execute Bills of Sale. Each of the Issuers hereby
-----------------------------------
irrevocably appoints the Collateral Agent the true and lawful attorney-in-fact
of such Issuer in its respective name and stead and on its respective behalf,
for the purpose of effectuating any sale, assignment, transfer or delivery for
the enforcement of the Lien in connection with this Agreement and any other
Transaction Documents, following the occurrence of an Event of Default to
execute and deliver all such bills of sale, assignments, UCC financing
statements and other instruments as the Collateral Agent may consider necessary
or appropriate, with full power of substitution, each of the Issuers hereby
ratifying and confirming all that such attorney or any substitute shall lawfully
do by virtue hereof. After the Collateral Agent has exercised its rights
hereunder, if so requested by the Collateral Agent or any purchaser, each of the
Issuers shall ratify and confirm any such sale, assignment, transfer or deliv-
ery, by executing and delivering to the Collateral Agent or such purchaser all
bills of sale, assignments, releases, UCC financing statements and other proper
instruments to effect such ratification and confirmation as may be designated in
any such request.
10.4 Remedies Cumulative. Each and every right, power and remedy herein
-------------------
specifically given to the Purchasers or the Collateral Agent or otherwise in
this Agreement or any other Transaction Documents shall be cumulative and shall
be in addition to every other right, power and remedy herein specifically given
or now or hereafter existing at law, in equity or by statute, and each and
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<PAGE>
every right, power and remedy whether specifically herein given or otherwise
existing may be exercised from time to time and as often and in such order as
may be deemed expedient by the Purchasers or the Collateral Agent, and the
exercise or the beginning of the exercise of any power or remedy shall not be
construed to be a waiver of the right to exercise at the same time or thereafter
any other right, power or remedy. No delay or omission by the Purchasers or the
Collateral Agent in the exercise of any right, remedy or power or in the
pursuance of any remedy shall impair any such right, power or remedy or be
construed to be a waiver of any Default or Event of Default on the part of any
Issuer or to be an acquiescence therein.
10.5 Discontinuance of Proceedings. In case any of the Purchasers or the
-----------------------------
Collateral Agent shall have proceeded to enforce any right, power or remedy
under this Agreement or any other Transaction Documents and such proceedings
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to such Purchaser or the Collateral Agent, then and in
every such case the Issuers and the Collateral Agent shall be restored to their
former positions and rights hereunder with respect to the Collateral, and all
rights, remedies and powers of such Purchaser or the Collateral Agent shall
continue as if no such proceedings had been taken.
10.6 Agreements with respect to Remedies and Defaults.
------------------------------------------------
Notwithstanding any provisions of this Agreement or the Collateral
Documents to the contrary,
(a) If an Event of Default shall have occurred and is continuing
under this Agreement or any other Transaction Documents (whether declared or
not), the Collateral Agent shall in accordance with instructions from the
Majority In Interest, to the extent remedies are available to do so and the
Collateral Agent is not stayed from exercising such remedies, pursue such
remedies as are available under the Lease and the Collateral Documents and at
law in respect of the Collateral in accordance with the Collateral Documents and
with respect to the parties thereto to repay the Notes.
(b) If an Event of Default shall have occurred and is continuing,
the Collateral Agent shall act in a commercially reasonable manner in respect of
the Collateral and with respect to the exercise of the remedies provided under
the Collateral Documents and at law related to the Collateral.
10.7 Waiver of Existing Defaults. The Issuers, upon written confirmation
---------------------------
that the Majority In Interest waive an existing Event of Default, shall notify
all the Purchasers that the Majority In
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Interest has provided such waiver; provided, however, no such waiver shall be
-------- -------
effective in the case of (i) an Event of Default in the payment of the principal
of, Make Whole Premium, if any, or interest on, any Note or (ii) in respect of a
covenant or provision of Section 9.18 and Section 9.19 unless such waiver is
------------ ------------
made by all the Purchasers.
10.8 Rights of Purchasers to Receive Payment. Each Purchaser, or with
---------------------------------------
respect to all the Notes, the Majority In Interest, shall have the right to
bring suit for the enforcement of such Purchaser's, or with respect to all
Notes, all of Purchasers' rights to receive payment of principal of, Make Whole
Premium, if any, and interest on such Note or Notes on or after the due date
expressed in such Note or Notes. Notwithstanding any other provision of this
Agreement or the Agency Agreement, the right of any Purchaser to receive payment
of principal of, Make Whole Premium, if any, and interest on a Note on or after
the respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Purchaser.
SECTION 11. EXPENSES.
--------
Each of the Issuers agrees, whether or not the transactions contemplated
by this Agreement are consummated, for the sole benefit of each of the
Purchasers and the Collateral Agent, to pay (or reimburse each Purchaser for the
payment of) all costs and expenses, of the negotiation, execution and delivery
of this Agreement and each of the other Transaction Documents and every other
related agreement, instrument and document, and the perfection by the Collateral
Agent of a valid first priority Lien in the Collateral including all reasonable
legal fees and expenses, and expenses of lien searches, filing fees of UCC
financing statements, Railcar Security Agreement and other lien instruments, and
fees and expenses relating to the titling and registration of the Collateral and
noting Liens on certificates of title, incurred by or on behalf of each
Purchaser and the Collateral Agent, including without limitation, the fees and
disbursements of Rosenman & Colin and Rogers & Wells, special counsel for the
Purchasers. Each of the Issuers further agrees to pay (or reimburse each
Purchaser for the payment of) all costs and expenses including all reasonable
legal fees and expenses, and expenses of lien searches, filing fees, and fees
and expenses relating to the titling and registration of the Collateral and
noting the Liens on the certificates of title, incurred on behalf of each
Purchaser and the Collateral Agent, including without limitation, the fees and
disbursements of special counsel to the Purchasers incurred in connection with
(a) the negotiation, execution and delivery of any amendments, supplements or
modifications to this Agreement, the other Transaction Documents and other
related agreements,
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instruments and documents, and any amendment, supplement or waiver or any
provision hereof or thereof, (b) the perfection by the Collateral Agent by
filing, recording, possession or otherwise in any jurisdiction whose laws are
applicable to an Issuer or any of the Collateral of a valid first priority Lien
in the Collateral, both initially and with regard to any substitute or
additional Collateral including but not limited to Cash Collateral and other
Collateral granted pursuant to any provision of Section 5 and any release of any
---------
Collateral, and (c) the enforcement of the provisions of this Agreement, the
other Transaction Documents or any of the other related agreements, instruments
and documents, by or on behalf of any Purchaser or the Collateral Agent,
including the exercise of any rights and remedies provided herein or in the
Agency Agreement.
SECTION 12. NOTICES.
-------
All communications and notices provided for herein shall be in writing
and delivered by hand, the United States certified or registered mail or by
telecopier, and any such notice shall become effective (a) upon personal
delivery thereof, including, without limitation, by overnight mail and courier
service, (b) five (5) days after the date on which it shall have been mailed by
United States mail, certified or registered, postage prepaid, return receipt
requested, or (c) in the case of notice by telecopier, when electronically or
verbally confirmed, in each case addressed to (i) if to a Purchaser, at the
address set forth under such Purchaser's name on Schedule 3 attached hereto, or
(ii) if to Issuers, at the address set forth under such Issuer's name on
Schedule 2 attached hereto, or at such other address as such Person may from
time to time designate by written notice to the other parties hereto. Any party
may change the person or address to whom or which notices are to be given
hereunder, by notice duly given hereunder; provided, however, that any such
notice shall be deemed to have been given hereunder only when actually received
by the party to which it is addressed.
SECTION 13. PURCHASERS AND NOTES.
--------------------
13.1 Withholding Taxes; Information Reporting. Notwithstanding the
----------------------------------------
Issuers' obligation to ensure that the Purchasers are reimbursed for any
withholding Taxes, the Issuers shall exclude and withhold from each distribution
of principal, Make Whole Premium, if any, and interest and other amounts due
hereunder or under the Notes any and all withholding Taxes applicable thereto as
required by law. Any such withholding shall in no event give rise to an Event
of Default. The Issuers agree (a) to act as such withholding agent and, in
connection therewith, whenever any present or future Taxes or similar charges
are required to be withheld with respect to any such amounts payable in respect
of the Notes, to withhold
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<PAGE>
such amounts and timely pay the same to the appropriate authority in the name of
and on behalf of the Purchasers, (b) that it will file any necessary withholding
Tax returns or statements when due and (c) that, as promptly as possible after
the payment of such amounts, it will deliver to each Purchaser appropriate
documentation showing the payment of such amounts, together with such additional
documentary evidence as such Purchasers may reasonably request from time to
time. Each of the Issuers agrees to file any other information reports as it
may be required to file under United States law. To the extent that such Issuer
fails, with respect to any Purchaser, to withhold and pay over any such taxes to
the appropriate taxing authority, such Issuer shall, upon a claim being made for
such taxes by such authority, take all reasonable steps to recover such taxes
from such Purchaser, including, without limitation, withholding the amount of
such Taxes from subsequent distributions, if any, to such Purchaser.
13.2 Satisfaction and Discharge of Agreement; Termination of Obligations.
-------------------------------------------------------------------
Subject to Section 13.3, the Issuers shall, except as herein provided, be deemed
------------
to have been discharged from their respective Obligations with respect to the
Notes, when
(a) the principal of, Make Whole Premium, if any, and interest on
the Notes and all other amounts due and payable under the Notes, this Agreement
and other Transaction Documents have been paid in full or there shall have been
deposited with the Purchaser an amount equal to the amount required to discharge
such indebtedness and other Obligations; and
(b) each Purchaser shall have received evidence that all
conditions precedent provided for relating to the satisfaction and discharge of
this Agreement contemplated by this Section 13.2 have been complied with.
------------
13.3 Amendments to This Agreement With Consent of
Purchasers.
--------------------------------------------
(a) With the written consent of the Majority In Interest, the
Issuers may enter into such supplemental agreements to add any provisions to or
to change or eliminate any provisions of this Agreement or of any such
supplemental agreements or to modify the rights of the Purchasers; provided,
--------
however, that, without the consent of each Purchaser affected thereby, an
- -------
amendment under this Section 13.3 may not:
------------
(i) reduce the amount of principal, interest or Make Whole
Premium due or owing on the Notes held by such Purchaser; or
(ii) affect the terms of payment of any Note; or
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(iii) reduce the amount of Purchasers which constitutes the
Majority In Interest; or
(iv) make any change in Section 5.1, 5.6, 5.7, 9.19, 10, or this
-------------------------------
Section 13.3(a); or
---------------
(v) affect the preference between Purchasers and/or Purchasers
and other creditors.
(b) Promptly after the execution of any supplemental agreement
pursuant to the provisions of this Section 13.3, the Issuers shall transmit by
------------
first-class mail a copy of such supplemental agreement to all Purchasers, as the
names and addresses of such Purchasers appear on the Register. Any failure of
the Issuers to mail such copy, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental agreement.
13.4 Notification on or Exchange of Notes. Each of the Purchasers may
------------------------------------
place an appropriate notation about an amendment or waiver on any Note
thereafter executed. Each of the Purchasers in exchange for such Notes may
execute new Notes that reflect the amendment or waiver.
SECTION 14. MISCELLANEOUS.
-------------
14.1 Oral Modification, Termination, etc. This Agreement cannot be
------------------------------------
changed, discharged or terminated orally.
14.2 Successors and Assigns. All the terms of this Agreement shall be
----------------------
binding upon, inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto, and, in particular, shall inure to
the benefit of and be enforceable by any registered owner or holder of a Note;
provided, however, the liabilities and Obligations of the Issuers may not be
- -------- -------
assigned or otherwise transferred except by any merger permitted under Section
-------
9.18(b) or an assumption by Interpool provided under Section 5.6.
- ------- -----------
14.3 Headings. The headings to the various sections of this Agreement
--------
have been inserted for the convenience of reference only and shall not limit or
otherwise affect any of the terms hereof.
14.4 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
14.5 Survival. All warranties, representation, indemnities and covenants
--------
made by any Person hereto, herein or in any certificate or other instrument
delivered by any such Person or on
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the behalf of any such Person under this Agreement shall be considered to have
been relied upon by each other Person hereto and shall survive the consummation
of the transactions contemplated hereby on the Closing Date regardless of any
investigation made by any such Person or on the behalf of any such Person. All
statements in any such certificate or other instrument shall constitute warran-
ties and representations by the Person so making the same.
14.6 Governing Law; Severability. This Agreement shall be governed by
---------------------------
and construed and enforced in accordance with the internal laws (as opposed to
conflicts of law provisions) of the State of New York. Whenever possible, each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without invali-
dating the remainder of such provision or the remaining provisions of this
Agreement.
14.7 WAIVER OF JURY TRIAL; SUBMISSION TO JURISDICTION. EACH OF THE
------------------------------------------------
ISSUERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT TO A JURY TRIAL IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. In any
action or proceeding arising out of or relating to this Agreement, each of the
Issuers hereby accepts, for itself and its property, the non-exclusive jurisdic-
tion of the courts of the State of New York, and the federal courts in New York
City, and agrees that effective service of process may be made on each Issuer by
mailing same to such Issuer's address set in Schedule 2 attached hereto. The
Collateral Agent or any Purchaser may proceed against any Issuer in any other
applicable jurisdiction, and may serve process in any other manner permitted by
applicable law. Each of the Issuers hereby irrevocably waives any objection to
the laying of venue in the aforesaid courts, and any claim of an inconvenient
forum. To the extent that such Issuer or its property may have or hereafter
acquire immunity, on the grounds of sovereignty or otherwise, from any judicial
process in connection with this Agreement, each Issuer hereby irrevocably
waives, to the fullest extent permitted by law, any such immunity and agrees not
to claim same. Each of the Issuers agrees that a final judgment in any such
action or proceeding shall be conclusive, and may be enforced in any other
jurisdiction by suit on the judgment or in any other permitted manner.
Interpool hereby irrevocably designates and appoints Interpool
Limited of 633 Third Avenue, New York, New York 10017 as its agent to receive on
its behalf and its property service of copies of the summons and complaint and
any other process which may be served upon Interpool in the State of New York in
connection
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<PAGE>
with any action or proceeding in the courts of the State of New York or of the
United States of America for the Southern District of New York.
SECTION 15. DEFINITIONS.
-----------
The following terms used herein shall have the following respective
meanings (such definitions to be equally applicable to both the singular and
plural forms of the terms defined):
"Affiliate" of any Person shall mean any other Person which directly or
indirectly controls, or is controlled by, or is under a common control with,
such Person, including, without limitation, Related Parties.
"Agency Agreement" shall mean the Agency Agreement dated the date hereof
among the Collateral Agent, the Issuers and the Purchasers, as the same may be
amended, supplemented or modified from time to time, substantially in the form
of Exhibit B hereto.
"Approved Investments" shall mean the investments listed in paragraphs (a)
or (b) of Section 9.25 hereof, provided that such investments have maturities of
------------
less than one (1) year. So long as no Default or Event of Default shall have
occurred, the Issuer pledging Cash Collateral shall have the option of
designating the specific Approved Investment in which such Cash Collateral shall
be maintained. If a Default or Event of Default shall have occurred, such
Approved Investment shall be designated by the Collateral Agent.
"Business Day" shall mean any day other than a Saturday, Sunday or other
day on which commercial banking institutions in the State of New York are
authorized or obligated by law to close.
"Cash Collateral" shall mean
(i) all bank accounts in the name of the Collateral Agent as
agent for the ratable benefit of the Purchasers, all funds held therein and all
certificates and instruments representing or evidencing such bank accounts which
are maintained by the Collateral Agent;
(ii) all Approved Investments made from time to time in
accordance with the provisions of this Agreement and the applicable Transaction
Documents;
(iii) all interest, dividends and other property from time to
time received, receivable or otherwise distributed in respect of any amounts on
deposit in any of the accounts or the
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<PAGE>
Approved Investments described in subparagraphs (i) or (ii) above; and
(iv) all proceeds of any or all of the foregoing.
The Issuers shall, at all times, cause all Cash Collateral to be subject
to a first priority perfected security interest in favor of the Collateral
Agent for the ratable benefit of the Purchasers, subject to no other Liens.
"Chassis" shall mean wheeled steel frames used to carry containers over
the road.
"Chief Offices" shall mean, for each Issuer, those offices listed on
Schedule 7.1 attached hereto.
"Claims" shall have the meaning set forth in Section 9.8 hereof.
-----------
"Closing" shall have the meaning set forth in Section 3 hereof.
---------
"Closing Date" shall have the meaning set forth in Section 3 hereof.
---------
"Code" shall have the meaning set forth in Section 7.12 hereof.
------------
"Collateral" shall mean all Equipment, Leases and other property subject
to the Lien of the Collateral Documents, including, without limitation,
insurance policies as required pursuant to Section 9.6.
-----------
"Collateral Agent" shall mean First Security Bank of Utah, National
Association, not in its individual capacity but solely as agent under the Agency
Agreement, and its successors thereof.
"Collateral Certificate" shall mean the Collateral Value certificate,
substantially in the form of Exhibit C.
"Collateral Documents" shall mean the Security Agreements, together with
any Security Agreement Supplements, the Railcar Security Agreements and the
Guaranties.
"Collateral Value" shall mean with respect to each Issuer (including an
Issuer for whose benefit Collateral is added or designated pursuant to Sections
5.6(c) or 5.6(e)) (a) in respect of Containers pledged to the Collateral Agent,
the cost basis of the individual Containers less depreciation on a straight line
basis
-51-
<PAGE>
over a fifteen (15) year life until their estimated salvage value is reached as
reflected on the books and records of an Issuer, in accordance with GAAP,
(b) with respect to Chassis pledged to the Collateral Agent, the depreciated
calculated value using a depreciable basis of $6,250 per Chassis, less
depreciation on a straight line basis over a twenty (20) year life until a
specified "floor value" of no less than $2,000 per Chassis is reached and (c)
with respect to Railcars pledged to the Collateral Agent, the cost basis of the
individual Railcar less depreciation on a straight line basis over a twenty-five
(25) year life until their estimated salvage value is reached, as reflected on
the books and records of an Issuer in accordance with GAAP.
"Commitment" shall mean the amount set forth opposite the name of each
Purchaser on Schedule 1 attached hereto.
"Containers" shall mean general purpose standard, intermodal dry cargo
containers, each in 20 or 40 foot lengths and having a configuration suitable
for shipping small packages or bulk material that confines the contents and can
be handled in transit as a unit, for road transport on chassis, or for rail
transport deck-mounted to appropriate rail cars.
"Control" shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
"Controlled Group" shall have the meaning as defined in the Code.
"Default" shall mean an event or condition which, with the passage of time
or with the giving of notice, or both, would constitute an Event of Default.
"Depreciation" shall be determined in accordance with GAAP.
"Duff & Phelps" shall mean Duff & Phelps Credit Rating Co.
"Earnings Available for Fixed Charges" shall mean the sum of Fixed Charges
plus Net Earnings before income taxes.
"Equipment" shall mean Containers, Chassis and Railcars.
"ERISA" shall have the meaning set forth in Section 7.12 hereof.
------------
"Event of Default" shall mean any of the events specified in Section 10.1,
------------
provided there has been satisfied any requirement in
-52-
<PAGE>
connection with such event for the giving of notice, or the lapse of time, or
the happening of any further condition, event or act.
"Financed Equipment" shall mean all Equipment now owned or hereafter
acquired by any of the Issuers, including New Equipment and Used Equipment which
is included in the Collateral pursuant to this Agreement.
"Fixed Charges" shall mean the sum of interest expense (including
capitalized interest, if any,) plus lease rentals on Long-Term Leases and the
interest component of capitalized leases.
"Funded Debt" shall mean all indebtedness for money borrowed with recourse
to Interpool and its Restricted Subsidiaries, including purchase money
mortgages, leases capitalized in accordance with Statement 13 of the Financial
Standards Board and conditional sales contracts and similar title retention debt
in instruments (excluding any current maturities of such indebtedness) which by
its terms mature more than one year from the date of any calculation thereof
and/or which is renewable or extendible under any revolving or similar
agreement. The calculation of Funded Debt shall include all Funded Debt of
Interpool and its Restricted Subsidiaries, plus any Funded Debt of another
Person, other than a Restricted Subsidiary, which has been guaranteed by
Interpool or its Restricted Subsidiaries. Funded Debt shall exclude all Indebt-
edness of Interpool or any of its Restricted Subsidiaries which is non-recourse
to Interpool or any of its Restricted Subsidiaries, as the case may be.
"GAAP" shall mean generally accepted accounting principles, in effect from
time to time, consistently applied in the United States.
"Guarantor" shall mean Interpool.
"Guaranties" shall mean the Guaranties by the Guarantor in favor of each
Purchaser, substantially in the form of Exhibit D.
"Investment Company Act of 1940" shall mean the Investment Company Act of
1940, as amended.
"Issuer(s)" shall have the meaning set forth in the introductory paragraph
hereof.
"Leases" shall mean all leases or similar arrangements with respect to the
Financed Equipment, but only to the extent that they relate to the Financed
Equipment, and all extensions, substitutions and modifications thereto.
-53-
<PAGE>
"Liens" shall mean all mortgages, liens, judicial liens, encumbrances,
security interests, charges, pledges, hypothecations, assignments, conditional
sale or other title retention agreements and the like, relating to any real or
personal property interest of any Issuer, whether legal or equitable.
"Long-Term Leases" shall mean minimum lease rentals of non-capitalized
leases whereunder Interpool or any Restricted Subsidiary is the lessee with an
initial term in excess of three years, excluding leases of office equipment and
---------
motor vehicles used in the ordinary course of business.
"Majority In Interest", as of a particular date of determination, shall
mean the holders of more than 66 2/3% of the aggregate outstanding principal
amount of the Notes.
"Make Whole Premium" means a premium, determined as of the Prepayment Date
pursuant to Section 5.5 equal to the amount (but not less than zero) obtained by
-----------
subtracting (i) the sum of the unpaid principal amount of the Note (or the
portion thereof) being prepaid or accelerated to the Prepayment Date or date of
acceleration, as the case may be, from (ii) the sum of the Current Values of
each prospective interest payment (excluding accrued interest from the last date
that interest was payable to and including the date prior to the payment or
prepayment date or the date of acceleration, as the case may be), and the
Current Value of each required prepayment and principal payment at maturity
(each such amount of principal or interest being referred to herein as an
"Amount Payable") being prepaid or accelerated that would otherwise have become
due after the date of such determination if such Note were not being prepaid or
accelerated. The "Current Value" of any Amount Payable means such Amount
Payable discounted (on a semi-annual basis) to its present value on the date of
determination in accordance with the following formula:
Amount Payable
--------------
Current Value =
(1 +d/2)n
where "d" is the sum of (a) 50 basis points and (b) the Treasury Yield per annum
expressed as a decimal, and "n" is an exponent (which need not be an integer)
equal to the number of semiannual periods and portions thereof (any such portion
of a period to be determined by dividing the number of days in such portion of
such period by the total number of days in such period, both computed on the
basis of twelve 30-day months in a 360-day year) from the date of such
determination to the scheduled payment date of the Amount Payable. The
"Treasury Yield" applicable to each Amount Payable shall be determined as of
10:00 a.m. (New York time) two (2) Business Days prior to the date fixed for
prepayment or the date of
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<PAGE>
acceleration, as the case may be, by reference to U.S. Treasury securities
having a maturity equal to the remaining weighted average life of such Notes as
reported by the Telerate Access Service page 500 (or, if such data services are
no longer available then any publicly available source of similar market data
acceptable to at least 51% of the Purchasers of the outstanding Notes being
prepaid or accelerated, as the case may be), and shall be equal to the then
remaining weighted average life of all Amounts Payable (the "Remaining Life"),
computed by dividing (x) the sum of the principal portion of all Amounts Payable
into (y) the total of the products obtained by multiplying (A) the principal
portion of each Amount Payable by (B) the number of years (calculated to the
nearest one-twelfth) which will elapse between the date as of which such
computation is made and the due date of the Amount Payable. If the Remaining
Life is not equal to the constant maturity of a U.S. Treasury security for which
a yield is given, the Treasury Yield shall be obtained by linear interpolation
(calculated to the nearest one-twelfth of a year) from the yields of (a) the
actively traded U.S. Treasury security with a maturity closest to and less than
the Remaining Life and (b) the actively traded U.S. Treasury security with a
maturity closest to and greater than the Remaining Life, except that if the
Remaining Life is less than one year, the yield on actively traded U.S. Treasury
securities adjusted to a constant maturity of one year shall be used. The
Treasury Yield shall be computed to the fifth decimal place (one thousandth of a
percentage point) and then rounded to the fourth decimal place (one hundredth of
a percentage point).
"Margin Stock" shall have the meaning as defined in Regulation U.
"Moody's" shall mean Moody's Investors Services, Inc.
"NAIC" shall have the meaning set forth in Section 4.13(a) hereof.
---------------
"Net Book Value" shall have the meaning as determined in accordance with
GAAP.
"Net Earnings" shall mean the consolidated net income before extraordinary
items of Interpool and its Restricted Subsidiaries for any period, determined in
conformity with GAAP consistent with those applied in preparing Interpool's
audited annual reports.
"New Equipment" shall mean newly manufactured Equipment owned at any time
by any of the Issuers that have not yet been put into use and free of all Liens.
"Nominee(s)" shall have the meaning set forth in Section 3 hereof.
---------
-55-
<PAGE>
"Obligations" shall mean (i) any and all indebtedness, obligations,
liabilities and agreements of any kind and nature of the Issuers pursuant to
this Agreement, the Notes or any other Transaction Document to or with any of
the Purchasers, or to or with any Nominees of any of the Purchasers, or of any
guarantor of any of such Issuers' indebtedness, obligations, liabilities and
agreements, now existing or hereafter arising, and now or hereafter incurred,
whether in the form of loans, guarantees, interest, charges, expenses, fees
(including, without limitation, attorneys' fees) or otherwise, direct or
indirect, (including, without limitation, any participation or interest of any
of the Purchasers (or of a Nominee of any of the Purchasers) in any such
Issuers' indebtedness) acquired outright, conditionally or as collateral
security from another, absolute or contingent, joint and/or several, liquidated
or unliquidated, due or not due, contractual or tortious, secured or unsecured,
arising by operation of law or otherwise, whether incurred by the Issuers as
principal, surety, endorser, guarantor, accommodation party or otherwise; (ii)
all other sums and charges to be paid to the Purchasers pursuant to this
Agreement; and (iii) all interest and late charges on any of the foregoing.
"Officer's Certificate" shall mean a certificate signed by the President,
any Vice President, the Treasurer or an Assistant Treasurer and, in the case of
a commercial bank or trust company, by any other officer customarily performing
the functions similar to those performed by the Persons who at the time shall be
such officers, or to whom any corporate trust matter is referred because of his
knowledge of and familiarity with the particular subject; provided, however,
-------- -------
that in the case of the Collateral Agent, "Officer's Certificate" shall mean a
certificate signed by any Vice President, any Trust Officer or any Assistant
Trust Officer who is, in each case, responsible for corporate trust
administration.
"Other Investments" shall mean investments in excess of an aggregate of
$10,000,000.00 (other investments up to an aggregate of $10,000,000.00 being
provided for in Section 9.25(k) hereof) in anything other than those investments
---------------
listed in paragraphs (a) through (g) and (i) and (j) of Section 9.25 hereof,
------------
which shall be deemed to be Unrestricted Subsidiaries for purposes of
calculating the financial covenants in connection with Section 9.19 hereof.
------------
"Overdue Rate" shall have the meaning set forth in the Notes.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any Person
succeeding to the functions thereof.
"Permitted Investments" shall have the meaning set forth in Section 9.25
------------
hereof.
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<PAGE>
"Permitted Liens" shall mean
(i) Liens for Taxes not yet delinquent or which are being
contested in good faith by appropriate proceedings and the enforcement of which
has been stayed (and for the payment of which adequate reserves are provided);
(ii) carriers', seamen's, stevedores', wharfinger's,
warehousemen's, mechanics', suppliers', materialmen's, repairmen's or other like
Liens arising in the ordinary course of business and relating to amounts not yet
due or which shall not have been overdue for a period of more than sixty (60)
days or which are being contested in good faith by appropriate proceedings or
for the payment of which adequate reserves have been provided;
(iii) leases, lease agreements, and other contracts entered into in
the ordinary course of business providing for the leasing, sale or exchange of
Equipment owned by the Company;
(iv) deposits and other forms of security given to any governmental
agency or body created or approved by law or governmental regulation as a
condition to the transaction of business or the exercise of any privilege,
franchise or license;
(v) deposits and other forms of security in connection with
worker's compensation, unemployment insurance and other social security
legislation; and
(vi) deposits and other forms of security to secure the performance
of bids, trade contracts (other than for borrowed money), leases, surety and
appeal bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business.
"Person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a government
or any department or agency thereof.
"Placement Agents" shall have the meaning set forth in Section 4.14
------------
hereof.
"Plan" shall mean any plan subject to the minimum funding requirements of
Section 412 of the Code.
"Prepayment Date" shall mean the date of an optional prepayment of any of
the Notes by any Issuer pursuant to Section 5.5 hereof.
-----------
"Pro-Forma Fixed Charges" shall mean Fixed Charges after giving effect to
the Funded Debt referred to in Section 9.19(b).
---------------
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<PAGE>
"Purchasers" shall have the meaning set forth in the introductory
paragraph hereof and shall include the successors and assigns of each Purchaser.
"Qualified Institutional Buyer" shall mean
(i) a duly authorized domestic bank, savings and loan
association, insurance company, registered investment company, registered
investment adviser or registered dealer, acting for its own account, which in
the aggregate owns and invests on a discretionary basis at least $100 million in
securities and, in each case, which has a net worth of at least $100 million; or
(ii) A foreign bank, savings and loan association or
insurance company or equivalent institution, acting for its own account, which
in the aggregate owns and invests on a discretionary basis at least $100 million
in securities and, in each case, has a net worth of at least $100 million; or
(iii) Any other entity which also constitutes a "qualified
institutional buyer" as defined in Rule 144A under the Securities Act of 1933
(or any successor statute) and the rules and regulations thereunder, all as from
time to time in effect.
"QPAM Exemption" shall have the meaning set forth in Section 8.3(c)
--------------
hereof.
"Railcars" shall mean steel wheeled vehicles for use on railroad tracks.
"Railcar Security Agreement" shall mean the Railcar Security Agreement
between the Collateral Agent and Interpool in respect of the Railcars (as may be
amended, supplemented or modified from time to time), substantially in the form
of Exhibit E.
"Record Date" shall have the meaning specified in the relevant Note.
"Register" shall have the meaning specified in Section 5.4(a) hereof.
--------------
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System, as the same may be amended or supplemented from time to
time.
"Related Party" shall mean The Ivy Group, Radcliff Group, Princeton
Intermodal Equipment Trust I, Eurochassis L.P., three New Jersey limited
partnerships called Microtech Three, Microtech Four and Microtech Five,
Princeton International Properties, Inc., Martom Associates, and 211 College
Road Associates, a New Jersey
-58-
<PAGE>
general partnership and any other Affiliates of Interpool or its Restricted
Subsidiaries.
"Reportable Event" shall have the meaning as such term is defined in Title
IV of ERISA.
"Responsible Officer" shall mean, with respect to the subject matter of
any covenant, agreement or obligation of any Person contained in any Transaction
Document, the President, or any Vice President, Treasurer, Assistant Treasurer
or other officer thereof, who in the normal performance of his or her
operational responsibility would have knowledge of such matters and the
requirements with respect thereto.
"Restricted Payments" shall mean cash dividends, redemption of capital
stock, Other Investments, and investments in Unrestricted Subsidiaries.
"Restricted Subsidiary" shall mean any Subsidiary which has not been
designated as an Unrestricted Subsidiary, provided that Ltd. and Trac shall each
be a Restricted Subsidiary unless and until: (a) it shall be fully released
from all its Obligations (other that its representations, warranties and
indemnities) upon Interpool's assumption of all such Obligations pursuant to
Section 5.6(a) hereof, or (b) its Notes and all its other Obligations shall have
- --------------
been paid in full, provided further that neither Ltd. nor Trac may be designated
----------------
as an Unrestricted Subsidiary if a Default or an Event of Default shall have
occurred and be continuing or would result from Ltd. or Trac being designated as
an Unrestricted Subsidiary.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Security Agreement(s)" shall mean each of the Security Agreements between
the Collateral Agent and an Issuer in respect of the Collateral, excluding the
Railcars, substantially in the form of Exhibit F.
"Security Agreement Supplement(s)" shall have the meaning set forth in the
Security Agreement.
"Series" shall have the meaning set forth in Section 1.1 hereof.
-----------
"Standard & Poor's" shall mean Standard & Poor's Ratings Group, a division
of McGraw - Hill, Inc.
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<PAGE>
"Subsidiary" shall mean any Person (other than an individual) with respect
to which Interpool or any one or more of its subsidiaries has Control.
"Tangible Net Worth" shall mean stockholders' equity as set forth on a
consolidated financial statement for Interpool and its Restricted Subsidiaries,
reduced by all items of goodwill and other intangible assets (other than
deferred charges).
"Taxes" shall have the meaning set forth in Section 9.24(a) hereof.
---------------
"Transaction Documents" shall mean this Agreement, the Notes, the Agency
Agreement and the Collateral Documents.
"UCC" shall mean the Uniform Commercial Code as enacted in any state of
the United States or in the District of Columbia or the United States Virgin
Islands insofar as any such statute, as in effect from time to time, may be
relevant to the creation, perfection continuation and enforcement of Liens on
Collateral.
"Unrestricted Subsidiary" shall mean any Subsidiary which is designated by
Interpool as an Unrestricted subsidiary and/or any Other Investment.
"Used Equipment" shall mean all Equipment owned at any time by any of the
Issuers that is not New Equipment.
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterparts of this Agreement and return the same to
the Issuers, whereupon this Agreement shall become a binding agreement among the
Issuers and the Purchasers.
Very truly yours,
INTERPOOL, INC.
By:
------------------------------
Title:
INTERPOOL LIMITED
By:
------------------------------
Title:
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<PAGE>
TRAC LEASE, INC.
By:
------------------------------
Title:
The foregoing Agreement is
hereby accepted as of the
date first above written.
NOTE PURCHASERS:
*
By: _________________________
Title:
*
By: _________________________
Title:
*
By: _________________________
Title:
*
By: _________________________
Title:
*
By: _________________________
Title:
* Confidential Treatment Requested
<PAGE>
*
By: *
By: _________________________
Title:
*
By: *
By: _________________________
Title:
*
By: *
By: _________________________
Title:
*
By: *
By: _________________________
Title:
* Confidential Treatment Requested
<PAGE>
*
By: *
By: _________________________
Title:
*
By: *
By: _________________________
Title:
*
By: *
By: _________________________
Title:
*
By: *
By: _________________________
Title:
* Confidential Treatment Requested
<PAGE>
Schedule 1 To Note Purchase Agreement
PURCHASERS SCHEDULE
<TABLE><CAPTION>
Consolidated
Interpool, Interpool Trac Total
Name of Purchaser Series A Note Series B Note Inc. Limited Lease, Inc. Commitment
----------------- ------------- ------------- ------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
1. * $10,000,000.00 $2,758,620.69 $4,482,758.62 $2,758,620.69 $10,000,000.00
7,300,000.00 2,013,793.10 3,272,413.80 2,013,793.10 7,300,000.00
2,700,000.00 744,827.59 1,210,344.82 744,827.59 2,700,000.00
2. * 12,500,000.00 3,448,275.86 5,603,448.28 3,448,275.86 12,500,000.00
3. * 2,000,000.00 551,724.14 896,551.72 551,724.14 2,000,000.00
4. * 2,000,000.00 551,724.14 896,551.72 551,724.14 2,000,000.00
5. * 1,000,000.00 275,862.07 448,275.86 275,862.07 1,000,000.00
6. * 1,000,000.00 275,862.07 448,275.86 275,862.07 1,000,000.00
7. * 500,000.00 137,931.03 224,137.94 137,931.03 500,000.00
8. * 1,950,000.00 537,931.03 874,137.94 537,931.03 1,950,000.00
9. * 1,050,000.00 289,655.17 470,689.66 289,655.17 1,050,000.00
10. * 1,000,000.00 275,862.07 448,275.86 275,862.07 1,000,000.00
11. * 10,000,000.00 2,758,620.69 4,482,758.62 2,758,620.69 10,000,000.00
12. * 4,000,000.00 1,103,448.28 1,793,103.44 1,103,448.28 4,000,000.00
13. * 1,000,000.00 275,862.07 448,275.86 275,862.07 1,000,000.00
------------- ------------- -------------- -------------- -------------- --------------
$43,000,000.00 $15,000,000.00 $16,000,000.00 $26,000,000.00 $16,000,000.00 $58,000,000.00
</TABLE>
* Confidential Treatment Requested
1-1
EXHIBIT 10.15
[FORM OF SECURITY AGREEMENT]
SECURITY AGREEMENT
SECURITY AGREEMENT (the "Agreement"), dated November 30, 1993, between
[INTERPOOL, INC., a Delaware] [INTERPOOL LIMITED, a Barbados] [TRAC LEASE, INC.,
a Delaware] corporation (the "Company"), and FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION as collateral agent for the Purchasers and each other
holder of a Note from time to time (in such capacity, together with its
successors in such capacity, the "Collateral Agent").
W I T N E S S E T H:
--------------------
WHEREAS, Interpool Inc., Interpool Ltd. and Trac Lease, Inc. (the
"Obligors") have entered into that certain Note Purchase Agreement, of even date
herewith, with the Purchasers, as purchasers of the Notes (as it may be amended
and supplemented from time to time, the "Note Purchase Agreement"); and
WHEREAS, it is a condition precedent to the obligation of the Purchasers
to purchase the Notes provided for in the Note Purchase Agreement that the
Company shall execute and deliver this Agreement;
NOW, TREREFORE, in consideration of the premises and in order to induce
the Purchasers to purchase the Notes pursuant to the Note Purchase Agreement,
the parties hereto agree as follows:
Section 1. Definitions.
-----------
Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Note Purchase Agreement. The terms "equipment,"
"inventory," "accounts," "chattel paper," ''instruments," "documents," "general
intangibles," "products" and "proceeds" shall have the respective meanings
ascribed thereto in the UCC.
Section 2. Security Interest.
-----------------
(a) To secure the due payment and performance of all of the
Obligations of the Company [including the Guaranties] (the "Secured
Obligations''), including, without limitation, the strict performance and
observance by the Company of all representations, warranties, c,ovenants and
conditions of this Agreement, the Note Purchase Agreement, the Notes and the
other Transaction Documents, and any and all amendments thereto and replacements
therefor, the Company hereby assigns, mortgages, pledges, hypothecates,
transfers and sets over to the Collateral Agent, for the benefit of the
Purchasers and the Collateral Agent, and grants to the Collateral Agent, for the
benefit of the Purchasers and the Collateral Agent, a duly perfected first
priority Lien upon the Company's right, title and interest in and to (i) all
Financed Equipment now owned by the Company listed on Exhibit A attached hereto
or hereafter listed on each of the Security Agreement Supplements attached
hereto as Exhibit B (the "Security Agreement Supplements") and executed from
time to time, including all accessions, additions, improvements, upgrades and
parts to such Financed Equipment and all substitutions and replacements
therefor, all guarantees, warranties and rights against manufacturers under
purchase agreements or otherwise and other parties in connection therewith, all
insurance thereon and all insurance proceeds payable in connection
<PAGE>
therewith; (ii) all lease rental schedules, master leases as they relate to such
lease rental schedules, Leases, agreements for use and chattel paper to the
extent that they relate to the leasing by the Company of such Financed Equipment
now or hereafter in effect or executed from time to time, and any and all
renewals, extensions, modifications and substitutions thereof and therefor (all
such lease rental schedules, master leases, Leases, agreements for use and
chattel paper, to the extent that they cover such Financed Equipment now or
hereafter in effect or executed from time to time, and any and all renewals,
extensions, modifications and substitutions thereof and therefor, are
hereinafter referred to collectively as the "Lease Collateral"), all of its
rights to all rentals and additional rentals and all other amounts, monies or
payments due or to become due under the Lease Collateral, to the extent
applicable to such Financed Equipment, including without limitation, amounts,
monies or payments representing rent, principal, interest, Taxes, insurance
premiums, condemnation awards, delinquency charges, together with rights
evidenced by an account, note, contract, security agreement, chattel paper or
other evidence of indebtedness or security, all guaranties, warranties and
indemnities in respect thereof, and all of its accounts, contract rights and
general intangibles arising thereunder; (iii) all security pledged, assigned,
hypothecated or granted to or held by the Company to secure the obligations of
any lessees or other obligors under any Lease Collateral; (iv) all powers of
attorney for the execution of any evidence of indebtedness or security or other
writing in connection with the Lease Collateral or such Financed Equipment; (v)
all books, records, ledger cards, invoices and certificates of title relating to
the Lease Collateral or such Financed Equipment; (vi) all evidences of the
filing of financing statements and other statements, if any, and the
registration and notation of Liens on certificates of title or of other
instruments in connection with any of the foregoing and all amendments thereto,
notices to other creditors or secured parties, and certificates from filing or
other registration officers; (vii) all credit information, reports and memoranda
relating to such Lease Collateral; (viii) all maintenance contracts relating to
such Financed Equipment; and (ix) all proceeds and products of any and all of
the foregoing (all of the items described in preceding parts (i) through (ix)
being hereinafter referred to as the "Collateral").
(b) (i) This Agreement shall create a present and continuing
collateral assignment of and security interest in the Collateral and shall
remain in full force and effect until payment in full of the Obligations to the
Purchasers. Upon receipt by the Collateral Agent of written advice from the
Purchasers that the Notes and all the Secured Obligations have been paid or
satisfied in full, the Collateral Agent shall, upon the Company's written
request, promptly execute and deliver to the Company, at the Company's expense,
termination statements for all financing statements filed by the Collateral
Agent against the Company and such assignments and reassignments, as the Company
shall reasonably require in order to terminate the security interests created
hereunder and any collateral assignments of Collateral to the Collateral Agent,
in each case with the Collateral Agent's sole representation and warranty that
the Collateral is being reconveyed free and clear of any Lien created by or as a
result of any act of the Collateral Agent.
(ii) Notwithstanding the foregoing to the contrary, the Collateral
Agent agrees that the Company shall be permitted to add Collateral to, and
obtain the partial or full release of Collateral from, the Lien created under
this Agreement from time to time on the terms and subject to the conditions set
forth in the Note Purchase Agreement.
Section 3. Company's Title: Liens and Encumbrances: Security Interest.
----------------------------------------------------------
(a) The Company represents and warrants that the Company is or, to
the extent that Collateral is acquired after the date hereof, agrees that it
will be on the date on which such Collateral is included in the Lien, created
under this Agreement the owner of the Collateral, having good and marketable
title thereto free from any and all Liens except for the Lien created and
granted pursuant to this Agreement and Permitted Liens.
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<PAGE>
(b) The Company will not create or assume or permit to exist any
Lien or claim on or against the Collateral, except for the Lien hereof and
Permitted Liens, and the Company will promptly notify the Collateral Agent of
any such Lien, except for the Lien hereof and Permitted Liens, made or asserted
against the Collateral, and will defend the Collateral against, and take all
such action as may be necessary to remove, any such Lien, other than the Lien
hereof and Permitted Liens.
(c) The Company represents and warrants that the Liens which have
been created in favor of the Collateral Agent on behalf of the Purchasers under
this Agreement and granted to the Collateral Agent on behalf of the Purchasers
upon the execution of this Agreement, constitute, or which will be created and
granted upon the execution and delivery of a Security Agreement Supplement, will
constitute, first priority Liens and with respect to Containers and non-titled
Chassis, upon the filing of appropriate UCC financing statements duly perfected
Liens in favor of the Collateral Agent on behalf of the Purchasers on the
Collateral subject to no other Lien other than the Lien hereof and Permitted
Liens on such Collateral and with respect to titled Chassis, upon the notation
of Liens on certificates of title duly perfected Liens in favor of the
Collateral Agent on behalf of the Purchasers on the Collateral subject to no
other Lien other than the Lien hereof and Permitted Liens on such Collateral.
Section 4. Location of Collateral and Records: Names of Company.
----------------------------------------------------
(a) The Company represents and warrants that it has, and during at
least the past four months, has had, no place of business or office where the
Company's books of account and records are kept other than its principal place
of business set forth in Section 7.1 of the Note Purchase Agreement.
(b) The Company shall at all times maintain its records as to the
Collateral at its principal place of business at the address for the Company
specified in Schedule 7.1 of the Note Purchase Agreement and the Company agrees
(i) to give the Collateral Agent prior written notice promptly of any change in
the place where it maintains such records or of any change in location of its
principal place of business and (ii) maintain all its properties in good working
order and condition and, in the ordinary course of business, make all repairs,
replacements, additions and improvements in accordance with the provisions of
Section 9.5 of the Note Purchase Agreement.
Section 5. Perfection of Security Intereat.
-------------------------------
The Company will join with the Collateral Agent in executing one or
more UCC financing statements, applications for the notation of the Liens
created hereunder on certificates of title covering any of the Collateral or
other notices, agreements, documents or instruments appropriate under applicable
law in form satisfactory to the Collateral Agent and shall pay all filing or
recording costs with respect thereto, and all costs of filing or recording this
Agreement or any other instrument, agreement or document executed and delivered
pursuant hereto (including the cost of all Federal, state or local mortgage,
documentary, stamp or other taxes), in each case, in all public offices where
filing or recording is deemed by the Purchasers to be necessary or desirable.
The Company hereby authorizes the Collateral Agent to take all action at the
expense of the Company (including, without limitation, the filing of any UCC
financing statements or amendments thereto, applications for the notation of the
Liens created hereunder on certificates of title covering any of the Collateral
and any other documents or instruments without the signature of the Company)
which the Purchasers may deem reasonably necessary or desirable to perfect or
otherwise protect the Liens created hereunder and to obtain the benefits of this
Agreement. The Collateral Agent shall endeavor to give the Company notice prior
to taking such action if such notice is
3
<PAGE>
practicable; provided, however, the Company shall take such action whether or
not such notice is received by the Company. Without limiting the generality of
the foregoing, the Company shall, at the Company's expense, take and cause to be
taken all such actions as the Collateral Agent by instructions from the
Purchasers may reasonably request in order to perfect and continue the
perfection of the Liens granted to the Collateral Agent in the Collateral. The
Collateral Agent shall have the right at any time at the Company's expense to
cause the perfection of the Liens granted to the Collateral Agent in the
Collateral by whatever means reasonably deemed by the Purchasers to be
necessary, and the Company shall cooperate fully with the Collateral Agent in
connection therewith.
Section 6. General Covenants.
-----------------
The Company covenants and agrees that it shall:
(a) furnish the Collateral Agent, and the Collateral Agent shall
deliver to each Purchaser upon request by such Purchaser, from time to time at
the Collateral Agent's request with written statements and schedules further
identifying and describing the Collateral in such detail as the Collateral Agent
may reasonably require;
(b) comply or, with respect to the Collateral, require the lessees
thereof to comply, with all acts, rules, regulations and orders of any
legislative, administrative or judicial body or official applicable to the
Collateral or any part thereof or to the operation of the Company's business; -
(c) at all times use, or require the lessees to use, the Collateral
for lawful purposes only, with all reasonable care and caution;
(d) cause the Lien granted pursuant to this Agreement to be at all
times a first priority duly perfected Lien upon the Collateral, subject to no
Liens other than Permitted Liens; and
(e) promptly execute and deliver to the Collateral Agent, and the
Collateral Agent shall deliver to each Purchaser upon request by such Purchaser,
such further deeds, mortgages, assignments, security agreements or other
instruments, documents, certificates and assurances and take such further action
as the Collateral Agent may from time to time in its reasonable discretion deem
necessary to perfect, protect or enforce its Lien on the Collateral or otherwise
to effectuate the intent of this Agreement, including, without limitation, the
right of the Collateral Agent upon the occurrence of an Event of Default and
pursuant to instructions by the Majority In Interest to enforce such rights to
(i) take possession of the Collateral and without liability for trespass to
enter any premises where the Collateral may be located for the purpose of taking
possession of or removing the Collateral, upon notice to the Company, as to any
or all of the Collateral, by any available judicial procedure, or without
judicial process, and, in connection therewith, the Company shall, upon request
of the Collateral Agent and at the Company's expense, assemble the Collateral
and make it available to the Collateral Agent at the Company's standard depot
locations worldwide, and (ii) to require the Company to, and upon such demand
the Company shall (A) instruct each lessee under the Lease Collateral to make
payment of rentals and other sums (to the extent that such rentals and other
sums relate to the Financed Equipment) due and becoming due under a Lease
included in the Lease Collateral directly to, in the Collateral Agent's sole
discretion, either the Collateral Agent or to a post office box designated by
the Collateral Agent to which only the Collateral Agent shall have access, (B)
if the Company shall receive any rental or other payment in respect of any
Financed Equipment covered by any such Lease, or any Financed Equipment
(including, without limitation, any proceeds of insurance with respect to
Financed Equipment), hold such payment in trust by the Company for the benefit
of the Purchasers and the
4
<PAGE>
Collateral Agent and shall not commingle such payment with any other moneys or
assets of the Company, and (C) promptly turn over and remit to the Collateral
Agent all sums thus received, in the identical form as received, with all such
endorsements thereof as may be required, as contemplated by Section 8 hereof; in
the event that the Company shall fail within three (3) Business Days of demand
by the Collateral Agent to notify the Lessees to make payments to the Collateral
Agent or to a post office designated by it, the Collateral Agent shall be
entitled to do so, either in the name of the Company pursuant to its power of
attorney in Section 11 hereof or in its own name.
Section 7. Assiqnment of Insurance.
-----------------------
(a) The Company shall keep all its properties insured as provided in
Section 9.6 of the Note Purchase Agreement.
(b) As further security for the due payment and performance of the
Secured Obligations, the Company hereby assigns to the Collateral Agent all sums
relating to the Collateral, including returned or unearned premiums, which may
become payable under or in respect of any policy of insurance owned by the
Company or payable to the Company covering the Collateral, and the Company
hereby directs each insurance company issuing any such policy owned by the
Company to make payment of such sums directly to the Collateral Agent upon
notice from the Collateral Agent to such insurance company of the occurrence of
an Event of Default as defined in the Note Purchase Agreement. The Company
hereby appoints the Collateral Agent as the Company's attorney-in-fact and in
the Company's or in the Collateral Agent's name to do one or more of the
following upon the occurrence of an Event of Default and pursuant to
instructions by the Majority In Interest: (i) endorse any check or draft
representing any such payment or execute any proof of claim, subrogation receipt
or any other document required by such insurance company as a condition to or
otherwise in connection with such payment or (ii) assign the proceeds under any
such policies. All such sums received by the Collateral Agent shall be paid by
the Collateral Agent to the Purchasers pursuant to the Collateral Agency
Agreement or, to the extent that such sums represent unearned premiums in
respect of any policy of insurance on the Collateral refunded by reason of
cancellation, toward payment for similar insurance protecting the respective
interests of the Company and the Collateral Agent, or as otherwise required by
applicable law. The Company shall send a notice to the insurers of the
assignment contained herein and shall furnish the Collateral Agent with a copy
of such notice and the insurers' receipt thereof on the date of examination
hereof.
Section 8. Collections.
------------
At any time if the Collateral Agent exercises the rights granted to
it under this Agreement, the Company shall, at the request of the Collateral
Agent, immediately upon receipt of any checks, drafts, cash or other remittances
in payment of any of its accounts, contract rights, or general intangibles
constituting part of the Collateral or in payment for any Collateral sold,
transferred, or otherwise disposed of, or in payment of or on account of its
accounts, contracts, contract rights, notes, drafts, acceptances, general
intangibles, chooses in action and all other forms of obligations relating to
any of the Collateral so sold, transferred or otherwise disposed of, deliver any
such items to the Collateral Agent accompanied by a remittance report in form
supplied or approved by the Collateral Agent, such items to be delivered to the
Collateral Agent in the same form received, endorsed or otherwise assigned by
the Company where necessary to permit collection of items and, regardless of the
form of such endorsement the Company hereby waives presentment, demand, notice
of dishonor, protest, notice of protest and all other notices with respect
thereto. All such remittances shall be applied and paid over by the Collateral
Agent to the Purchasers pursuant to the Collateral Agency Agreement or as
otherwise required by applicable law.
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<PAGE>
Section 9. Rights and Remedies on Default.
-------------------------------
(a) In the event of the occurrence of any Event of Default and
pursuant to instructions by the Majority In Interest to enforce the Lien granted
hereunder:
(i) the Collateral Agent shall at any time thereafter have the
right, itself or through any of its agents, upon notice to the Company, as to
any or all of the Collateral, (to the extent it is permissible to do so in view
of the rights of lessees who may have the right to possession of certain
Collateral) by any available judicial procedure, or without judicial process, to
take possession of the Collateral and without liability for trespass to enter
any premises where the Collateral may be located for the purpose of taking
possession of or removing the Collateral, and, generally, to exercise any and
all rights afforded to a secured party under the UCC or other applicable law;
(ii) without limiting the generality of the foregoing, the Company
agrees that the Collateral Agent shall have the right (subject to any rights of
lessees) to sell, lease, or otherwise dispose of all or any part of the
Collateral, whether in its then condition or after further preparation or
processing, either at public or private sale or at any broker's board, in lots
or in bulk, for cash or for credit, with or without warranties or
representations, and upon such terms and conditions, all as the Collateral Agent
in its sole discretion may deem advisable, and it shall have the right to
purchase at any such sale; and, if any Collateral shall require rebuilding,
repairing, maintenance, preparation, or is in process or other unfinished state,
the Collateral Agent shall have the right, at its option, to do such rebuilding,
repairing, maintenance, preparation, processing or completion of manufacturing,
for the purpose of putting the Collateral in such salable or disposable form as
it shall deem appropriate; and
(iii) the Collateral Agent shall at any time have the right to
require the Company to, and upon such demand the Company shall (A) instruct each
lessee under the Lease Collateral to make payment or all rentals and other sums
relating to the Collateral, due and becoming due under a Lease included in the
Lease Collateral directly to, in the Collateral Agent's sole discretion, either
the Collateral Agent or to a post office box designated by the Collateral Agent
to which only the Collateral Agent shall have access, (B) if the Company shall
receive any rental or other payment relating to the Collateral in respect of any
such Lease, or any Financed Equipment (including, without limitation, any
proceeds of insurance with respect to Financed Equipment), hold the amount of
such payment relating to the Collateral in trust by the Company for the benefit
of the Purchasers and the Collateral Agent and shall not commingle such payment
with any other moneys or assets of the Company, and (C) promptly turn over and
remit to the Collateral Agent all sums thus received, in the identical form as
received, with all such endorsements thereof as may be required, as contemplated
by Section 8 hereof; in the event that the Company shall fail within three (3)
Business Days of demand by the Collateral Agent to notify the lessees to make
payments to the Collateral Agent or to a post office designated by it, the
Collateral Agent shall be entitled to do so, either in the name of the Company
pursuant to its power of attorney in Section 11 hereof, or in its own name; and
(iv) at the Collateral Agent's request, the Company shall assemble
the Collateral and make the Collateral available to the Collateral Agent at the
Company's standard depots worldwide and make available to the Collateral Agent,
without rent, all of the Company's premises and facilities for the purpose of
the Collateral Agent's taking possession of, removing or putting the Collateral
in salable or disposable form.
(b) The Company hereby agrees that a notice sent at least ten (10)
days before the time of any intended public sale or of the time after which any
private sale or other disposition of the Collateral is to be made, shall be
reasonable notice of such sale or other disposition.
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<PAGE>
(c) The proceeds of any collection, sale, lease or other disposition
of all or any part of the Collateral, and of all proceeds of the enforcement of
any Lien created under this Agreement or any other Transaction Document,
together with any sums then held by any Purchaser or the Collateral Agent as
part of the Collateral, shall be applied and paid over to the Purchasers
pursuant to the Collateral Agency Agreement.
(d) To the extent permitted by applicable law, the Company waives
all claims, damages and demands against the Collateral Agent arising out of the
repossession, removal, retention, sale or lease of the Collateral, provided that
the Company does not waive any claim, damages or demand it may have arising out
of the Collateral Agent's willful misconduct or gross negligence in connection
with any action taken in respect of the Note Purchase Agreement or this
Agreement.
Section 10. Cost and Expenses.
-----------------
Any and all fees, costs and expenses, of whatever kind or nature,
including the reasonable attorneys' fees and legal expenses incurred by the
Collateral Agent in connection with the preparation of this Agreement and all
other documents relating hereto and the consummation of the transactions
contemplated by the Note Purchase Agreement, the filing or recording of UCC
financing statements, applications for notation of the Liens created hereunder
on certificates of title covering any of the Collateral and other documents
(including all Taxes in connection therewith) in public offices, the payment or
discharge of any Taxes, insurance premiums, encumbrances or otherwise
protecting, maintaining or preserving the Collateral, or the enforcing,
foreclosing, retaking, holding, storing, processing, selling, leasing or
otherwise realizing upon the Collateral and the Collateral Agent's Lien thereon,
whether through judicial proceedings or otherwise, or in defending or
prosecuting any actions or proceedings arising out of or relating to the
transaction to which this Agreement relates, shall be borne and paid by the
Company on demand by the Collateral Agent and if not paid within ten days of
such demand, the Collateral Agent shall provide the notice to the Purchasers
pursuant to Section 4 of the Collateral Agency Agreement.
Section 11. Power of Attorney.
-----------------
(a) The Company authorizes the Collateral Agent and does hereby
make, constitute and appoint the Collateral Agent, and any officer, employee or
agent of the Collateral Agent, with full power of substitution, as the Company's
true and lawful attorneyin-fact, exercisable upon the occurrence of an Event of
Default or if the Collateral Agent exercises any of its rights under this
Agreement pursuant to instructions by the Majority In Interest, with power in
its own name or in the name of the Company:
(i) to endorse any notes, checks, drafts, money orders, or other
instruments of payment (including payments payable under or in respect of any
policy of insurance) in respect of the Collateral that may come into possession
of the Collateral Agent;
(ii) to sign and endorse any invoice, freight or express bill,
bill of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with accounts, and other
documents relating to the Collateral;
(iii) to pay or discharge Taxes, Liens, security interests or
other encumbrances at any time levied or placed on or threatened against the
Collateral;
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<PAGE>
(iv) to demand, collect, receive, compromise, settle and sue for
monies due in respect of the Collateral;
(v) to cause each lessee under the Lease Collateral to make
payment of rentals and other sums (to the extent that such rentals and other
sums relate to the Financed Equipment) due and becoming due under a Lease
included in the Lease Collateral to the Collateral Agent;
(vi) to notify lessees and other persons obligated with respect to
the Collateral to make payments directly to the Collateral Agent; and
(vii) generally, to do, at the Collateral Agent's option and at
the Company's expense, at any time, or from time to time, all acts and things
which the Collateral Agent reasonably deems necessary to protect, preserve and
realize upon the Collateral and the Collateral Agent's security interest therein
(including signing and filing any UCC Financing Statements, applications for the
notation of the Lien created hereunder upon certificates of title covering the
Collateral or other agreements, documents, instruments or notices in the name of
the Company or otherwise) in order to effect the intent of this Agreement and of
the other Transaction Documents, all as fully and effectively as the Company
might or could do.
(b) The Company hereby ratifies all that said attorney shall
lawfully do or cause to be done by virtue hereof.
(c) This power of attorney, being coupled with an interest, shall be
irrevocable for the term of this Agreement and thereafter as long as any of the
Obligations shall be outstanding.
Section 12. Dispositon of Collateral.
------------------------
The Company shall not be entitled to sell or otherwise dispose of
any of the Collateral except such as shall have been released from the Lien
granted hereby in accordance with the terms hereof or as permitted by the Note
Purchase Agreement.
Section 13. Notices
-------
Except as otherwise provided for herein, all communications and notices provided
for herein, shall be in writing and delivered by hand, the United States
certified or registered mail or by telecopier, and any such notice shall become
effective (a) upon personal delivery thereof, including, without limitation, by
overnight mail courier service, (b) five (5) days after the date on which it
shall have been mailed by United States mail, certified or registered, postage
prepaid, return receipt requested, or (c) in the case of notice by telecopier,
when electronically or verbally confirmed, in each case addressed as follows:
8
<PAGE>
If to the Company:
[Interpool, Inc.]
[Interpool Limited]
[Trac Lease, Inc.]
[633 Third Avenue, 17th Floor
New York, New York 10017]
[211 College Road East
Princeton, New Jersey 08540]
Attention: President and Chief Financial Officer
Facsimile: [(212) 687-8403]
[(609) 452-8211]
If to the Collateral Agent:
First Security Bank of Utah, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Department
Facsimile: (801) 246-5053
with a copy to the following counsel or such other counsel as the
Collateral Agent shall designate to the Company:
Rogers & Wells
200 Park Avenue
New York, New York 10166
Attention: Shephard W. Melzer, Esq.
Facsimile: (212) 878-3009
Any party may change the person or address to whom or which notices are to be
given hereunder, by notice duly given hereunder; provided, however, that any
-------- -------
such notice shall be deemed to have been given hereunder only when actually
received by the party to which it is addressed.
Section 14. Other Security.
--------------
To the extent that the Secured Obligations are now or hereafter
secured by property other than the Collateral or by the guarantee, endorsement
or property of any other person, firm, corporation or other entity, then the
Collateral Agent shall have the right in its sole discretion to pursue,
relinquish, subordinate, modify or take any other action with respect thereto,
without in any way modifying or affecting any of the Collateral Agent's rights
and remedies hereunder.
Section 15. Custody of the Collateral.
-------------------------
The Collateral Agent shall have no duty as to the collection of any
Collateral in its possession or control or in the possession or control of any
agent or nominee of the Collateral Agent, or any income thereon or as to the
preservation of rights against prior parties or any other rights pertaining
thereto.
9
<PAGE>
Section 16. Waivers; Obligations Absolute.
------- --------------------
(a) No course of dealing between the Company and the Collateral
Agent, nor any failure to exercise, nor any delay in exercising, on the part of
the Collateral Agent, of any right, power or privilege hereunder or under the
Note Purchase Agreement shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, power or privilege hereunder or thereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.
(b) The Company acknowledges that this Agreement is a continuing
obligation and that the obligations hereunder shall extend to each and every
extension or renewal of any Obligation of the other Issuers, regardless of
whether the Obligations of the Company may, in successive transactions, be paid,
repaid, advanced or renewed from time to time and the Obligations shall be
absolute, independent and unconditional under any and all circumstances.
(c) The liability of the Company under this Agreement shall be
absolute and unconditional irrespective of the validity, legality or
enforceability of the Transaction Documents or other agreements evidencing or
securing the Obligations or any part thereof, or Collateral for any or all of
the Obligations or any part thereof or any other circumstance or circumstances
which might otherwise constitute a legal or equitable discharge of, or a defense
available to, a surety or guarantor and regardless of any law, rule, regulation,
order, writ, judgment, decree, award or other administrative or judicial
pronouncement now or hereafter in effect in any jurisdiction purporting to
affect in any manner any of the terms of the Transaction Documents. The
Purchasers or the Collateral Agent, as applicable, may at any time or times, in
their absolute discretion, in the manner permitted under the Transaction
Documents (a) extend or change the time, manner, place or other term of payment
of any Obligation or any part thereof, (b) waive compliance by the Obligors with
any term, covenant, agreement or condition on its part to be complied with under
any of the Transaction Documents, (c) obtain or release Collateral for, or the
Company, any guarantor or any obligor obligated with respect to, any Obligation
or any part thereof, (d) file, record, refile, re-record or otherwise perfect,
fail to do any of the foregoing, or allow to lapse any Transaction Document,
financing statement, mortgage, deed of trust, pledge or other security document
or interest, covering or relating to Collateral for, or securing, any Obligation
or any part thereof, (e) settle or compromise with the Obligors under any
Transaction Document, or any other person or entity obligated with respect to
any Obligation or any part thereof, and subordinate upon any terms the
Purchasers' right or rights to receive payment or performance of any Obligation
or any part thereof, and (f) amend or otherwise modify any Obligation or any
part thereof or the Transaction Documents, or the liability of the Obligors or
any entity obligated with respect thereto, in any manner, all without notice to
or the assent of the Company and without affecting this Agreement or the
liability of the Company hereunder, which shall continue with respect to the
Obligations as extended, changed, modified, settled or compromised, until inde
feasibly paid in full.
Section 17. Cumulative Remedies.
-------------------
All of the Collateral Agent's rights and remedies with respect to
the Collateral, whether established hereby or by any other agreements,
instruments or documents or by law shall be cumulative and may be exercised
singly or concurrently.
10
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Section 18. Severability.
------------
The provisions of this Agreement are severable, and if any clause or
provision shall be held invalid or unenforceable in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall affect only such
clause or provision, or part thereof, in such jurisdiction and shall not in any
manner affect such clause or provision in any other jurisdiction, or any other
clause or provision of this Agreement in any jurisdiction.
Section 19. Modification.
------------
This Agreement may not be amended or modified, nor may any
provisions be waived, except by a writing signed by each of the parties hereto
or, in the case of a waiver, by the party so waiving its rights.
Section 20. Counterparts.
------------
This Agreement may be executed in as many counterparts as may be
deemed necessary or convenient, each of which, when so executed, shall be deemed
an original, but all such counterparts shall constitute one and the same
instrument.
Section 21 Binding Effect, Benefit of Agreement and Assignment.
---------------------------------------------------
The benefits and burdens of this Agreement shall inure to the
benefit of and be binding upon the respective successors and assigns of the
parties; provided, however, that the rights and obligations of the Company under
-------- -------
this Agreement shall not be assigned or delegated without the prior written
consent of the Collateral Agent, and any purported assignment or delegation
without such consent shall be void.
Section 22. Governing Law.
-------------
This Agreement shall be governed and construed and enforced in
accordance with the laws of the State of New York, applicable to contracts
entered into and to be performed entirely within such State.
Section 23. Indemnity.
---------
(a) The Company covenants and agrees to indemnify and hold harmless
the Collateral Agent, the Purchasers and their respective officers, directors,
employees, agents, attorneys-infact and affiliates, from and against any and all
claims, suits, losses, penalties, demands, causes of action and judgments of any
nature whatsoever and all liabilities and indebtedness of any and every kind and
nature now or hereafter owing, arising, due or payable, including all costs and
expenses (including reasonable attorneys fees and expenses) (all of the
foregoing being herein collectively called "Liabilities"), which may be imposed
on, incurred by or asserted against any of them in connection with (i) the
ownership or use of any of the Collateral or the security interest of the
Collateral Agent in the Collateral, (ii) the failure on the part of the Company
to comply and to cause the lessees and users under all Leases to comply in all
respects with the laws of the United States of America and other jurisdictions
in which the Collateral or any part thereof may be operated and with all lawful
acts, rules, regulations and orders of any commissions, boards or other
legislative, executive, administrative or judicial bodies or officers having
power to regulate or supervise any of the Collateral, and (iii) the execution,
delivery, consummation, waiver, consent, amendment, enforcement, performance and
administration of this Agreement, the Note Purchase Agreement, the Security
Agreement Supplements and the other Transaction Documents, or the use by the
11
<PAGE>
Company of the proceeds of the Note Purchase Agreement; provided, however, that
-------- -------
the Company shall not have any obligation with respect to liabilities arising
from the gross negligence or willful misconduct of the Collateral Agent or the
Purchasers, as the case may be.
(b) The Company agrees to defend and pay all costs, expenses and
judgments incurred by it, the Collateral Agent or the Purchasers in any action
brought against the Company under the Leases or in any actions brought by the
Collateral Agent pursuant to this Agreement whether under or pursuant to the
provision of any Lease or to enforce any provisions of the Leases.
(c) The obligations of the Company under this Section 24 shall
survive the termination of this Agreement.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
[INTERPOOL, INC.,]
[INTERPOOL LIMITED]
TRAC LEASE, INC.]
as an Obligor
By:
----------------------------------
Title:
--------------------------------
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION, as
Collateral Agent
By:
--------------------------------
Title:
------------------------------
12
<PAGE>
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
INTERPOOL LIMITED,
as an Obligor
By:
-----------------------------------
Title:
---------------------------------
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION, as
Collateral Agent
By:
-------------------------------------
Title:
----------------------------------
13
<PAGE>
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
INTERPOOL LIMITED,
as an Obligor
By:
-------------------------------------
Title:
----------------------------------
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION, as
Collateral Agent
By:
-------------------------------------
Title:
----------------------------------
14
<PAGE>
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On November , 1993, before me personally came, to me known,
who, being by me duly sworn, did depose and say that he is a of [Interpool,
Inc.] [Interpool Limited] [Trac Lease, Inc.], the corporation described in and
which executed the foregoing instrument; that he knows the seal of said
corporation that the seal affixed to such instrument is such corporate seal and
that he signed his name and affixed such seal by order of the Board of Directors
of said corporation.
-------------------------
Notary Public
15
<PAGE>
STATE OF )
) SS.:
COUNTY OF )
On , 1993, before me personally
---------------------------
came, to me known, who, being by me duly sworn, did
------------------------
depose and say that he is a of
------------------------------ ------------------
, as the Collateral Agent on behalf of the Purchasers, the
- -------------- -------
described in and which executed the foregoing instrument;
- ------------------
that he knows the seal of said that the seal affixed
--------------------------
to such instrument is such corporate seal and that he signed his name and
affixed such seal by order of the Board of Directors of said
-------------------
.
- -------
-----------------------
Notary Public
16
<PAGE>
EXHIBIT A
TYPE OF FINANCE UNIT NUMBER MANUFACTURER'S SERIAL NUMBER
EQUIPMENT (FOR CHASSIS)
17
<PAGE>
EXHIBIT B
FORM OF SECURITY AGREEMENT SUPPLEMENT
-------------------------------------
SUPPLEMENT NO. _____
TO
SECURITY AGREEMENT
DATED NOVEMBER ____ , 1993
BETWEEN
[INTERPOOL, INC.]
[INTERPOOL LIMITED]
[TRAC LEASE, INC.]
(the "COMPANY")
AND
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION
as COLLATERAL AGENT
(the "COLLATERAL AGENT")
_____________________________________________________
WHEREAS:
A. Interpool, Inc., Interpool Limited and Trac Lease, Inc. (the
"Issuers"), the Collateral Agent and the Purchasers listed therein (the
"Purchasers") entered into a certain Note Purchase Agreement dated November,
1993, (which agreement, as the same may have been or hereafter may be amended,
supplemented, restated or otherwise, the "Note Purchase Agreement");
B. Pursuant to the Note Purchase Agreement, each of the Issuers and the
Agent entered into certain Security Agreements dated as of November _ , 1993
(each a "Security Agreement" and collectively, the "Security Agreements");
C. Pursuant to the Note Purchase Agreement, the Company is obligated
with the addition by the Company of any Equipment to the Collateral to deliver
to the Agent supplements to its Security Agreement (which agreement, as the same
may have been or hereafter may be amended, supplemented, restated or otherwise,
each, a "Security Agreement Supplement" and collectively, the "Security
Agreement Supplements") describing the properties and assets which shall
constitute the Collateral, and it is therefore in consideration of the premises
that the Company shall execute and deliver to the Agent on behalf of the Banks
this Security Agreement Supplements;
NOW, THEREFORE, the parties hereto hereby agree as follows (capitalized
terms which are not defined herein shall have the meanings given to them in the
Note Purchase Agreement):
The Security Agreement is hereby amended and supplemented by the
addition thereto (in addition to any other Collateral added by previous Security
Agreement Supplements) of the following Collateral: the Financed Equipment
listed or identified on Exhibit I hereto.
18
<PAGE>
The Company hereby represents and warrants that upon the consummation
of this Supplement, no Default or Event of Default shall exist under any of the
Transaction Documents, and the Issuers will be in compliance with the
requirements of the Transaction Documents.]
Capitalized terms used herein are used as defined in the Security
Agreement.
Except as supplemented by this Supplement, the Security Agreement shall
continue unchanged and remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Supplement to be duly
executed this day of 19 .
------- ------------------- -------
[INTERPOOL, INC.]
[INTERPOOL LIMITED]
[TRAC LEASE, INC.]
By
--------------------------------
Title
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION
as Collateral Agent on behalf of the
Purchasers
By
---------------------------------
Title
19
<PAGE>
EXHIBIT I
TYPE OF FINANCED EQUIPMENT UNIT NUMBER MANUFACTURER'S SERIAL
- -------------------------- ------------- ---------------------
NUMBER (FOR CHASSIS)
--------------------
20
Exhibit 10.16
INTERPOOL, INC.
INTERPOOL LIMITED
$32,500,000 7.92%
GUARANTEED SENIOR SECURED NOTES
DUE October 27, 2001
============================
NOTE PURCHASE AGREEMENT
============================
Dated October 27, 1994
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1. AUTHORIZATION OF ISSUE OF NOTES . . . . . . 1
1.1 Issuance of Notes . . . . . . . . . . . . . 1
1.2 Notes . . . . . . . . . . . . . . . . . . . 1
1.3 Interest Rate Calculation . . . . . . . . . 1
SECTION 2. PURCHASE AND SALE OF NOTES; USE OF PROCEEDS 2
2.1 Purchase and Sale of Notes . . . . . . . . . 2
2.2 Use of Proceeds . . . . . . . . . . . . . . 2
SECTION 3. THE CLOSING . . . . . . . . . . . . . . . . 2
SECTION 4. CONDITIONS OF CLOSING . . . . . . . . . . . 2
4.1 Transaction Documents . . . . . . . . . . . 3
4.2 Legal Opinions . . . . . . . . . . . . . . . 3
4.3 Representations and Warranties, No
Default . . . . . . . . . . . . . . . . . . 3
4.4 Evidence of Title to Collateral,
Absence of Liens on Collateral and
Collateral Certificate . . . . . . . . . . . 3
4.5 Corporate Proceedings and Documents . . . . 4
4.6 Taxes . . . . . . . . . . . . . . . . . . . 4
4.7 UCC Financing Statements; Applications
to Note Liens on Certificates of Title . . . 4
4.8 Purchase Permitted By Applicable Laws . . . 4
4.9 Sale of Notes to Other Purchasers . . . . . 5
4.10 Other Documents . . . . . . . . . . . . . . 5
4.11 Legal Matters . . . . . . . . . . . . . . . 5
4.12 Legality . . . . . . . . . . . . . . . . . . 5
4.13 Information Certificate; Standard & Poor's
Rating; Private Placement Number . . . . . . 5
4.14 Placement Agent Letters . . . . . . . . . . 6
4.15 Expenses . . . . . . . . . . . . . . . . . . 6
4.16 Compliance with This Agreement . . . . . . . 6
SECTION 5. REPAYMENT; PREPAYMENT; ASSUMPTION OF NOTES;
RELEASE OF COLLATERAL . . . . . . . . . . . 6
5.1 Repayment of Principal and Interest on the
Notes . . . . . . . . . . . . . . . . . . . 6
5.2 Maturity . . . . . . . . . . . . . . . . . . 7
5.3 Method of Payment . . . . . . . . . . . . . 7
5.4 Registration of Notes; Transfer and
Exchange of Notes . . . . . . . . . . . . . 7
5.5 Optional Prepayments . . . . . . . . . . . . 9
5.6 Interpool's Assumption of Notes; Pledge of
Equipment . . . . . . . . . . . . . . . . . 11
5.7 Termination of Collateral . . . . . . . . . 16
-i-
<PAGE>
Page
----
SECTION 6. RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE COLLATERAL . . . . . . . 19
6.1 Collateral . . . . . . . . . . . . . . . . . 19
6.2 Payment of Moneys Received With Respect
to the Collateral . . . . . . . . . . . . . 19
SECTION 7. REPRESENTATIONS AND WARRANTIES OF ISSUERS . 20
7.1 Organization and Power . . . . . . . . . . . 20
7.2 Trademarks, Licenses, etc. . . . . . . . . . 20
7.3 Subsidiaries . . . . . . . . . . . . . . . . 20
7.4 Business . . . . . . . . . . . . . . . . . . 20
7.5 Financial Statements . . . . . . . . . . . . 21
7.6 Taxes . . . . . . . . . . . . . . . . . . . 21
7.7 Litigation . . . . . . . . . . . . . . . . . 21
7.8 Title, Liens . . . . . . . . . . . . . . . . 21
7.9 Consent, Approval . . . . . . . . . . . . . 22
7.10 Compliance with Other Instruments . . . . . 22
7.11 Corporate Existence; Place of Business; Books
and Records . . . . . . . . . . . . . . . . 22
7.12 ERISA . . . . . . . . . . . . . . . . . . . 23
7.13 Capital Stock . . . . . . . . . . . . . . . 23
7.14 Governmental Licenses . . . . . . . . . . . 23
7.15 Event of Default . . . . . . . . . . . . . . 23
7.16 Offering of the Notes . . . . . . . . . . . 24
7.17 Margin Securities . . . . . . . . . . . . . 24
7.18 Use of Proceeds . . . . . . . . . . . . . . 24
7.19 Liabilities; Business . . . . . . . . . . . 24
7.20 Investment Company Act . . . . . . . . . . . 25
7.21 Disclosure . . . . . . . . . . . . . . . . . 25
7.22 Foreign Assets Control Regulations . . . . . 25
7.23 Leases . . . . . . . . . . . . . . . . . . . 25
7.24 Financed Equipment . . . . . . . . . . . . . 25
7.25 Insurance . . . . . . . . . . . . . . . . . 25
SECTION 8. REPRESENTATIONS AND WARRANTIES OF
PURCHASERS . . . . . . . . . . . . . . . . . 26
8.1 Purchase for Investment . . . . . . . . . . 26
8.2 Taxpayer Status . . . . . . . . . . . . . . 26
8.3 Source of Funds . . . . . . . . . . . . . . 26
SECTION 9. COVENANTS OF ISSUERS . . . . . . . . . . . . . . 27
9.1 Maintenance of Corporate Existence . . . . . 27
9.2 Amendments . . . . . . . . . . . . . . . . . 27
9.3 Compliance . . . . . . . . . . . . . . . . . 28
9.4 Taxes . . . . . . . . . . . . . . . . . . . 28
9.5 Preservation of Assets . . . . . . . . . . . 28
9.6 Insurance . . . . . . . . . . . . . . . . . 29
9.7 Liens . . . . . . . . . . . . . . . . . . . 30
9.8 Litigation . . . . . . . . . . . . . . . . . 30
9.9 Line of Business . . . . . . . . . . . . . . 30
9.10 Chief Offices; Places of Business . . . . . 30
9.11 Financial Statements . . . . . . . . . . . . 31
9.12 Books and Records . . . . . . . . . . . . . 32
9.13 Inspection . . . . . . . . . . . . . . . . . 33
-ii-
<PAGE>
Page
----
9.14 ERISA . . . . . . . . . . . . . . . . . . . 33
9.15 Use of Proceeds . . . . . . . . . . . . . . 33
9.16 Further Assurances . . . . . . . . . . . . . 34
9.17 Government Contracts . . . . . . . . . . . . 34
9.18 Sell, Merge, Consolidate, etc. . . . . . . . 34
9.19 Financial Covenants . . . . . . . . . . . . 35
9.20 Payment of Obligations . . . . . . . . . . . 36
9.21 Notice of Default . . . . . . . . . . . . . 36
9.22 Lock Box . . . . . . . . . . . . . . . . . . 37
9.23 Additional Costs . . . . . . . . . . . . . . 37
9.24 Transactions with Related Parties . . . . . 38
9.25 Permitted Investments . . . . . . . . . . . 38
9.26 Leases . . . . . . . . . . . . . . . . . . . 39
9.27 Acquisition of Notes . . . . . . . . . . . . 40
9.28 Private Offering . . . . . . . . . . . . . . 40
SECTION 10. DEFAULT; REMEDIES OF THE PURCHASERS . . . . 40
10.1 Occurrence of Event of Default . . . . . . . 40
10.2 Action Upon Event of Default . . . . . . . . 42
10.3 Authorized to Execute Bills of Sale . . . . 44
10.4 Remedies Cumulative . . . . . . . . . . . . 44
10.5 Discontinuance of Proceedings . . . . . . . 45
10.6 Agreements with Respect to Remedies and
Defaults . . . . . . . . . . . . . . . . . . 45
10.7 Waiver of Existing Defaults . . . . . . . . 45
10.8 Rights of Purchasers to Receive Payment . . 45
SECTION 11. EXPENSES . . . . . . . . . . . . . . . . . . 46
SECTION 12. NOTICES . . . . . . . . . . . . . . . . . . 47
SECTION 13. PURCHASERS AND NOTES . . . . . . . . . . . . 47
13.1 Withholding Taxes; Information Reporting . . 47
13.2 Satisfaction and Discharge of Agreement;
Termination of Obligations . . . . . . . . . 48
13.3 Amendments to This Agreement With Consent
of Purchasers . . . . . . . . . . . . . . . 48
13.4 Notification on or Exchange of Notes . . . . 49
SECTION 14. MISCELLANEOUS . . . . . . . . . . . . . . . 49
14.1 Oral Modification, Termination, etc. . . . . 49
14.2 Successors and Assigns . . . . . . . . . . . 49
14.3 Headings . . . . . . . . . . . . . . . . . . 49
14.4 Counterparts . . . . . . . . . . . . . . . . 49
14.5 Survival . . . . . . . . . . . . . . . . . . 49
14.6 Governing Law; Severability . . . . . . . . 49
14.7 WAIVER OF JURY TRIAL; SUBMISSION TO
JURISDICTION . . . . . . . . . . . . . . . . 50
SECTION 15. DEFINITIONS . . . . . . . . . . . . . . . . 50
-iii-
<PAGE>
LIST OF EXHIBITS
Exhibit A Form of Note
Exhibit B Form of Agency Agreement
Exhibit C Form of Collateral Certificate
Exhibit D Form of Guaranty
Exhibit E Form of Security Agreement
Exhibit F Form of Assumption Agreement
Exhibit G Form of Information Certificate
Exhibit H Form of Railcar Security Agreement
-iv-
<PAGE>
LIST OF SCHEDULES
-----------------
Schedule 1 - Purchasers Schedule
Schedule 2 - Issuers Schedule
Schedule 3 - Names, Addresses of and
Wiring Instructions for
Each Purchaser
Schedule 7.1 - Issuers' Jurisdictions of
Incorporation; Other
Jurisdictions where
Issuers are Qualified to
do Business; Chief
Offices of Issuers and
Locations of Issuers'
Books and Records;
Subsidiaries of Issuers;
Capital Stock of Issuers
Schedule 7.5 - Indebtedness of Issuers
Schedule 8.2 - Taxpayer Status of Purchasers
-v-
<PAGE>
NOTE PURCHASE AGREEMENT
October 27, 1994
To Each of the Purchasers Named in the
Purchaser Schedule Attached Hereto as
Schedule 1
Ladies and Gentlemen:
Interpool, Inc., a Delaware corporation ("Interpool"), and Interpool
---------
Limited, a Barbados corporation ("Ltd." and together with Interpool, each,
---
an "Issuer" and collectively, the "Issuers"), hereby agree with the
------ -------
purchasers named in Schedule 1 attached hereto (the "Purchasers") as
---------- ----------
follows:
SECTION 1. AUTHORIZATION OF ISSUE OF NOTES
-------------------------------
1.1 Issuance of Notes. (a) The Issuers will authorize the issuance and
-----------------
sale to the Purchasers of secured promissory notes in the aggregate
principal amount of $32,500,000.00, (the "Notes") pursuant to Section 1.2
----- -----------
and as indicated on Schedule 1 attached hereto, each of which Notes is to
----------
be dated the Closing Date and (b) Interpool will authorize the assumption
by Interpool of any or all the Notes.
1.2 Notes. Interpool will issue Notes in the aggregate principal amount of
-----
nine million dollars and no cents ($9,000,000); and Ltd. will issue Notes
in the aggregate principal amount of twenty three million five hundred
thousand dollars and no cents ($23,500,000); which Notes shall be in the
aggregate principal amount of $32,500,000.00, shall mature on the seventh
(7th) anniversary of the Closing Date, shall bear interest on the unpaid
balance thereof from the Closing Date until the principal thereof shall
become due and payable at the rate of 7.92% per annum quarterly in arrears
commencing on January 27, 1994 and on overdue payments at the rate
specified therein, and shall be substantially in the form of Exhibit A
---------
attached hereto. The term "Notes" as used herein shall include each such
Note delivered pursuant to any provision of this Agreement and each such
Note delivered in substitution or exchange for any other Note pursuant to
any such provision.
1.3 Interest Rate Calculation. Interest shall be calculated on the basis
-------------------------
of a 360-day year of twelve 30-day months.
SECTION 2. PURCHASE AND SALE OF NOTES; USE OF PROCEEDS
--------
2.1 Purchase and Sale of Notes. Each of the Issuers hereby agrees to sell
--------------------------
to each Purchaser and, subject to the terms and conditions herein set
forth, each Purchaser agrees to purchase from such Issuer one or more Notes
each in the respective principal amount set forth opposite such Issuer's
and Purchaser's
<PAGE>
respective name on Schedule 1 attached hereto at 100% of such aggregate
----------
principal amount. Each purchase is a separate and several purchase.
2.2 Use of Proceeds. The proceeds of the Notes will be used by the
---------------
Issuers (i) to retire outstanding indebtedness, (ii) to acquire New
Equipment and/or (iii) for the Issuers' general corporate purposes.
SECTION 3. THE CLOSING. The closing (the "Closing") of the issuance and
----------- -------
sale of the Notes to be purchased by the Purchasers shall take place at the
offices of Cadwalader, Wickersham & Taft, 100 Maiden Lane, New York, New
York, commencing at 10:00 a.m., New York time, on October 27, 1994 or such
other date and time as shall be agreed between the Issuers and the Majority
in Interest (the "Closing Date"). At the Closing, each Issuer will deliver
------------
to each Purchaser or a nominee designated by such Purchaser and set forth
in Schedule 3 attached hereto (each a "Nominee" and, collectively, the
---------- -------
"Nominees") one or more Notes as specified in Section 1.2 and on Schedule 1
-------- ----------- ----------
attached hereto registered on the books of such Issuer in such Purchaser's
name or in the name of such Nominee evidencing the aggregate principal
amount of such Purchaser's Commitment in respect of such Note against
payment by such Purchaser of the purchase price for each such Note to be
purchased by such Purchaser by wire transfer thereof in immediately
available funds to account number 0170-9644 for Interpool, account number
0174-3180 for Interpool Ltd.; and account number 0170-9660 for Trac at
Corestates Bank, N.A., Philadelphia, Pennsylvania 19178, ABA # 031-000-011, on
the Closing Date. If at the Closing any Issuer shall fail to tender to any
Purchaser the relevant Notes, as provided herein, or any of the conditions
specified in Section 4 shall not have been fulfilled to the reasonable
---------
satisfaction of each of the Purchasers, each Purchaser shall, at its option, be
relieved of its obligations under this Agreement, without thereby waiving any
other rights such Purchasers may have by reason of such failure or
nonfulfillment. If at the Closing each Purchaser does not provide the
purchase price for its respective Note(s), then the other Purchasers may,
but shall not be obligated to, purchase the Notes to be issued to it by
wiring funds to the respective Issuer.
SECTION 4. CONDITIONS OF CLOSING. The obligation of each of the
---------------------
Purchasers to purchase and pay for the Notes being purchased by such
Purchaser hereunder is subject to the satisfaction, on or before the
Closing Date, of the following conditions:
4.1 Transaction Documents. The Purchasers and the Collateral Agent shall
---------------------
have received a fully executed counterpart of each of the Transaction
Documents, each of which shall be in full force and effect and no term or
condition thereof shall have been amended, modified or waived, and the
transactions contemplated therein to be consummated hereunder and
thereunder (including the payment of all fees and other charges) on or
prior to the Closing shall have been consummated.
4.2 Legal Opinions. The Purchasers and the Collateral Agent shall have
--------------
received a legal opinion from each of (a) DeCampo, Diamond & Ash, special
counsel to the Issuers and the Guarantor;
-2-
<PAGE>
(b) Arthur Burns, Esq., general counsel to the Issuers and the Guarantor;
(c) David King, Esq., special Barbados counsel to Ltd.; and (d) Ray,
Quinney & Nebeker, counsel to the Collateral Agent (with a copy of such
opinion to be delivered to the Issuers); and the Purchasers shall have
received a legal opinion from Cadwalader, Wickersham & Taft, special
counsel to the Purchasers, all of which legal opinions shall be in form and
substance satisfactory to the Purchasers.
4.3 Representations and Warranties, No Default. The representations and
------------------------------------------
warranties contained in Section 7 shall be true and correct and the
---------
conditions set forth in this Section 4 shall have been satisfied on and as
---------
of the Closing Date as if restated at and as of the Closing Date, there
shall exist on the Closing Date no Default or Event of Default, and each of
the Issuers shall have delivered to the Purchasers an Officer's
Certificate, dated the Closing Date, to each such effect.
4.4 Evidence of Title to Collateral, Absence of Liens on
----------------------------------------------------
Collateral and Collateral Certificate.
- -------------------------------------
(a) The Purchasers shall have received true, correct and
complete copies of the certificates of title for the Chassis included in
the Collateral.
(b) The Purchasers, shall have received: (i) to the extent
reasonably available, evidence of title to the Containers included in the
Collateral showing that the relevant Issuer has good and marketable title
to such Containers; (ii) search reports of the records of the applicable
offices where UCC financing statements, Federal tax liens and judgments are
filed showing that such Containers are free and clear of Liens of record;
(iii) an affidavit executed by an officer of the relevant Issuer as to such
Issuer's ownership of, and good and marketable title to, such Containers
free and clear of Liens other than Permitted Liens, which affidavit shall
be in form and substance satisfactory to the Purchasers and their special
counsel; and (iv) a legal opinion of Arthur Burns, Esq., general counsel to
the Issuers, in form and substance satisfactory to the Purchasers and their
special counsel, as to the relevant Issuer's having good and marketable
title to such Containers free and clear of Liens of record.
(c) The Purchasers shall have received a Collateral Certificate
executed by an officer of each Issuer with respect to all the Collateral
referred to in paragraphs (a) and (b) above.
4.5 Corporate Proceedings and Documents. Each Issuer shall have taken all
-----------------------------------
necessary corporate action to authorize the transactions contemplated by
the Transaction Documents to the reasonable satisfaction of the Purchasers
and their special counsel, and the Purchasers and their special counsel
shall have received evidence of such proceedings, together with such other
corporate documents and certificates reasonably requested by the Purchasers
and their special counsel including, without limitation, charter documents,
certificates of good standing and
-3-
<PAGE>
certificates of incumbency of officers, in form and substance satisfactory
to the Purchasers and their special counsel.
4.6 Taxes. All Taxes, fees and other charges payable in connection with
-----
the execution, delivery, recording, publishing and filing of the
Transaction Documents, and the issue, sale and delivery of the Notes to be
delivered on the Closing Date shall have been paid in full by the Issuers
and the Purchasers and their special counsel shall have received evidence
of any such payment or arrangements for any such payment satisfactory to
the Purchasers and their special counsel.
4.7 UCC Financing Statements; Applications to Note Liens on Certificates
--------------------------------------------------------------------
of Title. All UCC financing statements, naming the relevant Issuer, as
- --------
debtor, and the Collateral Agent, as secured party, all certificates of
title, applications to note the Lien of the Collateral Agent in any
Collateral covered by certificates of title and all other documents and
instruments required under other applicable laws, shall have been duly
executed and delivered to special counsel to the Purchasers and the
Collateral Agent, in appropriate form for filing together with the
applicable filing fees with respect thereto, in all jurisdictions that the
Purchasers deem necessary or desirable in order to perfect the Liens of the
Collateral Agent on behalf of the Purchasers in the Collateral.
4.8 Purchase Permitted By Applicable Laws. The purchase of and payment
-------------------------------------
for each of the Notes to be purchased by the relevant Purchasers on the
Closing Date on the terms and conditions herein provided (including the use
of the proceeds of such Notes by the Issuers pursuant to Section 2.2) shall
-----------
not violate any law or governmental regulation in any jurisdiction to which
any Purchaser is subject and shall not subject any Purchaser or the
Collateral Agent to any Tax, penalty, liability or to jurisdiction as a
domiciliary or resident of or other onerous condition under or pursuant to
any applicable law or governmental regulation in any jurisdiction, and such
Purchaser shall have received such certificates, legal opinions or other
evidence as it or its special counsel may request to establish compliance
with this condition.
4.9 Sale of Notes to Other Purchasers. Simultaneously with the purchase
---------------------------------
of and payment for Notes by each Purchaser, all of the other Notes to be
issued to, and purchased and paid for by, the other Purchasers, as set
forth on Schedule 1 attached hereto, shall be issued to, and purchased and
----------
paid for by, such other Purchasers.
4.10 Other Documents. The Purchasers and the Collateral Agent shall have
---------------
received all such other agreements, documents, instruments and certificates
and evidence that all action shall have been taken as is reasonably
requested by the Purchasers or their special counsel in order to effect the
transactions contemplated hereby and by the other Transaction Documents.
4.11 Legal Matters. All legal matters incident to the purchase of the
-------------
Notes, the Collateral and the transactions relating thereto shall be
satisfactory to counsel for the Purchasers and the Collateral Agent.
-4-
<PAGE>
4.12 Legality. The Notes shall on the Closing Date qualify as a legal
--------
investment for insurance companies under applicable insurance law (without
recourse to laws permitting limited investments by insurance companies
without restriction as to the character of the particular investment) and
the Purchasers shall have received a certificate from the Issuers as to
factual matters as the Purchasers or their special counsel may reasonably
request, to establish compliance with this condition.
4.13 Information Certificate; Standard & Poor's Rating; Private
----------------------------------------------------------
Placement Number.
- ----------------
(a) Information Certificate. The Issuers shall have
-----------------------
completed and delivered to the Purchasers the information certificate in
the form of Exhibit G attached hereto, with a copy of the Issuers' most
---------
recent audited annual financial statements attached thereto, which
certificate and statements the Purchasers have informed the Issuers may be
used as a basis for filings which the Purchasers may be required to make
with certain regulatory bodies and with the National Association of
Insurance Commissioners (the "NAIC").
----
(b) Standard & Poor's Rating. The Purchasers and their
------------------------
special counsel shall have received evidence satisfactory to the Purchasers
and their special counsel that the Notes shall have been rated PPR2+ or
better by Standard & Poor's.
(c) Private Placement Number. The Notes shall each have
------------------------
received a private placement number from Standard & Poor's Corporation
CUSIP Service Bureau.
4.14 Placement Agent Letters. The Issuers, Issuers' counsel, the
-----------------------
Purchasers and the Purchasers' special counsel shall have received a letter
from SBCI Swiss Bank Corporation Investment banking Inc. (the "Placement
---------
Agent"), placement agent with respect to the Notes, which letter shall be
- -----
in form and substance satisfactory to the addressees thereof, to the effect
that the offering of the Notes has been a private offering as set forth in
Section 7.16.
- ------------
4.15 Expenses. At the Closing, upon presentation of invoices therefor,
--------
the Issuers shall pay all fees and expenses relating to this Agreement, all
other Transaction Documents and the transactions contemplated hereunder and
thereunder including but not limited to:
(a) the reasonable fees and disbursements of all the
Purchasers' and the Collateral Agent's special counsel;
(b) all costs and expenses relating to this Agreement, all
other Transaction Documents, the transactions contemplated hereunder and
thereunder and the cost of the issuance, purchase and delivery of the
Notes;
-5-
<PAGE>
(c) any broker's fees or finder's fees and placement costs
of the Placement Agent and any other Persons who acted as broker or
placement agent for or on behalf of an Issuer or who was retained by an
Issuer to so act relating to the sale of the Notes hereunder; and
(d) all costs and expenses associated with obtaining a
private placement number for the Notes.
4.16 Compliance with This Agreement. The Issuers shall have performed and
------------------------------
complied with all agreements and conditions contained herein or in the
other Transaction Documents which are required to be performed or complied
with by the Issuers before or at the Closing Date to the satisfaction of
the Purchasers and their special counsel.
SECTION 5. REPAYMENT; PREPAYMENT; ASSUMPTION OF NOTES;
------
RELEASE OF COLLATERAL
----------------------------------------
5.1 Repayment of Principal and Interest on the Notes.
------------------------------------------------
(a) Each of the Issuers shall pay principal of the Notes
issued by it in quarterly installments on the dates and in the amounts set
forth in Schedule 1 attached to such Notes, in arrears.
----------
(b) The Issuers shall pay interest on the outstanding
principal balance of each Note issued by it on the dates, and at the rates,
set forth in such Note.
(c) If the date that any payment under the Notes is due is
other than a Business Day, the amount of principal and interest otherwise
payable on such date shall be payable on the next succeeding Business Day
together with interest accrued on the unpaid principal through such next
succeeding Business Day.
5.2 Maturity. The entire unpaid principal amount of the Notes, together
--------
with accrued and any remaining unpaid interest thereon, shall be due and
payable on the seventh (7th) anniversary of the Closing Date, subject to
acceleration or prepayment as hereinafter provided.
5.3 Method of Payment. All payments (including optional prepayments
-----------------
pursuant to Section 5.5) by the Issuers on account of the Notes shall be
-----------
payable by wire transmittal thereof in immediately available funds to the
Purchasers' accounts set forth on Schedule 3 attached hereto or as the
----------
Purchasers shall specify in writing to the Issuers from time to time. Each
of the Purchasers agrees that in the event it shall sell or transfer such
Note(s) (a) it shall, prior to the delivery of such Note(s) (unless it
shall have already done so), make a notation thereon of all principal, if
any, prepaid on such Note(s) and shall also note thereon the date, if any,
to which interest shall have been paid on such Note(s) and (b) it shall
promptly notify the Issuers of the name and address of the transferee of
any such Note(s) so transferred.
-6-
<PAGE>
5.4 Registration of Notes; Transfer and Exchange of Notes.
-----------------------------------------------------
(a) Each Issuer shall cause to be kept at its office,
maintained pursuant to Section 9.10, a register (each, a "Register") for
------------ --------
the registration and transfer of Notes. The name and address of each
holder of one or more Notes, each transfer thereof and the name and address
of each transferee of such Notes shall be registered in each Register. The
Person in whose name any Note shall be registered shall be deemed and
treated as the owner and holder thereof for all purposes of this Agreement.
(b) A Purchaser intending to transfer a Note shall
surrender such Note duly endorsed, or accompanied by a duly executed
written instrument of transfer, together with a written request for the
issuance of a new Note, and the name and address of the intended transferee
and shall provide such further information relating to such transferee and
such transfer as the relevant Issuer shall reasonably request. The Notes
have not been registered under the Securities Act and may not be resold or
transferred except as provided in this Section 5.4. The Notes shall not be
-----------
transferred to any Person whose principal business is operating or leasing
chassis, railcars or containers. No transfer of the Notes may be made
unless pursuant to an effective registration statement under the Securities
Act or unless exempt from the registration requirements under the
Securities Act. No Issuer shall be obligated to register the Notes under
the Securities Act or any other securities law. The Notes will not be
offered or sold in, nor will any offering material relating to the Notes be
distributed in Canada nor will any resale or other transfer in Canada be
made except in compliance with applicable securities laws of the dominions
or provinces of Canada (including any exemptions thereunder).
In connection with the transfer of any Note pursuant to the foregoing and
upon surrender of any Note at the office of the Issuer maintained pursuant
to Section 9.10, such Issuer, at the request of the holder thereof, shall
------------
execute and deliver, at such Issuer's expense (except as provided below),
new Notes in exchange therefor, in denominations of at least $100,000
(except as may be necessary to reflect any principal amount not evenly
divisible by $100,000), in an aggregate principal amount equal to the
unpaid principal amount of the surrendered Note. Each such new Note shall
be payable to such transferee and shall be substantially in the form of the
Note set out in Exhibit A to this Agreement. Each such new Note shall be
---------
dated and bear interest from the date to which interest shall have been
paid on the surrendered Note or dated the date of the surrendered Note if
no interest shall have been paid thereon. Simultaneously with the transfer
of any Note issued by Ltd. to a transferee pursuant to the foregoing
provisions of this Section 5.4(b), upon the request of the transferee or
--------------
the Purchaser transferor, Interpool shall issue a Guaranty to and in favor
of such transferee and all other obligations of Ltd. to such transferee, as
the case may be,
-7-
<PAGE>
which Guaranty shall be in the form of Exhibit D hereto and shall be
---------
secured by the Collateral granted by Interpool pursuant to the Security
Agreement executed and delivered by Interpool to the Collateral Agent and
the Railcar Security Agreement if then executed and delivered by Interpool
to the Collateral Agent in accordance with Section 5.6(b) hereof; provided
--------------
that the failure of the transferee or the Purchaser transferor to request
such a Guaranty shall not affect or limit Interpool's Obligations in favor
of such Purchaser transferor under its Guaranty or under this Agreement or
the other Transaction Documents which shall inure to the benefit of such
transferee.
(c) Upon receipt by the Issuer of evidence reasonably
satisfactory to it of (i) the ownership and (ii) the loss, theft,
destruction or mutilation, of any Note, and
(A) in the case of loss, theft or destruction, an indemnity reasonably
satisfactory to it (provided that if the holder of the Note is an
institutional investor which is a "Qualified Institutional Buyer" such
-----------------------------
institutional investor's own agreement of indemnity shall be deemed to be
satisfactory), or
(B) in the case of mutilation, upon surrender and cancellation thereof,
the Issuer shall execute and deliver, in lieu thereof, a new Note of like
tenor, dated and bearing interest from the date to which interest shall
have been paid on such lost, stolen, destroyed or mutilated Note or dated
the date of such lost, stolen, destroyed or mutilated Note if no interest
shall have been paid thereon.
5.5 Optional Prepayments.
--------------------
(a) Prepayment. Each Issuer shall have the right to prepay
----------
the principal of Notes issued by such Issuer at any time and from time to
time in whole or in part together with a Make Whole Premium. The proceeds
of any such prepayment of the relevant Notes shall be applied ratably over
all Notes issued by such Issuer and then applied to the prepayment of such
Notes in inverse order of the scheduled principal payments thereof without
priority of any one such Note over any other in accordance with the terms
of this Agreement.
(b) Notice of Optional Prepayments; Officers' Certificate.
-----------------------------------------------------
Each Issuer will give each Purchaser written notice of each optional
prepayment under Section 5.5(a) not less than thirty (30) days and not more
--------------
than sixty (60) days prior to the date fixed for such prepayment, in each
case specifying such date, the aggregate principal amount of the Notes to
be prepaid, the principal amount of each Note held by such Purchaser to be
prepaid, the aggregate accrued and unpaid interest due thereon calculated
to but not including the date of prepayment, an estimate of the aggregate
Make Whole Premium due with respect to such prepayment, calculations
showing how such estimated Make Whole Premium was calculated and the
amounts of principal, accrued interest and Make Whole Premium to be
received by each
-8-
<PAGE>
Purchaser in connection with such prepayment. Each Purchaser shall receive
on the Business Day immediately preceding the date scheduled for any such
prepayment, an Officer's Certificate of the Issuers certifying that all
conditions of such prepayment have been fulfilled and specifying the
particulars of such fulfillment, and, setting forth the calculations used
in computing the amount of the Make Whole Premium and, a copy of the market
data used in determining the Reinvestment Yield in accordance with the
terms of this Agreement. In the event that there shall have been a partial
prepayment of the Notes under Section 5.5(a), such Issuer shall promptly
--------------
give notice to the Purchasers, accompanied by an Officers' Certificate
setting forth the principal amount of each of the Notes that was prepaid
and specifying how each such amount was determined, and if such prepayment
was a prepayment in part, setting forth the reduced amount of each required
payment thereafter becoming due with respect to each of the Notes under
Section 5.1(a), and certifying that such reduction has been computed in
- --------------
accordance with Section 5.5(a).
(c) Making of Prepayment. On or before the Prepayment
--------------------
Date, such Issuer (or any Persons on behalf of such Issuer) shall pay or
cause to be paid to the relevant Purchaser by 12:00 noon (New York City
time) on the Prepayment Date in immediately available funds the amount to
be prepaid with respect to the Notes in accordance with Section 5.3.
-----------
(d) Notes Payable on Prepayment Date. If notice of
--------------------------------
prepayment has been given in accordance with Section 5.5(b), the amount of
--------------
the prepayment of such Notes to be prepaid in accordance with the notice
described in Section 5.5(b) shall, on the Prepayment Date, become due and
--------------
payable at the principal offices of the respective Purchasers at the
addresses set forth in Schedule 3 attached hereto. If the amount of the
----------
prepayment of the Notes to be prepaid in accordance with the notice
described in Section 5.5(b) shall not be so prepaid, the amount of such
--------------
prepayment shall, until paid, continue to bear interest from the applicable
Prepayment Date at the Overdue Rate through the date upon which such Notes
are so prepaid.
(e) If there is more than one Purchaser, the aggregate
principal amount of each partial optional prepayment of the Notes shall be
allocated in units of One Thousand Dollars ($1,000) or multiples thereof
among the Purchasers at the time outstanding, in proportion, as nearly as
practicable, to the respective unpaid principal amounts of the Notes then
outstanding, with adjustments, to the extent practicable, to equalize for
any prior partial optional prepayments not in such proportion.
(f) Upon any partial prepayment of any Note, such Note may,
at the option of the Purchasers, be (i) surrendered to the relevant Issuer
pursuant to Section 5.4(b) in exchange for a
--------------
-9-
<PAGE>
new Note in a principal amount equal to the principal amount then remaining
unpaid on the surrendered Note, (ii) made available to the relevant Issuer
for notation thereon of the portion of the principal so prepaid or (iii)
marked with a notation thereon by the holder thereof as to the portion of
the principal so prepaid. In case the entire principal amount of any Note
is prepaid, such Note shall be surrendered to the relevant Issuer promptly
after such prepayment for cancellation, and shall not be reissued, and no
Note shall be issued in lieu of the prepaid principal amount of any Note.
5.6 Interpool's Assumption of Notes; Pledge of Equipment.
----------------------------------------------------
(a) At any time and from time to time (but in the case of a
partial assumption not more often than once during any calendar quarter)
Interpool may assume the Obligations of Ltd., in whole or in part,
including, but not limited to, its Notes, pursuant to an assumption
agreement in the form of Exhibit F attached hereto, provided that (i)
---------
Interpool's Collateral Value shall not be less than an amount equal to 125%
of the aggregate outstanding principal amount of the Notes issued or
assumed by Interpool after giving effect to such assumption and (ii) no
Default or Event of Default exists (unless such Default shall be cured by
the assumption by Interpool) and the Purchasers shall have received an
Officer's Certificate of Interpool to such effect. If Interpool assumes
any Obligations of Ltd., Ltd. will be released from its Obligations
hereunder to the extent such Obligations shall have been assumed by
Interpool and under the other Transaction Documents except that the
representations, warranties and indemnities of Ltd. shall survive the
release of its other Obligations.
(b) Any Issuer shall have the right to add Collateral to,
or obtain the partial release by the Collateral Agent of Collateral from,
the Lien created under the relevant Security Agreement at any time or from
time to time by the execution and delivery to the Collateral Agent with
copies to the Purchasers and special counsel to the Purchasers, at least
ten (10) Business Days prior to the proposed effective date of any addition
or partial release of Collateral of an appropriate Security Agreement
Supplement indicating specifically the Collateral to be added or released
from such Lien; provided, that no Default or Event of Default exists (other
--------
than a Default which would be cured by such addition or release), or would
arise as a result of or after giving effect to, such addition or release of
Collateral and the Purchasers shall have received an Officer's Certificate
of such Issuer to such effect. Interpool shall have the right to add
Railcars to the
-10-
<PAGE>
Collateral or obtain the partial release by the Collateral Agent of
Railcars from the Lien in favor of the Collateral Agent, at any time or
from time to time, by, in the case of the initial addition of Railcars to
the Collateral, satisfaction, on or before the initial addition of such
Collateral, of the following conditions:
(i) The Purchasers and the Collateral Agent shall have received a
fully executed counterpart of the Railcar Security Agreement in
substantially the form of Exhibit H hereto, which shall be in full force
---------
and effect and no term or condition thereof shall have been amended,
modified or waived;
(ii) The Purchasers and the Collateral Agent shall have received a
legal opinion from each of (a) special counsel to Interpool reasonably
acceptable to Purchasers, which counsel may be DeCampo, Diamond & Ash;
(b) the general counsel to Interpool; and (c) counsel to the Collateral
Agent reasonably acceptable to Purchasers, which counsel may be Ray,
Quinney & Nebeker (with a copy of such opinion to be delivered to the
Issuers); and the Purchasers shall have received a legal opinion from
special counsel to the Purchasers, which counsel may be Cadwalader,
Wickersham & Taft, all of which legal opinions shall be in form and
substance satisfactory to the Purchasers;
(iii) The Lien granted by Interpool in the Railcar Security Agreement
shall constitute a valid first priority perfected Lien on the Collateral
listed in such Railcar Security Agreement;
(iv) The Purchasers, shall have received: (A) to the extent
reasonably available, evidence of title to such Collateral showing that
Interpool has good and marketable title thereto; (B) search reports of the
records of the applicable offices where UCC financing statements, Federal
tax liens and judgments are filed showing that such Collateral is free and
clear of Liens of record; (C) an affidavit executed by an officer of
Interpool as to Interpool's ownership of, and good and marketable title to,
such Collateral free and clear of Liens, other than Permitted Liens, which
affidavit shall be in form and substance satisfactory to the Purchasers and
their special counsel; and (D) a legal opinion of Arthur Burns, Esq.,
general counsel to Interpool, in form and substance satisfactory to the
Purchasers and their special counsel, as to Interpool's having good and
marketable title to such Collateral free and clear of Liens of record. The
Purchasers shall have received search reports of the records of the
Interstate Commerce Commission that Interpool has good and marketable title
to the Railcars included in the Collateral free and clear of Liens of
record and a Collateral Certificate executed by an officer of Interpool
with respect thereto;
(v) Interpool shall have taken all necessary corporate action to
authorize the transactions contemplated by the Railcar Security Agreement
to the reasonable satisfaction of the Purchasers and their special counsel,
and the Purchasers and their special counsel shall have received evidence
of such proceedings, together with such other corporate documents and
certificates reasonably requested by the Purchasers and their special
counsel including, without limitation, charter documents, certificates of
good standing and certificates of incumbency of
-11-
<PAGE>
officers, in form and substance satisfactory to the Purchasers and their
special counsel;
(vi) All Taxes, fees and other charges payable in connection with
the execution, delivery, recording, publishing and filing of the Railcar
Security Agreement shall have been paid in full by Interpool, and the
Purchasers and their special counsel shall have received evidence of any
such payment or arrangements for any such payment satisfactory to the
Purchasers and their special counsel;
(vii) All UCC financing statements, naming Interpool, as debtor, and
the Collateral Agent, as secured party, the Railcar Security Agreement in
form for filing with the Interstate Commerce Commission and all other
documents or instruments required under other applicable laws, in each case
in appropriate form for filing, together with the applicable filing fees
with respect thereto, in all jurisdictions that the Purchasers deem
necessary or desirable in order to perfect the Liens of the Collateral
Agent on behalf of the Purchasers in the Collateral;
(viii) The Purchasers and the Collateral Agent shall have received all
such other agreements, documents, instruments and certificates and evidence
that all action shall have been taken as is reasonably requested by the
Purchasers or their special counsel in order to effect the transactions
contemplated by the Railcar Security Agreement; and
(ix) All legal matters incident to the Railcar Security Agreement
and the transactions relating thereto shall be satisfactory to counsel for
the Purchasers and the Collateral Agent;
and, in the case of each subsequent addition of such Collateral or in the
case of a partial release of such Collateral, by the execution and delivery
to the Collateral Agent with copies to the Purchasers and special counsel
to the Purchasers, at least ten (10) Business Days prior to the proposed
effective date of any subsequent addition or partial release of such
Collateral of an appropriate Railcar Security Agreement Supplement (in the
form attached as Annex A to Exhibit H hereto) indicating specifically the
---------
Collateral to be added to or released from such Lien; provided that with
--------
respect to the initial addition of Railcars pursuant to the Railcar
Security Agreement and each subsequent addition or release of such
Collateral pursuant to a Railcar Security Agreement Supplement, no Default
or Event of Default exists (other than a Default which would be cured by
such addition or release), or would arise as a result of or after giving
effect to, such addition or release of Collateral and the Purchasers shall
have received an Officer's Certificate of Interpool to such effect. The
Collateral Agent shall countersign such Security Agreement Supplement,
Railcar Security Agreement, or Railcar Security Agreement Supplement, as
the case may be, pursuant to instructions by the Purchasers to do so which
the Purchasers shall issue upon then being satisfied that the conditions
set forth herein have been fulfilled whereupon such Security Agreement
Supplement, Railcar Security Agreement, or
-12-
<PAGE>
Railcar Security Agreement Supplement, as the case may be, shall become
effective.
(c) At any time or from time to time Interpool shall have
the right, for the benefit of Ltd., in order to enable Ltd. to avoid the
occurrence of an Event of Default under the provisions of Section 10.1(k),
---------------
to add Collateral to the Lien created by the relevant Security Agreement
executed by Interpool in favor of the Collateral Agent by the execution and
delivery to the Collateral Agent with copies to the Purchasers and special
counsel to the Purchasers, at least five (5) Business Days prior to the
proposed effective date of any addition of Collateral, of an appropriate
Security Agreement Supplement provided that (A) such Security Agreement
Supplement indicates specifically the Collateral being added to such Lien;
(B) such Security Agreement Supplement or an Officer's Certificate
delivered in connection therewith specifically provides that such
Collateral is being added for the benefit of Ltd. to avoid the occurrence
of an Event of Default under the provisions of Section 10.1(k) and that
---------------
such Collateral shall secure all the Obligations of Interpool (including
Obligations of Interpool under the Guaranty) and the Obligations of Ltd.;
and (C) no Default or Event of Default exists (unless such Default shall be
cured by the addition of such Collateral) and the Purchasers shall have
received an Officer's Certificate of Interpool to such effect. The
Collateral Agent shall countersign such Security Agreement Supplement
pursuant to instructions by the Purchasers to do so which the Purchasers
shall issue upon their being satisfied that the conditions set forth in
this Section 5.6(c) shall have been fulfilled whereupon such Security
--------------
Agreement Supplement shall become effective.
(d) In lieu of adding Collateral to the Lien created by the
relevant Security Agreement executed by an Issuer in favor of the
Collateral Agent, such Issuer shall have the right to grant to the
Collateral Agent for the ratable benefit of the Purchasers a first Lien on
Cash Collateral by the execution and delivery to the Collateral Agent with
copies to the Purchasers and special counsel to the Purchasers, at least
ten (10) Business Days prior to the proposed effective date of any such
grant, of a security and pledge agreement in form and substance
satisfactory to the Purchasers and their special counsel and such Issuer
and its counsel covering such Cash Collateral provided that (i) such
security and pledge agreement specifically designates the Issuer for whose
benefit such Cash Collateral is being granted and (ii) no Default or Event
of Default exists (unless such Default shall be cured by the grant of such
Cash Collateral) and the Purchasers shall have received an Officer's
Certificate of such Issuer to such effect. Such Issuer may thereafter add
Collateral to its Security Agreement pursuant to and in compliance with the
provisions of subsection (b) or (c) above and upon such addition of
-------------- ---
Collateral becoming effective, such Issuer may request the release of Cash
Collateral
-13-
<PAGE>
corresponding to the Collateral so added and upon the Purchasers having
been satisfied that (x) such Collateral has been added to the relevant
Security Agreement pursuant to and in compliance with the provisions of
subsection (b) or (c) above and (y) no Event of Default or Default exists
- -------------- ---
and the Purchasers have received an Officer's Certificate of such Issuer
that no Event of Default or Default exists, the Purchasers shall instruct
the Collateral Agent to execute and deliver to such Issuer a release of
such Cash Collateral and the Collateral Agent shall execute and deliver
such release to such Issuer.
(e) In the event that Interpool determines that the
Collateral Value of the Collateral granted by it pursuant to its Security
Agreement (and not theretofore released) exceeds 125% of the sum of the
aggregate outstanding principal amount of the Notes issued by Interpool and
the aggregate outstanding principal amount of Notes issued by Ltd. and
assumed by Interpool, then Interpool shall have the right, for the benefit
of Ltd., in order to enable Ltd. to avoid the occurrence of an Event of
Default under the provisions of Section 10.1(k), to notify the Purchasers,
---------------
the Collateral Agent and their special counsel at least ten (10) business
days prior to the effective date thereof of its designation that the
Collateral representing such excess Collateral Value shall inure to the
benefit of Ltd., to avoid the occurrence of such an Event of Default, which
notice shall be accompanied by (i) a Collateral Certificate specifically
calculating such excess and indicating specifically the Collateral
representing such excess Collateral Value and (ii) an Officer's Certificate
of Interpool that no Event of Default or Default exists (unless such
Default shall be cured by such designation by Interpool of excess
Collateral Value). Upon their satisfaction that the conditions referred to
above shall have been fulfilled, the Purchasers shall instruct the
Collateral Agent to countersign such notice and designation and the
Collateral Agent shall so countersign such notice and designation,
whereupon such designation by Interpool shall become effective.
(f) All assumptions, additions, releases or substitutions
of Collateral and Cash Collateral pursuant to the provisions of this
Section 5.6 shall be accompanied by all such agreements, instruments,
- -----------
documents, certificates, UCC financing statements, notations of Liens on
certificates of title or applications therefor and other lien instruments
and the taking of all such action (including the filing and recording of
any of the foregoing and searches of public records) as the Purchasers, the
Collateral Agent and their special counsel shall reasonably require and all
fees and expenses with respect thereto (including the fees and expenses of
special counsel to the Purchasers and the Collateral Agent) shall be paid
promptly by the Issuers upon presentation of invoices therefor.
-14-
<PAGE>
5.7 Termination of Collateral.
-------------------------
(a) If (i) based upon the financial statements and the
related certificates delivered to the Purchasers pursuant to Section 9.11
------------
each of the financial conditions set forth in paragraph (b) below have been
met by the Issuers for the most recent six consecutive quarters as applied
at the end of each quarter and (ii) Interpool receives a private rating for
the Notes on an unsecured basis of PPR2, its equivalent rating or higher
from either Moody's, Duff & Phelps or Standard & Poor's and (iii) the
holders of at least 80% of Interpool's outstanding recourse Funded Debt
other than the Obligations (excluding capitalized leases) consent in
writing to the release of the collateral securing such Funded Debt,
Interpool may request that the Purchasers waive the requirement that the
Obligations be secured by the Collateral and cause the Collateral Agent to
release the Liens of the Collateral Agent created by the Transaction
Documents. Upon (A) receipt of such consent from the holders of at least
60% of the outstanding principal amount of the Notes, which consent the
Purchasers agree shall not be unreasonably withheld (it being understood
that such consent may be reasonably withheld even if the financial
conditions set forth in paragraph (b) have been met) and (B) the release by
the holders of 80% of Interpool's outstanding Funded Debt other than the
Obligations (excluding capitalized leases) of the collateral securing such
Funded Debt, the Purchasers shall instruct the Collateral Agent and the
Collateral Agent shall take any and all steps necessary to terminate the
Liens created under the Transaction Documents.
(b) The financial conditions referred to in paragraph (a) above
shall be as follows:
(i) Funded Debt did not exceed 300% of Tangible Net Worth;
(ii) the sum of Fixed Charges for Interpool and its Restricted
Subsidiaries would have been covered by at least 1.75 times the sum of
Earnings Available for Fixed Charges for Interpool and its Restricted
Subsidiaries for the sum of the four (4) fiscal quarters preceding the date
of determination; and
(iii) Tangible Net Worth exceeded $125,000,000;
(c) In the event that the Liens of the Collateral Agent shall
have been terminated in accordance with the provisions of Section 5.7(a),
--------------
then at all times thereafter unless and until the Obligations become
secured pursuant to the provisions of Section 5.7(d), neither Interpool nor
--------------
any Restricted Subsidiary will cause, incur or suffer to be incurred or to
exist any Lien on any of its or their property or assets other than:
(i) Permitted Liens;
(ii) judgment Liens contested with execution stayed on appeal;
(iii) Liens securing indebtedness between Interpool and the
Restricted Subsidiaries;
-15-
<PAGE>
(iv) Liens existing on property as at the date of such termination
of Collateral after the release of Collateral referred to in Section 5.7(a)
--------------
(iii) and clause B of Section 5.7(a) which Liens were not prohibited under
---------------
this Agreement at such date;
(v) Liens incurred subsequent to the date of such release of
Collateral on property acquired after such date securing up to 100% of the
lower of cost or fair market value; Liens existing on property at the time
of acquisition; and Liens on the property of a corporation at the time such
corporation becomes a Restricted Subsidiary;
(vi) Subject to the provisions of Section 9.19(b), other Liens if
---------------
the amount of indebtedness secured by such Liens when added to Funded Debt
incurred subsequent to the date of such release of Collateral, does not
exceed 20% of Tangible Net Worth; and
(vii) extensions, renewals and refundings of the Liens and
indebtedness referred to in clauses (i), (ii), (iii), (iv), (v) and (vi)
above.
In the event that Interpool shall cause, incur or suffer to be incurred or
to exist any Lien upon any of its property or assets, or the property or
assets of any of its Restricted Subsidiaries, whether now owned or
hereafter acquired, in violation of the provisions of subdivisions (i)
through (vii) of this Section 5.7(c), it will promptly cause the
--------------
Obligations to be secured by an equivalent amount of Collateral equally and
ratably with any and all other Funded Debt thereby secured so long as such
other Funded Debt shall be so secured. Such action taken by Interpool
pursuant to the immediately preceding sentence shall have the effect of
curing any Default or Event of Default arising out of the causing or
incurrence of a Lien in violation of subdivisions (i) through (vii) of
Section 5.7(c).
- --------------
(d) In the event that following the release of Collateral
pursuant to Section 5.7(a) the Issuers determine that they may be unable to
--------------
continue to meet the financial conditions referred to in Section 9.19(e),
---------------
they may notify the Purchasers that they will no longer be able to comply
with the financial conditions of Section 9.19(e) but that they will
---------------
continue to comply with the financial conditions as set forth in Section
-------
9.19(a), (b) and (c) then from and after the twentieth (20th) Business Day
- --------------------
following such notice such financial conditions as set forth in Section
-------
9.19(a), (b) and (c) shall become applicable to the Issuers, provided that
- -------------------- -------- ----
on or prior to the twentieth (20th) Business Day following such notice (i)
the Issuers shall each grant to the Collateral Agent a first priority
perfected security interest in the Collateral in accordance with the
provisions of this Agreement and the other Transaction Documents having a
Collateral Value of at least 125% of the aggregate outstanding principal
amount of the Notes pursuant to Security Agreements and, if applicable, a
Railcar Security Agreement executed and delivered by the Issuers to the
Purchasers, the Collateral Agent and their special counsel; (ii) the
Issuers shall have executed
-16-
<PAGE>
and delivered to the Purchasers, the Collateral Agent and their special
counsel all such legal opinions, agreements, documents, instruments,
certificates, UCC financing statements and other lien instruments and take
all such actions (including notations on certificates of title) as the
Purchasers, their Collateral Agent and their special counsel shall
reasonably require in connection therewith; (iii) no Default or Event of
Default shall exist (other than a Default which would be cured by such
reinstatement of the original provisions of Section 9.19(a), (b) and (c))
----------------------------
and the Purchasers shall have received an Officer's Certificate of the
Issuers to the foregoing effect; (iv) no lowering in any rating of the
Notes by Standard & Poor's or the NAIC shall have occurred; and (v) the
Issuers shall be able to effect such reversion of the financial conditions
from Section 9.19(e) to the original provisions of Section 9.19(a), (b) and
--------------- ------------------------
(c) only once during the term of this Agreement. All reasonable fees and
- ---
expenses relating to the foregoing (including the fees and expenses of
special counsel to the Purchasers and the Collateral Agent) shall be paid
by the Issuers promptly upon presentation of invoices therefor.
(e) If (i) the Collateral Value of an Issuer is greater
than 125% of the outstanding aggregate principal amount of the Notes issued
or assumed by such Issuer or, in the case of Interpool, subject to a
designation pursuant to Section 5.6(c), as evidenced by a Collateral
--------------
Certificate delivered to the Purchasers and the Collateral Agent and (ii)
no Default or Event of Default exists (other than a Default which would be
cured by a release of Collateral referred to below), then an Issuer may
request the Purchasers to instruct the Collateral Agent to partially
release Collateral (including Cash Collateral) to the extent of the excess
of the Collateral Value over 125% of the aggregate principal amount of such
Notes and upon receipt of such instructions the Collateral Agent shall
partially release such Collateral from the Lien created by the relevant
Security Agreement in accordance with the provisions of Section 2(b)(ii)(A)
of such Security Agreement; provided that after giving effect to such
partial release the Collateral Value of such Issuer is not less than 125%
of the outstanding principal amount of the Notes issued or assumed by such
Issuer or, in the case of Interpool, subject to a designation pursuant to
Section 5.6(c).
- --------------
SECTION 6. RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE COLLATERAL
----------------------------------------
6.1 Collateral. The payment and performance of the Obligations shall be
----------
secured by the Collateral. Notwithstanding any other provision hereof or
any provision of any other Transaction Document to the contrary, no
Collateral of Ltd. shall secure the Obligations of Interpool.
6.2 Payment of Moneys Received With Respect to the Collateral. Each of
---------------------------------------------------------
the Issuers hereby irrevocably covenants and agrees to cause all amounts
payable or realized in respect of the
-17-
<PAGE>
Collateral to be paid to the Collateral Agent on behalf of the Purchasers
if and to the extent required by any of the Transaction Documents.
Pursuant to Section 12 of the Agency Agreement, the Collateral Agent, on
behalf of the Purchasers, shall pay to the Purchasers all such amounts.
Except as otherwise provided in this Agreement or the other Transaction
Documents, if an Event of Default shall have occurred and be continuing
moneys received by the Purchasers pursuant to this Section 6.2, shall be
-----------
applied, first, to the payment of accrued interest (including any default
-----
interest) on the Notes on a pro rata basis to the due date of such payments
--------
and any Make Whole Premium, and second, to the payment of the principal
------
amount of the Notes pro rata based upon the outstanding principal amounts
--------
thereof and third, to the other Obligations in such order as the Purchasers
-----
shall determine. Prior to the occurrence of an Event of Default the
Issuers may continue to collect and receive such monies. All payments
which are made with respect to the Notes pursuant to this Section 6.2 shall
-----------
be applied to such Notes in inverse order of the scheduled principal
payments thereof.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF
ISSUERS
----------------------------------------
Each of the Issuers hereby represents and warrants to the Purchasers as
follows:
7.1 Organization and Power. Each of the Issuers (a) (i) is a corporation
----------------------
duly organized, validly existing and in good standing under the laws of the
jurisdiction of incorporation and qualified to do business in the
jurisdictions set forth in Schedule 7.1 attached hereto for each Issuer,
------------
(ii) is not required to be qualified as a foreign corporation in any
jurisdiction other than the jurisdictions set forth in Schedule 7.1
------------
attached hereto for such Issuer, except where the failure to so qualify
would not have a material adverse effect on such Issuer, its business
operations or its property and (iii) has its chief executive office and
chief place of business at the respective Chief Office set forth on
Schedule 7.1 attached hereto; and (b) has all requisite corporate power and
- ------------
authority and all necessary licenses and permits to enter into and perform
this Agreement and the other Transaction Documents to which such Issuer is
a party and to issue and deliver its Notes. This Agreement, the Notes and
the other Transaction Documents to which such Issuer is a party have been
duly authorized, executed and delivered by such Issuer and, assuming the
due authorization, execution and delivery thereof by the other parties
thereto, such documents constitute the legal, valid and binding obligations
of such Issuer, enforceable against such Issuer in accordance with their
respective terms.
7.2 Trademarks, Licenses, etc. Each of the Issuers possesses, in full
--------------------------
force and effect, all necessary franchises, patents, licenses, trademarks,
trademark rights, trade names, trade name rights, fictitious name
authorizations or certificates and copyrights material to conduct its
business as now being conducted, without any conflict, to its knowledge,
with the
-18-
<PAGE>
franchises, patents, licenses, trademarks, trademark rights, trade name,
trade name rights, fictitious name authorizations or certificates and
copyrights of others.
7.3 Subsidiaries. Each of the Issuers has no Subsidiaries, other than
------------
those set forth in Schedule 7.1 attached hereto.
------------
7.4 Business. Each of the Issuers is engaged principally in the
--------
businesses of leasing, financing or managing containers, chassis, railcars
or other transportation equipment and business related to the foregoing.
In addition, a Subsidiary of one of the Issuers is engaged in the business
of leasing micro computers and related accessories and businesses related
to the foregoing.
7.5 Financial Statements. Interpool has furnished to the Purchasers
--------------------
balance sheets of Interpool and its consolidated subsidiaries as of
December 31, 1992 and December 31, 1993, and the related statements of
income, statements of cash flows and statements of the stockholders'
equity, for the years ended December 31, 1991, December 31, 1992 and
December 31, 1993, respectively, all of which were audited by Arthur
Andersen & Co. and the unaudited consolidated balance sheet of Interpool
and its consolidated subsidiaries as of June 30, 1994, and the related
statements of income, stockholders' equity and cash flows for the six (6)
months ended June 30, 1994, certified by the chief financial officer,
president, chief operating officer or chief executive officer of Interpool.
All such financial statements present fairly, in all material respects, the
financial position, stockholders' equity, results of operations and cash
flows of the entities covered thereby for the periods involved. Since the
date of such financial statements, there has been no material and adverse
change in the financial position of any Issuer not reflected in the
financial statements as of that date, and, since such date, the business of
each Issuer has not been materially and adversely affected by any
occurrence, whether or not insured against. Except as otherwise disclosed
on Schedule 7.5 attached hereto, the Issuers have issued no other
------------
indebtedness for borrowed money which is still outstanding on the date
hereof, except indebtedness which is reflected in the financial statements
referred to above or restructuring or refinancing thereof.
7.6 Taxes. All tax returns of the Issuers which are due have been duly
-----
filed and are correct in all material respects, and all Taxes and other
governmental charges upon the Issuers which are shown to be due and payable
thereon have been paid.
7.7 Litigation. There are no outstanding judgments against any Issuer or
----------
any actions, proceedings, claims or investigations pending or, to any
Issuer's knowledge, threatened before any court or governmental body which,
if adversely determined, would materially and adversely affect the
business, properties, prospects, operations or affairs of any Issuer or
impair any Issuer's ability to perform its Obligations under this Agreement
and the other Transaction Documents.
7.8 Title, Liens. Each of the Issuers owns and has good and marketable
------------
title to all of the Collateral included in the Collateral Value relating to
such Issuer, and there are no Liens
-19-
<PAGE>
on the Collateral of any Issuer other than those Liens created pursuant to
this Agreement and the other Transaction Documents and except for Permitted
Liens. The Liens granted in the Security Agreements and, in the case of
Interpool, if then executed and delivered by Interpool to the Collateral
Agent in accordance with Section 5.6(b) hereof, in the Railcar Security
--------------
Agreement, constitute valid first priority perfected Liens on the
Collateral subject to no other mortgage, Lien or security interest. The
law of Barbados does not necessitate, require or provide for the recording,
registration or filing of any mortgage or Lien in any of the Equipment,
Leases or any other types or items of property or proceeds thereof which
are included in the Collateral covered by or provided for in the
Transaction Documents executed and delivered by Ltd.
7.9 Consent, Approval. No consent or approval of any Person, shareholder,
-----------------
landlord or mortgagee, no waiver of any Lien or right of distraint or other
similar right, and no consent, license, approval or authorization of or
registration, qualification, designation, declaration or filing (except any
recordations required in connection with the perfection of the Liens
granted in the Security Agreements and any required filings or notices
under applicable securities laws, rules or regulations or the rules of the
New York Stock Exchange) with or payment of any withholding or other tax to
any governmental authority by or on the part of the Issuers is required in
connection with the execution, delivery and performance of this Agreement
or any other Transaction Document, the issuance and sale or payment of the
Notes or the consummation of any other transactions contemplated hereby or
thereby.
7.10 Compliance with Other Instruments. Neither of the Issuers is a party
---------------------------------
to any contract, commitment or agreement or subject to any restriction or
to any order, rule, regulation, writ, injunction or decree of any court or
governmental authority or to any statute which materially and adversely
affects its business, property, prospects, operations, assets or financial
condition as now conducted or as proposed to be conducted. Neither the
execution, delivery or performance by either Issuer of this Agreement, the
Notes or the other Transaction Documents to be delivered by such Issuer nor
compliance herewith or therewith (a) conflicts with or results in a breach
of (i) any law, statute, rule or regulation in effect as of the date of
delivery of this Agreement, (ii) any order, writ, injunction or decree of
any court or other governmental authority, or (b) results or will result in
the creation or imposition of any Lien, charge or encumbrance upon its
property pursuant to such agreement or instrument, except for Liens created
hereunder and Permitted Liens. Neither the execution, delivery or
performance by either Issuer of this Agreement, the Notes or the other
Transaction Documents nor compliance by either Issuer herewith or therewith
conflicts or will conflict with the certificate of incorporation, by-laws
or other organizational document of either Issuer or results or will result
in a breach of or constitutes or will
-20-
<PAGE>
constitute a default under any agreement or instrument to which either
Issuer is a party or by which it is bound.
7.11 Corporate Existence; Place of Business; Books and Records. Except as
---------------------------------------------------------
disclosed in Schedule 7.1 attached hereto, neither of the Issuers has at
------------
any time within the last five (5) years, (i) changed its name; (ii) used
any fictitious name, (iii) been the surviving corporation of a merger or
consolidation, or (iv) acquired all or substantially all of the assets of
any Person. The Chief Offices, all other offices of the Issuers and the
only places of business of each of the Issuers where commercial affairs are
conducted and books and records are maintained are set forth on Schedule
--------
7.1 attached hereto. Neither of the Issuers is in violation of any charter
- ---
instrument or by-law, and neither of the Issuers is in violation in any
material respect of any term in any agreement or other instrument to which
it is a party or by which it or any of its property may be bound which
violation could have a material adverse effect on either Issuer or its
business, assets, operations, leaseholds and equipment.
7.12 ERISA.
-----
(a) No Reportable Event has occurred with respect to any
Plan maintained for employees of (i) either Issuer or (ii) any member of a
Controlled Group of which either Issuer is a part.
(b) Neither of the Issuers is entering into the Transaction
Documents or any other transaction contemplated hereby, directly or
indirectly, in connection with any arrangement in any way involving any
employee benefit plan or fund or trust which holds assets of any employee
benefit plan with respect to which it in its individual capacity is a
party-in-interest, all within the meaning of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") and the Internal Revenue Code of
-----
1986, as amended (the "Code").
----
7.13 Capital Stock. All of the issued and outstanding capital stock of
-------------
Ltd. is owned and registered as set forth in Schedule 7.1 attached hereto.
------------
7.14 Governmental Licenses. Each of the Issuers has been issued all
---------------------
required federal, state, local and foreign licenses, certificates or
permits relating to, and each of the Issuers and its facilities, business,
assets, property, prospects, operations, leaseholds and equipment are in
compliance in all respects with, all applicable federal, state, local and
foreign laws, rules and regulations relating to air emissions, water
discharge, noise emissions, solid or liquid disposal, hazardous waste or
materials, or other environmental health or safety matters, where the
failure to so comply could have a material adverse effect on either Issuer
or its business, assets, operations, leaseholds and equipment.
7.15 Event of Default. No Event of Default or Default has occurred and is
----------------
continuing.
-21-
<PAGE>
7.16 Offering of the Notes. Neither the Issuers nor anyone acting on
---------------------
their behalf has offered, directly or indirectly, the Notes or any part
thereof or any similar security for sale to, solicited offers to buy any
thereof from or otherwise approached or negotiated with anyone other than
the Purchasers and the institutional investors referred to in the letter of
the Placement Agent delivered pursuant to Section 4.14. In connection with
------------
the sale of the Notes hereunder, neither of the Issuers has engaged in
general solicitation or advertising. Neither the Issuers nor anyone on
their behalf will sell or offer the Notes or any part thereof or any
similar security for sale to, solicit any offers to buy any thereof from or
otherwise approach or negotiate in respect thereof with any other Person or
Persons so as thereby to require registration of the Notes under Section 5
of the Securities Act.
7.17 Margin Securities.
-----------------
(a) Neither of the Issuers will, directly or indirectly,
apply any part of the proceeds of the Notes for the purpose (whether
immediate, incidental or ultimate) of purchasing or carrying any "margin
stock" as defined in Regulation G of the Federal Reserve Board (12 C.F.R.
207) or any security issued by any investment company registered pursuant
to Section 8 of the Investment Company Act of 1940 or for the purpose of
repaying any indebtedness originally incurred for such purpose.
(b) Neither of the Issuers is, in any way, engaged in the
business of extending credit for the purpose of purchasing or carrying
Margin Stock; nor has either Issuer secured the payment of the Notes by an
assignment of any stock (as such term is defined in Regulation U) or by any
arrangement under which either Issuer's right or ability to sell, pledge or
otherwise dispose of stock owned by it is in any way restricted or under
which the exercise of such right, whether by written agreement or
otherwise, is or may be cause for acceleration of the Notes.
7.18 Use of Proceeds. Neither of the Issuers is, directly or indirectly,
---------------
applying any part of the proceeds of the Notes for any purpose other than
for the purposes described in Section 2.2.
-----------
7.19 Liabilities; Business. Neither of the Issuers has any liabilities or
---------------------
obligations which are material to its business, property, prospects,
operations, assets or financial condition as now conducted or as proposed
to be conducted which are prohibited by this Agreement and by the other
Transaction Documents to which it is a party. Neither of the Issuers'
assets are less than its liabilities, both determined in accordance with
GAAP, and each of the Issuers is solvent.
7.20 Investment Company Act. Neither of the Issuers is, and is not
----------------------
directly or indirectly controlled by or acting on behalf of any Person
which is, an "investment company" within the meaning of the Investment
Company Act of 1940.
-22-
<PAGE>
7.21 Disclosure. Neither this Agreement nor any other Transaction
----------
Document nor any other document, certificate or instrument delivered to the
Purchasers by or on behalf of either Issuer in connection with the
transactions contemplated by this Agreement contains any untrue statement
of a material fact or omits to state a material fact necessary in order to
make the statements contained in this Agreement, any other Transaction
Document and in such other documents, certificates or instruments not
misleading. There is no fact known to either Issuer which materially and
adversely affects or in the future may (so far as either Issuer can now
reasonably foresee) materially and adversely affect the business,
prospects, operations, affairs, condition (financial or otherwise),
properties or assets of either Issuer which has not been set forth in the
financial statements or in this Agreement, any other Transaction Document
or the other documents, certificates and instruments delivered to the
Purchasers by or on behalf of either Issuer specifically for use in
connection with the transactions contemplated by this Agreement.
7.22 Foreign Assets Control Regulations. Neither the issuance and sale by
----------------------------------
either Issuer of the Notes under this Agreement nor its use of the proceeds
thereof will violate the Foreign Assets Control Regulations, the Foreign
Funds Control Regulations, the Transaction Control Regulations, the Cuban
Assets Control Regulations, the Libyan Sanctions Regulations, the Iraqi
Sanctions Regulations, the Haitian Transactions Regulations, the Federal
Republic of Yugoslavia (Serbia and Montenegro) Sanctions Regulations, or
the Iranian Assets Control Regulations of the Office of Foreign Assets
Control, United States Department of the Treasury (31 C.F.R., Chapter V,
Subpart B, as amended) or any other order, regulation or ruling thereunder
or pursuant thereto.
7.23 Leases. The Leases which are in effect on the date of this Agreement
------
each constitute legal, valid and binding obligations of the relevant Issuer
and, to the best of the Issuers' knowledge, each of the respective lessees
thereunder, enforceable in accordance with their respective terms.
7.24 Financed Equipment. As of the date hereof no Person has a Lien on
------------------
any Financed Equipment which represents a replacement or a substitution of
equipment.
7.25 Insurance. Each of the Issuers is, as of the date of this Agreement,
---------
in compliance with the provisions of Section 9.6.
-----------
SECTION 8. REPRESENTATIONS AND WARRANTIES OF
PURCHASERS
----------------------------------------
8.1 Purchase for Investment. Each Purchaser represents and warrants it is
-----------------------
purchasing the Notes being purchased by it for its own account, and that
each such Note is being purchased for the purpose of investment and not
with a view to the distribution thereof, subject, nevertheless, to any
requirement of law that the disposition of its property shall be at all
times within such Purchaser's control. Such Purchaser will not, in any
event, make any sale or other disposition of such Notes except in
accordance with the Securities Act and the rules and regulations of the
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<PAGE>
Securities and Exchange Commission thereunder, or pursuant to an exemption
under such Securities Act and rules and regulations and of the terms of
this Agreement. Each Purchaser represents and warrants it is an "insurance
company" as defined in Section 2(13) of the Securities Act.
8.2 Taxpayer Status. Each Purchaser represents and warrants that it is a
---------------
United States person within the meaning of Section 7701(a)(30) of the Code
except as disclosed on Schedule 8.2 attached hereto.
------------
8.3 Source of Funds. At least one of the following statements is an
---------------
accurate representation as to the source of funds to be used by such
Purchaser to pay the purchase price of the Notes purchased by such
Purchaser:
(a) if such Purchaser is an insurance company, no part of
such funds constitutes assets allocated to any separate account maintained
by it in which any employee benefit plan (or its related trust) has any
interest; or
(b) if such Purchaser is an insurance company, to the
extent that any part of such funds constitutes assets allocated to any
separate account maintained by it, (x) such separate account is a "pooled
separate accounts" within the meaning of Prohibited Transaction Class
Exemption 90-1, in which case such Purchaser has complied and will continue
to comply with the conditions set forth in Part III thereof and such
Purchaser has disclosed in writing to the relevant Issuer the names of each
employee benefit plan whose assets in such separate account exceed 10% of
the total assets of such account as of the date of such purchase (and for
the purposes of this paragraph (b) all employee benefit plans maintained by
the same employer or employee organization are deemed to be a single plan),
or (y) such separate account contains only the assets of a specific
employee benefit plan, complete and accurate information as to the identity
of which such Purchaser has delivered to the Issuers by separate letter; or
(c) if such Purchaser is a "qualified professional asset
manager" or "QPAM" (within the meaning of Part V of Prohibited Transaction
Class Exemption 84-14 (the "QPAM Exemption")), all of such funds constitute
--------------
assets of an "investment fund" (within the meaning of Part V of the QPAM
Exemption) managed by such Purchaser, no employee benefit plan's assets
which are combined with the assets of all other employee benefit plans
established or maintained by the same employer or by an affiliate of such
employer or by the same employee organization and managed by such
Purchaser, exceed 20% of the total client assets managed by such Purchaser,
the conditions of Part I(g) of the QPAM Exemption are satisfied and such
Purchaser has disclosed to the Issuers the names of all employee benefit
plans whose assets are included in such investment fund; or
-24-
<PAGE>
(d) if such Purchaser is other than an insurance company,
all or a portion of such funds consists of funds which do not constitute
assets of any employee benefit plan (other than a governmental plan exempt
from the coverage of ERISA) and the remaining portion, if any, of such
funds consists of funds which may be deemed to constitute assets of one or
more specific employee benefit plans, complete and accurate information as
to the identity of each of which such Purchaser has delivered to the
Issuers in writing by separate letter.
As used in this Section 8.3, the terms "employee benefit plan",
-----------
"governmental plan" and "separate account" shall have the respective
meanings assigned to such terms in Section 3 of ERISA and the term "assets"
shall have the meaning assigned to such term in Department of Labor
regulations Section 2510.3-101.
SECTION 9. COVENANTS OF ISSUERS. Each of the Issuers hereby covenants and
--------------------
agrees that from the date of this Agreement and so long as any Obligations
or other amounts under the Notes and hereunder are outstanding, such
Issuers will comply with the following covenants:
9.1 Maintenance of Corporate Existence. Each of the Issuers shall
----------------------------------
preserve and keep in full force and effect its corporate existence and all
franchises, rights and privileges necessary to the proper conduct of its
business, including, without limitation, all necessary franchises, patents,
licenses, trademarks, trademark rights, trade names, trade name rights,
fictitious name authorizations or certificates and copyrights, without any
unlawful conflict with franchises, patents, licenses, trademarks, trademark
rights, trade names, trade name rights, fictitious name authorizations or
certificates and copyrights of others which conflict may materially and
adversely affect such Issuer or interfere with the conduct of such Issuer's
business or may result in an action brought against such Issuer for such
violation which action may materially and adversely affect such Issuer or
interfere with the conduct of such Issuer's business.
9.2 Amendments. Each of the Issuers shall (a) promptly deliver to the
----------
Purchasers and the Collateral Agent copies of any amendments or
modifications to its certificate of incorporation, bylaws and
organizational documents and/or other documents of formation, as the case
may be, certified, with respect to the certificate of incorporation, by the
Secretary of State of the jurisdiction of incorporation, or by the
appropriate official of its jurisdiction of formation, as the case may be,
and, with respect to the bylaws, by the secretary of such Issuer and (b) on
a quarterly basis deliver to the Purchasers and the Collateral Agent a
certificate of the incumbency of its officers.
9.3 Compliance. Each of the Issuers shall comply with all laws,
----------
ordinances, rules and regulations of any foreign, federal, state or local
government or any instrumentality or agency thereof, applicable to it,
including, without limitation, the Fair Labor Standards Act, now or
hereafter in effect, and all international laws, ordinances, rules and
regulations, the failure to comply with which may have a materially adverse
effect on any Issuer or on its ability to perform its Obligations under any
of the
-25-
<PAGE>
Transaction Documents, any material agreement, document or instrument to
which it is a party, or on the Collateral or on the Purchasers or the
Collateral Agent in enforcing their rights hereunder against any Issuer or
the Collateral.
9.4 Taxes. Each of the Issuers shall pay and discharge, as they become
-----
due, all Taxes, assessments, debts, claims and other governmental or
non-governmental charges lawfully imposed upon it or incurred by it or its
properties and assets, except Taxes, assessments, debts, claims and charges
contested in good faith in appropriate proceedings and for which any Issuer
shall have set aside adequate reserves for the payment of such Tax,
assessment, debts, claims or charges. Such Issuer shall provide the
Collateral Agent, upon the Collateral Agent's request, evidence of payment
of such Taxes, assessments, debts, claims and charges. If such Issuer
fails to pay such Taxes, assessments, debts, claims or charges when due,
and is not contesting the same in good faith or has not set aside adequate
reserves for the payment thereof, the Collateral Agent may discharge the
same, and any amounts so advanced by the Collateral Agent for such purposes
shall be added to the Obligations of such Issuer secured by the Collateral
and shall bear interest at the overdue rate set forth in such Notes
relating to such Taxes, assessments, debts, claims or charges.
9.5 Preservation of Assets. Each of the Issuers shall maintain, preserve
----------------------
and keep or cause to be maintained, preserved and kept, all its properties,
Equipment and assets, including the Collateral, in accordance with industry
standards, and make, or cause to be made, all necessary or appropriate
repairs, renewals, replacements, substitutions, additions, betterments and
improvements thereto so that efficiency of all such property and assets
shall at all times be properly preserved and maintained in accordance with
industry standards.
9.6 Insurance. Each of the Issuers shall maintain, with financially sound
---------
and reputable insurance companies, such insurance on its properties,
businesses and assets, including, without limitation, the Collateral,
against casualty, general liability, worker's compensation and such other
insurable interests and in such amounts as is consistent with practices
generally followed in the container industry for companies of comparable
size. The all risk insurance policies with respect to the Collateral shall
initially cover $3,500,000 in physical damage in respect of any one
occurrence, shall name the Collateral Agent for the benefit of the
Purchasers and the Purchasers as additional insureds and loss payees, and
the liability insurance policies with respect to the Collateral shall
initially cover $50,000,000 any one occurrence and in the aggregate and
shall name the Collateral Agent and the Purchasers, as additional insureds.
All such policies of insurance shall provide for at least thirty (30) days'
advance notice in writing to the Collateral Agent of any cancellation or
modification thereof and, with respect to all risk casualty insurance only,
contain a "breach of warranty clause" whereby the insurer agrees that a
breach of the insuring conditions or any negligence by an
-26-
<PAGE>
Issuer, or any other Person, shall not invalidate the insurance as to the
Collateral Agent, the Purchasers and their respective successors and
assigns. If an Issuer fails to pay the premiums on any such insurance or
maintain such insurance in effect, the Collateral Agent shall have the
right (but shall be under no duty) to pay such premiums for such Issuer's
account and take all such action (at such Issuer's expense) as the
Collateral Agent deems necessary to keep such insurance in effect. Such
Issuer shall repay to the Collateral Agent any sums which the Collateral
Agent shall have so paid, together with interest thereon at the rate of
7.92% per annum. Such Issuer, upon the Collateral Agent's request, shall
(a) deliver to the Collateral Agent a detailed list of insurance then in
effect, stating the names of the insurance companies, the amounts and rates
of the insurance, dates of expiration thereof and the properties and risks
covered thereby; (b) obtain, within thirty (30) days after notice from the
Collateral Agent, such additional insurance as described in this Section
-------
9.6 which is reasonably required by the Collateral Agent and which is
- ---
consistent with practices generally followed in the container industry for
companies of comparable size; (c) provide to the Collateral Agent and
Purchasers copies of all insurance policies relating to its properties,
business and assets; and (d) assign to the Collateral Agent all rights to
receive proceeds of any such insurance with respect to the Collateral and
direct all insurers to pay all proceeds directly to the Collateral Agent.
Each of the Issuers hereby authorizes the Collateral Agent to endorse any
draft for such proceeds. Notwithstanding anything contained herein, each
of the Issuers shall have the option to (i) use all said proceeds received
by the Collateral Agent with respect to the Collateral to pay down the
outstanding amount of its Notes in inverse order of the scheduled principal
payments thereof without priority of any one such Note over any other such
Note, or (ii) receive said proceeds from the Collateral Agent; provided,
--------
that (a) no Default or Event of Default shall have occurred and be
- ----
continuing and (b) such Issuer shall provide the Purchasers with substitute
Collateral if it is necessary to ensure that the Collateral Value of such
Issuer is greater than 125% of the aggregate outstanding principal amount
of the Notes issued by such Issuer which Collateral may be purchased with
the proceeds of such insurance, provided said substitute Collateral shall
be the subject of a valid first perfected Lien in favor of the Collateral
Agent for the benefit of the Purchasers subject to no other Liens.
9.7 Liens. Neither of the Issuers shall, directly or indirectly, (a)
-----
permit to exist any Liens with respect to the Collateral other than Liens
in favor of the Purchasers or the Collateral Agent or Permitted Liens; nor
(b) pledge any shares owned by it in Restricted Subsidiaries.
9.8 Litigation. The Issuers shall promptly notify all of the Purchasers
----------
and, with respect to the Collateral, the Collateral Agent of any
litigation, actions, proceedings, claims or investigations (collectively,
"Claims") pending or threatened against either Issuer wherein claimant
------
seeks to recover in excess
-27-
<PAGE>
of $2,000,000 and of the entry of any judgment in excess of $1,000,000
against it, which Claims or judgments are not fully covered by insurance
(subject to deductibles) in respect of which the carrier has not disclaimed
liability or any of the Collateral becoming subject to any Liens securing
or relating to Claims, judgments or indebtedness in excess of $500,000,
other than Liens in favor of the Purchasers or the Collateral Agent.
9.9 Line of Business. Neither of the Issuers shall materially change its
----------------
present lines of business as described in Section 7.4 nor will Interpool
-----------
permit any Restricted Subsidiary to engage in any business other than such
present lines of business or any other business related thereto.
9.10 Chief Offices; Places of Business. Each Issuer shall notify the
---------------------------------
Collateral Agent in writing at least thirty (30) days in advance of (a) any
change of location of its Chief Office, (b) the change, elimination or
opening of any chief executive office of such Issuer, or (c) any change in
the place where such Issuer maintains its records as to the Collateral such
that such records are not located at such Issuer's Chief Office. Each
Issuer shall notify the Collateral Agent in writing promptly following a
change in the character, use or location of any of the Financed Equipment
such that any of such Financed Equipment ceases to be either "mobile goods"
or "goods covered by a certificate of title", in each case within the
meaning of the UCC. Each Issuer shall notify the Collateral Agent in
writing within five (5) days if there is a change in the character of any
of the Collateral such that it constitutes an "instrument" (other than an
"instrument" which constitutes part of "chattel paper") within the meaning
of the UCC.
9.11 Financial Statements. The Issuers shall deliver to the Purchasers
--------------------
the following:
(a) Within forty-five (45) days after the end of each
quarterly fiscal period of Interpool, with the exception of its last fiscal
quarter (commencing with the quarterly period in which this Agreement is
executed and continuing until all of the Obligations under this Agreement
and the other Transaction Documents are satisfied), company prepared
unaudited consolidated financial statements for Interpool and its
consolidated subsidiaries in comparative form showing the corresponding
figures for the preceding year prepared in accordance with GAAP, along with
a certificate by an authorized officer of Interpool which shall include an
attestation by such officer briefly stating he has reviewed such unaudited
consolidated financial statements and that he has reviewed the relevant
provisions of this Agreement and stating whether his examination has
disclosed the existence of any Default or Event of Default and, if so,
specifying the nature and period of existence thereof and actions
management proposes to undertake to cure the same.
(b) Within ninety (90) days after the end of each fiscal
year of each Issuer, a consolidated balance sheet of each Issuer and its
consolidated subsidiaries as of the end of such
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<PAGE>
year and the related consolidated statements of income, statements of cash
flows and statements of shareholders' equity for such year audited, without
qualification, by Arthur Andersen & Co. or another independent "Big Six"
certified public accounting firm, in comparative form to the corresponding
figures as at the end of and for the preceding financial year. In
addition, such accountants shall issue a statement in connection with their
audit as to whether anything has come to their attention that would cause
them to believe that the Issuers were not in compliance with any of the
terms, covenants or conditions of Sections 9.19 or 9.25 of this Agreement
---------------------
it being understood that their audit was not directed primarily to
obtaining knowledge of such non-compliance and if any such non-compliance
is indicated, specifying the nature and period of existence thereof,
together with a certificate of an authorized officer with respect to such
financial statements covering the same matters referred to in the first
three quarter's attestation delivered pursuant to Section 9.11(a) and
---------------
actions management proposes to undertake to cure the same.
(c) (i) Within sixty (60) days after the end of each calendar
quarter until all of the Obligations outstanding are satisfied, a
Collateral Certificate, an equipment status report sent to the Collateral
Agent for Collateral (indicating the Collateral located at depots or under
lease) and an aging of all accounts receivable (including lease receivables
covering the Equipment and other equipment) of Interpool and its
consolidated subsidiaries, as at the end of such calendar quarter, in form
and substance reasonably satisfactory to the Purchasers.
(ii) Within forty five (45) days after the end of each
calendar quarter until all the Obligations are satisfied, an Equipment
utilization report (showing the percentage of Equipment under lease) with
respect to Equipment owned and managed by Interpool and its consolidated
subsidiaries.
(d) Copies of all formal, written notices or reports, if
any, furnished to an Issuer by its independent certified public accountants
in connection with each fiscal year audit of the financial statements of
such Issuer made by such accountants.
(e) Such additional financial information with respect to
the Issuers and information with respect to the Collateral as the
Purchasers may from time to time reasonably require.
(f) Promptly after the filing thereof, copies of all
financial statements and reports (including all exhibits or schedules
annexed thereto or filed therewith) which are material to any Issuer and
which such Issuer may file with the Securities and Exchange Commission of
the United States or any public body
-29-
<PAGE>
succeeding to the functions of that Commission and which are generally
available to the public.
9.12 Books and Records. Each of the Issuers shall, at all times and in
-----------------
accordance with GAAP keep complete and accurate books and records
concerning its business, affairs and operations and concerning its
properties and assets, including, without limitation, the Collateral, and
shall deliver, or cause to be delivered to the Collateral Agent promptly
upon the Collateral Agent's request, from time to time, with respect to the
Collateral (i) after an Event of Default occurs, to the extent in its
possession, all instruments and chattel paper (including all executed
copies thereof), representing or evidencing the Collateral or proceeds of
the Collateral; (ii) after an Event of Default occurs, to the extent in its
possession or control, all original invoices, original bills of lading,
documents of title, all Leases covering Financed Equipment included in the
Collateral, original contracts, chattel paper, instruments, and any other
writings relating to the Collateral; and (iii) such other information to
the extent in its possession or control with respect to any of the
Collateral as the Collateral Agent may, in its sole discretion, deem to be
necessary or effectual to evidence the transactions contemplated hereby or
to evidence, enforce or perfect the Collateral Agent's Lien in the
Collateral, or to carry into effect the provisions and intent of this
Agreement or other Transaction Documents delivered pursuant hereto, all at
the sole expense of the Issuers.
9.13 Inspection. The Issuers shall, from time to time and during normal
----------
business hours, on reasonable notice, permit the Purchasers or the
Collateral Agent to inspect or examine the properties and assets of the
Issuers, including, without limitation, the Collateral, to the extent the
Collateral is in the possession or control of the Issuers or could be so
inspected or examined under the terms of applicable Leases with respect
thereto, and further to examine, check, make copies of, or extracts from,
any of the Issuers' books, records, journals, receipts, orders,
correspondence, other data, or orders and accounts receivable of the
Issuers and to permit the Purchasers and the Collateral Agent to hold
discussions with the Issuers' officers and auditors and the Issuers shall
instruct such officers and request such auditors to hold such discussions.
If a Default or Event of Default has occurred and is continuing (a) all of
the foregoing shall be at the Issuers' expense, (b) the Purchasers or the
Collateral Agent may independently verify the orders and accounts
receivable of the Issuers at the Issuers' expense, and (c) the Purchasers
shall have the right to audit (or cause to be audited by certified public
accountants) all of the foregoing items of the Issuers at the Issuers'
expense.
9.14 ERISA. Each of the Issuers shall furnish to the Purchasers and, with
-----
respect to the Collateral, the Collateral Agent (a) as soon as possible and
in any event within thirty (30) days after such Issuer or a duly appointed
administrator of a Plan knows or has reason to believe that any Reportable
Event has occurred with respect to any Plan, a statement of the principal
financial
-30-
<PAGE>
officer of such Issuer setting forth details as to such Reportable Event
and the action which such Issuer proposes to take with respect thereto,
together with a copy of the notice of such Reportable Event given to the
PBGC or a statement that said notice will be filed with the annual report
to the United States Department of Labor with respect to such Plan if
required under applicable regulations; (b) promptly after receipt thereof,
a copy of any notice an Issuer or any other member of a Controlled Group
may receive from the United States Department of Labor, the Internal
Revenue Service or the PBGC with respect to any deficiency with respect to
any Plan; (c) in the event any stock of an Issuer is ever offered pursuant
to a registration statement filed with the Securities and Exchange
Commission, promptly after the sending of, making available or filing of
the same, copies of any proxy statements and financial statements which
such Issuer shall send or make available to all of its stockholders, and
any registration statements and any reports which such Issuer shall file
with the Securities and Exchange Commission; and (d) promptly after receipt
thereof, a copy of any notice an Issuer may receive indicating an actual or
potential violation of any environmental law or regulation.
9.15 Use of Proceeds. The Issuers shall use the proceeds of the Notes
---------------
solely in accordance with the provisions of Section 2.2.
-----------
9.16 Further Assurances. The Issuers shall procure, execute and deliver
------------------
to the Collateral Agent any security agreement, financing statement, or
other writing and take all such other actions as the Collateral Agent may
reasonably require to evidence, preserve, protect or enforce the Collateral
Agent's rights and interests to or in the Collateral.
9.17 Government Contracts. If any of the Collateral consists of Financed
--------------------
Equipment covered by contracts with the United States or any other
governmental entity or any of their respective departments, agencies or
instrumentalities, the Issuers shall notify the Collateral Agent and
execute any writings and take all such other actions as the Collateral
Agent may require in order that all money due or to become due under such
contracts shall be assigned to the Collateral Agent and proper notice of
the assignment given under the Federal Assignment of Claims Act or other
applicable law.
9.18 Sell, Merge, Consolidate, etc. Neither of the Issuers shall:
------------------------------
(a) Sell, abandon, or otherwise dispose of all or any
substantial part (which shall be deemed to constitute an amount in excess
of 20% of the consolidated assets of Interpool and its Restricted
Subsidiaries), of its properties or assets in any 12 month period unless
(i) it either (A) reinvests the proceeds from such transactions in excess
of 20% of such consolidated assets in its principal businesses as described
in Section 7.4 or other investments permitted hereunder provided that such
-----------
investments are fully liquidated and the proceeds thereof are invested in
such principal businesses within twelve (12) months from the date of such
transaction, and/or (B) prepays
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<PAGE>
the Notes in inverse order of the scheduled principal payments thereof
without priority of any one such Note over any other such Note in the
amount of such excess of 20% of such consolidated assets, together with a
Make Whole Premium, if any, or (ii) such transaction occurs entirely
between the Issuers.
(b) Consolidate with or merge into any Person or permit any
merger of any other Person into an Issuer or acquire all or substantially
all the assets of any Person, unless such Issuer is the surviving
corporation (and if one of the Issuers involved in such transaction is
Interpool, Interpool is the surviving corporation) or the survivor
expressly assumes the Obligations of such Issuer and following and giving
effect to such merger, consolidation or acquisition, no Default or Event of
Default exists or shall result under any Transaction Document, the
Collateral Agent continues to have a first perfected security interest in
the Collateral under the UCC, reflected on the certificates of title and,
if applicable, through a filing with the Interstate Commerce Commission, as
applicable to the relevant Collateral subject to no other Liens, other than
Permitted Liens and the Issuers, including the surviving corporation, may
issue at least $1.00 of additional Funded Debt without any Default or Event
of Default resulting hereunder.
(c) Alter the existing capital stock structure of any
Issuer such that Interpool owns less than 100% of the common stock of Ltd.
and 87.5% of the common stock of Trac Lease, Inc.
(d) Sell, assign, transfer, discount or otherwise dispose
of any Lease, or any interest therein, with or without recourse, except in
the ordinary course of its business as presently conducted.
9.19 Financial Covenants. So long as the Obligations remain outstanding
-------------------
under any of the Transaction Documents (subject to the provisions of
Section 9.19(e)):
- ---------------
(a) Interpool shall cause Tangible Net Worth to be greater
than $100,000,000 for the period commencing on the Closing Date to December
31, 1995; and $125,000,000 at all times from and after January 1, 1996.
(b) Neither Interpool nor any of its Restricted
Subsidiaries shall incur any Funded Debt unless after giving effect to such
incurrence of Funded Debt (i) the ratio of Funded Debt to Tangible Net
Worth is not greater than 4 to 1; and (ii) the sum of Pro-Forma Fixed
Charges for Interpool and its Restricted Subsidiaries would have been
covered by at least 1.5 times the sum of Earnings Available for Fixed
Charges for Interpool and its Restricted Subsidiaries for the most recent
four (4) fiscal quarters preceding the date of determination.
(c) Interpool shall not permit the ratio of (i) the sum of
Earnings Available for Fixed Charges plus Depreciation
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<PAGE>
for Interpool and its Restricted Subsidiaries for the sum of the four (4)
fiscal quarters immediately preceding the date of determination to (ii) the
sum of Fixed Charges for Interpool and its Restricted Subsidiaries for the
sum of the four (4) fiscal quarters immediately preceding the date of
determination to be less than 1.5 to 1.
(d) Neither Interpool nor its Restricted Subsidiaries shall
make any Restricted Payments if the aggregate amount of all Restricted
Payments made subsequent to June 30, 1993 would exceed the sum of
$5,000,000 plus 75% of the sum of (i) Net Earnings of Interpool and its
Restricted Subsidiaries (minus 100% of any net loss) subsequent to June 30,
1993 and (ii) the net cash proceeds received after June 30, 1993 from the
sales (other than to Interpool or its Subsidiaries) of shares of common
stock and preferred stock of Interpool or any Restricted Subsidiary which
does not provide for mandatory redemption thereof or sinking fund payments
with respect thereto.
(e) If the Collateral is terminated pursuant to Section
-------
5.7(a) then, from and after the date of such termination up to and until
- ------
such time, if any, as the Issuers again secure the Obligations with
Collateral in accordance with Section 5.7(d), the Issuers shall not be
--------------
required to comply with the financial covenants set forth in Sections
--------
9.19(a), (b) and (c) and shall, instead be required to comply with the
- --------------------
following financial covenants:
(i) Interpool shall cause Tangible Net Worth to be greater
than $125,000,000;
(ii) Neither Interpool nor any of its Restricted
Subsidiaries shall incur any Funded Debt unless after
giving effect to such incurrence of Funded Debt (A)
the ratio of Funded Debt to Tangible Net Worth is not
greater than 3 to 1; and (B) the sum of Pro-Forma
Fixed Charges for Interpool and its Restricted
Subsidiaries would have been covered by at least 1.75
times the sum of Earnings Available for Fixed Charges
for Interpool and its Restricted Subsidiaries for the
most recent four (4) fiscal quarters preceding the
date of determination;
(iii) Interpool shall not permit the ratio of (i) the sum of
Earnings Available for Fixed Charges plus Depreciation
for Interpool and its Restricted Subsidiaries for the
sum of the four (4) fiscal quarters immediately
preceding the date of determination to (ii) the sum of
the Fixed Charges for Interpool and its Restricted
Subsidiaries for the sum
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<PAGE>
of the four (4) fiscal quarters immediately preceding
the date of determination to be less than 1.75 to 1.
9.20 Payment of Obligations. Each Issuer shall pay all obligations
----------------------
material to its business when due (taking into account any grace periods
granted in respect thereof) other than those disputed by it in good faith,
if failure to pay might have a material adverse affect on the business,
conditions (financial or otherwise), prospects or creditworthiness of an
Issuer.
9.21 Notice of Default. Each Issuer shall promptly but in any event
-----------------
within three (3) Business Days after obtaining knowledge thereof furnish
the Collateral Agent and the Purchasers with a statement of the occurrence
of any Event of Default or Default, specifying the nature and period of
existence thereof and what action management of such Issuer proposes to
take with respect thereto. If an Issuer receives a notice of Default from
any creditor or Person other than the Collateral Agent or the Purchasers,
such Issuer shall deliver to the Collateral Agent and the Purchasers a copy
of such notice of Default, immediately upon receipt thereof. In the event
that the Issuers have cured such Default within any applicable cure period
provided therefor, such cure shall have the effect of remedying any failure
of the Issuers to give notice relating to such Default.
9.22 Lock Box. Upon the occurrence of an Event of Default and at the
--------
request of the Majority In Interest or the Collateral Agent acting on the
instructions of the Majority In Interest, the Issuers will establish a lock
box in respect of the Collateral and all proceeds thereof at a location
satisfactory to the Purchasers and the Collateral Agent, and take all such
action and execute all agreements, documents, letters and instruments which
the Collateral Agent deems appropriate in its sole discretion to establish
and maintain said lock box.
9.23 Additional Costs. (a) In the event of any change in or adoption of
----------------
any applicable law, regulation or guideline, or any interpretation thereof
by any governmental authority charged with the administration thereof, not
published on or prior to the date hereof, subjects a Purchaser to any Tax
of any kind whatsoever with respect to the Notes issued to such Purchaser,
or changes the basis of taxation of payments to such Purchaser of any fees,
principal or interest payable on such Notes (except for changes in the rate
of tax based solely on the overall net income of such Purchaser) or
imposes, modifies or deems applicable any reserve requirement against
assets held by, or other liabilities in or for the account of, or loans by,
such Purchaser, or imposes on such Purchaser, directly or indirectly, any
of the conditions affecting the relevant Notes, and the result of any of
the foregoing is to increase the cost to such Purchaser of purchasing or
holding the relevant Notes by an amount which such Purchaser deems to be
material, then upon demand by such Purchaser made promptly upon such event,
the Issuers will pay to such Purchaser, upon its demand, the additional
amount or amounts necessary to compensate such Purchaser for such
additional cost. Absent manifest error, such Purchaser's statement shall
be conclusive as
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<PAGE>
to any additional amount to be paid. Such Purchaser shall supply the
Issuers with such information related to any such Taxes, taxation or
reserve requirement as is available to such Purchaser and is not
confidential. In the event that any such additional cost arises and is
demanded by a Purchaser from an Issuer, the Issuer shall have the right to
prepay the Notes of such Purchaser, together with payment of accrued
interest thereon and any Make Whole Premium.
The Issuers shall pay to the Purchasers all principal of, and interest on,
the amount outstanding on the Notes and all their other Obligations under
the Transaction Documents free and clear of and without deduction or
withholding for Taxes (as defined below). "Taxes" means any present or
-----
future license, registration or other fees, taxes or other amounts for or
on account of levies, imposts, duties, deductions, withholdings or other
charges assessed by any governmental or taxing authority, excluding income
and franchise taxes imposed on a Purchaser by a jurisdiction under which
such Purchaser is organized or operating in connection with this Agreement
or any political subdivision thereof. In the event an Issuer is or may
become required to pay any such costs, such Issuer may elect to prepay the
Notes, together with accrued interest thereon, Make Whole Premium, and any
additional costs associated with such prepayment.
(b) If an Issuer shall be required to withhold or deduct
Taxes from any sum payable hereunder, (i) the sum payable shall be
increased as may be necessary so that the amount received is equal to the
sum which would have been received had no withholdings or deductions been
made, (ii) such Issuer shall make such necessary withholdings and
deductions, and (iii) such Issuer shall pay the full amount withheld or
deducted to the relevant authority according to applicable law so that any
Purchaser shall not be required to make any deduction or payment of Taxes.
9.24 Transactions with Related Parties. The Issuers will not and will not
---------------------------------
permit any Restricted Subsidiary to enter into any transaction or
arrangement with any Related Party, including the purchase from, sale to or
exchange of property with the lessee of Financed Equipment (either as
lessee or lessor) or rendering of any service by or for, any Related Party,
except in the ordinary course of business and pursuant to the reasonable
requirement of the Issuers and a Restricted Subsidiary and upon fair and
reasonable terms no less favorable than would be obtained in a comparable
arm's length transaction with a Person other than a Related Party.
9.25 Permitted Investments. Neither Interpool nor any of its Restricted
---------------------
Subsidiaries shall make cash or cash equivalent investments in, loans or
advances to or guarantee the obligations of, any Person except the
following ("Permitted Investments"):
---------------------
(a) Purchases of obligations of the United States
Government and its agencies, U.S. dollar denominated obligations of the
Canadian Government and AAA-rated by Standard & Poor's or
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<PAGE>
Moody's "obligations of supranationals" which includes government issued
securities and World Bank securities, that are rated at least AAA, all
having maturities not in excess of five (5) years;
(b) Purchases of prime commercial paper rated A1/P1 by
Standard & Poor's or Moody's or higher maturing in 270 days or less;
(c) Purchases of certificates of deposit or bankers'
acceptances issued by a bank with capital, surplus and undivided profits of
at least $100,000,000, having a term of one year or less;
(d) Investments in or advances to Restricted Subsidiaries
or any legal entity which after such investments or advances would become a
Restricted Subsidiary;
(e) Advances to employees for expenses incurred by such
employees in the ordinary course of the Issuers' business;
(f) Carrying lease or notes receivable arising from
transactions with customers and suppliers in the normal course of the
Issuers' business;
(g) Guarantees of obligations of Unrestricted Subsidiaries
provided that such guarantees would be permitted under Section 9.19(b);
---------------
(h) Other Investments subject to the limitations set forth
in Section 9.19(d);
---------------
(i) Purchases of corporate debt securities rated A3/A- or
higher by Moody's or Standard & Poor's and which mature within five (5)
years after the date of acquisition in an amount not to exceed 15% of the
sum of cash and marketable securities as reflected on the Issuers'
quarterly financial statements of the most recently completed fiscal
quarter;
(j) Purchases of tax exempt securities which are rated
Aa3/AA- or higher by Moody's or Standard & Poor's and which mature within
five (5) years from the date of acquisition; and
(k) Any other investments up to an aggregate of $10,000,000
at any one time outstanding.
To the extent the Issuers have Permitted Investments and prior to any
investment by any Issuers in marketable securities with maturities greater
than one year, or investments described in subsections (h) and (k) above,
the Issuers shall have caused the greater of (i) 5% of Tangible Net Worth
and (ii) $10,000,000.00 to have been invested in investments described in
subsections (a), (b), (c), (i) or (j) above with final maturities not
exceeding one year.
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<PAGE>
The foregoing provisions of this Section 9.25 shall not be deemed to limit
------------
the transactions in which the Issuers are permitted to engage in accordance
with the provisions of Section 9.18.
------------
9.26 Leases. At all times following the occurrence and during the
------
continuance of an Event of Default and upon the lock box provided for in
Section 9.22 being established, the Issuers shall immediately notify the
- ------------
Collateral Agent of the cancellation of any Lease with a term of one (1)
year or more or any master lease.
9.27 Acquisition of Notes. No Issuer shall, nor shall such Issuer permit
--------------------
any Subsidiary or any Affiliate to, directly or indirectly, acquire or make
any offer to acquire any Notes unless such Issuer or such Subsidiary or
Affiliate shall have offered to acquire Notes, pro rata, from all of the
--------
Purchasers and upon the same terms. In case an Issuer, or any Subsidiary
or Affiliate, acquires any Notes, such Notes shall thereafter be cancelled
and no Notes shall be issued in substitution thereof.
9.28 Private Offering. The Issuers agree that neither of the Issuers nor
----------------
anyone acting on such Issuers' behalf shall offer the Notes or any part
thereof or any similar securities for issue or sale to, or solicit any
offer to acquire any of the same from, any Person so as to bring the
issuance and sale of the Notes within the provisions of Section 5 of the
Securities Act.
SECTION 10. DEFAULT; REMEDIES OF THE PURCHASERS
-----------------------------------
10.1 Occurrence of Event of Default. Any one of the following events or
------------------------------
conditions shall constitute an Event of Default:
(a) either Issuer's failure to pay, when due, at maturity
(whether as stated or by acceleration) or otherwise, any payment of
principal, interest, fees, Make Whole Premium or other charges or amounts
due and owing to the Purchasers with respect to the Obligations, and such
failure shall continue for five (5) Business Days or more; or
(b) either Issuer shall fail to observe or perform the
covenants set forth in Sections 9.6, 9.18, 9.19, 9.21 or 9.25; or
--------------------------------------
(c) either Issuer shall fail to observe or perform any
other covenant or agreement of such Issuer in this Agreement or any other
Transaction Document which shall remain unremedied for thirty (30) days; or
(d) any representation or warranty made by either Issuer
hereunder, under any Transaction Document or in any other document to any
Purchaser or the Collateral Agent shall be incorrect as at the date made in
any material respect; or
(e) if either Issuer shall (i) file, or consent by answer
or otherwise to the filing against it of, a petition for relief or
reorganization or arrangement or any other petition
-37-
<PAGE>
in bankruptcy, for liquidation or to take advantage of any bankruptcy or
insolvency law of any jurisdiction or if there shall be commenced against
either Issuer any such proceeding and such action or proceeding remains
undismissed for a period of sixty (60) days, (ii) make an assignment for
the benefit of its creditors, (iii) consent to the appointment of a
custodian, receiver, trustee or other officer with similar powers for
itself or any substantial part of its property, (iv) be adjudicated a
bankrupt or insolvent, or (v) take any action for the purpose of any of the
foregoing; or
(f) if a court or governmental authority of competent
jurisdiction shall enter an order appointing, without consent by an Issuer,
a custodian, receiver, trustee or other officer with similar powers with
respect to it or with respect to any substantial part of its property, or
constituting an order for relief or approving a petition for relief or
reorganization or any other petition in bankruptcy or for liquidation or to
take advantage of any bankruptcy or insolvency law of any jurisdiction, or
ordering its dissolution, winding-up or liquidation and such order shall
not have been stayed or dismissed within sixty (60) days; or
(g) if any Lien (other than a Lien in favor of the
Purchasers or the Collateral Agent or a Permitted Lien) or attachment, levy
or garnishment exists or is issued against the Collateral or any property
of either Issuer securing any of the Obligations in respect of indebtedness
or obligations of $2,000,000 or more in the case of Ltd. or $1,000,000 or
more in the case of Interpool and is not released, discharged, dismissed,
stayed or fully bonded within a period of thirty (30) days after its
creation, attachment, issue or levy or if any such Lien, attachment, levy
or garnishment against the Collateral or any property of an Issuer securing
Obligations shall have priority over the security interest of the
Collateral Agent in the Collateral, such Lien, attachment, levy or
garnishment is not released, discharged, dismissed, stayed or fully bonded
within a period of fifteen (15) days after its creation, attachment, issue
or levy; or
(h) if any judgment or tax lien is entered against either
Issuer and remains unsatisfied after thirty (30) days, unless said judgment
or tax lien is being contested in good faith by appropriate proceedings and
is stayed in the interim; or
(i) a Person or outside group of related Persons which is
not listed on Schedule 7.1 attached hereto obtains voting control of fifty
------------
one percent (51%) or more of the voting securities of Interpool; or
(j) either Issuer (as principal, guarantor or other surety)
defaults in the payment of any principal or interest of any indebtedness
for borrowed money in excess of
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<PAGE>
$4,000,000.00 with respect to Interpool and in excess of $1,000,000.00 with
respect to Ltd. (including any indebtedness of Interpool or Ltd. to the
Purchasers other than the Obligations) beyond the period of grace, if any
specified therefor or any other default in respect of such indebtedness
which give the holder of any such indebtedness the right to cause the
acceleration of such indebtedness including any grace period provided to
such holder; or
(k) if the Collateral Value for an Issuer shall be less
than 125% of the aggregate outstanding principal amount of the Notes issued
by such Issuer by (i) an amount of $2,000,000 or more in respect of Ltd. or
of $1,000,000 or more for Interpool or (ii) an amount less than $2,000,000
for Ltd. or less than $1,000,000 for Interpool and such deficiency shall
not have been fully eliminated (A) in the case of the deficiency described
in clause (i) hereof within fifteen (15) days from the date that such
deficiency arises or (B) in the case of the deficiency described in clause
(ii) hereof within fifteen (15) days following the date that the next
Collateral Certificate is required to be delivered pursuant to Section
-------
9.11(c), by the prepayment of Notes pursuant to Section 5.5 or the
- ------ -----------
assumption of Notes by Interpool pursuant to Section 5.6(a) or the grant of
--------------
additional Collateral pursuant to Section 5.6(b) or Section 5.6(c) or the
------------- -------------
grant of Cash Collateral pursuant to Section 5.6(d) or the designation by
--------------
Interpool of Collateral in respect of excess Collateral Value of Interpool
for the benefit of Ltd. pursuant to Section 5.6(e).
--------------
10.2 Action Upon Event of Default.
----------------------------
(a) Declaration of Acceleration of Each Note. If an Event
----------------------------------------
of Default under Section 10.1(a) occurs and is continuing, any of the
---------------
Purchasers may by notice to the Issuers, declare the principal of its Notes
to be immediately due and payable together with accrued interest thereon
and a Make Whole Premium with respect thereto. At any time after such
acceleration, and prior to the sale or disposition of any of the
Collateral, such Purchaser may rescind such a declaration or automatic
acceleration, as the case may be, and thereby annul its consequences if (i)
the Issuers pay an amount sufficient to pay all principal of, Make Whole
Premium, if any, and interest on such Note, to the extent each such amount
is due or past due without regard to the acceleration hereof, if any, in
respect of the outstanding Note otherwise than by reason of such
acceleration and all sums due and payable to such Purchaser or the
Collateral Agent, (ii) the rescission would not conflict with any judgment
or decree and (iii) all existing Events of Default relating to such Note
have been cured or waived except nonpayment of principal of, Make Whole
Premium or interest on the Note that has become due solely because of such
acceleration.
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<PAGE>
(b) Declaration of Acceleration of All Notes. If an Event
----------------------------------------
of Default occurs and is continuing, the Majority In Interest may by notice
to the Issuers, declare the principal of all Notes to be immediately due
and payable together with accrued interest thereon and a Make Whole Premium
with respect thereto; provided that the Notes will automatically become due
--------
and payable together with accrued interest thereon and a Make Whole Premium
with respect thereto without any action of the Purchasers in the case of an
Event of Default under Section 10.1(e) or Section 10.1(f). At any time
--------------- --------------
after such acceleration, and prior to the sale or disposition of any of the
Collateral, the Majority In Interest may rescind such a declaration or
automatic acceleration, as the case may be, and thereby annul its
consequences if (i) the Issuers pay an amount sufficient to pay all
principal of, Make Whole Premium, if any, and interest on the Notes, to the
extent each such amount is due or past due without regard to the
acceleration hereof, if any, in respect of the outstanding Notes otherwise
than by reason of such acceleration and all sums due and payable to the
Purchasers or the Collateral Agent, (ii) the rescission would not conflict
with any judgment or decree and (iii) all existing Events of Default have
been cured or waived except nonpayment of principal of, Make Whole Premium
or interest on the Notes that has become due solely because of such
acceleration.
(c) Payments after Acceleration of Notes. All payments
------------------------------------
received and all amounts held or realized by the Purchasers after the
outstanding principal of any of the Notes shall have been declared to be
due and payable pursuant to Section 10.2(a) or Section 10.2(b), and all
-------------- --------------
payments or amounts then held or thereafter received by the Purchasers
hereunder, shall be applied by each such Purchaser in the following order
of priority:
First, to reimburse the Purchasers for any costs and expenses not
- -----
reimbursed by the Issuers;
Second, so much of such payments or amounts remaining as shall be required
- ------
to pay in full any interest at the Overdue Rate, the accrued but unpaid
interest on the Notes to the date of distribution and any Make Whole
Premium;
Third, so much of such amounts remaining as shall be required to pay in
- -----
full the aggregate unpaid principal amount of the Notes on a pro rata basis
--------
for all the Notes for each Issuer and then applied to such Notes in inverse
order of the scheduled principal payments thereof and all other amounts
payable hereunder;
Fourth, so much of such amounts remaining as shall be required to pay in
- ------
full all other outstanding Obligations; and
Fifth, the balance, if any, of such payments or amounts remaining
- -----
thereafter shall be distributed to each of the relevant Issuers, upon its
written direction or to any other Person entitled thereto as a matter of
law.
All payments and proceeds received by the Collateral Agent or the
Purchasers shall be applied to the Obligations secured thereby pursuant to
the applicable Security Agreement, Railcar Security
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<PAGE>
Agreement, or security and pledge agreement in respect of Cash Collateral.
(d) Other Remedies. The Issuers agree, to the full extent
--------------
that they lawfully may, that if one or more Events of Default shall have
occurred and be continuing, then, and in every such case the Purchasers or
upon the instructions of the Majority In Interest the Collateral Agent on
behalf of the Purchasers pursuant to the Agency Agreement, as secured
party, mortgagee or collateral assignee hereunder or under the Collateral
Documents, or otherwise, may exercise any or all of the rights and powers
and pursue any and all of the remedies available to the Purchasers
hereunder or under any of the Transaction Documents or with respect to the
Collateral Agent, under the Collateral Documents.
10.3 Authorized to Execute Bills of Sale. Each of the Issuers hereby
-----------------------------------
irrevocably appoints the Collateral Agent the true and lawful
attorney-in-fact of such Issuer in its respective name and stead and on its
respective behalf, for the purpose of effectuating any sale, assignment,
transfer or delivery for the enforcement of the Lien in connection with
this Agreement and any other Transaction Documents, following the
occurrence of an Event of Default to execute and deliver all such bills of
sale, assignments, UCC financing statements and other instruments as the
Collateral Agent may consider necessary or appropriate, with full power of
substitution, each of the Issuers hereby ratifying and confirming all that
such attorney or any substitute shall lawfully do by virtue hereof. After
the Collateral Agent has exercised its rights hereunder, if so requested by
the Collateral Agent or any purchaser, each of the Issuers shall ratify and
confirm any such sale, assignment, transfer or delivery, by executing and
delivering to the Collateral Agent or such purchaser all bills of sale,
assignments, releases, UCC financing statements and other proper
instruments to effect such ratification and confirmation as may be
designated in any such request.
10.4 Remedies Cumulative. Each and every right, power and remedy herein
-------------------
specifically given to the Purchasers or the Collateral Agent or otherwise
in this Agreement or any other Transaction Documents shall be cumulative
and shall be in addition to every other right, power and remedy herein
specifically given or now or hereafter existing at law, in equity or by
statute, and each and every right, power and remedy whether specifically
herein given or otherwise existing may be exercised from time to time and
as often and in such order as may be deemed expedient by the Purchasers or
the Collateral Agent, and the exercise or the beginning of the exercise of
any power or remedy shall not be construed to be a waiver of the right to
exercise at the same time or thereafter any other right, power or remedy.
No delay or omission by the Purchasers or the Collateral Agent in the
exercise of any right, remedy or power or in the pursuance of any remedy
shall impair any such right, power or remedy or be
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<PAGE>
construed to be a waiver of any Default or Event of Default on the part of
any Issuer or to be an acquiescence therein.
10.5 Discontinuance of Proceedings. In case any of the Purchasers or the
-----------------------------
Collateral Agent shall have proceeded to enforce any right, power or remedy
under this Agreement or any other Transaction Documents and such
proceedings shall have been discontinued or abandoned for any reason or
shall have been determined adversely to such Purchaser or the Collateral
Agent, then and in every such case the Issuers and the Collateral Agent
shall be restored to their former positions and rights hereunder with
respect to the Collateral, and all rights, remedies and powers of such
Purchaser or the Collateral Agent shall continue as if no such proceedings
had been taken.
10.6 Agreements with Respect to Remedies and Defaults.
------------------------------------------------
Notwithstanding any provisions of this Agreement or the Collateral
Documents to the contrary,
(a) If an Event of Default shall have occurred and is
continuing under this Agreement or any other Transaction Documents (whether
declared or not), the Collateral Agent shall in accordance with
instructions from the Majority In Interest, to the extent remedies are
available to do so and the Collateral Agent is not stayed from exercising
such remedies, pursue such remedies as are available under the Leases and
the Collateral Documents and at law in respect of the Collateral in
accordance with the Collateral Documents and with respect to the parties
thereto to repay the Notes.
(b) If an Event of Default shall have occurred and is
continuing, the Collateral Agent shall act in a commercially reasonable
manner in respect of the Collateral and with respect to the exercise of the
remedies provided under the Collateral Documents and at law related to the
Collateral.
10.7 Waiver of Existing Defaults. The Issuers, upon written confirmation
---------------------------
that the Majority In Interest waive an existing Event of Default, shall
notify all the Purchasers that the Majority In Interest has provided such
waiver; provided, however, no such waiver shall be effective in the case of
-------- -------
(i) an Event of Default in the payment of the principal of, Make Whole
Premium, if any, or interest on, any Note or (ii) in respect of a covenant
or provision of Section 9.18 and Section 9.19 unless such waiver is made by
------------ ------------
all the Purchasers.
10.8 Rights of Purchasers to Receive Payment. Each Purchaser, or with
---------------------------------------
respect to all the Notes, the Majority In Interest, shall have the right to
bring suit for the enforcement of such Purchaser's, or with respect to all
Notes, all of Purchasers' rights to receive payment of principal of, Make
Whole Premium, if any, and interest on such Note or Notes on or after the
due date expressed in such Note or Notes. Notwithstanding any other
provision of this Agreement or the Agency Agreement, the right of any
Purchaser to receive payment of principal of, Make Whole Premium, if any,
and interest on a Note on or after the
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<PAGE>
respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Purchaser.
SECTION 11. EXPENSES. Each of the Issuers agrees, whether or not the
--------
transactions contemplated by this Agreement are consummated, for the sole
benefit of each of the Purchasers and the Collateral Agent, to pay (or
reimburse each Purchaser for the payment of) all costs and expenses, of the
negotiation, execution and delivery of this Agreement and each of the other
Transaction Documents and every other related agreement, instrument and
document, and the perfection by the Collateral Agent of a valid first
priority Lien in the Collateral including all reasonable legal fees and
expenses, and expenses of lien searches, filing fees of UCC financing
statements, Railcar Security Agreement (if applicable) and other lien
instruments, and fees and expenses relating to the titling and registration
of the Collateral and noting Liens on certificates of title, incurred by or
on behalf of each Purchaser and the Collateral Agent, including without
limitation, the fees and disbursements of Cadwalader, Wickersham & Taft,
special counsel for the Purchasers. Each of the Issuers further agrees to
pay (or reimburse each Purchaser for the payment of) all costs and expenses
including all reasonable legal fees and expenses, and expenses of lien
searches, filing fees, and fees and expenses relating to the titling and
registration of the Collateral and noting the Liens on the certificates of
title, incurred on behalf of each Purchaser and the Collateral Agent,
including without limitation, the fees and disbursements of special counsel
to the Purchasers incurred in connection with (a) the negotiation,
execution and delivery of any amendments, supplements or modifications to
this Agreement, the other Transaction Documents and other related
agreements, instruments and documents, and any amendment, supplement or
waiver or any provision hereof or thereof, (b) the perfection by the
Collateral Agent by filing, recording, possession or otherwise in any
jurisdiction whose laws are applicable to an Issuer or any of the
Collateral of a valid first priority Lien in the Collateral, both initially
and with regard to any substitute or additional Collateral including but
not limited to Cash Collateral and other Collateral granted pursuant to any
provision of Section 5 and any release of any Collateral, and (c) the
---------
enforcement of the provisions of this Agreement, the other Transaction
Documents or any of the other related agreements, instruments and
documents, by or on behalf of any Purchaser or the Collateral Agent,
including the exercise of any rights and remedies provided herein or in the
Agency Agreement.
SECTION 12. NOTICES. All communications and notices provided for herein
-------
shall be in writing and delivered by hand, the United States certified or
registered mail or by telecopier, and any such notice shall become
effective (a) upon personal delivery thereof, including, without
limitation, by overnight mail and courier service, (b) five (5) days after
the date on which it shall have been mailed by United States mail,
certified or
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<PAGE>
registered, postage prepaid, return receipt requested, or (c) in the case
of notice by telecopier, when electronically or verbally confirmed, in each
case addressed to (i) if to a Purchaser, at the address set forth under
such Purchaser's name on Schedule 3 attached hereto, with a copy to
----------
Purchaser's special counsel, Cadwalader, Wickersham & Taft, 100 Maiden
Lane, New York, New York 10038, Telecopier (212) 504-6666, Attn: Richard A.
Aborn, Esq., or (ii) if to Issuers, at the address set forth under such
Issuer's name on Schedule 2 attached hereto, or at such other address as
----------
such Person may from time to time designate by written notice to the other
parties hereto. Any party may change the person or address to whom or
which notices are to be given hereunder, by notice duly given hereunder;
provided, however, that any such notice shall be deemed to have been given
- -------- -------
hereunder only when actually received by the party to which it is
addressed.
SECTION 13. PURCHASERS AND NOTES
--------------------
13.1 Withholding Taxes; Information Reporting. Notwithstanding the
----------------------------------------
Issuers' obligation to ensure that the Purchasers are reimbursed for any
withholding Taxes, the Issuers shall exclude and withhold from each
distribution of principal, Make Whole Premium, if any, and interest and
other amounts due hereunder or under the Notes any and all withholding
Taxes applicable thereto as required by law. Any such withholding shall in
no event give rise to an Event of Default. The Issuers agree (a) to act as
such withholding agent and, in connection therewith, whenever any present
or future Taxes or similar charges are required to be withheld with respect
to any such amounts payable in respect of the Notes, to withhold such
amounts and timely pay the same to the appropriate authority in the name of
and on behalf of the Purchasers, (b) that it will file any necessary
withholding Tax returns or statements when due and (c) that, as promptly as
possible after the payment of such amounts, it will deliver to each
Purchaser appropriate documentation showing the payment of such amounts,
together with such additional documentary evidence as such Purchasers may
reasonably request from time to time. Each of the Issuers agrees to file
any other information reports as it may be required to file under United
States law. To the extent that such Issuer fails, with respect to any
Purchaser, to withhold and pay over any such Taxes to the appropriate
taxing authority, such Issuer shall, upon a claim being made for such Taxes
by such authority, take all reasonable steps to recover such Taxes from
such Purchaser, including, without limitation, withholding the amount of
such Taxes from subsequent distributions, if any, to such Purchaser.
13.2 Satisfaction and Discharge of Agreement; Termination of Obligations.
-------------------------------------------------------------------
Subject to Section 13.3, the Issuers shall, except as herein provided, be
------------
deemed to have been discharged from their respective Obligations with
respect to the Notes, when
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<PAGE>
(a) the principal of, Make Whole Premium, if any, and
interest on the Notes and all other amounts due and payable under the
Notes, this Agreement and other Transaction Documents have been paid in
full or there shall have been deposited with the Purchasers an amount equal
to the amount required to discharge such indebtedness and other
Obligations; and
(b) each Purchaser shall have received evidence that all
conditions precedent provided for relating to the satisfaction and
discharge of this Agreement contemplated by this Section 13.2 have been
------------
complied with.
13.3 Amendments to This Agreement With Consent of Purchasers.
-------------------------------------------------------
(a) With the written consent of the Majority In Interest,
the Issuers may enter into such supplemental agreements to add any
provisions to or to change or eliminate any provisions of this Agreement or
of any such supplemental agreements or to modify the rights of the
Purchasers; provided, however, that, without the consent of each Purchaser
-------- -------
affected thereby, an amendment under this Section 13.3 may not:
------------
(i) reduce the amount of principal, interest or Make Whole Premium
due or owing on the Notes held by such Purchaser; or
(ii) affect the terms of payment of any Note; or
(iii) reduce the amount of Purchasers which constitutes the Majority
In Interest; or
(iv) make any change in Section 5.1, 5.6, 5.7, 9.19, 10, or this
-------------------------------
Section 13.3(a); or
- ---------------
(v) affect the preference between Purchasers and/or Purchasers and
other creditors.
(b) Promptly after the execution of any supplemental
agreement pursuant to the provisions of this Section 13.3, the Issuers
------------
shall transmit by first-class mail a copy of such supplemental agreement to
all Purchasers, as the names and addresses of such Purchasers appear on the
Register. Any failure of the Issuers to mail such copy, or any defect
therein, shall not, however, in any way impair or affect the validity of
any such supplemental agreement.
13.4 Notification on or Exchange of Notes. Each of the Purchasers may
------------------------------------
place an appropriate notation about an amendment or waiver on any Note
thereafter executed. Each of the Purchasers in exchange for such Notes may
execute new Notes that reflect the amendment or waiver.
SECTION 14. MISCELLANEOUS
-------------
14.1 Oral Modification, Termination etc. This Agreement cannot be
----------------------------------
changed, discharged or terminated orally.
14.2 Successors and Assigns. All the terms of this Agreement shall be
----------------------
binding upon, inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto, and, in particular, shall
inure to the benefit of and be enforceable by any registered owner or
holder of a Note;
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<PAGE>
provided, however, the liabilities and Obligations of the Issuers may not
- -------- -------
be assigned or otherwise transferred except by any merger permitted under
Section 9.18(b) or an assumption by Interpool provided under Section 5.6.
- --------------- -----------
14.3 Headings. The headings to the various sections of this Agreement
--------
have been inserted for the convenience of reference only and shall not
limit or otherwise affect any of the terms hereof.
14.4 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
14.5 Survival. All warranties, representation, indemnities and covenants
--------
made by any Person hereto, herein or in any certificate or other instrument
delivered by any such Person or on the behalf of any such Person under this
Agreement shall be considered to have been relied upon by each other Person
hereto and shall survive the consummation of the transactions contemplated
hereby on the Closing Date regardless of any investigation made by any such
Person or on the behalf of any such Person. All statements in any such
certificate or other instrument shall constitute warranties and
representations by the Person so making the same.
14.6 Governing Law; Severability. This Agreement shall be governed by and
---------------------------
construed and enforced in accordance with the internal laws (as opposed to
conflicts of law provisions) of the State of New York. Whenever possible,
each provision of this Agreement shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
14.7 WAIVER OF JURY TRIAL; SUBMISSION TO JURISDICTION. EACH OF THE
------------------------------------------------
ISSUERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT TO A JURY TRIAL IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY. In any action or proceeding arising out of or
relating to this Agreement, each of the Issuers hereby accepts, for itself
and its property, the nonexclusive jurisdiction of the courts of the State
of New York, and the federal courts in New York City, and agrees that
effective service of process may be made on each Issuer by mailing same to
such Issuer's address set in Schedule 2 attached hereto. The Collateral
----------
Agent or any Purchaser may proceed against an Issuer in any other
applicable jurisdiction, and may serve process in any other manner
permitted by applicable law. Each of the Issuers hereby irrevocably waives
any objection to the laying of venue in the aforesaid courts, and any claim
of an inconvenient forum. To the extent that such Issuer or its property
may have or hereafter acquire immunity, on the grounds of sovereignty or
otherwise, from any judicial process in connection with this Agreement,
each Issuer hereby irrevocably waives, to the fullest extent permitted by
law, any such immunity and agrees not to claim same. Each of the Issuers
agrees that a
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<PAGE>
final judgment in any such action or proceeding shall be conclusive, and
may be enforced in any other jurisdiction by suit on the judgment or in any
other permitted manner.
Interpool hereby irrevocably designates and appoints Interpool Limited of
633 Third Avenue, New York, New York 10017 as its agent to receive on its
behalf and its property service of copies of the summons and complaint and
any other process which may be served upon Interpool in the State of New
York in connection with any action or proceeding in the courts of the State
of New York or of the United States of America for the Southern District of
New York.
SECTION 15. DEFINITIONS. The following terms used herein shall have the
-----------
following respective meanings (such definitions to be equally applicable to
both the singular and plural forms of the terms defined):
"Affiliate" of any Person shall mean any other Person which directly or
---------
indirectly controls, or is controlled by, or is under a common control
with, such Person, including, without limitation, Related Parties.
"Agency Agreement" shall mean the Collateral Agency Agreement dated the
----------------
date hereof among the Collateral Agent, the Issuers and the Purchasers, as
the same may be amended, supplemented or modified from time to time,
substantially in the form of Exhibit B hereto.
---------
"Approved Investments" shall mean the investments listed in paragraphs (a)
--------------------
or (b) of Section 9.25 hereof, provided that such investments have
------------
maturities of less than one (1) year. So long as no Default or Event of
Default shall have occurred, the Issuer pledging Cash Collateral shall have
the option of designating the specific Approved Investment in which such
Cash Collateral shall be maintained. If a Default or Event of Default
shall have occurred, such Approved Investment shall be designated by the
Collateral Agent.
"Business Day" shall mean any day other than a Saturday, Sunday or other
------------
day on which commercial banking institutions in the State of New York are
authorized or obligated by law to close.
"Cash Collateral" shall mean
---------------
(i) all bank accounts in the name of the Collateral Agent as
agent for the ratable benefit of the Purchasers, all funds held therein and
all certificates and instruments representing or evidencing such bank
accounts which are maintained by the Collateral Agent;
(ii) all Approved Investments made from time to time in
accordance with the provisions of this Agreement and the applicable
Transaction Documents;
(iii) all interest, dividends and other property from time to
time received, receivable or otherwise distributed in respect of any
amounts on deposit in any of the accounts or the Approved Investments
described in subparagraphs (i) or (ii) above; and
(iv) all proceeds of any or all of the foregoing.
The Issuers shall, at all times, cause all Cash Collateral to be subject to
a first priority perfected security interest in favor
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<PAGE>
of the Collateral Agent for the ratable benefit of the Purchasers, subject
to no other Liens.
"Chassis" shall mean wheeled steel frames used to carry containers over the
-------
road.
"Chief Offices" shall mean, for each Issuer, its Chief Executive Office as
-------------
listed on Schedule 7.1 attached hereto.
------------
"Claims" shall have the meaning set forth in Section 9.8 hereof.
------ -----------
"Closing" shall have the meaning set forth in Section 3 hereof.
------- ---------
"Closing Date" shall have the meaning set forth in Section 3 hereof.
------------
"Code" shall have the meaning set forth in Section 7.12 hereof.
---- ------------
"Collateral" shall mean all Equipment, Leases and other property subject to
----------
the Lien of the Collateral Documents, including, without limitation,
insurance policies as required pursuant to Section 9.6.
-----------
"Collateral Agent" shall mean First Security Bank Of Utah, National Association
----------------
not in its individual capacity but solely as agent under the Agency Agreement,
and its successors thereof.
"Collateral Certificate" shall mean the Collateral Value certificate,
----------------------
substantially in the form of Exhibit C.
---------
"Collateral Documents" shall mean the Security Agreements, together with
--------------------
any Security Agreement Supplements, and the Guaranties. Following the
execution and delivery, if any, of the Railcar Security Agreement in
accordance with Section 5.6(b) hereof, "Collateral Documents" shall include
-------------- --------------------
the Railcar Security Agreement, together with any Railcar Security
Agreement Supplements.
"Collateral Value" shall mean with respect to each Issuer (including an
----------------
Issuer for whose benefit Collateral is added or designated pursuant to
Section 5.6(c) or 5.6(e)) (a) in respect of Containers pledged to the
- -------------- ------
Collateral Agent, the cost basis of the individual Containers less
depreciation on a straight line basis over a fifteen (15) year life until
their estimated salvage value is reached as reflected on the books and
records of an Issuer, in accordance with GAAP, (b) with respect to Chassis
pledged to the Collateral Agent, the depreciated calculated value using a
depreciable basis of $6,250 per Chassis, less depreciation on a straight
line basis over a twenty (20) year life until a specified "floor value" of
no less than $2,000 per Chassis is reached (which results in depreciation
of $212.50 per Chassis per year of age), and (c) with respect to Railcars
pledged to the Collateral Agent, if any, the cost basis of the individual
Railcar less depreciation on a straight line basis over a twenty-five (25)
year life until the estimated salvage value of each such Railcar is
reached, as reflected on the books and records of Interpool, in accordance
with GAAP.
"Commitment" shall mean the amount set forth opposite the name of each
----------
Purchaser on Schedule 1 attached hereto.
----------
"Containers" shall mean general purpose standard, inter-modal dry cargo
----------
containers, each in 20 or 40 foot lengths and having a configuration
suitable for shipping small packages or bulk material that confines the
contents and can be handled in transit
-48-
<PAGE>
as a unit, for road transport on chassis, or for rail transport
deck-mounted to appropriate rail cars.
"Control" shall mean the possession, directly or indirectly, of the power
-------
to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Controlled Group" shall have the meaning as defined in the Code.
----------------
"Default" shall mean an event or condition which, with the passage of time
-------
or with the giving of notice, or both, would constitute an Event of
Default.
"Depreciation" shall be determined in accordance with GAAP.
------------
"Duff & Phelps" shall mean Duff & Phelps Credit Rating Co.
-------------
"Earnings Available for Fixed Charges" shall mean the sum of Fixed Charges
------------------------------------
plus Net Earnings before income taxes.
"Equipment" shall mean Containers, Chassis and Railcars.
---------
"ERISA" shall have the meaning set forth in Section 7.12 hereof.
----- ------------
"Event of Default" shall mean any of the events specified in Section 10.1,
---------------- ------------
provided there has been satisfied any requirement in connection with such
event for the giving of notice, or the lapse of time, or the happening of
any further condition, event or act.
"Financed Equipment" shall mean all Equipment now owned or hereafter
------------------
acquired by any of the Issuers, including New Equipment and Used Equipment,
which is included in the Collateral pursuant to this Agreement.
"Fixed Charges" shall mean the sum of interest expense (including
-------------
capitalized interest, if any,) plus lease rentals on Long-Term Leases and
the interest component of capitalized leases.
"Funded Debt" shall mean all indebtedness for money borrowed with recourse
-----------
to Interpool and its Restricted Subsidiaries, including purchase money
mortgages, leases capitalized in accordance with Statement 13 of the
Financial Standards Board and conditional sales contracts and similar title
retention debt in instruments (excluding any current maturities of such
indebtedness) which by its terms mature more than one year from the date of
any calculation thereof and/or which is renewable or extendible under any
revolving or similar agreement. The calculation of Funded Debt shall
include all Funded Debt of Interpool and its Restricted Subsidiaries, plus
any Funded Debt of another Person, other than a Restricted Subsidiary,
which has been guaranteed by Interpool or any of its Restricted
Subsidiaries. Funded Debt shall exclude all Indebtedness of Interpool or
any of its Restricted Subsidiaries which is non-recourse to Interpool or
any of its Restricted Subsidiaries, as the case may be.
"GAAP" shall mean generally accepted accounting principles, in effect from
----
time to time, consistently applied in the United States.
"Guarantor" shall mean Interpool.
---------
"Guaranties" shall mean the Guaranties by the Guarantor in favor of each
----------
Purchaser, substantially in the form of Exhibit D.
---------
"Investment Company Act of 1940" shall mean the Investment Company Act of
------------------------------
1940, as amended.
-49-
<PAGE>
"Issuer(s)" shall have the meaning set forth in the introductory paragraph
---------
hereof.
"Leases" shall mean all leases or similar arrangements with respect to the
------
Financed Equipment, but only to the extent that they relate to the Financed
Equipment, and all extensions, substitutions and modifications thereto.
"Liens" shall mean all mortgages, liens, judicial liens, encumbrances,
-----
security interests, charges, pledges, hypothecations, assignments,
conditional sale or other title retention agreements and the like, relating
to any real or personal property interest of an Issuer, whether legal or
equitable.
"Long-Term Leases" shall mean minimum lease rentals of non-capitalized
----------------
leases whereunder Interpool or any Restricted Subsidiary is the lessee with
an initial term in excess of three years, excluding leases of office
---------
equipment and motor vehicles used in the ordinary course of business.
"Majority In Interest", as of a particular date of determination, shall
--------------------
mean the holders of more than 66 2/3% of the aggregate outstanding
principal amount of the Notes.
"Make Whole Premium" and related definitions. For all purposes
-------------------------------------------
of this Section 15, the following terms shall have the following meanings
(such definitions to be equally applicable to both the singular and plural
forms of the terms defined):
"Discounted Value" shall mean, as of any Settlement Date,
----------------
the sum of amounts obtained by discounting all Remaining Scheduled Payments
as of such Settlement Date from their respective scheduled due dates to the
Settlement Date in accordance with accepted financial practice and using a
discount factor based on the Reinvestment Yield restated on an equivalent
quarterly compounded basis. The Reinvestment Yield restated on an
equivalent quarterly compounded basis ("Yq") shall be equal to the product
of (a) four, and (b) one subtracted from the square root of the sum of one
plus a fraction, the numerator of which is the Reinvestment Yield and the
denominator of which is two, it being understood that the foregoing
calculation is expressed as the formula below where RY equals the
Reinvestment Yield:
----------
Yq = 4 x (1 + RY - 1)
--
2
Such discount factor for each Remaining Scheduled Payment shall be applied
by dividing such Remaining Scheduled Payment ("RSP") by an amount equal to
(A) the sum of one plus a fraction, the numerator of which is the
Reinvestment Yield restated on an equivalent quarterly compounded basis
(Yq) and the denominator of which is four, (B) which sum shall be raised to
an exponent equal to the number of quarterly payments or portions thereof
from the Settlement Date to the scheduled due date of such Remaining
-50-
<PAGE>
Scheduled Payment ("n"), it being understood that the foregoing calculation
is expressed as the formula below:
Discounted RSP
----------
Value of RSP = (1 + Yq)n
--
4
"Make Whole Premium" shall mean, as of any Settlement Date,
------------------
an amount equal to the excess, if any, of the Discounted Value over the
unpaid principal amount of the Note (or the portion thereof being prepaid
or accelerated) then outstanding (determined immediately prior to any
prepayment made on such Settlement Date). The Make Whole Premium shall in
no event be less than zero.
"Reinvestment Yield" shall mean, as of any Settlement Date,
------------------
0.50% over the yield to maturity (computed to the fifth decimal place (one
thousandth of a percentage point) and then rounded to the fourth decimal
place (one hundredth of a percentage point)) implied by the yields
reported, as of 10:00 a.m. (New York City time) two Business Days next
preceding such Settlement Date on the display designated as "Page 500" on
the Telerate Service for actively traded U.S. Treasury securities having a
maturity equal to the Remaining Average Life of the Notes as of such
Settlement Date (or if such data services are no longer available or if
such yields shall not be reported as of such time or the yields reported as
of such time shall not be ascertainable, then any publicly available source
of similar market data acceptable to at least 51% of the Purchasers of the
outstanding Notes being prepaid or accelerated, as the case may be). It is
understood that the yield to maturity for actively traded U.S. Treasury
securities and the Reinvestment Yield are stated on a semi-annual bond
equivalent basis in accordance with accepted financial practice. Such
implied yield shall be determined, if necessary, by (a) converting U.S.
Treasury bill/note quotations to bond-equivalent yields in accordance with
accepted financial practice and (b) interpolating linearly (calculated to
the nearest one-twelfth of a year) between yields reported for (i) the
actively traded U.S. Treasury security with a maturity closest to and less
than the Remaining Average Life and (ii) the actively traded U.S. Treasury
security with a maturity closest to and greater than the Remaining Average
Life, except that if the Remaining Average Life is less than one year, the
yield on actively traded U.S. Treasury securities adjusted to a constant
maturity of one year shall be used.
"Remaining Average Life" shall mean, as of any Settlement
----------------------
Date, the number of years (calculated to the nearest one-twelfth year)
obtained by dividing (i) the principal amount of the Notes then outstanding
(or if less than all Notes are to be prepaid, the principal amount to be
prepaid) (determined prior to any prepayment or acceleration required or
made on such
-51-
<PAGE>
Settlement Date) into (ii) the sum of the products obtained by multiplying
(a) each Remaining Scheduled Payment (but not of interest thereon) by (b)
the number of years (calculated to the nearest one-twelfth year) which will
elapse between such Settlement Date and the scheduled due date of such
Remaining Scheduled Payment.
"Remaining Scheduled Payments" shall mean, as of any
----------------------------
Settlement Date, all payments of principal to be prepaid or accelerated on
such Settlement Date and interest on such payments that would be due on or
after such Settlement Date if such Note (or such payments of principal)
were not prepaid or accelerated prior to its scheduled due date (excluding
accrued interest from the last date that interest was payable to and
including the date prior to the Settlement Date).
"Settlement Date" shall mean each Prepayment Date and the
---------------
date of any other prepayment or acceleration of the Notes with respect to
which prepayment or acceleration the Make Whole Premium is payable.
"Margin Stock" shall have the meaning as defined in Regulation U.
------------
"Moody's" shall mean Moody's Investors Services, Inc.
-------
"NAIC" shall have the meaning set forth in Section 4.13(a) hereof.
---- --------------
"Net Book Value" shall have the meaning as determined in accordance with
--------------
GAAP.
"Net Earnings" shall mean the consolidated net income before extraordinary
------------
items of Interpool and its Restricted Subsidiaries for any period,
determined in conformity with GAAP consistent with those applied in
preparing Interpool's audited annual reports.
"New Equipment" shall mean newly manufactured Equipment owned at any time
-------------
by either of the Issuers that have not yet been put into use and free of
all Liens.
"Nominee(s)" shall have the meaning set forth in Section 3 hereof.
---------- ---------
"Obligations" shall mean (i) any and all indebtedness, obligations,
-----------
liabilities and agreements of any kind and nature of the Issuers pursuant
to this Agreement, the Notes or any other Transaction Document to or with
any of the Purchasers, or to or with any Nominees of any of the Purchasers,
or of any guarantor of any of such Issuers' indebtedness, obligations,
liabilities and agreements, now existing or hereafter arising, and now or
hereafter incurred, whether in the form of loans, guarantees, interest,
charges, expenses, fees (including, without limitation, attorneys' fees) or
otherwise, direct or indirect, (including, without limitation, any
participation or interest of any of the Purchasers (or of a Nominee of any
of the Purchasers) in any such Issuers' indebtedness) acquired outright,
conditionally or as collateral security from another, absolute or
contingent, joint and/or several, liquidated or unliquidated, due or not
due, contractual or tortious, secured or unsecured, arising by operation of
law or otherwise, whether incurred by the Issuers as
-52-
<PAGE>
principal, surety, endorser, guarantor, accommodation party or otherwise;
(ii) all other sums and charges to be paid to the Purchasers pursuant to
this Agreement; and (iii) all interest and late charges on any of the
foregoing.
"Officer's Certificate" shall mean a certificate signed by the President,
---------------------
any Vice President, the Treasurer or an Assistant Treasurer and, in the
case of a commercial bank or trust company, by any other officer
customarily performing the functions similar to those performed by the
Persons who at the time shall be such officers, or to whom any corporate
trust matter is referred because of his knowledge of and familiarity with
the particular subject; provided, however, that in the case of the
-------- -------
Collateral Agent, "Officer's Certificate" shall mean a certificate signed
by any Vice President, any Assistant Vice President, any Trust Officer or
any Assistant Trust Officer who is, in each case, responsible for corporate
trust administration.
"Other Investments" shall mean investments in excess of an aggregate of
-----------------
$10,000,000.00 (other investments up to an aggregate of $10,000,000.00
being provided for in Section 9.25(k) hereof) in anything other than those
---------------
investments listed in paragraphs (a) through (g) and (i) and (j) of Section
-------
9.25 hereof, which shall be deemed to be Unrestricted Subsidiaries for
- ----
purposes of calculating the financial covenants in connection with Section
-------
9.19 hereof.
- ----
"Overdue Rate" shall have the meaning set forth in the Notes.
------------
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any Person
----
succeeding to the functions thereof.
"Permitted Investments" shall have the meaning set forth in Section 9.25
--------------------- ------------
hereof.
"Permitted Liens" shall mean
---------------
(i) Liens for Taxes not yet delinquent or which are being contested
in good faith by appropriate proceedings and the enforcement of which has
been stayed (and for the payment of which adequate reserves are provided);
(ii) carriers', seamen's, stevedores', wharfinger's, warehousemen's,
mechanics', suppliers', material- men's, repairmen's or other like Liens
arising in the ordinary course of business and relating to amounts not yet
due or which shall not have been overdue for a period of more than sixty
(60) days or which are being contested in good faith by appropriate
proceedings or for the payment of which adequate reserves have been
provided;
(iii) leases, lease agreements, and other contracts entered into in
the ordinary course of business providing for the leasing, sale or exchange
of Equipment owned by the Company;
(iv) deposits and other forms of security given to any governmental
agency or body created or approved by law or governmental regulation as a
condition to the transaction of business or the exercise of any privilege,
franchise or license;
(v) deposits and other forms of security in connection with
worker's compensation, unemployment insurance and other social security
legislation; and
-53-
<PAGE>
(vi) deposits and other forms of security to secure the performance
of bids, trade contracts (other than for borrowed money), leases, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business.
"Person" shall mean and include an individual, a partnership, a joint
------
venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
"Placement Agent" shall have the meaning set forth in Section 4.14 hereof.
--------------- ------------
"Plan" shall mean any plan subject to the minimum funding requirements of
----
Section 412 of the Code.
"Prepayment Date" shall mean the date of an optional prepayment of any of
---------------
the Notes by any Issuer pursuant to Section 5.5 hereof.
-----------
"Pro-Forma Fixed Charges" shall mean Fixed Charges after giving effect to
-----------------------
the Funded Debt referred to in Section 9.19(b).
---------------
"Purchasers" shall have the meaning set forth in the introductory paragraph
----------
hereof and shall include the successors and assigns of each Purchaser.
"Qualified Institutional Buyer" shall mean
-----------------------------
(i) a duly authorized domestic bank, savings and loan association,
insurance company, registered investment company, registered investment
adviser or registered dealer, acting for its own account, which in the
aggregate owns and invests on a discretionary basis at least $100 million
in securities and, in each case, which has a net worth of at least $100
million; or
(ii) A foreign bank, savings and loan association or insurance
company or equivalent institution, acting for its own account, which in the
aggregate owns and invests on a discretionary basis at least $100 million
in securities and, in each case, has a net worth of at least $100 million;
or
(iii) Any other entity which also constitutes a "qualified
institutional buyer" as defined in Rule 144A under the Securities Act of
1933 (or any successor statute) and the rules and regulations thereunder,
all as from time to time in effect.
"QPAM Exemption" shall have the meaning set forth in Section 8.3(c) hereof.
-------------- -------------
"Railcars" shall mean steel wheeled vehicles for use on railroad tracks.
--------
"Railcar Security Agreement" shall mean the Railcar Security Agreement
--------------------------
between the Collateral Agent and Interpool in respect of the Railcars (as
may be amended, supplemented or modified from time to time), substantially
in the form of Exhibit H.
---------
"Railcar Security Agreement Supplement(s)" shall have the meaning set forth
----------------------------------------
in the Railcar Security Agreement.
"Record Date" shall have the meaning specified in the relevant Note.
-----------
"Register" shall have the meaning specified in Section 5.4(a) hereof.
-------- -------------
"Regulation U" shall mean Regulation U of the Board of Governors of the
------------
Federal Reserve System, as the same may be amended or supplemented from
time to time.
-54-
<PAGE>
"Related Party" shall mean The Ivy Group, Radcliff Group, Princeton
-------------
Intermodal Equipment Trust I, Eurochassis L.P., three New Jersey limited
partnerships called Microtech Three, Microtech Four and Microtech Five,
Princeton International Properties, Inc., Martom Associates, and 211
College Road Associates, a New Jersey general partnership and any other
Affiliates of Interpool or its Restricted Subsidiaries.
"Reportable Event" shall have the meaning as such term is defined in Title
----------------
IV of ERISA.
"Responsible Officer" shall mean, with respect to the subject matter of any
-------------------
covenant, agreement or obligation of any Person contained in any
Transaction Document, the President, or any Vice President, Treasurer,
Assistant Treasurer or other officer thereof, who in the normal performance
of his or her operational responsibility would have knowledge of such
matters and the requirements with respect thereto.
"Restricted Payments" shall mean cash dividends, redemption of capital
-------------------
stock, Other Investments, and investments in Unrestricted Subsidiaries.
"Restricted Subsidiary" shall mean any Subsidiary which has not been
---------------------
designated as an Unrestricted Subsidiary, provided that Ltd. shall be a
Restricted Subsidiary unless and until: (a) it shall be fully released from
all its Obligations (other that its representations, warranties and
indemnities) upon Interpool's assumption of all such Obligations pursuant
to Section 5.6(a) hereof, or (b) its Notes and all its other Obligations
--------------
shall have been paid in full, provided further that Ltd. may not be
-------- -------
designated as an Unrestricted Subsidiary if a Default or an Event of
Default shall have occurred and be continuing or would result from Ltd.
being designated as an Unrestricted Subsidiary.
"Securities Act" shall mean the Securities Act of 1933, as amended.
--------------
"Security Agreement(s)" shall mean each of the Security Agreements between
---------------------
the Collateral Agent and an Issuer in respect of the Collateral, excluding
the Railcars, substantially in the form of Exhibit E.
---------
"Security Agreement Supplement(s)" shall have the meaning set forth in the
--------------------------------
Security Agreement.
"Standard & Poor's" shall mean Standard & Poor's Ratings Group, a division
-----------------
of McGraw Hill, Inc.
"Subsidiary" shall mean any Person (other than an individual) with respect
----------
to which Interpool or any one or more of its subsidiaries has Control.
"Tangible Net Worth" shall mean stockholders' equity as set forth on a
------------------
consolidated financial statement for Interpool and its Restricted
Subsidiaries, reduced by all items of goodwill and other intangible assets
(other than deferred charges).
"Taxes" shall have the meaning set forth in Section 9.23(a) hereof.
----- ---------------
"Transaction Documents" shall mean this Agreement, the Notes, the Agency
---------------------
Agreement and the Collateral Documents.
"UCC" shall mean the Uniform Commercial Code as enacted in any state of the
---
United States or in the District of Columbia or the
-55-
<PAGE>
United States Virgin Islands insofar as any such statute, as in effect from
time to time, may be relevant to the creation, perfection continuation and
enforcement of Liens on Collateral.
"Unrestricted Subsidiary" shall mean any Subsidiary which is designated by
-----------------------
Interpool as an Unrestricted subsidiary and/or any Other Investment.
"Used Equipment" shall mean all Equipment owned at any time by either of
--------------
the Issuers that is not New Equipment.
-56-
<PAGE>
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterparts of this Agreement and return the
same to the Issuers, whereupon this Agreement shall become a binding
agreement among the Issuers and the Purchasers.
Very truly yours,
INTERPOOL, INC.
By:
--------------------------------
Title:
INTERPOOL LIMITED
By:
--------------------------------
Title:
The foregoing Agreement is hereby
accepted as of the date first above
written.
NOTE PURCHASERS:
*
By:
--------------------------------
Title:
*
By:
--------------------------------
Title:
*
By:
--------------------------------
Title:
*
By:
--------------------------------
Title:
*
By:
--------------------------------
Title:
*
By:
--------------------------------
Title:
* Confidential Treatment Requested
<PAGE>
Schedule 1 To Note Purchase Agreement
PURCHASERS SCHEDULE
Interpool Ltd.
Name of Purchaser Note Note Total
- ----------------- ---- ---- -----
1. * $3,323,076.92 $8,676,923.08 $12,000,000
2. * $830,769.23 $2,169,230.77 $3,000,000
3. * 3,046,153.85 7,953,846.15 11,000,000
4. * 1,107,692.31 2,892,307.69 4,000,000
5. * 553,846.15 1,446,153.85 2,000,000
6. * 138,461.54 361,538.46 500,000
_________ __________ _________
$9,000,000 $23,500,000 $32,500,000
----------
* Confidential Treatment Requested
SCHED 1, Page 1
EXHIBIT 10.18
SECURITY AGREEMENT
SECURITY AGREEMENT (the "Agreement"), dated October 27, 1994, between INTERPOOL
---------
LIMITED, a Barbados corporation (the "Company"), and First Security Bank Of
-------
Utah, National Association, as collateral agent for the Purchasers and each
other holder of a Note from time to time (in such capacity, together with its
successors in such capacity, the "Collateral Agent").
----------------
W I T N E S S E T H:
- -------------------
WHEREAS, Interpool, Inc. and Interpool Limited (the "Obligors") have entered
into that certain Note Purchase Agreement, of even date herewith, with the
Purchasers, as purchasers of the Notes (as it may be amended and supplemented
from time to time, the "Note Purchase Agreement"); and
-----------------------
WHEREAS, it is a condition precedent to the obligation of the Purchasers to
purchase the Notes provided for in the Note Purchase Agreement that the Company
shall execute and deliver this Agreement;
NOW, THEREFORE, in consideration of the premises and in order to induce the
Purchasers to purchase the Notes pursuant to the Note Purchase Agreement, the
parties hereto agree as follows:
SECTION 1. DEFINITIONS.
-----------
Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Note Purchase Agreement. The terms
"equipment," "inventory," "accounts," "chattel paper," "instruments,"
--------- --------- -------- ------------- -----------
"documents," "general intangibles," "products" and "proceeds" shall have the
--------- ------------------- -------- --------
respective meanings ascribed thereto in the UCC.
SECTION 2. Security Interest.
-----------------
(a) To secure the due payment and performance of all of the
Obligations of the Company (the "Secured Obligations"), including, without
-------------------
limitation, the strict performance and observance by the Company of all
representations, warranties, agreements, covenants and conditions contained in
this Agreement, the Note Purchase Agreement, the Notes and the other Transaction
Documents, and any and all amendments thereto and replacements therefor, the
Company hereby assigns, mortgages, pledges, hypothecates, transfers and sets
over to the Collateral Agent, for the benefit of the Purchasers and the
Collateral Agent, and grants to the Collateral Agent, for the benefit of the
Purchasers and the Collateral Agent, a duly perfected first priority Lien upon
the Company's right, title and interest in and to (i) all Financed Equipment now
owned by the Company listed on Annex A attached hereto and all Financed
-------
Equipment hereafter listed on each of the Security Agreement Supplements (the
"Security Agreement Supplements")
------------------------------
<PAGE>
executed from time to time in the form attached hereto as Annex B, including all
-------
accessions, additions, improvements and upgrades to, and parts of, such Financed
Equipment and all substitutions and replacements therefor, all guarantees,
warranties and rights against manufacturers under purchase agreements or
otherwise and other parties in connection therewith, all insurance thereon and
all insurance proceeds payable in connection therewith; (ii) all lease rental
schedules, master leases as they relate to such lease rental schedules, Leases,
agreements for use and chattel paper to the extent that they relate to the
leasing by the Company of such Financed Equipment now or hereafter in effect or
executed from time to time, and any and all renewals, extensions, modifications
and substitutions thereof and therefor (all such lease rental schedules, master
leases, Leases, agreements for use and chattel paper, to the extent that they
cover such Financed Equipment now or hereafter in effect or executed from time
to time, and any and all renewals, extensions, modifications and substitutions
thereof and therefor, are hereinafter referred to collectively as the "Lease
-----
Collateral"), all of its rights to all rentals and additional rentals and all
- ----------
other amounts, monies or payments due or to become due under the Lease
Collateral, to the extent applicable to such Financed Equipment, including,
without limitation, amounts, monies or payments representing rent, principal,
interest, Taxes, insurance premiums, condemnation awards, delinquency charges,
together with rights evidenced by an account, note, contract, security
agreement, chattel paper or other evidence of indebtedness or security, all
guaranties, warranties and indemnities in respect thereof, and all of its
accounts, contract rights and general intangibles arising thereunder; (iii) all
security pledged, assigned, hypothecated or granted to or held by the Company to
secure the obligations of any lessees or other obligors under any Lease
Collateral; (iv) all powers of attorney for the execution of any evidence of
indebtedness or security or other writing in connection with the Lease
Collateral or such Financed Equipment; (v) all books, records, ledger cards,
invoices and certificates of title relating to the Lease Collateral or such
Financed Equipment; (vi) all evidences of the filing of financing statements and
other statements, if any, and the registration and notation of Liens on
certificates of title or of other instruments in connection with any of the
foregoing and all amendments thereto, notices to other creditors or secured
parties, and certificates from filing or other registration offices; (vii) all
credit information, reports and memoranda relating to such Lease Collateral;
(viii) all maintenance contracts relating to such Financed Equipment; and (ix)
all proceeds, including without limitation insurance proceeds, and products of
any and all of the foregoing (all of the items described in preceding parts (i)
through (ix) being hereinafter referred to as the "Collateral").
----------
<PAGE>
(b) (i) This Agreement shall create a present and continuing
collateral assignment of and security interest in the Collateral and shall
remain in full force and effect until payment in full of the Obligations to the
Purchasers. Upon receipt by the Collateral Agent of written advice from the
Purchasers that the Notes and all the Secured Obligations have been paid or
satisfied in full, the Collateral Agent shall, upon the Company's written
request, promptly execute and deliver to the Company, at the Company's expense,
termination statements for all financing statements filed by the Collateral
Agent against the Company and such assignments and reassignments as the Company
shall reasonably require in order to terminate the security interests created
hereunder and any collateral assignments of Collateral to the Collateral Agent,
in each case with the Collateral Agent's sole representation and warranty that
the Collateral is being reconveyed free and clear of any Lien created by or as a
result of any act of the Collateral Agent.
(ii) Notwithstanding the foregoing to the contrary, the
Collateral Agent agrees that the Company shall be permitted to add Collateral
to, and obtain the partial or full release of Collateral from, the Lien created
under this Agreement from time to time on the terms and subject to the
conditions set forth in the Note Purchase Agreement.
SECTION 3. COMPANY'S TITLE; LIENS AND ENCUMBRANCES; SECURITY INTEREST
----------------------------------------------------------
(a) The Company represents and warrants that the Company is or, to
the extent that Collateral is acquired after the date hereof, agrees that it
will be, on the date on which such Collateral is included in the Lien created
under this Agreement, the owner of the Collateral, having good and marketable
title thereto free from any and all Liens except for the Lien created and
granted pursuant to this Agreement and Permitted Liens.
(b) The Company will not create or assume or permit to exist any
Lien or claim on or against the Collateral, except for the Lien hereof and
Permitted Liens, and the Company will promptly notify the Collateral Agent of
any such Lien, except for the Lien hereof and Permitted Liens, made or asserted
against the Collateral, and will defend the Collateral against, and take all
such action as may be necessary to remove, any such Lien, other than the Lien
hereof and Permitted Liens.
(c) The Company represents and warrants that the Liens which have
been created in favor of the Collateral Agent on behalf of the Purchasers under
this Agreement and
<PAGE>
granted to the Collateral Agent on behalf of the Purchasers upon the execution
of this Agreement, constitute, or which will be created and granted upon the
execution and delivery of a Security Agreement Supplement, will constitute,
first priority Liens, and with respect to Containers and non-titled Chassis,
upon the filing of appropriate UCC financing statements, duly perfected Liens in
favor of the Collateral Agent on behalf of the Purchasers on the Collateral
subject to no other Lien other than the Lien hereof and Permitted Liens on such
Collateral, and with respect to titled Chassis, upon the notation of Liens on
certificates of title, duly perfected Liens in favor of the Collateral Agent on
behalf of the Purchasers on the Collateral subject to no other Lien other than
the Lien hereof and Permitted Liens on such Collateral.
SECTION 4. LOCATION OF COLLATERAL AND RECORDS; NAMES OF COMPANY.
----------------------------------------------------
(a) The Company represents and warrants that it has, and during at
least the past four months, has had, no place of business or office where the
Company's books of account and records are kept other than its Chief Office set
forth on Schedule 7.1 of the Note Purchase Agreement.
------------
(b) The Company shall maintain all its properties in good working
order and condition and, in the ordinary course of business, make all repairs,
replacements, additions and improvements in accordance with the provisions of
Section 9.5 of the Note Purchase Agreement.
(c) The Company shall notify the Collateral Agent in writing at
least thirty (30) days in advance of (a) any change of location of its Chief
Office, (b) the change, elimination or opening of any chief executive office of
the Company, or (c) any change in the place where the Company maintains its
records as to the Collateral such that such records are not located at the
Company's Chief Office. The Company shall notify the Collateral Agent in
writing promptly following a change in the character, use or location of any of
the Financed Equipment such that any of such Financed Equipment ceases to be
either "mobile goods" or "goods covered by a certificate of title", in each case
within the meaning of the UCC. The Company shall notify the Collateral Agent in
writing within five (5) days if there is a change in the character of any of the
Collateral such that it constitutes an "instrument" (other than an "instrument"
which constitutes part of "chattel paper") within the
meaning of the UCC.
<PAGE>
Section 5. PERFECTION OF SECURITY INTEREST.
-------------------------------
The Company will join with the Collateral Agent in executing one or
more UCC financing statements, applications for the notation of the Liens
created hereunder on certificates of title covering any of the Collateral or
other notices, agreements, documents or instruments appropriate under applicable
law in form satisfactory to the Collateral Agent and shall pay all filing or
recording costs with respect thereto, and all costs of filing or recording this
Agreement or any other instrument, agreement or document executed and delivered
pursuant hereto (including the cost of all Federal, state or local mortgage,
documentary, stamp or other Taxes), in each case, in all public offices where
filing or recording is deemed by the Purchasers to be necessary or desirable.
The Company hereby authorizes the Collateral Agent to take all action at the
expense of the Company (including, without limitation, the filing of any UCC
financing statements or amendments thereto, applications for the notation of the
Liens created hereunder on certificates of title covering any of the Collateral
and any other documents or instruments without the signature of the Company)
which the Purchasers may deem reasonably necessary or desirable to perfect or
otherwise protect the Liens created hereunder and to obtain the benefits of this
Agreement. The Collateral Agent shall endeavor to give the Company notice prior
to taking such action if such notice is practicable; provided, however, the
Collateral Agent shall take such action whether or not such notice is received
by the Company. Without limiting the generality of the foregoing, the Company
shall, at the Company's expense, take and cause to be taken all such actions as
the Collateral Agent by instructions from the Purchasers may reasonably request
in order to perfect and continue the perfection of the Liens granted to the
Collateral Agent in the Collateral. The Collateral Agent shall have the right
at any time at the Company's expense to cause the perfection of the Liens
granted to the Collateral Agent in the Collateral by whatever means reasonably
deemed by the Purchasers to be necessary, and the Company shall cooperate fully
with the Collateral Agent in connection therewith.
SECTION 6. GENERAL COVENANTS.
-----------------
The Company covenants and agrees that it shall:
(a) furnish the Collateral Agent, and the Collateral Agent shall
deliver to each Purchaser upon request by such Purchaser, from time to time at
the Collateral Agent's request, with written statements and schedules further
identifying and describing the Collateral
<PAGE>
in such detail as the Collateral Agent may reasonably require;
(b) comply or, with respect to the Collateral, require the lessees
thereof to comply, with all acts, rules, regulations and orders of any
legislative, administrative or judicial body or official applicable to the
Collateral or any part thereof or to the operation of the Company's business;
(c) at all times use, or require the lessees to use, the Collateral
for lawful purposes only, with all reasonable care and caution;
(d) cause the Lien granted pursuant to this Agreement to be at all
times a first priority duly perfected Lien upon the Collateral, subject to no
Liens other than Permitted Liens; and
(e) promptly execute and deliver to the Collateral Agent, and the
Collateral Agent shall deliver to each Purchaser upon request by such Purchaser,
such further deeds, mortgages, assignments, security agreements or other
instruments, documents, certificates and assurances and take such further action
as the Collateral Agent may from time to time in its reasonable discretion deem
necessary to perfect, protect or enforce its Lien on the Collateral or otherwise
to effectuate the intent of this Agreement, including, without limitation, the
right of the Collateral Agent upon the occurrence of an Event of Default and
pursuant to instructions by the Majority In Interest to enforce such rights to
(i) take possession of the Collateral and without liability for trespass to
enter any premises where the Collateral may be located for the purpose of taking
possession of or removing the Collateral, as to any or all of the Collateral, by
any available judicial procedure, or without judicial process, and, in
connection therewith, the Company shall, upon request of the Collateral Agent
and at the Company's expense, assemble the Collateral and make it available to
the Collateral Agent at the Company's standard depot locations worldwide, and
(ii) to require the Company to, and upon such demand the Company shall (A)
instruct each lessee under the Lease Collateral to make payment of rentals and
other sums (to the extent that such rentals and other sums relate to the
Financed Equipment) due and becoming due under a Lease included in the Lease
Collateral directly to, in the Collateral Agent's sole discretion, either the
Collateral Agent or to a post office box designated by the Collateral Agent to
which only the Collateral Agent shall have access, (B) if the Company shall
receive any rental or other payment in respect of any Financed Equipment covered
by any such Lease, or any Financed Equipment (including, without limitation, any
proceeds of insurance with respect to Financed Equipment), hold such payment in
trust by the
<PAGE>
Company for the benefit of the Purchasers and the Collateral Agent and shall not
commingle such payment with any other moneys or assets of the Company, and (C)
promptly turn over and remit to the Collateral Agent all sums thus received, in
the identical form as received, with all such endorsements thereof as may be
required, as contemplated by Section 8 hereof; in the event that the Company
---------
shall fail within three (3) Business Days of demand by the Collateral Agent to
notify the Lessees to make payments to the Collateral Agent or to a post office
designated by it, the Collateral Agent shall be entitled to do so, either in the
name of the Company pursuant to its power of attorney in Section 11 hereof or in
----------
its own name.
SECTION 7. ASSIGNMENT OF INSURANCE.
-----------------------
(a) The Company shall keep all its properties insured as
provided in Section 9.6 of the Note Purchase Agreement.
(b) As further security for the due payment and performance of
the Secured Obligations, the Company hereby assigns to the Collateral Agent all
sums relating to the Collateral, which may become payable under or in respect of
any policy of insurance owned by the Company or payable to the Company covering
the Collateral, and the Company hereby directs each insurance company issuing
any such policy owned by the Company to make payment of such sums directly to
the Collateral Agent upon notice from the Collateral Agent to such insurance
company of the occurrence of an Event of Default as defined in the Note Purchase
Agreement. The Company hereby appoints the Collateral Agent as the Company's
attorney-in-fact and in the Company's or in the Collateral Agent's name to do
one or more of the following upon the occurrence of an Event of Default and
pursuant to instructions by the Majority In Interest: (i) endorse any check or
draft representing any such payment or execute any proof of claim, subrogation
receipt or any other document required by such insurance company as a condition
to or otherwise in connection with such payment or (ii) assign the proceeds
under any such policies. All such sums received by the Collateral Agent shall
be paid by the Collateral Agent to the Purchasers pursuant to the Agency
Agreement or, to the extent that such sums represent unearned premiums in
respect of any policy of insurance on the Collateral refunded by reason of
cancellation, toward payment for similar insurance protecting the respective
interests of the Company and the Collateral Agent, or as otherwise required by
applicable law. The Company shall provide to the Collateral Agent evidence that
the Collateral Agent for the benefit of the Purchasers and the Purchasers have
been named as additional insureds and loss payees. On the date on which a
policy of insurance relating to the Collateral is issued or renewed, the Company
shall promptly
<PAGE>
provide to the Collateral Agent evidence that the Collateral Agent for the
benefit of the Purchasers together with the Purchasers have been named as
additional insureds and loss payees.
SECTION 8. COLLECTIONS.
-----------
At any time if the Collateral Agent exercises the rights
granted to it under this Agreement, the Company shall, at the request of the
Collateral Agent, immediately upon receipt of any checks, drafts, cash or other
remittances in payment of any of its accounts, contract rights, or general
intangibles constituting part of the Collateral or in payment for any Collateral
sold, transferred, or otherwise disposed of, or in payment of or on account of
its accounts, contracts, contract rights, notes, drafts, acceptances, general
intangibles, choses in action and all other forms of obligations relating to any
of the Collateral so sold, transferred or otherwise disposed of, deliver any
such items to the Collateral Agent accompanied by a remittance report in form
supplied or approved by the Collateral Agent, such items to be delivered to the
Collateral Agent in the same form received, endorsed or otherwise assigned by
the Company where necessary to permit collection of items and, regardless of the
form of such endorsement the Company hereby waives presentment, demand, notice
of dishonor, protest, notice of protest and all other notices with respect
thereto. All such remittances shall be applied and paid over by the Collateral
Agent to the Purchasers pursuant to the Agency Agreement or as otherwise
required by applicable law.
SECTION 9. RIGHTS AND REMEDIES ON DEFAULT.
------------------------------
(a) In the event of the occurrence of any Event of Default and
pursuant to instructions by the Majority In Interest to enforce the Lien granted
hereunder:
(i) the Collateral Agent shall at any time thereafter
have the right, itself or through any of its agents, as to any or all of the
Collateral (to the extent it is permissible to do so in view of the rights of
lessees who may have the right to possession of certain Collateral), by any
available judicial procedure, or without judicial process, to take possession of
the Collateral and without liability for trespass to enter any premises where
the Collateral may be located for the purpose of taking possession of or
removing the Collateral, and, generally, to exercise any and all rights afforded
to a secured party under the UCC or other applicable law;
(ii) without limiting the generality of the foregoing, the
Company agrees that the Collateral Agent shall have the right (subject to any
rights of lessees) to
<PAGE>
sell, lease, or otherwise dispose of all or any part of the Collateral, whether
in its then condition or after further preparation or processing, either at
public or private sale or at any broker's board, in lots or in bulk, for cash or
for credit, with or without warranties or representations, and upon such terms
and conditions, all as the Collateral Agent in its sole discretion may deem
advisable, and it shall have the right to purchase at any such sale; and, if any
Collateral shall require rebuilding, repairing, maintenance, preparation, or is
in process or other unfinished state, the Collateral Agent shall have the right,
at its option, to do such rebuilding, repairing, maintenance, preparation,
processing or completion of manufacturing, for the purpose of putting the
Collateral in such salable or disposable form as it shall deem appropriate;
(iii) the Collateral Agent shall at any time have the
right to require the Company to, and upon such demand the Company shall (A)
instruct each lessee under the Lease Collateral to make payment of all rentals
and other sums relating to the Collateral, due and becoming due under a Lease
included in the Lease Collateral directly to, in the Collateral Agent's sole
discretion, either the Collateral Agent or to a post office box designated by
the Collateral Agent to which only the Collateral Agent shall have access, (B)
if the Company shall receive any rental or other payment relating to the
Collateral in respect of any such Lease, or any Financed Equipment (including,
without limitation, any proceeds of insurance with respect to Financed
Equipment), hold the amount of such payment relating to the Collateral in trust
by the Company for the benefit of the Purchasers and the Collateral Agent and
shall not commingle such payment with any other moneys or assets of the Company,
and (C) promptly turn over and remit to the Collateral Agent all sums thus
received, in the identical form as received, with all such endorsements thereof
as may be required, as contemplated by Section 8 hereof; in the event that the
---------
Company shall fail within three (3) Business Days of demand by the Collateral
Agent to notify the lessees to make payments to the Collateral Agent or to a
post office designated by it, the Collateral Agent shall be entitled to do so,
either in the name of the Company pursuant to its power of attorney in Section
-------
11 hereof, or in its own name; and
- --
(iv) at the Collateral Agent's request, the Company shall
assemble the Collateral and make the Collateral available to the Collateral
Agent at the Company's standard depots worldwide and make available to the
Collateral Agent, without rent or any other charge, all of the Company's
premises and facilities for the purpose of the Collateral Agent's taking
possession of, removing or putting the Collateral in salable or disposable form.
<PAGE>
(b) The Company hereby agrees that a notice sent at least ten
(10) days before the time of any intended public sale or of the time after which
any private sale or other disposition of the Collateral is to be made, shall be
reasonable notice of such sale or other disposition.
(c) The proceeds of any collection, sale, lease or other
disposition of all or any part of the Collateral, and of all proceeds of the
enforcement of any Lien created under this Agreement or any other Transaction
Document, together with any sums then held by any Purchaser or the Collateral
Agent as part of the Collateral, shall be applied and paid over to the
Purchasers pursuant to the Agency Agreement.
(d) To the extent permitted by applicable law, the Company
waives all claims, damages and demands against the Collateral Agent arising out
of the repossession, removal, retention, sale or lease of the Collateral,
provided that the Company does not waive any claim, damages or demand it may
have arising out of the Collateral Agent's willful misconduct or gross
negligence in connection with any action taken in respect of the Note Purchase
Agreement or this Agreement.
SECTION 10. COSTS AND EXPENSES.
------------------
Any and all fees, costs and expenses, of whatever kind or
nature, including the reasonable attorneys' fees and legal expenses incurred by
the Collateral Agent in connection with the preparation of this Agreement and
all other documents relating hereto and the consummation of the transactions
contemplated by the Note Purchase Agreement, the filing or recording of UCC
financing statements, applications for notation of the Liens created hereunder
on certificates of title covering any of the Collateral and other documents
(including all Taxes in connection therewith) in public offices, the payment or
discharge of any Taxes, insurance premiums, encumbrances or otherwise
protecting, maintaining or preserving the Collateral, or the enforcing,
foreclosing, retaking, holding, storing, processing, selling, leasing or
otherwise realizing upon the Collateral and the Collateral Agent's Lien thereon,
whether through judicial proceedings or otherwise, or in defending or
prosecuting any actions or proceedings arising out of or relating to the
transaction to which this Agreement relates, shall be borne and paid by the
Company on demand by the Collateral Agent and if not paid within ten (10) days
of such demand, the Collateral Agent shall provide the notice to the Purchasers
pursuant to the third sentence of Section 4 of the Agency Agreement.
<PAGE>
SECTION 11. POWER OF ATTORNEY.
-----------------
(a) The Company authorizes the Collateral Agent and does
hereby make, constitute and appoint the Collateral Agent, and any officer,
employee or agent of the Collateral Agent, with full power of substitution, as
the Company's true and lawful attorney-in-fact, exercisable upon the occurrence
of an Event of Default or if the Collateral Agent exercises any of its rights
under this Agreement pursuant to instructions by the Majority In Interest, with
power in its own name or in the name of the Company:
(i) to endorse any notes, checks, drafts, money
orders, or other instruments of payment (including payments payable under or in
respect of any policy of insurance) in respect of the Collateral that may come
into possession of the Collateral Agent;
(ii) to sign and endorse any invoice, freight or
express bill, bill of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications and notices in connection with accounts, and
other documents relating to the Collateral;
(iii) to pay or discharge Taxes, Liens, security
interests or other encumbrances at any time levied or placed on or threatened
against the Collateral;
(iv) to demand, collect, receive, compromise, settle
and sue for monies due in respect of the Collateral;
(v) to cause each lessee under the Lease Collateral
to make payment of rentals and other sums (to the extent that such rentals and
other sums relate to the Financed Equipment) due and becoming due under a Lease
included in the Lease Collateral to the Collateral Agent;
(vi) to notify lessees and other persons obligated
with respect to the Collateral to make payments directly to the Collateral
Agent; and
(vii) generally, to do, at the Collateral Agent's
option and at the Company's expense, at any time, or from time to time, all acts
and things which the Collateral Agent reasonably deems necessary to protect,
preserve and realize upon the Collateral and the Collateral Agent's security
interest therein (including signing and filing any UCC Financing Statements,
applications for the notation of the Lien created hereunder upon certificates of
title covering the Collateral or other agreements, documents, instruments or
notices in the name of the Company or otherwise) in order to effect the intent
of this Agreement
<PAGE>
and of the other Transaction Documents, all as fully and effectively as the
Company might or could do.
(b) The Company hereby ratifies all that said attorney
shall lawfully do or cause to be done by virtue hereof.
(c) This power of attorney, being coupled with an
interest, shall be irrevocable for the term of this Agreement and thereafter as
long as any of the Obligations shall be outstanding.
SECTION 12. DISPOSITION OF COLLATERAL
-------------------------
The Company shall not be entitled to sell or otherwise
dispose of any of the Collateral except such as shall have been released from
the Lien granted hereby in accordance with the terms hereof or as permitted by
the Note Purchase Agreement.
SECTION 13. NOTICES.
-------
Except as otherwise provided for herein, all
communications and notices provided for herein shall be in writing and delivered
by hand, the United States certified or registered mail or by telecopier, and
any such notice shall become effective (a) upon personal delivery thereof,
including, without limitation, by overnight mail courier service, (b) five (5)
days after the date on which it shall have been mailed by United States mail,
certified or registered, postage prepaid, return receipt requested, or (c) in
the case of notice by telecopier, when electronically or verbally confirmed, in
each case addressed as follows:
If to the Company:
Interpool Limited
211 College Road East
Princeton, New Jersey 08540
Attention: President and Chief Financial Officer
Facsimile: (609) 452-8211
If to the Collateral Agent:
First Security Bank Of Utah,
National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Department
Facsimile: (801) 246-5053
Any party may change the person or address to whom or which notices are to be
given hereunder, by notice duly given hereunder; provided, however, that any
-------- -------
such notice shall be
<PAGE>
deemed to have been given hereunder only when actually received by the party to
which it is addressed.
SECTION 14. OTHER SECURITY.
--------------
To the extent that the Secured Obligations are now or
hereafter secured by property other than the Collateral or by the guarantee,
endorsement or property of any other person, firm, corporation or other entity,
then the Collateral Agent shall have the right in its sole discretion to pursue,
relinquish, subordinate, modify or take any other action with respect thereto,
without in any way modifying or affecting any of the Collateral Agent's rights
and remedies hereunder.
SECTION 15. CUSTODY OF THE COLLATERAL.
-------------------------
Except as expressly provided herein or in the Agency
Agreement, the Collateral Agent shall have no duty as to the collection of
any Collateral in its possession or control or in the possession or control
of any agent or nominee of the Collateral Agent, or any income thereon or as
to the preservation of rights against prior parties or any other rights
pertaining thereto.
SECTION 16. WAIVERS; OBLIGATIONS ABSOLUTE
-----------------------------
(a) No course of dealing between the Company and the
Collateral Agent, nor any failure to exercise, nor any delay in exercising,
on the part of the Collateral Agent, of any right, power or privilege hereunder
or under the Note Purchase Agreement shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
or thereunder preclude any other or further exercise thereof or the exercise of
any other right, power or privilege.
(b) The Company acknowledges that this Agreement is a
continuing obligation and that the obligations hereunder shall extend to each
and every extension or renewal of any Obligation of the Issuers, regardless of
whether the Obligations of the Company may, in successive transactions, be paid,
repaid, advanced or renewed from time to time and the Obligations shall be
absolute, independent and unconditional under any and all circumstances.
(c) The liability of the Company under this Agreement
shall be absolute and unconditional irrespective of the validity, legality or
enforceability of the Transaction Documents or other agreements evidencing or
securing the Obligations or any part thereof, or Collateral for any or all of
the Obligations or any part thereof or any other circumstance or circumstances
which might otherwise
<PAGE>
constitute a legal or equitable discharge of, or a defense available to, a
surety or guarantor and regardless of any law, rule, regulation, order, writ,
judgment, decree, award or other administrative or judicial pronouncement now or
hereafter in effect in any jurisdiction purporting to affect in any manner any
of the terms of the Transaction Documents. The Purchasers or the Collateral
Agent, as applicable, may at any time or times, in their absolute discretion, in
the manner permitted under the Transaction Documents (a) extend or change the
time, manner, place or other term of payment of any Obligation or any part
thereof, (b) waive compliance by either of the Obligors with any term, covenant,
agreement or condition on the part of such Obligor to be complied with under any
of the Transaction Documents, (c) obtain or release Collateral for, any
guarantor or any obligor obligated with respect to, any Obligation or any part
thereof, (d) file, record, refile, rerecord or otherwise perfect, fail to do any
of the foregoing, or allow to lapse any Transaction Document, financing
statement, mortgage, deed of trust, pledge or other security document or
interest, covering or relating to Collateral for, or securing, any Obligation or
any part thereof, (e) settle or compromise with the Obligors under any
Transaction Document, or any other person or entity obligated with respect to
any Obligation or any part thereof, and subordinate upon any terms the
Purchasers' right or rights to receive payment or performance of any Obligation
or any part thereof, and (f) amend or otherwise modify any Obligation or any
part thereof or the Transaction Documents, or the liability of the Obligors or
any entity obligated with respect thereto, in any manner, all without notice to
or the assent of the Company and without affecting this Agreement or the
liability of the Company hereunder, which shall continue with respect to the
Obligations as extended, changed, modified, settled or compromised, until
indefeasibly paid in full.
SECTION 17. CUMULATIVE REMEDIES.
-------------------
All of the Collateral Agent's rights and remedies with respect
to the Collateral, whether established hereby or by any other agreements,
instruments or documents or by law shall be cumulative and may be exercised
singly or concurrently.
SECTION 18. SEVERABILITY.
------------
The provisions of this Agreement are severable, and if any
clause or provision shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction and shall not in
any manner affect such
<PAGE>
clause or provision in any other jurisdiction, or any other clause or provision
of this Agreement in any jurisdiction.
SECTION 19. MODIFICATION.
------------
This Agreement may not be amended or modified, nor may any
provisions be waived, except by a writing signed by each of the parties hereto
or, in the case of a waiver, by the party so waiving its rights.
SECTION 20. COUNTERPARTS.
------------
This Agreement may be executed in as many counterparts as may
be deemed necessary or convenient, each of which, when so executed, shall be
deemed an original, but all such counterparts shall constitute one and the same
instrument.
SECTION 21. BINDING EFFECT, BENEFIT OF AGREEMENT AND
ASSIGNMENT.
----------------------------------------
The benefits and burdens of this Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns; provided, however, that the rights and obligations of
-------- -------
the Company under this Agreement shall not be assigned or delegated without the
prior written consent of the Collateral Agent, and any purported assignment or
delegation without such consent shall be void. The terms of this Agreement
shall also inure to the benefit of each of the Purchasers and their respective
successors and assigns.
SECTION 22. GOVERNING LAW.
-------------
This Agreement shall be governed and construed and enforced in
accordance with the laws of the State of New York, applicable to contracts
entered into and to be performed entirely within such State.
SECTION 23. INDEMNITY.
---------
(a) The Company covenants and agrees to indemnify and hold
harmless the Collateral Agent, the Purchasers and their respective officers,
directors, employees, agents, attorneys-in-fact and affiliates, from and against
any and all claims, suits, losses, penalties, demands, causes of action and
judgments of any nature whatsoever and all liabilities and indebtedness of any
and every kind and nature now or hereafter owing, arising, due or payable,
including all costs and expenses (including reasonable attorneys fees and
expenses) (all of the foregoing being herein collectively called "Liabilities"),
-----------
which may be imposed on, incurred by or asserted against any of them in
connection with (i) the ownership or use of any
<PAGE>
of the Collateral or the security interest of the Collateral Agent in the
Collateral, (ii) the failure on the part of the Company to comply and to cause
the lessees and users under all Leases to comply in all respects with the laws
of the United States of America and other jurisdictions in which the Collateral
or any part thereof may be operated and with all lawful acts, rules, regulations
and orders of any commissions, boards or other legislative, executive,
administrative or judicial bodies or officers having power to regulate or
supervise any of the Collateral, and (iii) the execution, delivery,
consummation, waiver, consent, amendment, enforcement, performance and
administration of this Agreement, the Note Purchase Agreement, the Security
Agreement Supplements and the other Transaction Documents, or the use by the
Company of the proceeds of the Notes or the Note Purchase Agreement; provided,
--------
however, that the Company shall not have any obligation to the Collateral Agent
- -------
or a Purchaser with respect to liabilities arising from such Person's own gross
negligence or willful misconduct.
(b) The Company agrees to defend and pay all costs, expenses
and judgments incurred by it, the Collateral Agent or the Purchasers in any
action brought against the Company under the Leases or in any actions brought by
the Collateral Agent pursuant to this Agreement whether under or pursuant to the
provision of any Lease or to enforce any provisions of the Leases.
(c) The obligations of the Company under this Section 23 shall
----------
survive the termination of this Agreement.
IN WITNESS WHEREOF the parties hereto have caused this
Agreement to be duly executed on the day and year first above written.
INTERPOOL LIMITED,
as an Obligor
By:____________________________
Title:_________________________
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION, as
Collateral Agent
By:____________________________
Title:_________________________
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On ___________ __, 1994, before me personally came
_________________________, to me known, who, being by me duly sworn, did depose
and say that he is _______________ of Interpool Limited, the corporation
described in and which executed the foregoing instrument; that he knows the seal
of said corporation that the seal affixed to such instrument is such corporate
seal and that he signed his name and affixed such seal by order of the Board of
Directors of said corporation.
______________________________
Notary Public
<PAGE>
STATE OF UTAH )
) ss.:
COUNTY OF________)
On the ____ day of ____________, 1994, before me personally appeared
________________, to me personally known, who being by me duly sworn, did depose
and say that he is ___________________ of FIRST SECURITY BANK OF UTAH, NATIONAL
ASSOCIATION , that the seal affixed to the foregoing instrument is the corporate
seal of said national banking association, that said instrument was signed and
sealed on behalf of said corporation by authority of its Board of Directors, and
he acknowledged that the execution of the foregoing instrument was the free act
and deed of said national banking association.
_________________________________
Notary Public
My Commission expires ___________
<PAGE>
ANNEX A TO
SECURITY AGREEMENT
TYPE OF FINANCED UNIT NUMBER
MANUFACTURER'S
EQUIPMENT SERIAL NUMBER
NUMBER (FOR CHASSIS)
<PAGE>
ANNEX B TO
SECURITY AGREEMENT
FORM OF SECURITY AGREEMENT SUPPLEMENT
- -------------------------------------
SUPPLEMENT NO.________
TO
SECURITY AGREEMENT
DATED __________ __ , 1994
BETWEEN
INTERPOOL LIMITED
(the "COMPANY")
AND
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION
as COLLATERAL AGENT
(the "COLLATERAL AGENT")
__________________________________________
WHEREAS:
A. Interpool, Inc. and Interpool Limited (the "Issuers"), the Collateral
-------
Agent and the Purchasers listed therein (the "Purchasers") entered into a
certain Note Purchase Agreement dated _________ __, 1994 (which agreement, as
the same may have been or hereafter may be amended, supplemented, restated or
otherwise, the "Note Purchase Agreement");
-----------------------
B. Pursuant to the Note Purchase Agreement, each of the Issuers and the
Collateral Agent entered into certain Security Agreements dated _________ __,
1994 (each a "Security Agreement" and collectively, the "Security Agreements");
------------------ -------------------
C. Pursuant to the Note Purchase Agreement, the Company is obligated with
the addition by the Company of any Equipment to the Collateral to deliver to the
Collateral Agent supplements to its Security Agreement (each, a "Security
--------
Agreement Supplement" and collectively, the "Security Agreement Supplements")
- -------------------- ------------------------------
describing the properties and assets which shall constitute the Collateral, and
it is therefore in consideration of the premises that the Company shall execute
and deliver to the Collateral Agent on behalf of the Purchasers this Security
Agreement Supplement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
The Security Agreement is hereby amended and supplemented by the addition
thereto (in addition to the Collateral covered by the Security Agreement and in
addition to any other Collateral added by previous Security Agreement
Supplements) of the following Collateral: the Financed Equipment listed or
identified on Schedule I hereto.
----------
The Company hereby represents and warrants that upon the consummation of this
Security Agreement Supplement, no Default or Event of Default shall exist under
any of the Transaction Documents, and the Issuers will be in compliance with the
requirements of the Transactions Documents.
Capitalized terms used herein are used as defined in, or by reference in, the
Security Agreement.
<PAGE>
Except as supplemented by this Security Agreement Supplement, the Security
Agreement (as heretofore supplemented) shall continue unchanged and remain in
full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
Supplement to be duly executed this ___ day of __________ 19___.
INTERPOOL LIMITED
By:________________________________
Title
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION
as Collateral Agent on behalf
of the Purchasers
By:______________________________
Title
<PAGE>
SCHEDULE I TO
SECURITY AGREEMENT
SUPPLEMENT
TYPE OF FINANCED EQUIPMENT UNIT NUMBER MANUFACTURER'S
- --------------------------- ----------- --------------
SERIAL
- ------
NUMBER (FOR
-----------
CHASSIS)
- --------
EXHIBIT 10.19
*
INTERPOOL, INC.
INTERPOOL LIMITED
$30,000,000 7.975%
GUARANTEED SENIOR SECURED NOTES
DUE APRIL 28, 2002
===============================
NOTE PURCHASE AGREEMENT
===============================
Dated April 28, 1995
* Confidential Treatment Requested
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. AUTHORIZATION OF ISSUE OF NOTES . . . . . . . . . . . . . . 1
1.1 Issuance of Notes . . . . . . . . . . . . . . . . . . . . 1
1.2 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Interest Rate Calculation . . . . . . . . . . . . . . . . 2
SECTION 2. PURCHASE AND SALE OF NOTES; USE OF PROCEEDS . . . . . . . . 2
2.1 Purchase and Sale of Notes . . . . . . . . . . . . . . . . 2
2.2 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . 2
SECTION 3. THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 4. CONDITIONS OF CLOSING . . . . . . . . . . . . . . . . . . . 3
4.1 Transaction Documents . . . . . . . . . . . . . . . . . . 3
4.2 Legal Opinions . . . . . . . . . . . . . . . . . . . . . . 3
4.3 Representations and Warranties, No Default . . . . . . . . 3
4.4 Evidence of Title to Collateral, Absence of Liens on
Collateral and Collateral Certificate . . . . . . . . . . 3
4.5 Corporate Proceedings and Documents . . . . . . . . . . . 5
4.6 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.7 UCC Financing Statements; Applications to Note Liens on
Certificates of Title; Railcars Security Agreement . . . . 5
4.8 Purchase Permitted By Applicable Laws . . . . . . . . . . 5
4.9 Sale of Notes to Other Purchasers . . . . . . . . . . . . 6
4.10 Other Documents . . . . . . . . . . . . . . . . . . . . . 6
4.11 Legal Matters . . . . . . . . . . . . . . . . . . . . . . 6
4.12 Legality . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.13 Information Certificate; Private Placement Number . . . . 6
4.14 Placement Agent Letter . . . . . . . . . . . . . . . . . . 7
4.15 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.16 Compliance with This Agreement . . . . . . . . . . . . . . 7
SECTION 5. REPAYMENT; PREPAYMENT; ASSUMPTION OF NOTES;
RELEASE OF COLLATERAL . . . . . . . . . . . . . . . . . 7
5.1 Repayment of Principal and Interest on the Notes . . . . . 7
5.2 Maturity . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.3 Method of Payment . . . . . . . . . . . . . . . . . . . . 8
5.4 Registration of Notes; Transfer and Exchange of Notes . . 8
5.5 Optional Prepayments . . . . . . . . . . . . . . . . . . . 10
5.6 Interpool's Assumption of Notes; Pledge of Equipment . . . 12
5.7 Termination of Collateral . . . . . . . . . . . . . . . . 15
SECTION 6. RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE COLLATERAL . . . . . . . . . . . . . 18
6.1 Collateral . . . . . . . . . . . . . . . . . . . . . . . . 18
<PAGE>
6.2 Payment of Moneys Received With Respect to the Collateral 18
SECTION 7. REPRESENTATIONS AND WARRANTIES OF ISSUERS . . . . . . . . . 19
7.1 Organization and Power . . . . . . . . . . . . . . . . . . 19
7.2 Trademarks, Licenses, etc. . . . . . . . . . . . . . . . . 19
7.3 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . 19
7.4 Business . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.5 Financial Statements . . . . . . . . . . . . . . . . . . . 20
7.6 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7.7 Litigation . . . . . . . . . . . . . . . . . . . . . . . . 20
7.8 Title, Liens . . . . . . . . . . . . . . . . . . . . . . . 20
7.9 Consent, Approval . . . . . . . . . . . . . . . . . . . . 21
7.10 Compliance with Other Instruments . . . . . . . . . . . . 21
7.11 Corporate Existence; Place of Business; Books and Records 21
7.12 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.13 Capital Stock . . . . . . . . . . . . . . . . . . . . . . 22
7.14 Governmental Licenses . . . . . . . . . . . . . . . . . . 22
7.15 Event of Default . . . . . . . . . . . . . . . . . . . . . 22
7.16 Offering of the Notes . . . . . . . . . . . . . . . . . . 22
7.17 Margin Securities . . . . . . . . . . . . . . . . . . . . 23
7.18 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . 23
7.19 Liabilities; Business . . . . . . . . . . . . . . . . . . 23
7.20 Investment Company Act . . . . . . . . . . . . . . . . . . 23
7.21 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . 23
7.22 Foreign Assets Control Regulations . . . . . . . . . . . . 24
7.23 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.24 Financed Equipment . . . . . . . . . . . . . . . . . . . . 24
7.25 Insurance . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 8. REPRESENTATIONS AND WARRANTIES OF PURCHASERS . . . . . . . 24
8.1 Purchase for Investment . . . . . . . . . . . . . . . . . 24
8.2 Taxpayer Status . . . . . . . . . . . . . . . . . . . . . 25
8.3 Source of Funds . . . . . . . . . . . . . . . . . . . . . 25
SECTION 9. COVENANTS OF ISSUERS . . . . . . . . . . . . . . . . . . . 26
9.1 Maintenance of Corporate Existence . . . . . . . . . . . . 26
9.2 Amendments . . . . . . . . . . . . . . . . . . . . . . . . 26
9.3 Compliance . . . . . . . . . . . . . . . . . . . . . . . . 27
9.4 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.5 Preservation of Assets . . . . . . . . . . . . . . . . . . 27
9.6 Insurance . . . . . . . . . . . . . . . . . . . . . . . . 27
9.7 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.8 Litigation . . . . . . . . . . . . . . . . . . . . . . . . 29
9.9 Line of Business . . . . . . . . . . . . . . . . . . . . . 29
9.10 Chief Offices; Places of Business; Character of
Collateral . . . . . . . . . . . . . . . . . . . . . . . . 29
9.11 Financial Statements . . . . . . . . . . . . . . . . . . . 30
9.12 Books and Records . . . . . . . . . . . . . . . . . . . . 31
<PAGE>
9.13 Inspection . . . . . . . . . . . . . . . . . . . . . . . . 32
9.14 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . 32
9.15 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . 33
9.16 Further Assurances . . . . . . . . . . . . . . . . . . . . 33
9.17 Government Contracts . . . . . . . . . . . . . . . . . . . 33
9.18 Sell, Merge, Consolidate, etc. . . . . . . . . . . . . . . 33
9.19 Financial Covenants . . . . . . . . . . . . . . . . . . . 34
9.20 Payment of Obligations . . . . . . . . . . . . . . . . . . 35
9.21 Notice of Default . . . . . . . . . . . . . . . . . . . . 36
9.22 Lock Box . . . . . . . . . . . . . . . . . . . . . . . . . 36
9.23 Additional Costs . . . . . . . . . . . . . . . . . . . . . 36
9.24 Transactions with Related Parties . . . . . . . . . . . . 37
9.25 Permitted Investments . . . . . . . . . . . . . . . . . . 37
9.26 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.27 Acquisition of Notes . . . . . . . . . . . . . . . . . . . 39
9.28 Private Offering . . . . . . . . . . . . . . . . . . . . . 39
9.29 Security Interest in Leases . . . . . . . . . . . . . . . 39
SECTION 10. DEFAULT; REMEDIES OF THE PURCHASERS . . . . . . . . . . . 40
10.1 Occurrence of Event of Default . . . . . . . . . . . . . . 40
10.2 Action Upon Event of Default . . . . . . . . . . . . . . . 42
10.3 Authorized to Execute Bills of Sale . . . . . . . . . . . 44
10.4 Remedies Cumulative . . . . . . . . . . . . . . . . . . . 44
10.5 Discontinuance of Proceedings . . . . . . . . . . . . . . 45
10.6 Agreements with respect to Remedies and Defaults . . . . . 45
10.7 Waiver of Existing Defaults . . . . . . . . . . . . . . . 45
10.8 Rights of Purchasers to Receive Payment . . . . . . . . . 45
SECTION 11. EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 12. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 13. PURCHASERS AND NOTES . . . . . . . . . . . . . . . . . . . 47
13.1 Withholding Taxes; Information Reporting . . . . . . . . . 47
13.2 Satisfaction and Discharge of Agreement; Termination of
Obligations . . . . . . . . . . . . . . . . . . . . . . . 48
13.3 Amendments to This Agreement With Consent of
Purchasers . . . . . . . . . . . . . . . . . . . . . . . 48
13.4 Notification on or Exchange of Notes . . . . . . . . . . . 49
SECTION 14. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 49
14.1 Oral Modification, Termination, etc. . . . . . . . . . . 49
14.2 Successors and Assigns . . . . . . . . . . . . . . . . . 49
14.3 Headings . . . . . . . . . . . . . . . . . . . . . . . . 49
14.4 Counterparts . . . . . . . . . . . . . . . . . . . . . . 49
14.5 Survival . . . . . . . . . . . . . . . . . . . . . . . . 49
14.6 Governing Law; Severability . . . . . . . . . . . . . . . 49
14.7 WAIVER OF JURY TRIAL; SUBMISSION TO JURISDICTION . . . . 50
SECTION 15. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 50
<PAGE>
LIST OF SCHEDULES
Schedule 1 -- Purchasers Schedules
Schedule 2 -- Issuers Schedule
Schedule 3 -- Names, Addresses of and
Wiring Instructions for Each
Purchaser
Schedule 7.1 -- Issuers' Jurisdictions of Incorporation;
Other Jurisdictions where Issuers are Qualified
to do Business; Chief Offices of Issuers and
Locations of Issuers' Books and Records;
Subsidiaries of Issuers; Capital Stock of Issuers
Schedule 7.5 -- Indebtedness of Issuers
Schedule 9.29 -- Stamp Language
<PAGE>
LIST OF EXHIBITS
Exhibit A Form of Note
Exhibit B Form of Agency Agreement
Exhibit C Form of Collateral Certificate
Exhibit D Form of Guaranty
Exhibit E Form of Security Agreement
Exhibit F Form of Assumption Agreement
Exhibit G Form of Information Certificate
Exhibit H Form of Railcars Security Agreement
Exhibit I Form of Officer's Certificate
<PAGE>
NOTE PURCHASE AGREEMENT
April 28, 1995
To Each of the Purchasers Named in the
Purchaser Schedule Attached Hereto as
Schedule 1
Ladies and Gentlemen:
Interpool, Inc., a Delaware corporation ("Interpool") and Interpool
---------
Limited, a Barbados corporation ("Ltd." and together with Interpool and
----
Ltd., each, an "Issuer" and collectively, the "Issuers"), hereby agree with
------ -------
the purchasers named in Schedule 1 attached hereto (the "Purchasers") as
---------- ----------
follows:
SECTION 1. AUTHORIZATION OF ISSUE OF NOTES.
-------------------------------
1.1 Issuance of Notes. (a) The Issuers will authorize the issuance
-----------------
and sale to the Purchasers of secured promissory notes in the aggregate
principal amount of $30,000,000.00 (the "Notes") pursuant to Section 1.2
----- -----------
and as indicated on Schedule 1 attached hereto, each of which Notes is to
----------
be dated the Closing Date and (b) Interpool will authorize the assumption
by Interpool of any or all the Notes.
1.2 Notes. Interpool will issue Notes in the aggregate principal
-----
amount of twenty-five million dollars and no cents ($25,000,000); and Ltd.
will issue Notes in the aggregate principal amount of five million dollars
and no cents ($5,000,000); which Notes shall be in the aggregate principal
amount of thirty million dollars ($30,000,000), shall mature on the seventh
(7th) anniversary of the Closing Date, shall bear interest on the unpaid
balance thereof from the Closing Date until the principal thereof shall
become due and payable at the rate of 7.975% per annum quarterly in arrears
commencing on July 28, 1995 and on overdue payments at the rate specified
therein, and shall be substantially in the form of Exhibit A attached
---------
hereto. The term "Notes" as used herein shall include each such Note
-----
delivered pursuant to any provision of this Agreement and each such Note
delivered in substitution or exchange for any other Note pursuant to any
such provision. Interpool will execute and deliver a guarantee to each
Purchaser and the Collateral Agent guaranteeing payment and performance of
the Notes issued by Ltd. (in the form of Exhibit D and as described below)
---------
and all other obligations of Ltd. under this Agreement and the other
Transaction Documents.
<PAGE>
1.3 Interest Rate Calculation. Interest shall be calculated on the
-------------------------
basis of a 360-day year of twelve 30-day months.
SECTION 2. PURCHASE AND SALE OF NOTES; USE OF PROCEEDS.
-------------------------------------------
2.1 Purchase and Sale of Notes. Each of the Issuers hereby agrees to
--------------------------
sell to each Purchaser and, subject to the terms and conditions herein set
forth, each Purchaser agrees to purchase from such Issuer one or more Notes
each in the respective principal amount set forth opposite such Issuer's
and Purchaser's respective name on Schedule 1 attached hereto at 100% of
----------
such aggregate principal amount. Each purchase is a separate and several
purchase.
2.2 Use of Proceeds. The proceeds of the Notes will be used by the
---------------
Issuers (i) to retire outstanding indebtedness, (ii) to acquire New
Equipment and/or (iii) for the Issuers' general corporate purposes.
SECTION 3. THE CLOSING. The closing (the "Closing") of the issuance
----------- -------
and sale of the Notes to be purchased by the Purchasers shall take place at
the offices of Rogers & Wells, 200 Park Avenue, New York, New York,
commencing at 10:00 a.m., New York time, on April 28, 1995 or such other
date and time as shall be agreed between the Issuers and the Majority in
Interest (the "Closing Date"). At the Closing, each Issuer will deliver to
------------
each Purchaser or a nominee designated by such Purchaser and set forth in
Schedule 3 attached hereto (each a "Nominee" and, collectively, the
- ---------- -------
"Nominees") one or more Notes as specified in Section 1.2 and on Schedule 1
-------- ----------- ----------
attached hereto registered on the books of such Issuer in such Purchaser's
name or in the name of such Nominee evidencing the aggregate principal
amount of such Purchaser's Commitment in respect of such Note against pay-
ment by such Purchaser of the purchase price for each such Note to be
purchased by such Purchaser by wire transfer thereof in immediately
available funds to account number 0170-9644 for Interpool, Inc. and account
number 0174-3180 for Interpool Limited, in each case at Core States Bank, N.A.,
Philadelphia, Pennsylvania 19178, ABA # 131-000-011, on the Closing Date. If at
the Closing any Issuer shall fail to tender to any Purchaser the relevant Notes,
as provided herein, or any of the conditions specified in Section 4 shall not
---------
have been fulfilled to the reasonable satisfaction of each of the Purchasers,
each Purchaser shall, at its option, be relieved of its obligations under this
Agreement, without thereby waiving any other rights such Purchasers may have by
reason of such failure or nonfulfillment. If at the Closing each Purchaser does
not provide the purchase price for its respective Note(s), then the other
Purchasers may, but shall not be obligated to, purchase the Notes to be issued
to it by wiring funds to the respective Issuer.
2
<PAGE>
SECTION 4. CONDITIONS OF CLOSING. The obligation of each of the
---------------------
Purchasers to purchase and pay for the Notes being purchased by such
Purchaser hereunder is subject to the satisfaction, on or before the
Closing Date, of the following conditions:
4.1 Transaction Documents. The Purchasers and the Collateral Agent
---------------------
shall have received a fully executed counterpart of each of the Transaction
Documents, each of which shall be in full force and effect and no term or
condition thereof shall have been amended, modified or waived, and the
transactions contemplated therein to be consummated hereunder and
thereunder (including the payment of all fees and other charges) on or
prior to the Closing shall have been consummated.
4.2 Legal Opinions. The Purchasers and the Collateral Agent shall
--------------
have received a legal opinion from each of (a) DeCampo, Diamond & Ash,
special counsel to the Issuers and the Guarantor; (b) Arthur L. Burns,
Esq., general counsel to the Issuers and the Guarantor; (c) David King,
Esq., special Barbados counsel to Ltd.; and (d) Ray, Quinney & Nebeker,
counsel to the Collateral Agent (with a copy of such opinion to be
delivered to the Issuers); and the Purchasers shall have received a legal
opinion from Rogers & Wells, special counsel to the Purchasers, all of
which legal opinions shall be in form and substance satisfactory to the
Purchasers.
4.3 Representations and Warranties, No Default. The representations
------------------------------------------
and warranties contained in Section 7 shall be true and correct and the
---------
conditions set forth in this Section 4 shall have been satisfied on and as
---------
of the Closing Date as if restated at and as of the Closing Date, there
shall exist on the Closing Date no Default or Event of Default, and each of
the Issuers shall have delivered to the Purchasers an Officer's
Certificate, dated the Closing Date, to each such effect.
4.4 Evidence of Title to Collateral, Absence of Liens on Collateral
---------------------------------------------------------------
and Collateral Certificate.
- --------------------------
(a) Prior to the Closing, the Purchasers shall have received
true, correct and complete copies of the certificates of title or similar
document for the Chassis included in the Collateral.
(b) Prior to the Closing, the Purchasers, shall have received
the following: (i) to the extent reasonably available, evidence of title to
the Containers included in the Collateral showing that the relevant Issuer
has good and marketable title to such Containers; (ii) search reports of
the records of the applicable offices where UCC financing statements,
Federal tax liens and judgments are filed showing that such Containers are
free and clear of Liens of record; (iii) an affidavit executed by an
3
<PAGE>
officer of the relevant Issuer of such Issuer's ownership of, and good and
marketable title to such Containers free and clear of Liens other than
Permitted Liens, which affidavit shall be in form and substance
satisfactory to the Purchasers and their special counsel; and (iv) a legal
opinion of Arthur L. Burns, Esq., general counsel to the Issuers, in form
and substance satisfactory to the Purchasers and their special counsel, as
to the relevant Issuer's having good and marketable title to such
Containers free and clear of Liens of record.
(c) Prior to the Closing, the Purchasers shall have received the
following:
(i) to the extent reasonably available, evidence of title
to the Railcars showing that Interpool has good and
marketable title to such Railcars;
(ii) search reports of the records of the Interstate
Commerce Commission and the applicable offices where
Federal tax liens and judgments are filed showing that
such Railcars are free and clear of Liens of record;
(iii) an affidavit executed by an officer of Interpool as to
Interpool's ownership of, and good and marketable title
to, such Railcars free and clear of Liens, other than
Permitted Liens, which affidavit shall be in form and
substance satisfactory to the Purchasers and their
special counsel; and
(iv) a legal opinion of Arthur L. Burns, Esq., general
counsel to Interpool, in form and substance
satisfactory to the Purchasers and their special
counsel, as to Interpool's having good and marketable
title to such Railcars free and clear of Liens of
record. The Purchasers shall have received search
reports of the records of the Interstate Commerce
Commission that Interpool has good and marketable title
to the Railcars included in the Collateral free and
clear of Liens of record and a Collateral Certificate
executed by an officer of Interpool with respect
thereto;
(d) Prior to the Closing, the Purchasers shall have received a
Collateral Certificate executed by an officer of each Issuer with respect
to all the Collateral referred to in paragraphs (a), (b) and (c) above.
4
<PAGE>
4.5 Corporate Proceedings and Documents. Each Issuer shall have
-----------------------------------
taken all necessary corporate action to authorize the transactions
contemplated by the Transaction Documents to the reasonable satisfaction of
the Purchasers and their special counsel, and the Purchasers and their
special counsel shall have received evidence of such proceedings, together
with such other corporate documents and certificates reasonably requested
by the Purchasers and their special counsel including, without limitation,
charter documents, certificates of good standing and certificates of
incumbency of officers, in form and substance satisfactory to the
Purchasers and their special counsel.
4.6 Taxes. All Taxes, fees and other charges payable in connection
-----
with the execution, delivery, recording, publishing and filing of the
Transaction Documents, and the issue, sale and delivery of the Notes to be
delivered on the Closing Date shall have been paid in full by the Issuers
and the Purchasers and their special counsel shall have received evidence
of any such payment or arrangements for any such payment satisfactory to
the Purchasers and their special counsel.
4.7 UCC Financing Statements; Applications to Note Liens on
-------------------------------------------------------
Certificates of Title; Railcars Security Agreement.
- --------------------------------------------------
(a) At the Closing, all UCC financing statements, naming the
relevant Issuer, as debtor, and the Collateral Agent, as secured party, all
certificates of title for Chassis included in the Collateral, applications
to note the Lien of the Collateral Agent in any Collateral covered by such
certificates of title, the Railcars Security Agreement and all other
documents and instruments required under other applicable laws, shall have
been duly executed and delivered to special counsel to the Purchasers and
the Collateral Agent, in appropriate form for filing together with the
applicable filing fees with respect thereto, in all jurisdictions that the
Purchasers deem necessary or desirable in order to perfect the Liens of the
Collateral Agent on behalf of the Purchasers in the Collateral.
(b) By the Closing, the Issuers shall have filed one or more
precautionary UCC financing statements against the lessee and any sublessee
under all Direct Finance Leases of Equipment not subject to a certificate
of title and assignments of such UCC financing statements in favor of the
Collateral Agent.
4.8 Purchase Permitted By Applicable Laws. The purchase of and
-------------------------------------
payment for each of the Notes to be purchased by the relevant Purchasers on
the Closing Date on the terms and conditions herein provided (including the
use of the proceeds of such Notes by the Issuers pursuant to Section
-------
2.2) shall not violate any law or governmental regulation in any
- ---
jurisdiction to which any Purchaser is subject and shall not subject any
Purchaser or the Collateral
5
<PAGE>
Agent to any Tax, penalty, liability or to jurisdiction as a domiciliary or
resident of or other onerous condition under or pursuant to any applicable
law or governmental regulation in any jurisdiction, and such Purchaser
shall have received such certificates, legal opinions or other evidence as
it or its special counsel may request to establish compliance with this
condition.
4.9 Sale of Notes to Other Purchasers. Simultaneously with the
---------------------------------
purchase of and payment for Notes by each Purchaser, all of the other Notes
to be issued to, and purchased and paid for by, the other Purchasers, as
set forth on Schedule 1 attached hereto, shall be issued to, and purchased
----------
and paid for by, such other Purchasers.
4.10 Other Documents. The Purchasers and the Collateral Agent shall
---------------
have received all such other agreements, documents, instruments and
certificates and evidence that all action shall have been taken as is
reasonably requested by the Purchasers or their special counsel in order to
effect the transactions contemplated hereby and by the other Transaction
Documents.
4.11 Legal Matters. All legal matters incident to the purchase of
-------------
the Notes, the Collateral and the transactions relating thereto shall be
satisfactory to special counsel for the Purchasers and the Collateral
Agent.
4.12 Legality. The Notes shall on the Closing Date qualify as a
--------
legal investment for insurance companies under applicable insurance law
(without recourse to laws permitting limited investments by insurance
companies without restriction as to the character of the particular
investment) and the Purchasers shall have received a certificate from the
Issuers as to factual matters as the Purchasers or their special counsel
may reasonably request, to establish compliance with this condition.
4.13 Information Certificate; Private Placement Number.
-------------------------------------------------
(a) Information Certificate. The Issuers shall have completed
-----------------------
and delivered to the Purchasers the information certificate in the form of
Exhibit G attached hereto, with a copy of the Issuers' most recent audited
- ---------
annual financial statements attached thereto, which certificate and
statements the Purchasers have informed the Issuers may be used as a basis
for filings which the Purchasers may be required to make with certain
regulatory bodies and with the National Association of Insurance
Commissioners (the "NAIC").
----
(b) Standard & Poor's Rating for Prior Private Placements. The
-----------------------------------------------------
Purchasers and their special counsel have received evidence satisfactory to
the Purchasers and their special counsel that the Prior Private Placements
have received ratings PPR2+ or better by Standard & Poor's.
6
<PAGE>
(c) Private Placement Number. The Notes shall each have
------------------------
received a private placement number from Standard & Poor's Corporation
CUSIP Service Bureau.
4.14 Placement Agent Letter. The Issuers, Issuers' counsel, the
----------------------
Purchasers and the Purchasers' special counsel shall have received a letter
from CoreStates Investment Banking (the "Placement Agent"), placement agent
---------------
with respect to the Notes, which letter shall be in form and substance
satisfactory to the addressees thereof, to the effect that the offering of
the Notes has been a private offering as set forth in Section 7.16.
------------
4.15 Expenses. At the Closing, upon presentation of invoices
--------
therefor, the Issuers shall pay all fees and expenses relating to this
Agreement, all other Transaction Documents or the transactions contemplated
hereunder and thereunder including but not limited to:
(a) the reasonable fees and disbursements of all the Purchasers'
and the Collateral Agent's special counsel;
(b) all costs and expenses relating to this Agreement, all other
Transaction Documents, the transactions contemplated hereunder and
thereunder and the cost of the issuance, purchase and delivery of the
Notes;
(c) any broker's fees or finder's fees and placement costs of
the Placement Agent and any other Persons who acted as broker or placement
agent for or on behalf of an Issuer or who was retained by an Issuer to so
act relating to the sale of the Notes hereunder; and
(d) all costs and expenses associated with obtaining a private
placement number for the Notes.
4.16 Compliance with This Agreement. The Issuers shall have
------------------------------
performed and complied with all agreements and conditions contained herein
or in the other Transaction Documents which are required to be performed or
complied with by the Issuers before or at the Closing Date to the
satisfaction of the Purchasers and their special counsel.
SECTION 5. REPAYMENT; PREPAYMENT; ASSUMPTION OF NOTES;
RELEASE OF COLLATERAL.
-------------------------------------------
5.1 Repayment of Principal and Interest on the Notes.
------------------------------------------------
(a) Each of the Issuers shall pay principal of the Notes issued
by it in quarterly installments on the dates and in the amounts set forth
in Schedule 1 attached to such Notes, in arrears.
----------
7
<PAGE>
(b) The Issuers shall pay interest on the outstanding principal
balance of each Note issued by it on the dates, and at the rates, set forth
in such Note.
(c) If the date that any payment under the Notes is due is other
than a Business Day, the amount of principal and interest otherwise payable
on such date shall be payable on the next succeeding Business Day together
with interest accrued on the unpaid principal through such next succeeding
Business Day but only with respect to the final payment due at maturity.
5.2 Maturity.
--------
The entire unpaid principal amount of the Notes, together with
accrued and any remaining unpaid interest thereon, shall be due and payable
on the seventh (7th) anniversary of the Closing Date, subject to
acceleration or prepayment as hereinafter provided.
5.3 Method of Payment. All payments (including optional prepayments
-----------------
pursuant to Section 5.5) by the Issuers on account of the Notes shall be
-----------
payable no later than 12:00 noon (New York time) by wire transmittal
thereof in immediately available funds to the Purchasers' accounts set
forth on Schedule 3 attached hereto or as the Purchasers shall specify in
----------
writing to the Issuers from time to time. Each of the Purchasers agrees
that in the event it shall sell or transfer such Note(s) (a) it shall,
prior to the delivery of such Note(s) (unless it shall have already done
so), make a notation thereon of all principal, if any, prepaid on such
Note(s) and shall also note thereon the date, if any, to which interest
shall have been paid on such Note(s) and (b) it shall promptly notify the
Issuers of the name and address of the transferee of any such Note(s) so
transferred.
5.4 Registration of Notes; Transfer and Exchange of Notes.
-----------------------------------------------------
(a) Each Issuer shall cause to be kept at its office, maintained
pursuant to Section 9.10, a register (each, a "Register") for the
------------ --------
registration and transfer of Notes. The name and address of each holder of
one or more Notes, each transfer thereof and the name and address of each
transferee of such Notes shall be registered in each Register. The Person
in whose name any Note shall be registered shall be deemed and treated as
the owner and holder thereof for all purposes of this Agreement.
(b) A Purchaser intending to transfer a Note shall surrender
such Note duly endorsed, or accompanied by a duly executed written
instrument of transfer, together with a written request for the issuance of
a new Note, and the name and address of the intended transferee and shall
provide such further information relating to such transferee and such
transfer as the relevant
8
<PAGE>
Issuer shall reasonably request. The Notes have not been registered under
the Securities Act and may not be resold or transferred except as provided
in this Section 5.4. The Notes shall not be transferred to any Person
-----------
whose principal business is operating or leasing chassis, railcars or
containers. No transfer of the Notes may be made unless pursuant to an
effective registration statement under the Securities Act or unless exempt
from the registration requirements under the Securities Act. No Issuer
shall be obligated to register the Notes under the Securities Act or any
other securities law. The Notes will not be offered or sold in, nor will
any offering material relating to the Notes be distributed in Canada nor
will any resale or other transfer in Canada be made except in compliance
with applicable securities laws of the dominions or provinces of Canada
(including any exemptions thereunder).
In connection with the transfer of any Note pursuant to the
foregoing and upon surrender of any Note at the office of the Issuer
maintained pursuant to Section 9.10, such Issuer, at the request of the
------------
holder thereof, shall execute and deliver, at such Issuer's expense (except
as provided below), new Notes in exchange therefor, in denominations of at
least $100,000 (except as may be necessary to reflect any principal amount
not evenly divisible by $100,000), in an aggregate principal amount equal
to the unpaid principal amount of the surrendered Note. Each such new Note
shall be payable to such transferee and shall be substantially in the form
of the Note set out in Exhibit A to this Agreement. Each such new Note
---------
shall be dated and bear interest from the date to which interest shall have
been paid on the surrendered Note or dated the date of the surrendered Note
if no interest shall have been paid thereon. Simultaneously with the
transfer of any Note issued by Ltd. to a transferee pursuant to the
foregoing provisions of this Section 5.4(b), upon the request of the
--------------
transferee or the Purchaser transferor, Interpool shall issue a Guaranty to
and in favor of such transferee all obligations of Ltd. to such transferee,
as the case may be, which Guaranty shall be in the form of Exhibit D hereto
---------
and shall be secured by the Collateral granted by Interpool pursuant to the
Security Agreement and the Railcars Security Agreement executed and
delivered by Interpool to the Collateral Agent; provided that the failure
of the transferee or the Purchaser transferor to request such a Guaranty
shall not affect or limit Interpool's Obligations in favor of such
Purchaser transferor under its Guaranty or under this Agreement or the
other Transaction Documents which shall inure to the benefit of such
transferee.
(c) Upon receipt by the Issuer of evidence reasonably
satisfactory to it of (i) the ownership and (ii) the loss, theft,
destruction or mutilation, of any Note, and
(A) in the case of loss, theft or destruction, an indemnity
reasonably satisfactory to it (provided
9
<PAGE>
that if the holder of the Note is an institutional investor
which is a "Qualified Institutional Buyer" such
-----------------------------
institutional investor's own agreement of indemnity shall be
deemed to be satisfactory), or
(B) in the case of mutilation, upon surrender and cancellation
thereof,
the Issuer shall execute and deliver, in lieu thereof, a new Note of like
tenor, dated and bearing interest from the date to which interest shall
have been paid on such lost, stolen, destroyed or mutilated Note or dated
the date of such lost, stolen, destroyed or mutilated Note if no interest
shall have been paid thereon.
5.5 Optional Prepayments.
--------------------
(a) Prepayment. Each Issuer shall have the right to prepay the
----------
principal of the Notes issued by such Issuer at any time and from time to
time in whole or in part together with any accrued and unpaid interest on
such principal amount so prepaid plus a Make Whole Premium. The proceeds
of any such prepayment of the relevant Notes shall be applied ratably over
all Notes issued by such Issuer and then applied to the prepayment of such
Notes in inverse order of the scheduled principal payments thereof without
priority of any one such Note over any other in accordance with the terms
of this Agreement.
(b) Notice of Optional Prepayments; Officers' Certificate. Each
-----------------------------------------------------
Issuer will give each Purchaser written notice of each optional prepayment
under Section 5.5(a) not less than thirty (30) days and not more than sixty
--------------
(60) days prior to the date fixed for such prepayment, in each case
specifying such date, the aggregate principal amount of the Notes to be
prepaid, the principal amount of each Note held by such Purchaser to be
prepaid, the aggregate accrued and unpaid interest due thereon calculated
to but not including the date of prepayment, an estimate of the aggregate
Make Whole Premium due with respect to such prepayment, calculations
showing how such estimated Make Whole Premium was calculated and the
amounts of principal, accrued interest and Make Whole Premium to be
received by each Purchaser in connection with such prepayment in inverse
order of the scheduled principal payments thereof without priority of any
one such Note over any other in accordance with the terms of the Agreement.
Each Purchaser shall receive on the Business Day immediately preceding the
date scheduled for any such prepayment, an Officer's Certificate of the
Issuers certifying that all conditions of such prepayment have been
fulfilled and specifying the particulars of such fulfillment, and, setting
forth the calculations used in computing the amount of the Make Whole
Premium and, a copy of the market data used in determining the Reinvestment
Yield in accordance with the terms of this Agreement. In the event that
10
<PAGE>
there shall have been a partial prepayment of the Notes under Section
-------
5.5(a), such Issuer shall promptly give notice to the Purchasers,
- ------
accompanied by an Officers' certificate setting forth the principal amount
of each of the Notes that was prepaid and specifying how each such amount
was determined, and if such prepayment was a prepayment in part, setting
forth the reduced amount of each required payment thereafter becoming due
with respect to each of the Notes under Section 5.1(a), and certifying that
--------------
such reduction has been computed in accordance with Section 5.5(a).
--------------
(c) Making of Prepayment. On or before the Prepayment Date,
--------------------
such Issuer (or any Persons on behalf of such Issuer) shall pay or cause to
be paid to the relevant Purchaser by 12:00 noon (New York City time) on the
Prepayment Date in immediately available funds the amount to be prepaid
with respect to the Notes in accordance with Section 5.3.
-----------
(d) Notes Payable on Prepayment Date. If notice of prepayment
--------------------------------
has been given in accordance with Section 5.5(b), the amount of the
--------------
prepayment of such Notes to be prepaid in accordance with the notice
described in Section 5.5(b) shall, on the Prepayment Date, become due and
--------------
payable at the principal offices of the respective Purchasers at the
addresses set forth in Schedule 3 attached hereto. If the amount of the
----------
prepayment of the Notes to be prepaid in accordance with the notice
described in Section 5.5(b) shall not be so prepaid, the amount of such
--------------
prepayment shall, until paid, continue to bear interest from the applicable
Prepayment Date at the Overdue Rate through the date upon which such Notes
are so prepaid.
(e) If there is more than one Purchaser, the aggregate principal
amount of each partial optional prepayment of the Notes shall be allocated
in units of One Thousand Dollars ($1,000) or multiples thereof among the
Purchasers at the time outstanding, in proportion, as nearly as
practicable, to the respective unpaid principal amounts of the Notes then
outstanding, with adjustments, to the extent practicable, to equalize for
any prior partial optional prepayments not in such proportion.
(f) Upon any partial prepayment of any Note, such Note may, at
the option of the Purchasers, be (i) surrendered to the relevant Issuer
pursuant to Section 5.4(b) in exchange for a new Note in a principal amount
--------------
equal to the principal amount then remaining unpaid on the surrendered
Note, (ii) made available to the relevant Issuer for notation thereon of
the portion of the principal so prepaid or (iii) marked with a notation
thereon by the holder thereof as to the portion of the principal so
prepaid. In case the entire principal amount of any Note is prepaid, such
Note shall be surrendered to the relevant Issuer promptly after such
prepayment for cancellation and shall not be reissued, and no Note
11
<PAGE>
shall be issued in lieu of the prepaid principal amount of any Note.
5.6 Interpool's Assumption of Notes; Pledge of Equipment.
----------------------------------------------------
(a) At any time and from time to time (but in the case of a
partial assumption not more often than once during any calendar quarter)
Interpool may assume the Obligations of Ltd., in whole or in part,
including, but not limited to, its Notes, pursuant to an assumption
agreement in the form of Exhibit F attached hereto, provided that (i)
---------
Interpool's Collateral Value shall not be less than an amount equal to 125%
of the aggregate outstanding principal amount of the Notes issued or
assumed by Interpool after giving effect to such assumption, (ii) no
Default or Event of Default exists (unless such Default shall be cured by
the assumption by Interpool) and the Purchasers shall have received an
Officer's Certificate of Interpool to such effect, and (iii) the Purchasers
shall have received a legal opinion of Arthur L. Burns Esq. or his
successor, as general counsel to the Issuers, in form and substance
satisfactory to the Purchasers and their special counsel as to the
enforceability of the assumption agreement and the transactions
contemplated thereto. If Interpool assumes any Obligations of Ltd., Ltd.
will be released from its Obligations hereunder to the extent such
Obligations shall have been assumed by Interpool and under the other
Transaction Documents except that the representations, warranties and
indemnities of Ltd. shall survive the release of its other Obligations.
(b) Any Issuer shall have the right to add Collateral to, or
obtain the partial release by the Collateral Agent of Collateral from, the
Lien created under the relevant Security Agreement at any time or from time
to time by the execution and delivery to the Collateral Agent with copies
to the Purchasers and special counsel to the Purchasers, at least ten (10)
Business Days prior to the proposed effective date of any addition or
partial release of Collateral of an appropriate Security Agreement
Supplement indicating specifically the Collateral to be added or released
from such lien provided, that no Default or Event of Default exists (other
than a Default which would be cured by such addition or release), or would
arise as a result of or after giving effect to, such addition or release of
Collateral and the Purchasers shall have received an Officer's Certificate
of such Issuer to such effect. The Collateral Agent shall countersign such
Security Agreement Supplement pursuant to instructions by the Purchasers to
do so which the Purchasers shall issue upon their being satisfied that the
conditions set forth herein have been fulfilled whereupon such Security
Agreement Supplement shall become effective. Interpool shall have the
right to add Railcars to, or obtain the partial release by the Collateral
Agent of Railcars from the Lien created under the Railcars Security
Agreement at any time or from time to time by the execution and delivery to
the
12
<PAGE>
Collateral Agent with copies to the Purchasers and special counsel to the
Purchasers, at least ten (10) Business Days prior to the proposed effective
date of any addition or partial release of such Collateral of an
appropriate Railcars Security Agreement Supplement (in the form attached as
Annex A to Exhibit H hereto) indicating specifically the Collateral to be
---------
added to or released from such Lien; provided that no Default or Event of
--------
Default exists (other than a Default which would be cured by such addition
or release), or would arise as a result of or after giving affect to, such
addition or release of Collateral and the Purchasers shall have received an
Officer's certificate of Interpool to such effect. The Collateral Agent
shall countersign such Railcars Security Agreement Supplement, pursuant to
instructions by the Purchasers to do so which the Purchasers shall issue
upon their being satisfied that the conditions set forth herein have been
fulfilled whereupon such Railcars Security Agreement Supplement shall
become effective and shall be filed with the Interstate Commerce
Commission.
(c) At any time or from time to time Interpool shall have the
right, for the benefit of Ltd., in order to enable Ltd. to avoid the
occurrence of an Event of Default under the provisions of Section 10.1(k),
---------------
to add Collateral to the Lien created by the relevant Security Agreement
executed by Interpool in favor of the Collateral Agent by the execution and
delivery to the Collateral Agent with copies to the Purchasers and special
counsel to the Purchasers, at least five (5) Business Days prior to the
proposed effective date of any addition of Collateral, of an appropriate
Security Agreement Supplement provided that (i) such Security Agreement
Supplement indicates specifically the Collateral being added to such Lien;
(ii) such Security Agreement Supplement or an Officer's Certificate
delivered in connection therewith specifically provides that such
Collateral is being added for the benefit of Ltd. to avoid the occurrence
of an Event of Default under the provisions of Section 10.1(k) and that
---------------
such Collateral shall secure all the Obligations of Interpool (including
Obligations of Interpool under the Guaranty) and the Obligations of Ltd.;
and (iii) no Default or Event of Default exists (unless such Default shall
be cured by the addition of such Collateral) and the Purchasers shall have
received an Officer's Certificate of Interpool to such effect. The
Collateral Agent shall countersign such Security Agreement Supplement
pursuant to instructions by the Purchasers to do so which the Purchasers
shall issue upon their being satisfied that the conditions set forth in
this Section 5.6(c) shall have been fulfilled whereupon such Security
--------------
Agreement Supplement shall become effective.
(d) In lieu of adding Collateral to the Lien created by the
relevant Security Agreement executed by an Issuer in favor of the
Collateral Agent, such Issuer shall have the right to grant to the
Collateral Agent for the ratable benefit of the Purchasers a first Lien on
Cash Collateral by the execution and delivery to the
13
<PAGE>
Collateral Agent with copies to the Purchasers and special counsel to the
Purchasers, at least ten (10) Business Days prior to the proposed effective
date of any such grant, of a security and pledge agreement in form and
substance satisfactory to the Purchasers and their special counsel and such
Issuer and its counsel covering such Cash Collateral, provided, that (i)
-------- ----
such agreement specifically designates the Issuer for whose benefit such
Cash Collateral is being granted and (ii) no Default or Event of Default
exists (unless such Default shall be cured by the grant of such Cash
Collateral) and the Purchasers shall have received an Officer's Certificate
of such Issuer to such effect. Such Issuer may thereafter add Collateral
to its Security Agreement pursuant to and in compliance with the provisions
of subsection (b) or (c) above and upon such addition of Collateral
becoming effective, such Issuer may request the release of Cash Collateral
corresponding to the Cash Collateral so added and upon the Purchasers
having been satisfied that (x) such Cash Collateral has been added to the
relevant Security Agreement pursuant to and in compliance with the
provisions of subsection (b) or (c) above and (y) no Event of Default or
-------------- ---
Default exists and the Purchasers have received an Officer's Certificate of
such Issuer that no Event of Default or Default exists, the Purchasers
shall instruct the Collateral Agent to execute and deliver to such Issuer a
release of such Cash Collateral and the Collateral Agent shall execute and
deliver such release to such Issuer.
(e) In the event that Interpool determines that the Collateral
Value of the Collateral granted by it pursuant to its Security Agreement
(and not theretofore released) exceeds 125% of the sum of the aggregate
outstanding principal amount of the Notes issued by Interpool and the
aggregate outstanding principal amount of Notes issued by Ltd. and assumed
by Interpool, then Interpool shall have the right, for the benefit of Ltd.
in order to enable Ltd. to avoid the occurrence of an Event of Default
under the provisions of Section 10.1(k), to notify the Purchasers, the
---------------
Collateral Agent and their special counsel at least ten (10) business days
prior to the effective date thereof of its designation that the Collateral
representing such excess Collateral Value shall inure to the benefit of
Ltd. to avoid the occurrence of such an Event of Default, which notice
shall be accompanied by (i) a Collateral Certificate specifically
calculating such excess and indicating specifically the Collateral
representing such excess Collateral Value and (ii) an Officer's Certificate
of Interpool that no Event of Default or Default exists (unless such
Default shall be cured by such designation by Interpool of excess
Collateral Value). Upon their satisfaction that the conditions referred to
above shall have been fulfilled, the Purchasers shall instruct the
Collateral Agent to countersign such notice and designation and the
Collateral Agent shall so countersign such notice and designation,
whereupon such designation by Interpool shall become effective.
14
<PAGE>
(f) All assumptions, additions, releases or substitutions of
Collateral and Cash Collateral pursuant to the provisions of this Section
-------
5.6 shall be accompanied by all such agreements, instruments, documents,
- ---
certificates, UCC financing statements, notations of Liens on certificates
of title or applications therefor and other lien instruments and the taking
of all such action (including the filing and recording of any of the
foregoing and searches of public records) as the Purchasers, the Collateral
Agent and their special counsel shall reasonably require and all fees and
expenses with respect thereto (including the fees and expenses of special
counsel to the Purchasers and the Collateral Agent) shall be paid promptly
by the Issuers upon presentation of invoices therefor.
5.7 Termination of Collateral.
-------------------------
(a) If (i) based upon the financial statements and the related
certificates delivered to the Purchasers pursuant to Section 9.11 each of
------------
the financial conditions set forth in paragraph (b) below have been met by
the Issuers for the most recent six consecutive quarters as applied at the
end of each quarter and (ii) Interpool receives a private rating for the
Notes on an unsecured basis of greater than PPR2-, or an equivalent rating
or higher from either Moody's, Duff & Phelps or Standard & Poor's and (iii)
the holders of at least 80% of Interpool's outstanding recourse Funded Debt
other than the Obligations (excluding capitalized leases) consent in
writing to the release of the collateral securing such Funded Debt,
Interpool may request that the Purchasers waive the requirement that the
Obligations be secured by the Collateral and cause the Collateral Agent to
release the Liens of the Collateral Agent created by the Transaction Docu-
ments. Upon (A) receipt of such consent from the holders of at least 60%
of the outstanding principal amount of the Notes, which consent the
Purchasers agree shall not be unreasonably withheld (it being understood
that such consent may be reasonably withheld even if the financial
conditions set forth in paragraph (b) have been met) and (B) the release by
the holders of 80% of Interpool's outstanding Funded Debt other than the
Obligations (excluding capitalized leases) of the collateral securing such
Funded Debt, the Purchasers shall instruct the Collateral Agent and the
Collateral Agent shall take any and all steps necessary to terminate the
Liens created under the Transaction Documents.
(b) The financial conditions referred to in paragraph (a) above
shall be as follows:
(i) Funded Debt did not exceed 300% of Tangible Net Worth;
(ii) the sum of Fixed Charges for Interpool and its
Restricted Subsidiaries would have been
15
<PAGE>
covered by at least 1.75 times the sum of Earnings
Available for Fixed Charges for Interpool and its
Restricted Subsidiaries for the sum of the four (4)
fiscal quarters preceding the date of determination;
and
(iii) Tangible Net Worth exceeded $125,000,000;
(c) In the event that the Liens of the Collateral Agent shall
have been terminated in accordance with the provisions of Section 5.7(a),
--------------
then at all times thereafter unless and until the Obligations become
secured pursuant to the provisions of Section 5.7(d), neither Interpool nor
--------------
any Restricted Subsidiary will cause, incur or suffer to be incurred or to
exist any Lien on any of its or their property or assets other than:
(i) Permitted Liens;
(ii) judgment Liens contested with execution stayed on
appeal;
(iii) Liens securing indebtedness between Interpool and the
Restricted Subsidiaries;
(iv) Liens existing on property as at the date of such
termination of Collateral after the release of
collateral referred to in Section 5.7(a)(iii) and
-------------------
clause B of Section 5.7(a) which Liens were not
--------------
prohibited under this Agreement at such date;
(v) Liens incurred subsequent to the date of such release
of Collateral on property acquired after such date
securing up to 100% of the lower of cost or fair market
value; Liens existing on property at the time of acqui-
sition; and Liens on the property of a corporation at
the time such corporation becomes a Restricted
Subsidiary;
(vi) Subject to the provisions of Section 9.19(b), other
---------------
Liens if the amount of indebtedness secured by such
Liens when added to Funded Debt incurred subsequent to
the date of such release of Collateral, does not exceed
20% of Tangible Net Worth; and
(vii) extensions, renewals and refundings of the Liens and
indebtedness referred to in clauses (i), (ii), (iii),
(iv), (v) and (vi) above.
16
<PAGE>
In the event that Interpool shall cause, incur or suffer to be
incurred or to exist any Lien upon any of its property or assets, or the
property or assets of any of its Restricted Subsidiaries, whether now owned
or hereafter acquired, in violation of the provisions of subdivisions (i)
through (vii) of this Section 5.7(c), it will promptly cause the
--------------
Obligations to be secured by an equivalent amount of Collateral equally and
ratably with any and all other Funded Debt thereby secured so long as such
other Funded Debt shall be so secured. Such action taken by Interpool
pursuant to the immediately preceding sentence shall have the effect of
curing any Default or Event of Default arising out of the causing or
incurrence of a Lien in violation of subdivisions (i) through (vii) of
Section 5.7(c).
- --------------
(d) In the event that following the release of Collateral
pursuant to Section 5.7(a) the Issuers determine that they may be unable to
--------------
continue to meet the financial conditions referred to in Section 9.19(e),
---------------
they may notify the Purchasers that they will no longer be able to comply
with the financial conditions of Section 9.19(e) but that they will
---------------
continue to comply with the financial conditions as set forth in Section
-------
9.19(a), (b) and (c) then from and after the twentieth (20th) Business Day
- --------------------
following such notice such financial conditions as set forth in Section
-------
9.19(a), (b) and (c) shall become applicable to the Issuers, provided that
- -------------------- -------- ----
on or prior to the twentieth (20th) Business Day following such notice (i)
the Issuers shall each grant to the Collateral Agent a first priority
perfected security interest in Collateral in accordance with the provisions
of this Agreement and the other Transaction Documents having a Collateral
Value of at least 125% of the aggregate outstanding principal amount of the
Notes pursuant to Security Agreements and a Railcars Security Agreement
executed and delivered by the Issuers to the Purchasers, the Collateral
Agent and their special counsel; (ii) the Issuers shall have executed and
delivered to the Purchasers, the Collateral Agent and their special counsel
all such legal opinions, agreements, documents, instruments, certificates,
UCC financing statements and other lien instruments and take all such
actions (including notations on certificates of title) as the Purchasers,
the Collateral Agent and their special counsel shall reasonably require in
connection therewith; (iii) no Default or Event of Default shall exist
(other than a Default which would be cured by such reinstatement of the
original provisions of Section 9.19(a), (b) and (c)) and the Purchasers
----------------------------
shall have received an Officer's Certificate of the Issuers to the
foregoing effect; and (iv) the Issuers shall be able to effect such
reversion of the financial conditions from Section 9.19(e) to the original
---------------
provisions of Section 9.19(a), (b) and (c) only once during the term of
----------------------------
this Agreement. All reasonable fees and expenses relating to the foregoing
(including the fees and expenses of special counsel to the Purchasers and
the Collateral Agent) shall be paid by the Issuers promptly upon
presentation of invoices therefore.
17
<PAGE>
(e) If (i) the Collateral Value of an Issuer is greater than
125% of the outstanding aggregate principal amount of the Notes issued or
assumed by such Issuer or, in the case of Interpool, subject to a
designation pursuant to Section 5.6(c), as evidenced by a Collateral
--------------
Certificate delivered to the Purchasers and the Collateral Agent and (ii)
no Default or Event of Default exists (other than a Default which would be
cured by a release of Collateral referred to below), then an Issuer may
request the Purchasers to instruct the Collateral Agent to partially
release Collateral (including Cash Collateral) to the extent of the excess
of the Collateral Value over 125% of the aggregate principal amount of such
Notes and upon receipt of such instructions the Collateral Agent shall
partially release such Collateral from the Lien created by the relevant
Security Agreement in accordance with the provisions of Section 2(b)(ii)(A)
of such Security Agreement; provided that after giving effect to such
partial release the Collateral Value of such Issuer is not less than 125%
of the outstanding principal amount of the Notes issued or assumed by such
Issuer or, in the case of Interpool, subject to a designation pursuant to
Section 5.6(c).
- --------------
SECTION 6. RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE COLLATERAL.
-------------------------------------
6.1 Collateral. The payment and performance of the Obligations shall
----------
be secured by the Collateral. Notwithstanding any other provision hereof
or any provision of any other Transaction Document to the contrary, no
Collateral of Ltd. shall secure the Obligations of Interpool.
6.2 Payment of Moneys Received With Respect to the Collateral. Each
---------------------------------------------------------
of the Issuers hereby irrevocably covenants and agrees to cause all amounts
payable or realized in respect of the Collateral to be paid to the
Collateral Agent on behalf of the Purchasers if and to the extent required
by any of the Transaction Documents. Pursuant to Section 12 of the Agency
Agreement, the Collateral Agent, on behalf of the Purchasers, shall pay to
the Purchasers all such amounts. Except as otherwise provided in this
Agreement or the other Transaction Documents, if an Event of Default shall
have occurred and be continuing moneys received by the Purchasers pursuant
to this Section 6.2, shall be applied, first, to the payment of accrued
----------- -----
interest (including any default interest) on the Notes on a pro rata basis
--- ----
to the due date of such payments and any Make Whole Premium, and second, to
------
the payment of the principal amount of the Notes pro rata based upon the
--- ----
outstanding principal amounts thereof and third, to the other Obligations
-----
in such order as the Purchasers shall determine. Prior to the occurrence
of an Event of Default the Issuers may continue to collect and receive such
monies. All payments with respect to the Notes pursuant to this Section
-------
6.2 shall be applied to such
- ---
18
<PAGE>
Notes on a pro rata basis in inverse order of the scheduled principal
--- ----
payments thereof.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF ISSUERS.
-----------------------------------------
Each of the Issuers hereby represents and warrants to the Purchasers
as follows:
7.1 Organization and Power. Each of the Issuers (a) (i) is a
----------------------
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of incorporation and qualified to do business as a
foreign corporation in the jurisdictions set forth in Schedule 7.1 attached
------------
hereto for each Issuer, (ii) is not required to be qualified as a foreign
corporation in any jurisdiction where the failure to so qualify would have
a material adverse effect on such Issuer, its business operations or its
property and (iii) has its chief executive office and chief place of
business at the respective Chief Office set forth on Schedule 7.1 attached
------------
hereto; and (b) has all requisite corporate power and authority and all
necessary licenses and permits to enter into and perform this Agreement and
the other Transaction Documents to which such Issuer is a party and to
issue and deliver its Notes. This Agreement, the Notes and the other
Transaction Documents to which such Issuer is a party have been duly
authorized, executed and delivered by such Issuer and, assuming the due
authorization, execution and delivery thereof by the other parties thereto,
such documents constitute the legal, valid and binding obligations of such
Issuer, enforceable against such Issuer in accordance with their respective
terms.
7.2 Trademarks, Licenses, etc. Each of the Issuers possesses, in
--------------------------
full force and effect, all necessary franchises, patents, licenses,
trademarks, trademark rights, trade names, trade name rights, fictitious
name authorizations or certificates and copyrights material to conduct its
business as now being conducted, without any conflict, to its knowledge,
with the franchises, patents, licenses, trademarks, trademark rights, trade
name, trade name rights, fictitious name authorizations or certificates and
copyrights of others.
7.3 Subsidiaries. Each of the Issuers has no Subsidiaries, other
------------
than those set forth in Schedule 7.1 attached hereto.
------------
7.4 Business. Each of the Issuers is engaged principally in the
--------
businesses of leasing, financing or managing containers, chassis, railcars
or other transportation equipment and business related to the foregoing.
In addition, a Subsidiary of one of the Issuers is engaged in the business
of leasing micro computers and related accessories and businesses related
to the foregoing.
19
<PAGE>
7.5 Financial Statements. Interpool has furnished to the Purchasers
--------------------
balance sheets of Interpool and its consolidated subsidiaries as of
December 31, 1993 and December 31, 1994, and the related statements of
income, statements of cash flows and statements of the stockholders'
equity, for the years ended December 31, 1992, December 31, 1993 and
December 31, 1994, respectively, all of which were audited by Arthur
Andersen LLP. All such financial statements present fairly, in all
material respects, the financial position, stockholders' equity, results of
operations and cash flows of the entities covered thereby for the periods
involved. Since the date of the most recent audited financial statements,
there has been no material and adverse change in the financial position of
any Issuer not reflected in the most recent audited financial statements as
of that date, and, since such date, the business of each Issuer has not
been materially and adversely affected by any occurrence, whether or not
insured against. Except as otherwise disclosed on Schedule 7.5 attached
------------
hereto, the Issuers have issued no other indebtedness for borrowed money
which is still outstanding on the date hereof, except indebtedness which is
reflected in the most recent audited financial statements referred to above
or restructuring or refinancing thereof.
7.6 Taxes. All tax returns of the Issuers which are due have been
-----
duly filed and are correct in all material respects, and all Taxes and
other governmental charges upon the Issuers which are shown to be due and
payable thereon have been paid.
7.7 Litigation. There are no outstanding judgments against any
----------
Issuer or any actions, proceedings, claims or investigations pending or, to
any Issuer's knowledge, threatened before any court or governmental body
which, if adversely determined, would materially and adversely affect the
business, properties, prospects, operations or affairs of any Issuer or
impair any Issuer's ability to perform its Obligations under this Agreement
and the other Transaction Documents.
7.8 Title, Liens. Each of the Issuers owns and has good and
------------
marketable title to all of the Collateral included in the Collateral Value
relating to such Issuer, and there are no Liens on the Collateral of any
Issuer other than those Liens created pursuant to this Agreement and the
other Transaction Documents and except for Permitted Liens. The Liens
granted in the Security Agreements and the Railcars Security Agreements
constitute valid first priority perfected Liens on the Collateral subject
to no other mortgage, Lien or security interest. The law of Barbados does
not necessitate, require or provide for the recording, registration or
filing of any mortgage or Lien in any of the Equipment, Leases or any other
types or items of property or proceeds thereof which are included in the
Collateral covered by or
20
<PAGE>
provided for in the Transaction Documents executed and delivered by Ltd.
7.9 Consent, Approval. No consent or approval of any Person,
-----------------
shareholder, landlord or mortgagee, no waiver of any Lien or right of
distraint or other similar right, and no consent, license, approval or
authorization of or registration, qualification, designation, declaration
or filing (except any recordations required in connection with the
perfection of the Liens granted in the Security Agreements and any required
filings or notices under applicable securities laws, rules or regulations
or the rules of the New York Stock Exchange) with or payment of any
withholding or other tax to any governmental authority by or on the part of
the Issuers is required in connection with the execution, delivery and
performance of this Agreement or any other Transaction Document, the
issuance and sale or payment of the Notes or the consummation of any other
transactions contemplated hereby or thereby.
7.10 Compliance with Other Instruments. Neither of the Issuers is a
---------------------------------
party to any contract, commitment or agreement or subject to any re-
striction or to any order, rule, regulation, writ, injunction or decree of
any court or governmental authority or to any statute which materially and
adversely affects its business, property, prospects, operations, assets or
financial condition as now conducted or as proposed to be conducted.
Neither the execution, delivery or performance by any Issuer of this
Agreement, the Notes or the other Transaction Documents to be delivered by
such Issuer nor compliance herewith or therewith (a) conflicts with or
results in a breach of (i) any law, statute, rule or regulation in effect
as of the date of delivery of this Agreement, (ii) any order, writ, injunc-
tion or decree of any court or other governmental authority, or (b) results
or will result in the creation or imposition of any Lien, charge or
encumbrance upon its property pursuant to such agreement or instrument,
except for Liens created hereunder and Permitted Liens. Neither the
execution, delivery or performance by any Issuer of this Agreement, the
Notes or the other Transaction Documents nor compliance by any Issuer
herewith or therewith conflicts or will conflict with the certificate of
incorporation, by-laws or other organizational document of any Issuer or
results or will result in a breach of or constitutes or will constitute a
default under any agreement or instrument to which any Issuer is a party or
by which it is bound.
7.11 Corporate Existence; Place of Business; Books and Records.
---------------------------------------------------------
Except as disclosed in Schedule 7.1 attached hereto, neither of the Issuers
------------
has at any time within the last five (5) years, (i) changed its name;
(ii) used any fictitious name, (iii) been the surviving corporation of a
merger or consolidation, or (iv) acquired all or substantially all of the
assets of any Person. The Chief Offices, all other offices of the Issuers
and the only places of business of each of the Issuers where commercial
21
<PAGE>
affairs are conducted and books and records are maintained are set forth on
Schedule 7.1 attached hereto. Neither of the Issuers is in violation of
- ------------
any charter instrument or by-law, and neither of the Issuers is in
violation in any material respect of any term in any agreement or other
instrument to which it is a party or by which it or any of its property may
be bound which violation could have a material adverse effect on any Issuer
or its business, assets, operations, leaseholds and equipment.
7.12 ERISA.
-----
(a) No Reportable Event has occurred with respect to any Plan
maintained for employees of (i) any Issuer or (ii) any member of a
Controlled Group of which any Issuer is a part.
(b) Neither of the Issuers is entering into the Transaction
Documents or any other transaction contemplated hereby, directly or
indirectly, in connection with any arrangement in any way involving any
employee benefit plan or fund or trust which holds assets of any employee
benefit plan with respect to which it in its individual capacity is a
party-in-interest, all within the meaning of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") and the Internal Revenue Code of
-----
1986, as amended (the "Code").
----
7.13 Capital Stock. All of the issued and outstanding capital stock
-------------
of Ltd. is owned and registered as set forth in Schedule 7.1 attached
------------
hereto.
7.14 Governmental Licenses. Each of the Issuers has been issued all
---------------------
required federal, state, local and foreign licenses, certificates or
permits relating to, and each of the Issuers and its facilities, business,
assets, property, prospects, operations, leaseholds and equipment are in
compliance in all respects with, all applicable federal, state, local and
foreign laws, rules and regulations relating to air emissions, water
discharge, noise emissions, solid or liquid disposal, hazardous waste or
materials, or other environmental health or safety matters, where the
failure to so comply could have a material adverse effect on either Issuer
or its business, assets, operations, leaseholds and equipment.
7.15 Event of Default. No Event of Default or Default has occurred
----------------
and is continuing.
7.16 Offering of the Notes. Neither the Issuers nor anyone acting on
---------------------
their behalf has offered, directly or indirectly, the Notes or any part
thereof or any similar security for sale to, solicited offers to buy any
thereof from or otherwise approached or negotiated with anyone other than
the Purchasers and the institutional investors listed in the letters of the
Placement Agent delivered pursuant to Section 4.14. In connection with the
------------
22
<PAGE>
sale of the Notes hereunder, neither of the Issuers has engaged in general
solicitation or advertising. Neither the Issuers nor anyone on their
behalf will sell or offer the Notes or any part thereof or any similar
security for sale to, solicit any offers to buy any thereof from or
otherwise approach or negotiate in respect thereof with any other Person or
Persons so as thereby to require registration of the Notes under Section 5
of the Securities Act.
7.17 Margin Securities.
-----------------
(a) Neither of the Issuers will, directly or indirectly, apply
any part of the proceeds of the Notes for the purpose (whether immediate,
incidental or ultimate) of purchasing or carrying any "margin stock" as
defined in Regulation G of the Federal Reserve Board (12 C.F.R. 207) or any
security issued by any investment company registered pursuant to Section 8
of the Investment Company Act of 1940 or for the purpose of repaying any
indebtedness originally incurred for such purpose.
(b) Neither of the Issuers is, in any way, engaged in the
business of extending credit for the purpose of purchasing or carrying
Margin Stock; nor has either Issuer secured the payment of the Notes by an
assignment of any stock (as such term is defined in Regulation U) or by any
arrangement under which either Issuer's right or ability to sell, pledge or
otherwise dispose of stock owned by it is in any way restricted or under
which the exercise of such right, whether by written agreement or
otherwise, is or may be cause for acceleration of the Notes.
7.18 Use of Proceeds. Neither of the Issuers is, directly or in-
---------------
directly, applying any part of the proceeds of the Notes for any purpose
other than for the purposes described in Section 2.2.
-----------
7.19 Liabilities; Business. Neither of the Issuers has any
---------------------
liabilities or obligations which are material to its business, property,
prospects, operations, assets or financial condition as now conducted or as
proposed to be conducted which are prohibited by this Agreement and by the
other Transaction Documents to which it is a party. Neither of the
Issuers' assets are less than its liabilities, both determined in
accordance with GAAP, and each of the Issuers is solvent.
7.20 Investment Company Act. Neither of the Issuers is, and is not
----------------------
directly or indirectly controlled by or acting on behalf of any Person
which is, an "investment company" within the meaning of the Investment
Company Act of 1940.
7.21 Disclosure. The Issuers have delivered to the Purchasers the
----------
Private Placement Memorandum. Neither this Agreement nor any other
Transaction Document nor the Private
23
<PAGE>
Placement Memorandum nor any other document, certificate or instrument
delivered to the Purchasers by or on behalf of any Issuer in connection
with the transactions contemplated by this Agreement contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained in this Agreement, any other
Transaction Document and in such other documents, certificates or instru-
ments not misleading. There is no fact known to any Issuer which
materially and adversely affects or in the future may (so far as any Issuer
can now reasonably foresee) materially and adversely affect the business,
prospects, operations, affairs, condition (financial or otherwise),
properties or assets of any Issuer which has not been set forth in the
financial statements or in this Agreement, any other Transaction Document
or the other documents, certificates and instruments delivered to the
Purchasers by or on behalf of either Issuer specifically for use in
connection with the transactions contemplated by this Agreement.
7.22 Foreign Assets Control Regulations. Neither the issuance and
----------------------------------
sale by either Issuer of the Notes under this Agreement nor its use of the
proceeds thereof will violate the Foreign Assets Control Regulations, the
Foreign Funds Control Regulations, the Transaction Control Regulations, the
Cuban Assets Control Regulations, or the Iranian Assets Control Regulations
of the Office of Foreign Assets Control, United States Department of the
Treasury (31 C.F.R., Chapter V, Subpart B, as amended) or any other order,
regulation or ruling thereunder or pursuant thereto.
7.23 Leases. The Leases which are in effect on the date of this
------
Agreement each constitute legal, valid and binding obligations of such
relevant Issuer and, to the best of the Issuers' knowledge, each of the
respective lessees thereunder, enforceable in accordance with their
respective terms.
7.24 Financed Equipment. As of the date hereof no Person has a Lien
------------------
on any Financed Equipment which represents a replacement or a substitution
of equipment.
7.25 Insurance. Each of the Issuers is, as of the date of this
---------
Agreement, in compliance with the provisions of Section 9.6.
-----------
SECTION 8. REPRESENTATIONS AND WARRANTIES OF PURCHASERS.
--------------------------------------------
8.1 Purchase for Investment. Each Purchaser represents and warrants
-----------------------
it is purchasing the Notes being purchased by it for its own account, and
that each such Note is being purchased for the purpose of investment and
not with a view to the distribution thereof, subject, nevertheless, to any
requirement of law that the disposition of its property shall be at all
times within such Purchaser's control. Such Purchaser will not, in any
event, make any sale or other disposition of such Notes except in
accordance
24
<PAGE>
with the Securities Act and the rules and regulations of the Securities and
Exchange Commission thereunder, or pursuant to an exemption under such
Securities Act and rules and regulations and of the terms of this
Agreement. Each Purchaser represents and warrants it is an "insurance
company" as defined in Section 2(13) of the Securities Act.
8.2 Taxpayer Status. Each Purchaser represents and warrants that it
---------------
is a United States person within the meaning of Section 7701(a)(30) of the
Code.
8.3 Source of Funds. At least one of the following statements is an
---------------
accurate representation as to the source of funds to be used by such
Purchaser to pay the purchase price of the Notes purchased by such
Purchaser:
(a) if such Purchaser is an insurance company, no part of such
funds constitutes assets allocated to any separate account maintained by it
in which any employee benefit plan (or its related trust) has any interest;
or
(b) if such Purchaser is an insurance company, to the extent
that any part of such funds constitutes assets allocated to any separate
account maintained by it, (x) such separate account is a "pooled separate
accounts" within the meaning of Prohibited Transaction Class Exemption 90-
1, in which case such Purchaser has complied and will continue to comply
with the conditions set forth in Part III thereof and such Purchaser has
disclosed in writing to the relevant Issuer the names of each employee
benefit plan whose assets in such separate account exceed 10% of the total
assets of such account as of the date of such purchase (and for the
purposes of this paragraph (b) all employee benefit plans maintained by the
same employer or employee organization are deemed to be a single plan), or
(y) such separate account contains only the assets of a specific employee
benefit plan, complete and accurate information as to the identity of which
such Purchaser has delivered to the Issuers by separate letter; or
(c) if such Purchaser is a "qualified professional asset
manager" or "QPAM" (within the meaning of Part V of Prohibited Transaction
Class Exemption 84-14 (the "QPAM Exemption")), all of such funds constitute
--------------
assets of an "investment fund" (within the meaning of Part V of the QPAM
Exemption) managed by such Purchaser, no employee benefit plan's assets
which are combined with the assets of all other employee benefit plans
established or maintained by the same employer or by an affiliate of such
employer or by the same employee organization and managed by such
Purchaser, exceed 20% of the total client assets managed by such Purchaser,
the conditions of Part I(g) of the QPAM Exemption are satisfied and such
Purchaser has disclosed to the Issuers the names of all
25
<PAGE>
employee benefit plans whose assets are included in such investment fund;
or
(d) if such Purchaser is other than an insurance company, all or
a portion of such funds consists of funds which do not constitute assets of
any employee benefit plan (other than a governmental plan exempt from the
coverage of ERISA) and the remaining portion, if any, of such funds
consists of funds which may be deemed to constitute assets of one or more
specific employee benefit plans, complete and accurate information as to
the identity of each of which such Purchaser has delivered to the Issuers
in writing by separate letter.
As used in this Section 8.3, the terms "employee benefit plan",
-----------
"governmental plan" and "separate account" shall have the respective
meanings assigned to such terms in Section 3 of ERISA and the term "assets"
shall have the meaning assigned to such term in Department of Labor
regulations Section 2510.3-101.
SECTION 9. COVENANTS OF ISSUERS. Each of the Issuers hereby
--------------------
covenants and agrees that from the date of this Agreement and so long as
any Obligations or other amounts under the Notes and hereunder are
outstanding, such Issuers will comply with the following covenants:
9.1 Maintenance of Corporate Existence. Each of the Issuers shall
----------------------------------
preserve and keep in full force and effect its corporate existence and all
franchises, rights and privileges necessary to the proper conduct of its
business, including, without limitation, all necessary franchises, patents,
licenses, trademarks, trademark rights, trade names, trade name rights,
fictitious name authorizations or certificates and copyrights, without any
unlawful conflict with franchises, patents, licenses, trademarks, trademark
rights, trade names, trade name rights, fictitious name authorizations or
certificates and copyrights of others which conflict may materially and
adversely affect such Issuer or interfere with the conduct of such Issuers'
business or may result in an action brought against such Issuer for such
violation which action may materially and adversely affect such Issuer or
interfere with the conduct of such Issuer's business.
9.2 Amendments. Each of the Issuers shall (a) promptly deliver to
----------
the Purchasers and the Collateral Agent copies of any amendments or
modifications to its certificate of incorporation, bylaws and
organizational documents and/or other documents of formation, as the case
may be, certified, with respect to the certificate of incorporation, by the
Secretary of State of the jurisdiction of incorporation, or by the
appropriate official of its jurisdiction of formation, as the case may be,
and, with respect to the bylaws, by the secretary of such Issuer and (b) on
26
<PAGE>
a quarterly basis deliver to the Purchasers and the Collateral Agent a
certificate of the incumbency of its officers.
9.3 Compliance. Each of the Issuers shall comply with all laws,
----------
ordinances, rules and regulations of any foreign, federal, state or local
government or any instrumentality or agency thereof, applicable to it,
including, without limitation, the Fair Labor Standards Act, now or
hereafter in effect, and all international laws, ordinances, rules and
regulations, the failure to comply with which may have a materially adverse
effect on any Issuer or on its ability to perform its Obligations under any
of the Transaction Documents, any material agreement, document or
instrument to which it is a party, or on the Collateral or on the
Purchasers or the Collateral Agent in enforcing their rights hereunder
against any Issuer or the Collateral.
9.4 Taxes. Each of the Issuers shall pay and discharge, as they
-----
become due, all Taxes, assessments, debts, claims and other governmental or
non-governmental charges lawfully imposed upon it or incurred by it or its
properties and assets, except Taxes, assessments, debts, claims and charges
contested in good faith in appropriate proceedings and for which any Issuer
shall have set aside adequate reserves for the payment of such Tax,
assessment, debts, claims or charges. Such Issuer shall provide the
Collateral Agent, upon the Collateral Agent's request, evidence of payment
of such Taxes, assessments, debts, claims and charges. If such Issuer
fails to pay such Taxes, assessments, debts, claims or charges when due,
and is not contesting the same in good faith or has not set aside adequate
reserves for the payment thereof, the Collateral Agent may discharge the
same, and any amounts so advanced by the Collateral Agent for such purposes
shall be added to the Obligations of such Issuer secured by the Collateral
and shall bear interest at the overdue rate set forth in such Notes
relating to such Taxes, assessments, debts, claims or charges.
9.5 Preservation of Assets. Each of the Issuers shall maintain,
----------------------
preserve and keep or cause to be maintained, preserved and kept, all its
properties, Equipment and assets, including the Collateral, in accordance
with industry standards, and make, or cause to be made, all necessary or
appropriate repairs, renewals, replacements, substitutions, additions,
betterments and improvements thereto so that efficiency of all such
property and assets shall at all times be properly preserved and maintained
in accordance with industry standards.
9.6 Insurance. Each of the Issuers shall maintain, with financially
---------
sound and reputable insurance companies, such insurance on its properties,
businesses and assets, including, without limitation, the Collateral,
against casualty, general liability, worker's compensation and such other
insurable interests and in such amounts as is consistent with practices
generally followed in
27
<PAGE>
the container industry for companies of comparable size. The all risk
insurance policies with respect to the Collateral shall initially cover
$3,500,000 in physical damage in respect of any one occurrence, shall name
the Collateral Agent for the benefit of the Purchasers and the Purchasers
as additional insureds and loss payees, and the liability insurance
policies with respect to the Collateral shall initially cover $50,000,000
any one occurrence and in the aggregate and shall name the Collateral Agent
and the Purchasers, as additional insureds. All such policies of insurance
shall provide for at least thirty (30) days' advance notice in writing to
the Collateral Agent of any cancellation or modification thereof and, with
respect to all risk casualty insurance only, contain a "breach of warranty
clause" whereby the insurer agrees that a breach of the insuring conditions
or any negligence by any Issuer, or any other Person, shall not invalidate
the insurance as to the Collateral Agent, the Purchasers and their
respective successors and assigns. If any Issuer fails to pay the premiums
on any such insurance or maintain such insurance in effect, the Collateral
Agent shall have the right (but shall be under no duty) to pay such
premiums for such Issuer's account and take all such action (at such
Issuer's expense) as the Collateral Agent deems necessary to keep such
insurance in effect. Such Issuer shall repay to the Collateral Agent any
sums which the Collateral Agent shall have so paid, together with interest
thereon at the rate of 7.975% per annum. Such Issuer, upon the Collateral
Agent's request, shall (a) deliver to the Collateral Agent a detailed list
of insurance then in effect, stating the names of the insurance companies,
the amounts and rates of the insurance, dates of expiration thereof and the
properties and risks covered thereby; (b) obtain, within thirty (30) days
after notice from the Collateral Agent, such additional insurance as
described in this Section 9.6 which is reasonably required by the
-----------
Collateral Agent and which is consistent with practices generally followed
in the container industry for companies of comparable size; (c) provide to
the Collateral Agent and Purchasers copies of all insurance policies
relating to its properties, business and assets; and (d) assign to the
Collateral Agent all rights to receive proceeds of any such insurance with
respect to the Collateral and direct all insurers to pay all proceeds
directly to the Collateral Agent. Each of the Issuers hereby authorizes
the Collateral Agent to endorse any draft for such proceeds.
Notwithstanding anything contained herein, each of the Issuers shall have
the option to (i) use all said proceeds received by the Collateral Agent
with respect to the Collateral to pay down the outstanding amount of its
Notes in inverse order of the scheduled principal payments thereof without
priority of any one such Note over any other such Note together with any
Make Whole Premium pursuant to Section 5.5, or (ii) receive said proceeds
-----------
from the Collateral Agent; provided, that (a) no Default or Event of
-------- ----
Default shall have occurred and be continuing and (b) such Issuer shall
provide the Purchasers with substitute Collateral if it is necessary to
ensure that the
28
<PAGE>
Collateral Value of such Issuer is greater than 125% of the aggregate
outstanding principal amount of the Notes issued by such Issuer which
Collateral may be purchased with the proceeds of such insurance, provided
said substitute Collateral shall be the subject of a valid first perfected
Lien in favor of the Collateral Agent for the benefit of the Purchasers
subject to no other Liens.
9.7 Liens. Neither of the Issuers shall, directly or indirectly, (a)
-----
permit to exist any Liens with respect to the Collateral other than Liens
in favor of the Purchasers or the Collateral Agent or Permitted Liens; nor
(b) pledge any shares owned by it in Restricted Subsidiaries. The relevant
Issuer shall ensure that appropriate notations of the Liens of the
Collateral Agent are made on the relevant certificates of title for Chassis
which are included in the Collateral and which are covered by certificates
of title or that UCC financing statements, naming the relevant Issuer, as
debtor and the Collateral Agent, as secured party, are filed for Chassis
which are included in the Collateral and which are not covered by
certificates of title, in each case with respect to Chassis which are
included in the Collateral after the Closing Date.
9.8 Litigation. The Issuers shall promptly notify all of the
----------
Purchasers and, with respect to the Collateral, the Collateral Agent of any
litigation, actions, proceedings, claims or investigations (collectively,
"Claims") pending or threatened against either Issuer wherein claimant
------
seeks to recover in excess of $2,000,000 and of the entry of any judgment
in excess of $1,000,000 against it, which Claims or judgments are not fully
covered by insurance (subject to deductibles) in respect of which the
carrier has not disclaimed liability or any of the Collateral becoming
subject to any Liens securing or relating to Claims, judgments or
indebtedness in excess of $500,000, other than Liens in favor of the
Purchasers or the Collateral Agent.
9.9 Line of Business. Neither of the Issuers shall materially change
----------------
its present lines of business as described in Section 7.4 nor will
-----------
Interpool permit any Restricted Subsidiary to engage in any business other
than such present lines of business or any other business related thereto.
9.10 Chief Offices; Places of Business; Character of Collateral. The
----------------------------------------------------------
Issuers shall notify the Collateral Agent in writing at least thirty (30)
days in advance of (a) any change of location of its Chief Office and
(b) the change, elimination or opening of any chief executive office of any
Issuer or (c) any change in the place where such Issuer maintains its
records as to the Collateral such that such records are not located at such
Issuer's Chief Office. Each Issuer shall notify the Collateral Agent in
writing promptly following a change in the character, use or location of
any of the Financed Equipment such that any of such
29
<PAGE>
Financed Equipment ceases to be either "mobile goods" or "goods covered by
a certificate of title", in each case within the meaning of the UCC. Each
Issuer shall notify the Collateral Agent in writing within five (5) days if
there is a change in the character of any of the Collateral such that it
constitutes an "instrument" (other than an "instrument" which constitutes
part of "chattel paper") within the meaning of the UCC.
9.11 Financial Statements. The Issuers shall deliver to the
--------------------
Purchasers the following:
(a) Within forty-five (45) days after the end of each quarterly
fiscal period of Interpool (commencing with March 31, 1995 and continuing
until all of the Obligations under this Agreement and the other Transaction
Documents are satisfied), company prepared unaudited consolidated financial
statements for Interpool and its consolidated subsidiaries in comparative
form showing the corresponding figures for the preceding year prepared in
accordance with GAAP, along with a certificate by an authorized officer of
Interpool which shall include an attestation by such officer briefly
stating he has reviewed such unaudited consolidated financial statements
and that he has reviewed the relevant provisions of this Agreement
including Section 9 together with supporting computations and stating
whether his examination has disclosed the existence of any Default or Event
of Default and, if so, specifying the nature and period of existence
thereof and actions management proposes to undertake to cure the same.
(b) Within ninety (90) days after the end of each fiscal year of
each Issuer, a consolidated balance sheet of each Issuer and its
consolidated subsidiaries as of the end of such year and the related
consolidated statements of income, statements of cash flows and statements
of shareholders' equity for such year audited, without qualification, by
Arthur Andersen LLP. or another independent "Big Six" certified public
accounting firm, in comparative form the corresponding figures as at the
end of and for the preceding financial year (a copy of which shall also be
delivered to NAIC Securities Valuation at 195 Broadway, New York, New York
10007). In addition, such accountants shall issue a statement in
connection with their audit as to whether anything has come to their
attention that would cause them to believe that the Issuers were not in
compliance with any of the terms, covenants or conditions of Sections 9.19
-------------
or 9.25 of this Agreement it being understood that their audit was not
- -------
directed primarily to obtaining knowledge of such non-compliance and if any
such non-compliance is indicated, specifying the nature and period of
existence thereof, together with a certificate of an authorized officer
with respect to such financial statements covering the same matters
referred to in the first three quarter's attestation delivered pursuant to
Section 9.11(a) and actions management proposes to undertake to cure the
- ---------------
same.
30
<PAGE>
(c) (i) Within sixty (60) days after the end of each calendar
quarter until all of the Obligations outstanding are satisfied, a
Collateral Certificate, an equipment status report sent to the Collateral
Agent for Collateral (indicating the Collateral located at depots or under
lease) and an aging of all accounts receivable (including lease receivables
covering the Equipment and other equipment) of Interpool and its
consolidated subsidiaries, as at the end of such calendar quarter, in form
and substance reasonably satisfactory to the Purchasers.
(ii) Within sixty (60) days after the end of each calendar
quarter until all the Obligations are satisfied, an Equipment utilization
report (showing the percentage of Equipment under lease) with respect to
Equipment owned and managed by Interpool and its consolidated subsidiaries.
(d) Copies of all formal, written notices or reports, if any,
furnished to an Issuer by its independent certified public accountants in
connection with each fiscal year audit of the financial statements of such
Issuer made by such accountants.
(e) Such additional financial information with respect to the
Issuers and information with respect to the Collateral as the Purchasers
may from time to time reasonably require.
(f) Promptly after the filing thereof, copies of all financial
statements and reports (including all exhibits or schedules annexed thereto
or filed therewith) which are material to any Issuer and which such Issuer
may file with the Securities and Exchange Commission of the United States
or any public body succeeding to the functions of that Commission and which
are generally available to the public.
(g) Upon the addition of any Direct Finance Leases to the
Collateral pursuant to Section 5.6 or any other provision of this Agreement
or the other Transaction Documents, the related Issuer shall furnish to the
Purchasers and the Collateral Agent a certificate of such Issuer (in the
form of Exhibit I attached hereto).
---------
9.12 Books and Records. Each of the Issuers shall, at all times and
-----------------
in accordance with GAAP keep complete and accurate books and records
concerning its business, affairs and operations and concerning its
properties and assets, including, without limitation, the Collateral, and
shall deliver, or cause to be delivered to the Collateral Agent promptly
upon the Collateral Agent's request, from time to time, with respect to the
Collateral (i) after an Event of Default occurs, to the extent in its
possession, all instruments and chattel paper (including all executed
copies thereof, representing or evidencing the Collateral or proceeds of
the Collateral; (ii) after an Event of Default
31
<PAGE>
occurs, to the extent in its possession or control, all original invoices,
original bills of lading, documents of title, all Leases covering Financed
Equipment included in the Collateral, original contracts, chattel paper,
instruments, and any other writings relating to the Collateral; and
(iii) such other information to the extent in its possession or control
with respect to any of the Collateral as the Collateral Agent may, in its
sole discretion, deem to be necessary or effectual to evidence the
transactions contemplated hereby or to evidence, enforce or perfect the
Collateral Agent's Lien in the Collateral, or to carry into effect the
provisions and intent of this Agreement or other Transaction Documents
delivered pursuant hereto, all at the sole expense of the Issuers.
9.13 Inspection. The Issuers shall, from time to time and during
----------
normal business hours, on reasonable notice, permit the Purchasers or the
Collateral Agent to inspect or examine the properties and assets of the
Issuers, including, without limitation, the Collateral, to the extent the
Collateral is in the possession or control of the Issuers or could be so
inspected or examined under the terms of applicable Leases with respect
thereto, and further to examine, check, make copies of, or extracts from,
any of the Issuers' books, records, journals, receipts, orders, correspon-
dence, other data, or orders and accounts receivable of the Issuers and to
permit the Purchasers and the Collateral Agent to hold discussions with the
Issuers' officers and auditors and the Issuers shall instruct such officers
and request such auditors to hold such discussions. If a Default or Event
of Default has occurred and is continuing (a) all of the foregoing shall be
at the Issuers' expense, (b) the Purchasers or the Collateral Agent may
independently verify the orders and accounts receivable of the Issuers at
the Issuers' expense, and (c) the Purchasers shall have the right to audit
(or cause to be audited by certified public accountants) all of the
foregoing items of the Issuers at the Issuers' expense.
9.14 ERISA. Each of the Issuers shall furnish to the Purchasers and,
-----
with respect to the Collateral, the Collateral Agent (a) as soon as
possible and in any event within thirty (30) days after such Issuer or a
duly appointed administrator of a Plan knows or has reason to believe that
any Reportable Event has occurred with respect to any Plan, a statement of
the principal financial officer of such Issuer setting forth details as to
such Reportable Event and the action which such Issuer proposes to take
with respect thereto, together with a copy of the notice of such Reportable
Event given to the PBGC or a statement that said notice will be filed with
the annual report to the United States Department of Labor with respect to
such Plan if required under applicable regulations; (b) promptly after
receipt thereof, a copy of any notice an Issuer or any other member of a
Controlled Group may receive from the United States Department of Labor,
the
32
<PAGE>
Internal Revenue Service or the PBGC with respect to any deficiency with
respect to any Plan; (c) in the event any stock of any Issuer is ever
offered pursuant to a registration statement filed with the Securities and
Exchange Commission, promptly after the sending of, making available or
filing of the same, copies of any proxy statements and financial statements
which such Issuer shall send or make available to all of its stockholders,
and any registration statements and any reports which such Issuer shall
file with the Securities and Exchange Commission; and (d) promptly after
receipt thereof, a copy of any notice an Issuer may receive indicating an
actual or potential violation of any environmental law or regulation.
9.15 Use of Proceeds. The Issuers shall use the proceeds of the
---------------
Notes solely in accordance with the provisions of Section 2.2.
-----------
9.16 Further Assurances. The Issuers shall procure, execute and
------------------
deliver to the Collateral Agent any security agreement, financing
statement, or other writing and take all such other actions as the
Collateral Agent may reasonably require to evidence, preserve, protect or
enforce the Collateral Agent's rights and interests to or in the
Collateral.
9.17 Government Contracts. If any of the Collateral consists of
--------------------
Financed Equipment covered by contracts with the United States or any other
governmental entity or any of their respective departments, agencies or
instrumentalities, the Issuers shall notify the Collateral Agent and
execute any writings and take all such other actions as the Collateral
Agent may require in order that all money due or to become due under such
contracts shall be assigned to the Collateral Agent and proper notice of
the assignment given under the Federal Assignment of Claims Act or other
applicable law.
9.18 Sell, Merge, Consolidate, etc. Neither of the Issuers shall:
------------------------------
(a) Sell, abandon, or otherwise dispose of all or any
substantial part (which shall be deemed to constitute an amount in excess
of 20% of the consolidated assets of Interpool and its Restricted
Subsidiaries), of its properties or assets in any 12 month period unless
(i) it either (A) reinvests the proceeds from such transactions in excess
of 20% of such consolidated assets in its principal businesses as described
in Section 7.4 or other investments permitted hereunder provided that such
-----------
investments are fully liquidated and the proceeds thereof are invested in
such principal businesses within twelve (12) months from the date of such
transaction, and/or (B) prepays the Notes in inverse order of the scheduled
principal payments thereof without priority of any one such Note over any
other such Note in the amount of such excess of 20% of such consolidated
assets, together with a Make Whole
33
<PAGE>
Premium, if any, or (iii) such transaction occurs entirely among the
Issuers.
(b) Consolidate with or merge into any Person or permit any
merger of any other Person into any Issuer or acquire all or substantially
all the assets of any Person, unless such Issuer is the surviving
corporation (and if one of the Issuers involved in such transaction is
Interpool, Interpool is the surviving corporation) or the survivor
expressly assumes the Obligations of such Issuer and following and giving
effect to such merger, consolidation or acquisition, no Default or Event of
Default exists or shall result under any Transaction Document, the
Collateral Agent continues to have a first perfected security interest in
the Collateral under the UCC, reflected on the certificates of title or
through a filing with the Interstate Commerce Commission, as applicable to
the relevant Collateral subject to no other Liens, other than Permitted
Liens and the Issuers, including the surviving corporation, may issue at
least $1.00 of additional Funded Debt without any Default or Event of
Default resulting hereunder.
(c) Alter the existing capital stock structure of any Issuer
such that Interpool owns less than 100% of the common stock of Ltd. and
87.5% of the common stock of Trac Lease, Inc.
(d) Sell, assign, transfer, discount, securitize or otherwise
dispose of any Lease, or any interest therein, with or without recourse,
except in the ordinary course of its business as presently conducted.
9.19 Financial Covenants. So long as the Obligations remain
-------------------
outstanding under any of the Transaction Documents (subject to the
provisions of Section 9.19(e)):
---------------
(a) Interpool shall cause Tangible Net Worth to be greater than
$100,000,000 for the period commencing on the Closing Date to December 31,
1995; and $125,000,000 at all times from and after January 1, 1996.
(b) Neither Interpool nor any of its Restricted Subsidiaries
shall incur any Funded Debt unless after giving effect to such incurrence
of Funded Debt (i) the ratio of Funded Debt to Tangible Net Worth is not
greater than 4 to 1; and (ii) the sum of Pro-Forma Fixed Charges for
Interpool and its Restricted Subsidiaries would have been covered by at
least 1.5 times the sum of Earnings Available for Fixed Charges for
Interpool and its Restricted Subsidiaries for the most recent four (4)
fiscal quarters preceding the date of determination.
(c) Interpool shall not permit the ratio of (i) the sum of
Earnings Available for Fixed Charges plus Depreciation for Interpool and
its Restricted Subsidiaries for the sum of the four
34
<PAGE>
(4) fiscal quarters immediately preceding the date of determination to (ii)
the sum of Fixed Charges for Interpool and its Restricted Subsidiaries for
the sum of the four (4) fiscal quarters immediately preceding the date of
determination to be less than 1.5 to 1.
(d) Neither Interpool nor its Restricted Subsidiaries shall make
any Restricted Payments if the aggregate amount of all Restricted Payments
made subsequent to June 30, 1993 would exceed the sum of $5,000,000 plus
75% of the sum of (i) Net Earnings of Interpool and its Restricted
Subsidiaries (minus 100% of any net loss) subsequent to June 30, 1993 and
(ii) the net cash proceeds received after June 30, 1993 from the sales
(other than to Interpool or its Subsidiaries) of shares of common stock and
preferred stock of Interpool or any Restricted Subsidiary which does not
provide for mandatory redemption thereof or sinking fund payments with
respect thereto.
(e) If the Collateral is terminated pursuant to Section 5.7(a)
--------------
then, from and after the date of such termination up to and until such
time, if any, as the Issuers again secure the Obligations with Collateral
in accordance with Section 5.7(d), the Issuers shall not be required to
--------------
comply with the financial covenants set forth in Sections 9.19(a), (b) and
-------------------------
(c) and shall, instead be required to comply with the following financial
- ---
covenants:
(i) Interpool shall cause Tangible Net Worth to be greater
than $125,000,000;
(ii) Neither Interpool nor any of its Restricted
Subsidiaries shall incur any Funded Debt unless after giving effect to such
incurrence of Funded Debt (A) the ratio of Funded Debt to Tangible Net
Worth is not greater than 3 to 1; and (B) the sum of Pro-Forma Fixed
Charges for Interpool and its Restricted Subsidiaries would have been
covered by at least 1.75 times the sum of Earnings Available for Fixed
Charges for Interpool and its Restricted Subsidiaries for the most recent
four (4) fiscal quarters preceding the date of determination;
(iii) Interpool shall not permit the ratio of (i) the sum of
Earnings Available for Fixed Charges plus Depreciation for Interpool and
its Restricted Subsidiaries for the sum of the four (4) fiscal quarters
immediately preceding the date of determination to (ii) the sum of the
Fixed Charges for Interpool and its Restricted Subsidiaries for the sum of
the four (4) fiscal quarters immediately preceding the date of
determination to be less than 1.75 to 1.
9.20 Payment of Obligations. Each Issuer shall pay all obligations
----------------------
material to its business when due (taking into account
35
<PAGE>
any grace periods granted in respect thereof) other than those disputed by
it in good faith, if failure to pay might have a material adverse affect on
the business, conditions (financial or otherwise), prospects or
creditworthiness of an Issuer.
9.21 Notice of Default. Each Issuer shall promptly but in any event
-----------------
within three (3) Business Days after obtaining knowledge thereof furnish
the Collateral Agent and the Purchasers with a statement of the occurrence
of any Event of Default or Default, specifying the nature and period of
existence thereof and what action management of such Issuer proposes to
take with respect thereto. If an Issuer receives a notice of Default from
any creditor or Person other than the Collateral Agent and the Purchasers,
such Issuer shall deliver to the Collateral Agent and the Purchasers a copy
of such notice of Default, immediately upon receipt thereof. In the event
that the Issuers have cured such Default within any applicable cure period
provided therefor, such cure shall have the effect of remedying any failure
of the Issuers to give notice relating to such Default.
9.22 Lock Box. Upon the occurrence of an Event of Default and at the
--------
request of the Majority In Interest or the Collateral Agent acting on the
instructions of the Majority In Interest, the Issuers will establish a lock
box in respect of the Collateral and all proceeds thereof at a location
satisfactory to the Purchasers and the Collateral Agent, and take all such
action and execute all agreements, documents, letters and instruments which
the Collateral Agent deems appropriate in its sole discretion to establish
and maintain said lock box.
9.23 Additional Costs. (a) In the event of any change in or adoption
----------------
of any applicable law, regulation or guideline, or any interpretation
thereof by any governmental authority charged with the administration
thereof, not published on or prior to the date hereof, subjects a Purchaser
to any Tax of any kind whatsoever with respect to the Notes issued to such
Purchaser, or changes the basis of taxation of payments to such Purchaser
of any fees, principal or interest payable on such Notes (except for
changes in the rate of tax based solely on the overall net income of such
Purchaser) or imposes, modifies or deems applicable any reserve requirement
against assets held by, or other liabilities in or for the account of, or
loans by, such Purchaser, or imposes on such Purchaser, directly or
indirectly, any of the conditions affecting the relevant Notes, and the
result of any of the foregoing is to increase the cost to such Purchaser of
purchasing or holding the relevant Notes by an amount which such Purchaser
deems to be material, then upon demand by such Purchaser made promptly upon
such event, the Issuers will pay to such Purchaser, upon its demand, the
additional amount or amounts necessary to compensate such Purchaser for
such additional cost. Absent manifest error, such Purchaser's statement
shall be conclusive as to any additional
36
<PAGE>
amount to be paid. Such Purchaser shall supply the Issuers with such
information related to any such Taxes, taxation or reserve requirement as
is available to such Purchaser and is not confidential. In the event that
any such additional cost arises and is demanded by a Purchaser from an
Issuer, the Issuer shall have the right to prepay the Notes of such
Purchaser, together with payment of accrued interest thereon and any Make
Whole Premium.
The Issuers shall pay to the Purchasers all principal of, and interest
on, the amount outstanding on the Notes and all their other Obligations
under the Transaction Documents free and clear of and without deduction or
withholding for any present or future license, registration or other fees,
taxes or other amounts for or on account of levies, imposts, duties,
deductions, withholdings or other charges assessed by any governmental or
taxing authority, excluding income and franchise taxes imposed on a
Purchaser by a jurisdiction under which such Purchaser is organized or
operating in connection with this Agreement or any political subdivision
thereof (the "Taxes"). In the event any Issuer is or may become required
-----
to pay any such costs, such Issuer may elect to prepay the Notes, together
with accrued interest thereon, Make Whole Premium, and any additional costs
associated with such prepayment.
(b) If an Issuer shall be required to withhold or deduct Taxes
from any sum payable hereunder, (i) the sum payable shall be increased as
may be necessary so that the amount received is equal to the sum which
would have been received had no withholdings or deductions been made,
(ii) such Issuer shall make such necessary withholdings and deductions, and
(iii) such Issuer shall pay the full amount withheld or deducted to the
relevant authority according to applicable law so that any Purchaser shall
not be required to make any deduction or payment of Taxes.
9.24 Transactions with Related Parties. The Issuers will not and
---------------------------------
will not permit any Restricted Subsidiary to enter into any transaction or
arrangement with any Related Party, including the purchase from, sale to or
exchange of property with the lessee of Financed Equipment (either as
lessee or lessor) or rendering of any service by or for, any Related Party,
except in the ordinary course of business and pursuant to the reasonable
requirement of the Issuers and a Restricted Subsidiary and upon fair and
reasonable terms no less favorable than would be obtained in a comparable
arm's length transaction with a Person other than a Related Party.
9.25 Permitted Investments. Neither Interpool nor any of its
---------------------
Restricted Subsidiaries shall make cash or cash equivalent investments in,
loans or advances to or guarantee the obligations of, any Person except the
following ("Permitted Investments"):
---------------------
(a) Purchases of obligations of the United States Government and
its agencies, U.S. dollar denominated obligations of
37
<PAGE>
the Canadian Government and AAA-rated by Standard & Poor's or Moody's
"obligations of supranationals" which includes government issued securities
and World Bank securities, that are rated at least AAA, all having
maturities not in excess of five (5) years;
(b) Purchases of prime commercial paper rated A1/P1 by Standard
& Poor's or Moody's or higher maturing in 270 days or less;
(c) Purchases of certificates of deposit or bankers' acceptances
issued by a bank with capital, surplus and undivided profits of at least
$100,000,000, having a term of one year or less;
(d) Investments in or advances to Restricted Subsidiaries or any
legal entity which after such investments or advances would become a
Restricted Subsidiary;
(e) Advances to employees for expenses incurred by such
employees in the ordinary course of the Issuers' business;
(f) Carrying lease or notes receivable arising from transactions
with customers and suppliers in the normal course of the Issuers' business;
(g) Guarantees of obligations of Unrestricted Subsidiaries
provided that such guarantees would be permitted under Section 9.19(b);
---------------
(h) Other Investments subject to the limitations set forth in
Section 9.19(d);
- ---------------
(i) Purchases of corporate debt securities rated A3/A- or higher
by Moody's or Standard & Poor's and which mature within five (5) years
after the date of acquisition in an amount not to exceed 15% of the sum of
cash and marketable securities as reflected on the Issuers' quarterly
financial statements of the most recently completed fiscal quarter;
(j) Purchases of tax exempt securities which are rated Aa3/AA-
or higher by Moody's or Standard & Poor's and which mature within five (5)
years from the date of acquisition; and
(k) Any other investments up to an aggregate of $10,000,000 at
any one time outstanding.
To the extent the Issuers have Permitted Investments and prior to any
investment by any Issuers in marketable securities with maturities greater
than one year, or investments described in subsections (h) and (k) above,
the Issuers shall have caused the greater of (i) 5% of Tangible Net Worth
and (ii) $10,000,000.00 to
38
<PAGE>
have been invested in investments described in subsections (a), (b), (c),
(i) or (j) above with final maturities not exceeding one year.
The foregoing provisions of this Section 9.25 shall not be deemed to
------------
limit the transactions in which the Issuers are permitted to engage in
accordance with the provisions of Section 9.18.
------------
9.26 Leases. At all times following the occurrence and during the
------
continuance of an Event of Default and upon the lock box provided for in
Section 9.22 being established, the Issuers shall immediately notify the
- ------------
Collateral Agent of the cancellation of any Lease with a term of one (1)
year or more or any master lease.
9.27 Acquisition of Notes. No Issuer shall, nor shall such Issuer
--------------------
permit any Subsidiary or any Affiliate to, directly or indirectly, acquire
or make any offer to acquire any Notes unless such Issuer or such
Subsidiary or Affiliate shall have offered to acquire Notes, pro rata, from
--- ----
all of the Purchasers and upon the same terms. In case an Issuer, or any
Subsidiary or Affiliate, acquires any Notes, such Notes shall thereafter be
cancelled and no Notes shall be issued in substitution thereof.
9.28 Private Offering. The Issuers agree that neither of the Issuers
----------------
nor anyone acting on such Issuers' behalf shall offer the Notes or any part
thereof or any similar securities for issue or sale to, or solicit any
offer to acquire any of the same from, any Person so as to bring the
issuance and sale of the Notes within the provisions of Section 5 of the
Securities Act.
9.29 Security Interest in Leases. Notwithstanding anything to the
---------------------------
contrary contained herein, the Issuers agree that they shall not deliver
any Lease relating to any Collateral to any Person, (other than a signed
counterpart of a Lease to the lessee under such Lease), unless an Issuer is
in default with respect to its obligations to a secured party having a
security interest in such Lease and is required under its agreement with
such secured party to deliver possession of such Lease to such secured
party, and either (x) (i) prior to delivering possession of any such
Leases, such Issuer shall stamp on the front cover or other conspicuous
space in any such Leases the language set forth in Schedule 9.29 and
-------------
furnish written evidence satisfactory to the Collateral Agent that such
stamping has been effected and (ii) such other secured party shall, as a
condition of obtaining possession of such Lease, furnish to the Issuers and
the Collateral Agent its agreement in form and substance satisfactory to
the Collateral Agent that it is receiving possession of and holding
possession of such Leases for its own benefit as well as agent of and for
the benefit of the Collateral Agent to the extent of their respective
security interests in such Leases or (y) such Leases and any related
Equipment is released from the Lien of the applicable Security
39
<PAGE>
Agreement, provided that the aggregate Collateral Value of such Issuer
after such release is equal to or greater than 125% of the aggregate
outstanding principal amount of the Notes issued by such Issuer. If a
Default or Event of Default has occurred and is continuing, the relevant
Issuer shall immediately deliver possession of all the Leases to the
Collateral Agent (unless such Issuer shall have previously delivered
possession of such Leases to another secured party under a prior
obligation), similarly stamped with respect to the security interest of any
other secured party in such Lease and provided the Collateral Agent shall
have furnished the Issuer with its agreement in form and substance
satisfactory to the Collateral Agent that it is receiving possession of and
holding possession of such Leases for its own benefit as well as agent of
and for the benefit of such other secured party to the extent of their
respective security interests in such Lease.
SECTION 10. DEFAULT; REMEDIES OF THE PURCHASERS.
-----------------------------------
10.1 Occurrence of Event of Default. Any one of the following events
------------------------------
or conditions shall constitute an Event of Default:
(a) either Issuer shall fail to pay, when due, at maturity
(whether as stated or by acceleration) or otherwise, any payment of
principal, interest, fees, Make Whole Premium or other charges or amounts
due and owing to the Purchasers with respect to the Obligations, and such
failure shall continue for five (5) Business Days or more; or
(b) either Issuer shall fail to observe or perform the covenants
set forth in Sections 9.6, 9.18, 9.19, 9.21 or 9.25; or
--------------------------------------
(c) either Issuer shall fail to observe or perform any other
covenant or agreement of such Issuer in this Agreement or any other
Transaction Document which shall remain unremedied for thirty (30) days; or
(d) any representation or warranty made by any Issuer hereunder,
under any Transaction Document or in any other document to any Purchaser or
the Collateral Agent shall be incorrect as at the date made in any material
respect; or
(e) if either Issuer shall (i) file, or consent by answer or
otherwise to the filing against it of, a petition for relief or
reorganization or arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy or insolvency law of any
jurisdiction or if there shall be commenced against either Issuer any such
proceeding and such action or proceeding remains undismissed for a period
of sixty (60) days, (ii) make an assignment for the benefit of its
creditors, (iii) consent to the appointment of a custodian, receiver,
trustee or other officer with similar powers for itself or any substantial
40
<PAGE>
part of its property, (iv) be adjudicated a bankrupt or insolvent, or
(v) take any action for the purpose of any of the foregoing; or
(f) if a court or governmental authority of competent
jurisdiction shall enter an order appointing, without consent by any
Issuer, a custodian, receiver, trustee or other officer with similar powers
with respect to it or with respect to any substantial part of its property,
or constituting an order for relief or approving a petition for relief or
reorganization or any other petition in bankruptcy or for liquidation or to
take advantage of any bankruptcy or insolvency law of any jurisdiction, or
ordering its dissolution, winding-up or liquidation and such order shall
not have been stayed or dismissed within sixty (60) days; or
(g) if any Lien (other than a Lien in favor of the Purchasers or
the Collateral Agent or a Permitted Lien) or attachment, levy or
garnishment exists or is issued against the Collateral or any property of
any Issuer securing any of the Obligations in respect of indebtedness or
obligations of $2,000,000 or more in the case of Ltd. or $1,000,000 or more
in the case of Interpool and is not released, discharged, dismissed, stayed
or fully bonded within a period of thirty (30) days after its creation,
attachment, issue or levy or if any such Lien, attachment, levy or
garnishment against the Collateral or any property of any Issuer securing
Obligations shall have priority over the security interest of the
Collateral Agent in the Collateral, such Lien, attachment, levy or
garnishment is not released, discharged, dismissed, stayed or fully bonded
within a period of fifteen (15) days after its creation, attachment, issue
or levy; or
(h) if any judgment or tax lien is entered against either Issuer
and remains unsatisfied after thirty (30) days, unless said judgment or tax
lien is being contested in good faith by appropriate proceedings and is
stayed in the interim; or
(i) a Person or outside group of related Persons which is not
listed on Schedule 7.1 attached hereto obtains voting control of fifty one
------------
percent (51%) or more of the voting securities of Interpool; or
(j) either Issuer (as principal, guarantor or other surety)
defaults in the payment of any principal or interest of any indebtedness
for borrowed money in excess of $4,000,000.00 with respect to Interpool and
in excess of $1,000,000.00 with respect to Ltd. (including any indebtedness
of Interpool or Ltd. to the Purchasers other than the Obligations) beyond
the period of grace, if any specified therefor or any other default in
respect of such indebtedness which give the holder of any such indebtedness
the
41
<PAGE>
right to cause the acceleration of such indebtedness including any grace
period provided to such holder; or
(k) if the aggregate Collateral Value for an Issuer shall be
less than 125% of the aggregate outstanding principal amount of the Notes
issued by such Issuer by (i) an amount of $2,000,000 or more in respect of
Ltd. or of $1,000,000 or more for Interpool or (ii) an amount less than
$2,000,000 for Ltd. or less than $1,000,000 for Interpool and such
deficiency shall not have been fully eliminated (A) in the case of the
deficiency described in clause (i) hereof within fifteen (15) days from the
date that such deficiency arises or (B) in the case of the deficiency
described in clause (ii) hereof within fifteen (15) days following the date
that the next Collateral Certificate is required to be delivered pursuant
to Section 9.11(c), by the prepayment of Notes pursuant to Section 5.5 or
--------------- -----------
the assumption of Notes by Interpool pursuant to Section 5.6(a) or the
--------------
grant of additional Collateral pursuant to Section 5.6(b) or Section 5.6(c)
-------------- --------------
or the grant of Cash Collateral pursuant to Section 5.6(d) or the
--------------
designation by Interpool of Collateral in respect of excess Collateral
Value of Interpool for the benefit of Ltd. pursuant to Section 5.6(e).
--------------
10.2 Action Upon Event of Default.
----------------------------
(a) Declaration of Acceleration of Each Note. If an Event of
----------------------------------------
Default under Section 10.1(a) occurs and is continuing, any of the
---------------
Purchasers may by notice to the Issuers, declare the principal of its Notes
to be immediately due and payable together with accrued interest thereon
and a Make Whole Premium with respect thereto. At any time after such
acceleration, and prior to the sale or disposition of any of the
Collateral, such Purchaser may rescind such a declaration or automatic
acceleration, as the case may be, and thereby annul its consequences if
(i) the Issuers pay an amount sufficient to pay all principal of, Make
Whole Premium, if any, and interest on such Note, to the extent each such
amount is due or past due without regard to the acceleration hereof, if
any, in respect of the outstanding Note otherwise than by reason of such
acceleration and all sums due and payable to such Purchaser or the
Collateral Agent, (ii) the rescission would not conflict with any judgment
or decree and (iii) all existing Events of Default relating to such Note
have been cured or waived except nonpayment of principal of, Make Whole
Premium or interest on the Note that has become due solely because of such
acceleration.
(b) Declaration of Acceleration of All Notes. If an Event of
----------------------------------------
Default occurs and is continuing, the Majority In Interest may by notice to
the Issuers, declare the principal of all Notes to be immediately due and
payable together with accrued interest thereon and a Make Whole Premium
with respect thereto; provided that the Notes will automatically become due
--------
and payable together with accrued interest thereon and a Make Whole Premium
with respect
42
<PAGE>
thereto without any action of the Purchasers in the case of an Event of
Default under Section 10.1(e) or Section 10.1(f). At any time after such
--------------- ---------------
acceleration, and prior to the sale or disposition of any of the
Collateral, the Majority In Interest may rescind such a declaration or
automatic acceleration, as the case may be, and thereby annul its
consequences if (i) the Issuers pay an amount sufficient to pay all
principal of, Make Whole Premium, if any, and interest on the Notes, to the
extent each such amount is due or past due without regard to the
acceleration hereof, if any, in respect of the outstanding Notes otherwise
than by reason of such acceleration and all sums due and payable to the
Purchasers or the Collateral Agent, (ii) the rescission would not conflict
with any judgment or decree and (iii) all existing Events of Default have
been cured or waived except nonpayment of principal of, Make Whole Premium
or interest on the Notes that has become due solely because of such
acceleration.
(c) Payments after Acceleration of Notes. All payments received
------------------------------------
and all amounts held or realized by the Purchasers after the outstanding
principal of any of the Notes shall have been declared to be due and
payable pursuant to Section 10.2(a) or Section 10.2(b), and all payments or
--------------- ---------------
amounts then held or thereafter received by the Purchasers hereunder, shall
be applied by each such Purchaser in the following order of priority:
First, to reimburse the Purchasers for any costs and expenses not
-----
reimbursed by the Issuers;
Second, so much of such payments or amounts remaining as shall be
------
required to pay in full any interest at the Overdue Rate, the accrued but
unpaid interest on the Notes to the date of distribution and any Make Whole
Premium;
Third, so much of such amounts remaining as shall be required to pay
-----
in full the aggregate unpaid principal amount of the Notes on a pro rata
--- ----
basis for all the Notes for each Issuer and then applied to such Notes in
inverse order of the scheduled principal payments thereof and all other
amounts payable hereunder;
Fourth, so much of such amounts remaining as shall be required to pay
------
in full all other outstanding Obligations; and
Fifth, the balance, if any, of such payments or amounts remaining
-----
thereafter shall be distributed to each of the relevant Issuers, upon its
written direction or to any other Person entitled thereto as a matter of
law.
All payments and proceeds received by the Collateral Agent or the
Purchasers shall be applied to the Obligations secured thereby pursuant to
the applicable Security Agreement, Railcars Security
43
<PAGE>
Agreement or security and pledge agreement in respect of the Cash
Collateral.
(d) Other Remedies. The Issuers agree, to the full extent that
--------------
they lawfully may, that if one or more Events of Default shall have
occurred and be continuing, then, and in every such case the Purchasers or
upon the instructions of the Majority In Interest the Collateral Agent on
behalf of the Purchasers pursuant to the Agency Agreement, as secured
party, mortgagee or collateral assignee hereunder or under the Collateral
Documents, or otherwise, may exercise any or all of the rights and powers
and pursue any and all of the remedies available to the Purchasers
hereunder or under any of the Transaction Documents or with respect to the
Collateral Agent, under the Collateral Documents.
10.3 Authorized to Execute Bills of Sale. Each of the Issuers hereby
-----------------------------------
irrevocably appoints the Collateral Agent the true and lawful attorney-in-
fact of such Issuer in its respective name and stead and on its respective
behalf, for the purpose of effectuating any sale, assignment, transfer or
delivery for the enforcement of the Lien in connection with this Agreement
and any other Transaction Documents, following the occurrence of an Event
of Default to execute and deliver all such bills of sale, assignments, UCC
financing statements and other instruments as the Collateral Agent may
consider necessary or appropriate, with full power of substitution, each of
the Issuers hereby ratifying and confirming all that such attorney or any
substitute shall lawfully do by virtue hereof. After the Collateral Agent
has exercised its rights hereunder, if so requested by the Collateral Agent
or any purchaser, each of the Issuers shall ratify and confirm any such
sale, assignment, transfer or delivery, by executing and delivering to the
Collateral Agent or such purchaser all bills of sale, assignments,
releases, UCC financing statements and other proper instruments to effect
such ratification and confirmation as may be designated in any such
request.
10.4 Remedies Cumulative. Each and every right, power and remedy
-------------------
herein specifically given to the Purchasers or the Collateral Agent or
otherwise in this Agreement or any other Transaction Documents shall be
cumulative and shall be in addition to every other right, power and remedy
herein specifically given or now or hereafter existing at law, in equity or
by statute, and each and every right, power and remedy whether specifically
herein given or otherwise existing may be exercised from time to time and
as often and in such order as may be deemed expedient by the Purchasers or
the Collateral Agent, and the exercise or the beginning of the exercise of
any power or remedy shall not be construed to be a waiver of the right to
exercise at the same time or thereafter any other right, power or remedy.
No delay or omission by the Purchasers or the Collateral Agent in the
exercise of any right, remedy or power or in the pursuance of any remedy
shall impair any
44
<PAGE>
such right, power or remedy or be construed to be a waiver of any Default
or Event of Default on the part of any Issuer or to be an acquiescence
therein.
10.5 Discontinuance of Proceedings. In case any of the Purchasers or
-----------------------------
the Collateral Agent shall have proceeded to enforce any right, power or
remedy under this Agreement or any other Transaction Documents and such
proceedings shall have been discontinued or abandoned for any reason or
shall have been determined adversely to such Purchaser or the Collateral
Agent, then and in every such case the Issuers and the Collateral Agent
shall be restored to their former positions and rights hereunder with
respect to the Collateral, and all rights, remedies and powers of such
Purchaser or the Collateral Agent shall continue as if no such proceedings
had been taken.
10.6 Agreements with respect to Remedies and Defaults.
------------------------------------------------
Notwithstanding any provisions of this Agreement or the Collateral
Documents to the contrary,
(a) If an Event of Default shall have occurred and is continuing
under this Agreement or any other Transaction Documents (whether declared
or not), the Collateral Agent shall in accordance with instructions from
the Majority In Interest, to the extent remedies are available to do so and
the Collateral Agent is not stayed from exercising such remedies, pursue
such remedies as are available under the Leases and the Collateral
Documents and at law in respect of the Collateral in accordance with the
Collateral Documents and with respect to the parties thereto to repay the
Notes.
(b) If an Event of Default shall have occurred and is
continuing, the Collateral Agent shall act in a commercially reasonable
manner in respect of the Collateral and with respect to the exercise of the
remedies provided under the Collateral Documents and at law related to the
Collateral.
10.7 Waiver of Existing Defaults. The Issuers, upon written
---------------------------
confirmation that the Majority In Interest waive an existing Event of
Default, shall notify all the Purchasers that the Majority In Interest has
provided such waiver; provided, however, no such waiver shall be effective
-------- -------
in the case of (i) an Event of Default in the payment of the principal of,
Make Whole Premium, if any, or interest on, any Note or (ii) in respect of
a covenant or provision of Section 9.18 and Section 9.19 unless such waiver
------------ ------------
is made by all the Purchasers.
10.8 Rights of Purchasers to Receive Payment. Each Purchaser, or
---------------------------------------
with respect to all the Notes, the Majority In Interest, shall have the
right to bring suit for the enforcement of
45
<PAGE>
such Purchaser's, or with respect to all Notes, all of Purchasers' rights
to receive payment of principal of, Make Whole Premium, if any, and
interest on such Note or Notes on or after the due date expressed in such
Note or Notes. Notwithstanding any other provision of this Agreement or
the Agency Agreement, the right of any Purchaser to receive payment of
principal of, Make Whole Premium, if any, and interest on a Note on or
after the respective due dates expressed in such Note, or to bring suit for
the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Purchaser.
SECTION 11. EXPENSES.
--------
Each of the Issuers agrees, whether or not the transactions
contemplated by this Agreement are consummated, for the sole benefit of
each of the Purchasers and the Collateral Agent, to pay (or reimburse each
Purchaser for the payment of) all costs and expenses, of the negotiation,
execution and delivery of this Agreement and each of the other Transaction
Documents and every other related agreement, instrument and document, and
the perfection by the Collateral Agent of a valid first priority Lien in
the Collateral including all reasonable legal fees and expenses, and
expenses of lien searches, filing fees of UCC financing statements,
Railcars Security Agreement and other lien instruments, and fees and
expenses relating to the titling and registration of the Collateral and
noting Liens on certificates of title, incurred by or on behalf of each
Purchaser and the Collateral Agent, including without limitation, the fees
and disbursements of Rogers & Wells, special counsel for the Purchasers and
of Rey, Quinney & Nebeker, counsel to the Collateral Agent. Each of the
Issuers further agrees to pay (or reimburse each Purchaser for the payment
of) all costs and expenses including all reasonable legal fees and
expenses, and expenses of lien searches, filing fees, and fees and expenses
relating to the titling and registration of the Collateral and noting the
Liens on the certificates of title, incurred on behalf of each Purchaser
and the Collateral Agent, including without limitation, the fees and
disbursements of special counsel to the Purchasers incurred in connection
with (a) the negotiation, execution and delivery of any amendments,
supplements or modifications to this Agreement, the other Transaction
Documents and other related agreements, instruments and documents, and any
amendment, supplement or waiver or any provision hereof or thereof, (b) the
perfection by the Collateral Agent by filing, recording, possession or
otherwise in any jurisdiction whose laws are applicable to an Issuer or any
of the Collateral of a valid first priority Lien in the Collateral, both
initially and with regard to any substitute or additional Collateral
including but not limited to Cash Collateral and other Collateral granted
pursuant to any provision of Section 5 and any release of any Collateral,
---------
and (c) the enforcement of the provisions of this Agreement, the other
Transaction Documents or any of the other related agreements,
46
<PAGE>
instruments and documents, by or on behalf of any Purchaser or the
Collateral Agent, including the exercise of any rights and remedies
provided herein or in the Agency Agreement.
SECTION 12. NOTICES.
-------
All communications and notices provided for herein shall be in
writing and delivered by hand, the United States certified or registered
mail or by telecopier, and any such notice shall become effective (a) upon
personal delivery thereof, including, without limitation, by overnight mail
and courier service, (b) five (5) days after the date on which it shall
have been mailed by United States mail, certified or registered, postage
prepaid, return receipt requested, or (c) in the case of notice by
telecopier, when electronically or verbally confirmed, in each case
addressed to (i) if to a Purchaser, at the address set forth under such
Purchaser's name on Schedule 3 attached hereto with a copy to Purchaser's
----------
special counsel, Rogers & Wells, 200 Park Avenue, New York, New York 10166,
Telecopier: (212) 878-8375, Attn. Shephard W. Melzer, Esq., or (ii) if to
Issuers, at the address set forth under such Issuer's name on Schedule 2
----------
attached hereto, or at such other address as such Person may from time to
time designate by written notice to the other parties hereto. Any party
may change the person or address to whom or which notices are to be given
hereunder, by notice duly given hereunder; provided, however, that any such
-------- -------
notice shall be deemed to have been given hereunder only when actually
received by the party to which it is addressed.
SECTION 13. PURCHASERS AND NOTES.
--------------------
13.1 Withholding Taxes; Information Reporting. Notwithstanding the
----------------------------------------
Issuers' obligation to ensure that the Purchasers are reimbursed for any
withholding Taxes, the Issuers shall exclude and withhold from each
distribution of principal, Make Whole Premium, if any, and interest and
other amounts due hereunder or under the Notes any and all withholding
Taxes applicable thereto as required by law. Any such withholding shall in
no event give rise to an Event of Default. The Issuers agree (a) to act as
such withholding agent and, in connection therewith, whenever any present
or future Taxes or similar charges are required to be withheld with respect
to any such amounts payable in respect of the Notes, to withhold such
amounts and timely pay the same to the appropriate authority in the name of
and on behalf of the Purchasers, (b) that it will file any necessary
withholding Tax returns or statements when due and (c) that, as promptly as
possible after the payment of such amounts, it will deliver to each
Purchaser appropriate documentation showing the payment of such amounts,
together with such additional documentary evidence as such Purchasers may
reasonably request from time to time. Each of the Issuers agrees to file
any other information reports as it may be required to file under United
States law. To the extent that such Issuer fails, with
47
<PAGE>
respect to any Purchaser, to withhold and pay over any such taxes to the
appropriate taxing authority, such Issuer shall, upon a claim being made
for such taxes by such authority, take all reasonable steps to recover such
taxes from such Purchaser, including, without limitation, withholding the
amount of such Taxes from subsequent distributions, if any, to such Pur-
chaser.
13.2 Satisfaction and Discharge of Agreement; Termination of
-------------------------------------------------------
Obligations. Subject to Section 13.3, the Issuers shall, except as herein
- ----------- ------------
provided, be deemed to have been discharged from their respective
Obligations with respect to the Notes, when
(a) the principal of, Make Whole Premium, if any, and interest
on the Notes and all other amounts due and payable under the Notes, this
Agreement and other Transaction Documents have been paid in full or there
shall have been deposited with the Purchaser an amount equal to the amount
required to discharge such indebtedness and other Obligations; and
(b) each Purchaser shall have received evidence that all
conditions precedent provided for relating to the satisfaction and
discharge of this Agreement contemplated by this Section 13.2 have been
------------
complied with.
13.3 Amendments to This Agreement With Consent of
Purchasers.
--------------------------------------------
(a) With the written consent of the Majority In Interest, the
Issuers may enter into such supplemental agreements to add any provisions
to or to change or eliminate any provisions of this Agreement or of any
such supplemental agreements or any of the other Transaction Documents or
to modify the rights of the Purchasers; provided, however, that, without
-------- -------
the consent of each Purchaser affected thereby, an amendment under this
Section 13.3 may not:
- ------------
(i) reduce the amount of principal, interest or Make Whole
Premium due or owing on the Notes held by such
Purchaser; or
(ii) affect the terms of payment of any Note; or
(iii) reduce the amount of Purchasers which constitutes the
Majority In Interest; or
(iv) make any change in Section 5.1, 5.6, 5.7, 9.19, 10, or
-------------------------------
this Section 13.3(a); or
---------------
(v) affect the preference between Purchasers and/or
Purchasers and other creditors.
48
<PAGE>
(b) Promptly after the execution of any supplemental agreement
pursuant to the provisions of this Section 13.3, the Issuers shall transmit
------------
by first-class mail a copy of such supplemental agreement to all
Purchasers, as the names and addresses of such Purchasers appear on the
Register. Any failure of the Issuers to mail such copy, or any defect
therein, shall not, however, in any way impair or affect the validity of
any such supplemental agreement.
13.4 Notification on or Exchange of Notes. Each of the Purchasers
------------------------------------
may place an appropriate notation about an amendment or waiver on any Note
thereafter executed. Each of the Purchasers in exchange for such Notes may
execute new Notes that reflect the amendment or waiver.
SECTION 14. MISCELLANEOUS.
-------------
14.1 Oral Modification, Termination, etc. This Agreement cannot be
------------------------------------
changed, discharged or terminated orally.
14.2 Successors and Assigns. All the terms of this Agreement shall
----------------------
be binding upon, inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto, and, in
particular, shall inure to the benefit of and be enforceable by any
registered owner or holder of a Note; provided, however, the liabilities
-------- -------
and Obligations of the Issuers may not be assigned or otherwise transferred
except by any merger permitted under Section 9.18(b) or an assumption by
---------------
Interpool provided under Section 5.6.
-----------
14.3 Headings. The headings to the various sections of this
--------
Agreement have been inserted for the convenience of reference only and
shall not limit or otherwise affect any of the terms hereof.
14.4 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
14.5 Survival. All warranties, representation, indemnities and
--------
covenants made by any Person hereto, herein or in any certificate or other
instrument delivered by any such Person or on the behalf of any such Person
under this Agreement shall be considered to have been relied upon by each
other Person hereto and shall survive the consummation of the transactions
contemplated hereby on the Closing Date regardless of any investigation
made by any such Person or on the behalf of any such Person. All state-
ments in any such certificate or other instrument shall constitute warran-
ties and representations by the Person so making the same.
14.6 Governing Law; Severability. This Agreement shall be governed
---------------------------
by and construed and enforced in accordance with the
49
<PAGE>
internal laws (as opposed to conflicts of law provisions) of the State of
New York. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement.
14.7 WAIVER OF JURY TRIAL; SUBMISSION TO JURISDICTION. EACH OF THE
------------------------------------------------
ISSUERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT TO A JURY TRIAL IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY. In any action or proceeding arising out of or
relating to this Agreement, each of the Issuers hereby accepts, for itself
and its property, the non-exclusive jurisdiction of the courts of the State
of New York, and the federal courts in New York City, and agrees that
effective service of process may be made on each Issuer by mailing same to
such Issuer's address set in Schedule 2 attached hereto. The Collateral
----------
Agent or any Purchaser may proceed against any Issuer in any other
applicable jurisdiction, and may serve process in any other manner
permitted by applicable law. Each of the Issuers hereby irrevocably waives
any objection to the laying of venue in the aforesaid courts, and any claim
of an inconvenient forum. To the extent that such Issuer or its property
may have or hereafter acquire immunity, on the grounds of sovereignty or
otherwise, from any judicial process in connection with this Agreement,
each Issuer hereby irrevocably waives, to the fullest extent permitted by
law, any such immunity and agrees not to claim same. Each of the Issuers
agrees that a final judgment in any such action or proceeding shall be
conclusive, and may be enforced in any other jurisdiction by suit on the
judgment or in any other permitted manner.
Interpool hereby irrevocably designates and appoints Interpool
Limited of 633 Third Avenue, New York, New York 10017 as its agent to
receive on its behalf and its property service of copies of the summons and
complaint and any other process which may be served upon Interpool in the
State of New York in connection with any action or proceeding in the courts
of the State of New York or of the United States of America for the
Southern District of New York.
SECTION 15. DEFINITIONS.
-----------
The following terms used herein shall have the following respective
meanings (such definitions to be equally applicable to both the singular
and plural forms of the terms defined):
50
<PAGE>
"Affiliate" of any Person shall mean any other Person which directly
---------
or indirectly controls, or is controlled by, or is under a common control
with, such Person, including, without limitation, Related Parties.
"Agency Agreement" shall mean the Agency Agreement dated the date
----------------
hereof among the Collateral Agent, the Issuers and the Purchasers, as the
same may be amended, supplemented or modified from time to time,
substantially in the form of Exhibit B hereto.
---------
"Approved Investments" shall mean the investments listed in paragraphs
--------------------
(a) or (b) of Section 9.25 hereof, provided that such investments have
------------
maturities of less than one (1) year. So long as no Default or Event of
Default shall have occurred, the Issuer pledging Cash Collateral shall have
the option of designating the specific Approved Investment in which such
Cash Collateral shall be maintained. If a Default or Event of Default
shall have occurred, such Approved Investment shall be designated by the
Collateral Agent.
"Business Day" shall mean any day other than a Saturday, Sunday or
------------
other day on which commercial banking institutions in the State of New York
are authorized or obligated by law to close.
"Cash Collateral" shall mean
---------------
(i) all bank accounts in the name of the Collateral Agent
as agent for the ratable benefit of the Purchasers, all funds held therein
and all certificates and instruments representing or evidencing such bank
accounts which are maintained by the Collateral Agent;
(ii) all Approved Investments made from time to time in
accordance with the provisions of this Agreement and the applicable
Transaction Documents which are properly perfected and pledged to the
Collateral Agent;
(iii) all interest, dividends and other property from time to
time received, receivable or otherwise distributed in respect of any
amounts on deposit in any of the accounts or the Approved Investments
described in subparagraphs (i) or (ii) above; and
(iv) all proceeds of any or all of the foregoing.
The Issuers shall, at all times, cause all Cash Collateral to be
subject to a first priority perfected security interest in favor of the
Collateral Agent for the ratable benefit of the Purchasers, subject to no
other Liens.
51
<PAGE>
"Chassis" shall mean wheeled steel frames used to carry containers
-------
over the road.
"Chief Offices" shall mean, for each Issuer, those offices listed on
-------------
Schedule 7.1 attached hereto.
- ------------
"Claims" shall have the meaning set forth in Section 9.8 hereof.
------ -----------
"Closing" shall have the meaning set forth in Section 3 hereof.
------- ---------
"Closing Date" shall have the meaning set forth in Section 3 hereof.
------------ ---------
"Code" shall have the meaning set forth in Section 7.12 hereof.
---- ------------
"Collateral" shall mean all Equipment, Leases and other property
----------
subject to the Lien of the Collateral Documents, including, without
limitation, insurance policies as required pursuant to Section 9.6.
-----------
"Collateral Agent" shall mean First Security Bank Of Utah, National
----------------
Association, not in its individual capacity but solely as agent under the Agency
Agreement, and its successors thereof.
"Collateral Certificate" shall mean the Collateral Value certificate,
----------------------
substantially in the form of Exhibit C.
---------
"Collateral Documents" shall mean the Security Agreements, together
--------------------
with any Security Agreement Supplements, the Railcars Security Agreements
and the Guaranties.
"Collateral Value" shall mean with respect to Collateral of each
----------------
Issuer (including an Issuer for whose benefit Collateral is added or
designated pursuant to Sections 5.6(c) or 5.6(e)) (a) in respect of
Containers pledged to the Collateral Agent, the cost basis of the
individual Containers less depreciation of $56.67 per $1,000 of the cost of
the Containers per year of age calculated on a straight line basis over a
fifteen (15) year life until their estimated salvage value of 15% of cost
basis is reached as reflected on the books and records of an Issuer, in
accordance with GAAP, (b) with respect to Chassis pledged to the Collateral
Agent, the depreciated calculated value using a depreciable basis of $6,800
per Chassis, less annual depreciation of $240 per Chassis per year of age,
and calculated on a straight line basis over a twenty (20) year life until
a floor value of no less than $2,000 per Chassis is reached, (c) with
respect to Railcars pledged to the Collateral Agent, the cost basis of the
individual Railcar less depreciation on a straight line basis over a
twenty-five (25) year
52
<PAGE>
life until their estimated salvage value is reached, as reflected on the
books and records of an Issuer in accordance with GAAP, (d) with respect to
Direct Finance Leases pledged to the Collateral Agent, such Direct Finance
Leases at their Unamortized Portion and (e) with respect to Cash Collateral
pledged to the Collateral Agent, the Cash Collateral shall have the value
ascribed to it in a security and pledge agreement related to the Cash
Collateral in form and substance satisfactory to the Purchasers and their
special counsel and to the applicable Issuer and its counsel.
"Commitment" shall mean the amount set forth opposite the name of each
----------
Purchaser on Schedule 1 attached hereto.
----------
"Containers" shall mean general purpose standard, inter-modal dry
----------
cargo containers, each in 20 or 40 foot lengths and having a configuration
suitable for shipping small packages or bulk material that confines the
contents and can be handled in transit as a unit, for road transport on
chassis, or for rail transport deck-mounted to appropriate rail cars.
"Control" shall mean the possession, directly or indirectly, of the
-------
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Controlled Group" shall have the meaning as defined in the Code.
----------------
"Default" shall mean an event or condition which, with the passage of
-------
time or with the giving of notice, or both, would constitute an Event of
Default.
"Depreciation" shall be determined in accordance with GAAP.
------------
"Direct Finance Leases" shall mean for purposes of determining
---------------------
Collateral Value under this Agreement and the other Transaction Documents,
Leases which have been classified as direct finance leases in the financial
statements of Interpool and its consolidated Subsidiaries in accordance
with GAAP. For all other purposes of this Agreement and the other
Transaction Documents, Direct Finance Leases shall mean Leases which have
been classified as direct finance leases in the financial statements of
Interpool and its consolidated Subsidiaries in accordance with GAAP or
Leases which are construed as leases intended as security in accordance
with New York UCC Section 1-201(37), as such section may be revised,
amended or supplemented from time to time.
"Duff & Phelps" shall mean Duff & Phelps Credit Rating Co.
-------------
"Earnings Available for Fixed Charges" shall mean the sum of Fixed
------------------------------------
Charges plus Net Earnings before income taxes.
53
<PAGE>
"Equipment" shall mean Containers, Chassis and Railcars, excluding
---------
those subject to Direct Finance Leases.
"ERISA" shall have the meaning set forth in Section 7.12 hereof.
----- ------------
"Event of Default" shall mean any of the events specified in Section
---------------- -------
10.1, provided there has been satisfied any requirement in connection with
- ----
such event for the giving of notice, or the lapse of time, or the happening
of any further condition, event or act.
"Financed Equipment" shall mean all Equipment now owned or hereafter
------------------
acquired by any of the Issuers, including New Equipment and Used Equipment
which is included in the Collateral pursuant to this Agreement.
"Fixed Charges" shall mean the sum of interest expense (including
-------------
capitalized interest, if any) plus lease rentals on Long-Term Leases and
the interest component of capitalized leases.
"Funded Debt" shall mean all indebtedness for money borrowed with
-----------
recourse to Interpool and its Restricted Subsidiaries, including purchase
money mortgages, leases capitalized in accordance with Statement 13 of the
Financial Accounting Standards Board and conditional sales contracts and
similar title retention debt in instruments (excluding any current
maturities of such indebtedness) which by its terms mature more than one
year from the date of any calculation thereof and/or which is renewable or
extendible under any revolving or similar agreement. The calculation of
Funded Debt shall include all Funded Debt of Interpool and its Restricted
Subsidiaries, plus any Funded Debt of another Person, other than a
Restricted Subsidiary, which has been guaranteed by Interpool or its
Restricted Subsidiaries. Funded Debt shall exclude all Indebtedness of
Interpool or any of its Restricted Subsidiaries which is non-recourse to
Interpool or any of its Restricted Subsidiaries, as the case may be.
"GAAP" shall mean generally accepted accounting principles, in effect
----
from time to time, consistently applied in the United States.
"Guarantor" shall mean Interpool.
---------
"Guaranties" shall mean the Guaranties by the Guarantor in favor of
----------
each Purchaser, substantially in the form of Exhibit D.
---------
"Initial Advance Amount" shall mean for each Direct Finance Lease, the
----------------------
amount equal to 100% of the net present value of all remaining Lease
payments at the time such Direct Finance Lease or a portion thereof becomes
a part of the Collateral Value where such
54
<PAGE>
Lease payments are present valued at the interest rate of the Notes.
"Investment Company Act of 1940" shall mean the Investment Company Act
------------------------------
of 1940, as amended.
"Issuer(s)" shall have the meaning set forth in the introductory
---------
paragraph hereof.
"Leases" shall mean all leases or similar arrangements with respect to
------
the Financed Equipment, but only to the extent that they relate to the
Financed Equipment, and all extensions, substitutions and modifications
thereto.
"Liens" shall mean all mortgages, liens, judicial liens, encumbrances,
-----
security interests, charges, pledges, hypothecations, assignments,
conditional sale or other title retention agreements and the like, relating
to any real or personal property interest of any Issuer, whether legal or
equitable.
"Long-Term Leases" shall mean minimum lease rentals of non-capitalized
----------------
leases whereunder Interpool or any Restricted Subsidiary is the lessee with
an initial term in excess of three years, excluding leases of office
---------
equipment and motor vehicles used in the ordinary course of business.
"Majority In Interest", as of a particular date of determination,
--------------------
shall mean the holders of more than 66 2/3% of the aggregate outstanding
principal amount of the Notes.
"Make Whole Premium" and related definitions. For all purposes of
------------------
this Section 15, the following terms shall have the following meanings
----------
(such definitions to be equally applicable to both the singular and plural
forms of the terms defined):
"Discounted Value" shall mean, as of any Settlement Date, the sum
----------------
of amounts obtained by discounting all Remaining Scheduled Payments as
of such Settlement Date from their respective scheduled due dates to
the Settlement Date in accordance with accepted financial practice and
using a discount factor based on the Reinvestment Yield restated on an
equivalent quarterly compounded basis. The Reinvestment Yield
restated on an equivalent quarterly compounded basis ("Yq") shall be
equal to the product of (a) four, and (b) one subtracted from the
square root of the sum of one plus a fraction, the numerator of which
is the Reinvestment Yield and the denominator of which is two, it
being understood that the foregoing calculation is expressed as the
formula below where RY equals the Reinvestment Yield:
Yq = 4 x ( 1 + RY - 1)
55
<PAGE>
Such discount factor for each Remaining Scheduled Payment shall be applied
by dividing such Remaining Scheduled Payment ("RSP") by an amount equal to
(A) the sum of one plus a fraction, the numerator of which is the
Reinvestment Yield restated on an equivalent quarterly compounded basis
(Yq) and the denominator of which is four, (B) which sum shall be raised to
an exponent equal to the number of quarterly payments or portions thereof
from the Settlement Date to the scheduled due date of such Remaining
Scheduled Payment ("n"), it being understood that the foregoing calculation
is expressed as the formula below:
Discounted RSP
--------
Value of RSP = (1 + Yq)n
--
4
"Make Whole Premium" shall mean, as of any Settlement Date, an
------------------
amount equal to the excess, if any, of the Discounted Value over the
unpaid principal amount of the Note (or the portion thereof being
prepaid or accelerated) then outstanding (determined immediately prior
to any prepayment made on such Settlement Date). The Make Whole
Premium shall in no event be less than zero.
"Reinvestment Yield" shall mean, as of any Settlement Date,
------------------
0.50% over the yield to maturity (computed to the fifth decimal place
(one thousandth of a percentage point) and then rounded to the fourth
decimal place (one hundredth of a percentage point)) implied by the
yields reported, as of 10:00 a.m. (New York City time) two Business
Days next preceding such Settlement Date on the display designated as
"Page 500" on the Telerate Service for actively traded U.S. Treasury
securities having a maturity equal to the Remaining Average Life of
the Notes as of such Settlement Date (or if such data services are no
longer available or if such yields shall not be reported as of such
time or the yields reported as of such time shall not be
ascertainable, then any publicly available source of similar market
data acceptable to at least 51% of the Purchasers of the outstanding
Notes being prepaid or accelerated, as the case may be). It is
understood that the yield to maturity for actively traded U.S.
Treasury securities and the Reinvestment Yield are stated on a semi-
annual bond equivalent basis in accordance with accepted financial
practice. Such implied yield shall be determined, if necessary, by
(a) converting U.S. Treasury bill/note quotations to bond-equivalent
yields in accordance with accepted financial practice and (b)
interpolating linearly (calculated to the nearest one-twelfth of a
year) between yields reported for (i) the actively traded U.S.
Treasury security with a maturity closest to and less than the
Remaining Average Life and (ii) the actively traded U.S.
56
<PAGE>
Treasury security with a maturity closest to and greater than the
Remaining Average Life, except that if the Remaining Average Life is
less than one year, the yield on actively traded U.S. Treasury
securities adjusted to a constant maturity of one year shall be used.
"Remaining Average Life" shall mean, as of any Settlement Date,
----------------------
the number of years (calculated to the nearest one-twelfth year)
obtained by dividing (i) the principal amount of the Notes then
outstanding (or if less than all Notes are to be prepaid, the
principal amount to be prepaid) (determined prior to any prepayment or
acceleration required or made on such Settlement Date) into (ii) the
sum of the products obtained by multiplying (a) each Remaining
Scheduled Payment (but not of interest thereon) by (b) the number of
years (calculated to the nearest one-twelfth year) which will elapse
between such Settlement Date and the scheduled due date of such
Remaining Scheduled Payment.
"Remaining Scheduled Payments" shall mean, as of any Settlement
----------------------------
Date, all payments of principal to be prepaid or accelerated on such
Settlement Date and interest on such payments that would be due on or
after such Settlement Date if such Note (or such payments of
principal) were not prepaid or accelerated prior to its scheduled due
date (excluding accrued interest from the last date that interest was
payable to and including the date prior to the Settlement Date).
"Settlement Date" shall mean each Prepayment Date and the date of
---------------
any other prepayment or acceleration of the Notes with respect to
which prepayment or acceleration the Make Whole Premium is payable.
"Margin Stock" shall have the meaning as defined in Regulation U.
------------
"Moody's" shall mean Moody's Investors Services, Inc.
-------
"NAIC" shall have the meaning set forth in Section 4.13(a) hereof.
---- ---------------
"Net Book Value" shall have the meaning as determined in accordance
--------------
with GAAP.
"Net Earnings" shall mean the consolidated net income before
------------
extraordinary items of Interpool and its Restricted Subsidiaries for any
period, determined in conformity with GAAP consistent with those applied in
preparing Interpool's audited annual reports.
57
<PAGE>
"New Equipment" shall mean newly manufactured Equipment owned at any
-------------
time by either of the Issuers that have not yet been put into use and free
of all Liens.
"Nominee(s)" shall have the meaning set forth in Section 3 hereof.
---------- ---------
"Obligations" shall mean (i) any and all indebtedness, obligations,
-----------
liabilities and agreements of any kind and nature of the Issuers pursuant
to this Agreement, the Notes or any other Transaction Document to or with
any of the Purchasers, or to or with any Nominees of any of the Purchasers,
or of any guarantor of any of such Issuers' indebtedness, obligations,
liabilities and agreements, now existing or hereafter arising, and now or
hereafter incurred, whether in the form of loans, guarantees, interest,
charges, expenses, fees (including, without limitation, attorneys' fees) or
otherwise, direct or indirect, (including, without limitation, any
participation or interest of any of the Purchasers (or of a Nominee of any
of the Purchasers) in any such Issuers' indebtedness) acquired outright,
conditionally or as collateral security from another, absolute or
contingent, joint and/or several, liquidated or unliquidated, due or not
due, contractual or tortious, secured or unsecured, arising by operation of
law or otherwise, whether incurred by the Issuers as principal, surety,
endorser, guarantor, accommodation party or otherwise; (ii) all other sums
and charges to be paid to the Purchasers pursuant to this Agreement; and
(iii) all interest and late charges on any of the foregoing.
"Officer's Certificate" shall mean a certificate signed by the
---------------------
President, any Vice President, the Treasurer or an Assistant Treasurer and,
in the case of a commercial bank or trust company, by any other officer
customarily performing the functions similar to those performed by the
Persons who at the time shall be such officers, or to whom any corporate
trust matter is referred because of his knowledge of and familiarity with
the particular subject; provided, however, that in the case of the
-------- -------
Collateral Agent, "Officer's Certificate" shall mean a certificate signed
by any Vice President, any Trust Officer or any Assistant Trust Officer who
is, in each case, responsible for corporate trust administration.
"Other Investments" shall mean investments in excess of an aggregate
-----------------
of $10,000,000.00 (other investments up to an aggregate of $10,000,000.00
being provided for in Section 9.25(k) hereof) in anything other than those
---------------
investments listed in paragraphs (a) through (g) and (i) and (j) of Section
-------
9.25 hereof, which shall be deemed to be Unrestricted Subsidiaries for
- ----
purposes of calculating the financial covenants in connection with Section
-------
9.19 hereof.
- ----
"Overdue Rate" shall have the meaning set forth in the Notes.
------------
58
<PAGE>
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
----
Person succeeding to the functions thereof.
"Permitted Investments" shall have the meaning set forth in Section
--------------------- -------
9.25 hereof.
- ----
"Permitted Liens" shall mean
---------------
(i) Liens for Taxes not yet delinquent or which are being
contested in good faith by appropriate proceedings and the enforcement of
which has been stayed (and for the payment of which adequate reserves are
provided);
(ii) carriers', seamen's, stevedores', wharfinger's,
warehousemen's, mechanics', suppliers', materialmen's, repairmen's or other
like Liens arising in the ordinary course of business and relating to
amounts not yet due or which shall not have been overdue for a period of
more than sixty (60) days or which are being contested in good faith by
appropriate proceedings or for the payment of which adequate reserves have
been provided;
(iii) leases, lease agreements, and other contracts entered into
in the ordinary course of business providing for the leasing, sale or
exchange of Equipment owned by the Company;
(iv) deposits and other forms of security given to any
governmental agency or body created or approved by law or governmental
regulation as a condition to the transaction of business or the exercise of
any privilege, franchise or license;
(v) deposits and other forms of security in connection with
worker's compensation, unemployment insurance and other social security
legislation; and
(vi) deposits and other forms of security to secure the
performance of bids, trade contracts (other than for borrowed money),
leases, surety and appeal bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business.
"Person" shall mean and include an individual, a partnership, a joint
------
venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
"Placement Agent" shall have the meaning set forth in Section 4.14
--------------- ------------
hereof.
"Plan" shall mean any plan subject to the minimum funding requirements
----
of Section 412 of the Code.
59
<PAGE>
"Prepayment Date" shall mean the date of an optional prepayment of any
---------------
of the Notes by any Issuer pursuant to Section 5.5 hereof.
-----------
"Private Placement Memorandum" shall mean the Private Placement
----------------------------
Memorandum of the Placement Agent dated February 1995.
"Prior Private Placements" shall mean the placement of notes issued on
------------------------
November 30, 1993 and October 27, 1994.
"Pro-Forma Fixed Charges" for any period shall mean the aggregate
-----------------------
amount of Fixed Charges as adjusted to reflect an increase or decrease in
Funded Debt for such period.
"Purchasers" shall have the meaning set forth in the introductory
----------
paragraph hereof and shall include the successors and assigns of each
Purchaser.
"Qualified Institutional Buyer" shall mean
-----------------------------
(i) A duly authorized domestic bank, savings and loan
association, insurance company, registered investment company, registered
investment adviser or registered dealer, acting for its own account, which
in the aggregate owns and invests on a discretionary basis at least $100
million in securities and, in each case, which has a net worth of at least
$100 million; or
(ii) A foreign bank, savings and loan association or
insurance company or equivalent institution, acting for its own account,
which in the aggregate owns and invests on a discretionary basis at least
$100 million in securities and, in each case, has a net worth of at least
$100 million; or
(iii) Any other entity which also constitutes a "qualified
institutional buyer" as defined in Rule 144A under the Securities Act of
1933 (or any successor statute) and the rules and regulations thereunder,
all as from time to time in effect.
"QPAM Exemption" shall have the meaning set forth in Section 8.3(c)
-------------- --------------
hereof.
"Railcars" shall mean steel wheeled vehicles for use on railroad
--------
tracks.
"Railcars Security Agreement" shall mean the Railcars Security
---------------------------
Agreement between the Collateral Agent and Interpool in respect of the
Railcars (as may be amended, supplemented or modified from time to time),
substantially in the form of Exhibit H.
---------
"Railcars Security Agreement Supplement" shall mean any Supplement to
--------------------------------------
the Railcars Security Agreement between the
60
<PAGE>
Collateral Agent and Interpool substantially in the form of Annex A to
Exhibit H.
- ---------
"Record Date" shall have the meaning specified in the relevant Note.
-----------
"Register" shall have the meaning specified in Section 5.4(a) hereof.
-------- --------------
"Regulation U" shall mean Regulation U of the Board of Governors of
------------
the Federal Reserve System, as the same may be amended or supplemented from
time to time.
"Related Party" shall mean The Ivy Group, Radcliff Group, Princeton
-------------
Intermodal Equipment Trust I, Eurochassis L.P., three New Jersey limited
partnerships called Microtech Three, Microtech Four and Microtech Five,
Princeton International Properties, Inc., Martom Associates, and 211
College Road Associates, a New Jersey general partnership and any other
Affiliates of Interpool or its Restricted Subsidiaries.
"Reportable Event" shall have the meaning as such term is defined in
----------------
Title IV of ERISA.
"Responsible Officer" shall mean, with respect to the subject matter
-------------------
of any covenant, agreement or obligation of any Person contained in any
Transaction Document, the President, or any Vice President, Treasurer,
Assistant Treasurer or other officer thereof, who in the normal performance
of his or her operational responsibility would have knowledge of such
matters and the requirements with respect thereto.
"Restricted Payments" shall mean cash dividends, redemption of capital
-------------------
stock, Other Investments, and investments in Unrestricted Subsidiaries.
"Restricted Subsidiary" shall mean any Subsidiary which has not been
---------------------
designated as an Unrestricted Subsidiary, provided that Ltd. shall be a
Restricted Subsidiary unless and until: (a) it shall be fully released
from all its Obligations (other that its representations, warranties and
indemnities) upon Interpool's assumption of all such Obligations pursuant
to Section 5.6(a) hereof, or (b) its Notes and all its other Obligations
--------------
shall have been paid in full, provided further that Ltd. may not be
----------------
designated as an Unrestricted Subsidiary if a Default or an Event of
Default shall have occurred and be continuing or would result from Ltd.
being designated as an Unrestricted Subsidiary.
"Securities Act" shall mean the Securities Act of 1933, as amended.
--------------
61
<PAGE>
"Security Agreement(s)" shall mean each of the Security Agreements
---------------------
between the Collateral Agent and an Issuer in respect of the Collateral,
excluding the Railcars, substantially in the form of Exhibit E.
---------
"Security Agreement Supplement(s)" shall have the meaning set forth in
--------------------------------
the Security Agreement.
"Standard & Poor's" shall mean Standard & Poor's Corporation.
-----------------
"Subsidiary" shall mean any Person (other than an individual) with
----------
respect to which Interpool or any one or more of its subsidiaries has
Control.
"Tangible Net Worth" shall mean stockholders' equity as set forth on a
------------------
consolidated financial statement for Interpool and its Restricted
Subsidiaries, reduced by all items of goodwill and other intangible assets
(other than deferred charges).
"Taxes" shall have the meaning set forth in Section 9.23(a) hereof.
----- ---------------
"Transaction Documents" shall mean this Agreement, the Notes, the
---------------------
Agency Agreement and the Collateral Documents.
"UCC" shall mean the Uniform Commercial Code as enacted in any state
---
of the United States or in the District of Columbia or the United States
Virgin Islands insofar as any such statute, as in effect from time to time,
may be relevant to the creation, perfection continuation and enforcement of
Liens on Collateral.
"Unamortized Portion" shall mean the Initial Advance Amount for a
-------------------
Direct Finance Lease, less a percentage of such amount equal to 100% of
such amount divided by the number of remaining monthly periods of the basic
lease term, for each month that the Direct Finance Lease constitutes
Collateral. The reduction of the percentage referenced above shall
commence on the later of (i) the date of the Initial Advance Amount was
made or (ii) the date of the commencement of the basic lease term.
"Unrestricted Subsidiary" shall mean any Subsidiary which is
-----------------------
designated by Interpool as an Unrestricted Subsidiary and/or any Other
Investment.
"Used Equipment" shall mean all Equipment owned at any time by any of
--------------
the Issuers that is not New Equipment.
62
<PAGE>
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterparts of this Agreement and return the
same to the Issuers, whereupon this Agreement shall become a binding
agreement among the Issuers and the Purchasers.
Very truly yours,
INTERPOOL, INC.
By:
------------------------------
Name:
Title:
INTERPOOL LIMITED
By:
------------------------------
Name:
Title:
The foregoing Agreement is
hereby accepted as of the
date first above written.
NOTE PURCHASERS:
*
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
* Confidential Treatment Requested
<PAGE>
SCHEDULE 1 TO NOTE PURCHASE AGREEMENT
PURCHASERS SCHEDULE
CONSOLIDATED
INTERPOOL INTERPOOL TOTAL
NAME OF PURCHASER INC. LIMITED COMMITMENT
----------------- --------- --------- ------------
1. * $8,333,333.33 $1,666,667.00
$5,833,333.33 $1,166,667.00
$833,333.33 $166,667.00
$1,666,666.67 $333,333.00
2. *
$4,166,666.67 $833,333.00
$4,166,666.67 $833,333.00
------------- -----------
*
TOTAL $25,000,000.00 $5,000,000.00 $30,000,000.00
* Confidential Treatment Requested
1-1
Exhibit 10.21
SECURITY AGREEMENT
SECURITY AGREEMENT (the "Agreement"), dated April 28, 1995 between INTERPOOL,
---------
INC., a Delaware corporation (the "Company"), and FIRST SECURITY BANK OF UTAH,
-------
NATIONAL ASSOCIATION as collateral agent for the Purchasers and each other
holder of a Note from time to time (in such capacity, together with its
successors in such capacity, the "Collateral Agent").
-----------------
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Interpool, Inc. and Interpool Limited (the "Obligors") have
entered into that certain Note Purchase Agreement, of even date herewith, with
the Purchasers, as purchasers of the Notes (as it may be amended and
supplemented from time to time, (the "Note Purchase Agreement"); and
-----------------------
WHEREAS, it is a condition precedent to the obligation of the
Purchasers to purchase the Notes provided for in the Note Purchase Agreement
that the Company shall execute and deliver this Agreement;
NOW, THEREFORE, in consideration of the premises and in order to
induce the Purchasers to purchase the Notes pursuant to the Note Purchase
Agreement, the parties hereto agree as follows:
Section 1. Definitions.
-----------
Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Note Purchase Agreement. The terms "equipment,"
---------
"inventory," "accounts," "chattel paper," "instruments," "documents," "general
--------- -------- ------------- ----------- --------- -------
intangibles," "products" and "proceeds" shall have the respective meanings
- ----------- -------- --------
ascribed thereto in the UCC.
Section 2. Security Interest.
-----------------
(a) To secure the due payment and performance of all of the
Obligations of the Company (the "Secured Obligations"), including, without
-------------------
limitation, the strict performance and observance by the Company of all
representations, warranties, agreements, covenants and conditions contained in
this Agreement, the Note Purchase Agreement, the Notes and the other Transaction
Documents, and any and all amendments thereto and replacements therefor, the
Company hereby assigns, mortgages, pledges, hypothecates, transfers and sets
over to the Collateral Agent, for the benefit of the Purchasers and the
Collateral Agent, and grants to the Collateral Agent, for the benefit of the
Purchasers and the Collateral Agent, a duly perfected first priority Lien upon
the Company's right, title and interest in and to (i) all equipment and
<PAGE>
inventory now owned by the Company listed on Annex A attached hereto and all
-------
equipment and inventory hereafter listed on each of the Security Agreement
Supplements (the "Security Agreement Supplements") executed from time to time in
------------------------------
the form attached hereto as Annex B, including all accessions, additions,
-------
improvements and upgrades to, and parts of, such equipment and inventory and all
substitutions and replacements therefor, all guarantees, warranties and rights
against manufacturers under purchase agreements or otherwise and other parties
in connection therewith, all insurance thereon and all insurance proceeds
payable in connection therewith; (ii) all lease rental schedules, master leases
as they relate to such lease rental schedules, Leases, agreements for use and
chattel paper to the extent that they relate to the leasing by the Company of
such equipment and inventory now or hereafter in effect or executed from time to
time, and any and all renewals, extensions, modifications and substitutions
thereof and therefor (all such lease rental schedules, master leases, Leases,
agreements for use and chattel paper, to the extent that they cover such
equipment and inventory now or hereafter in effect or executed from time-to
time, and any and all renewals, extensions, modifications and substitutions
thereof and therefor, are hereinafter referred to collectively as the "Lease
-----
Collateral"), all of its rights to all rentals and additional rentals and all
- ----------
other amounts, monies or payments due or to become due under the Lease
Collateral, to the extent applicable to such equipment and inventory, including,
without limitation, amounts, monies or payments representing rent, principal,
interest, Taxes, insurance premiums, condemnation awards, delinquency charges,
together with rights evidenced by an account, note, contract, security
agreement, chattel paper or other evidence of indebtedness or security, all
guaranties, warranties and indemnities in respect thereof, and all of its
accounts, contract rights and general intangibles arising thereunder; (iii) all
security pledged, assigned, hypothecated or granted to or held by the Company to
secure the obligations of any lessees or other obligors under any Lease
Collateral; (iv) all powers of attorney for the execution of any evidence of
indebtedness or security or other writing in connection with the Lease
Collateral or such equipment and inventory; (v) all books, records, ledger
cards, invoices and certificates of title relating to the Lease Collateral or
such equipment and inventory; (vi) all evidences of the filing of financing
statements and other statements, if any, and the registration and notation of
Liens on certificates of title or of other instruments in connection with any of
the foregoing and all amendments thereto, notices to other creditors or secured
parties, and certificates from filing or other registration offices; (vii) all
credit information, reports and memoranda relating to such Lease Collateral;
(viii) all maintenance contracts relating to such equipment and inventory; and
(ix) all proceeds, including without limitation insurance proceeds, and products
of any and all of the foregoing (all of the items described in preceding parts
(i) through (ix) being hereinafter referred to as the "Collateral").
----------
2
<PAGE>
(b) (i) This Agreement shall create a present and continuing
collateral assignment of and security interest in the Collateral and shall
remain in full force and effect until payment in full of the Obligations to the
Purchasers. Upon receipt by the Collateral Agent of written advice from the
Purchasers that the Notes and all the Secured Obligations have been paid or
satisfied in full, the Collateral Agent shall, upon the Company's written
request, promptly execute and deliver to the Company, at the Company's expense,
termination statements for all financing statements filed by the Collateral
Agent against the Company and such assignments and reassignments as the Company
shall reasonably require in order to terminate the security interests created
hereunder and any collateral assignments of Collateral to the Collateral Agent,
in each case with the Collateral Agent's sole representation and warranty that
the Collateral is being reconveyed free and clear of any Lien created by or as a
result of any act of the Collateral Agent.
(ii) Notwithstanding the foregoing to the contrary, the
Collateral Agent agrees that the Company shall be permitted to add Collateral
to, and obtain the partial or full release of Collateral from, the Lien created
under this Agreement from time to time on the terms and subject to the
conditions set forth in the Note Purchase Agreement.
Section 3. Company's Title; Liens and Encumbrances; Security Interest.
---------------
(a) The Company represents and warrants that the Company is or, to
the extent that Collateral is acquired after the date hereof, agrees that it
will be, on the date on which such Collateral is included in the Lien created
under this Agreement, the owner of the Collateral, having good and marketable
title thereto free from any and all Liens except for the Lien created and
granted pursuant to this Agreement and Permitted Liens.
(b) The Company will not create or assume or permit to exist any Lien
or claim on or against the Collateral, except for the Lien hereof and Permitted
Liens, and the Company will promptly notify the Collateral Agent of any such
Lien, except for the Lien hereof and Permitted Liens, made or asserted against
the Collateral, and will defend the Collateral against, and take all such action
as may be necessary to remove, any such Lien, other than the Lien hereof and
Permitted Liens.
(c) The Company represents and warrants that the Liens which have
been created in favor of the Collateral Agent on behalf of the Purchasers under
this Agreement and granted to the Collateral Agent on behalf of the Purchasers
upon the execution of this Agreement, constitute, or which will be created and
granted upon the execution and delivery of a Security Agreement Supplement, will
constitute, first priority Liens, and with respect to Containers and non-titled
Chassis, upon the filing of appropriate UCC financing statements, duly perfected
Liens in favor of the
3
<PAGE>
Collateral Agent on behalf of the Purchasers on the Collateral subject to no
other Lien other than the Lien hereof and Permitted Liens on such Collateral,
and with respect to titled Chassis, upon the notation of Liens on certificates
of title, duly perfected Liens in favor of the Collateral Agent on behalf of the
Purchasers on the Collateral subject to no other Lien other than the Lien hereof
and Permitted Liens on such Collateral.
Section 4. Location of Collateral and Records; Names of Company.
--------------------
(a) The Company represents and warrants that it has, and during at
least the past four months, has had, no place of business or office where the
Company's books of account and records are kept other than its Chief Office set
forth on Schedule 7.1 of the Note Purchase Agreement.
------------
(b) The Company shall maintain all its properties in good working
order and condition and, in the ordinary course of business, make all repairs,
replacements, additions and improvements in accordance with the provisions of
Section 9.5 of the Note Purchase Agreement.
(c) The Company shall notify the Collateral Agent in writing at least
thirty (30) days in advance of (a) any change of location of its Chief Office,
(b) the change, elimination or opening of any chief executive office of the
Company, or (c) any change in the place where the Company maintains its records
as to the Collateral such that such records are not located at the Company's
Chief Office. The Company shall notify the Collateral Agent in writing promptly
following a change in the character, use or location of any of the Financed
Equipment such that any of such Financed Equipment ceases to be either "mobile
goods" or "goods covered by a certificate of title", in each case within the
meaning of the UCC. The Company shall notify the Collateral Agent in writing
within five (5) days if there is a change in the character of any of the
Collateral such that it constitutes an "instrument" (other than an "instrument"
which constitutes part of "chattel paper") within the meaning of the UCC.
Section 5. Perfection of Security Interest.
-------------------------------
The Company will join with the Collateral Agent in executing one or
more UCC financing statements, applications for the notation of the Liens
created hereunder on certificates of title covering any of the Collateral or
other notices, agreements, documents or instruments appropriate under applicable
law in form satisfactory to the Collateral Agent and shall pay all filing or
recording costs with respect thereto, and all costs of filing or recording this
Agreement or any other instrument, agreement or document executed and delivered
pursuant hereto (including the cost of all Federal, state or local mortgage,
documentary, stamp or other Taxes), in each case, in all public offices where
filing or recording is deemed by the Purchasers to be necessary or desirable.
4
<PAGE>
The Company hereby authorizes the Collateral Agent to take all action at the
expense of the Company (including, without limitation, the filing of any UCC
financing statements or amendments thereto, applications for the notation of the
Liens created hereunder on certificates of title covering any of the Collateral
and any other documents or instruments without the signature of the Company)
which the Purchasers may deem reasonably necessary or desirable to perfect or
otherwise protect the Liens created hereunder and to obtain the benefits of this
Agreement. The Collateral Agent shall endeavor to give the Company notice prior
to taking such action if such notice is practicable; provided, however, the
-------- -------
Collateral Agent shall take such action whether or not such notice is received
by the Company. Without limiting the generality of the foregoing, the Company
shall, at the Company's expense, take and cause to be taken all such actions as
the Collateral Agent by instructions from the Purchasers may reasonably request
in order to perfect and continue the perfection of the Liens granted to the
Collateral Agent in the Collateral. The Collateral Agent shall have the right
at any time at the Company's expense to cause the perfection of the Liens
granted to the Collateral Agent in the Collateral by whatever means reasonably
deemed by the Purchasers to be necessary, and the Company shall cooperate fully
with the Collateral Agent in connection therewith.
Section 6. General Covenants.
-----------------
The Company covenants and agrees that it shall:
(a) furnish the Collateral Agent, and the Collateral Agent shall
deliver to each Purchaser upon request by such Purchaser, from time to time at
the Collateral Agent's request, with written statements and schedules further
identifying and describing the Collateral in such detail as the Collateral Agent
may reasonably require;
(b) comply or, with respect to the Collateral, require the lessees
thereof to comply, with all acts, rules, regulations and orders of any
legislative, administrative or judicial body or official applicable to the
Collateral or any part thereof or to the operation of the Company's business;
(c) at all times use, or require the lessees to use, the Collateral
for lawful purposes only, with all reasonable care and caution;
(d) cause the Lien granted pursuant to this Agreement to be at all
times a first priority duly perfected Lien upon the Collateral, subject to no
Liens other than Permitted Liens; and
(e) promptly execute and deliver to the Collateral Agent, and the
Collateral Agent shall deliver to each Purchaser upon request by such Purchaser,
such further deeds, mortgages, assignments, security agreements or other
instruments, documents, certificates and assurances and take such further action
as the
5
<PAGE>
Collateral Agent may from time to time in its reasonable discretion deem
necessary to perfect, protect or enforce its Lien on the Collateral or otherwise
to effectuate the intent of this Agreement, including, without limitation, the
right of the Collateral Agent upon the occurrence of an Event of Default and
pursuant to instructions by the Majority In Interest to enforce such rights to
(i) take possession of the Collateral and without liability for trespass to
enter any premises where the Collateral may be located for the purpose of taking
possession of or removing the Collateral, as to any or all of the Collateral, by
any available judicial procedure, or without judicial process, and, in
connection therewith, the Company shall, upon request of the Collateral Agent
and at the Company's expense, assemble the Collateral and make it available to
the Collateral Agent at the Company's standard depot locations worldwide, and
(ii) to require the Company to, and upon such demand the Company shall (A)
instruct each lessee under the Lease Collateral to make payment of rentals and
other sums (to the extent that such rentals and other sums relate to the
Financed Equipment) due and becoming due under a Lease included in the Lease
Collateral directly to, in the Collateral Agent's sole discretion, either the
Collateral Agent or to a post office box designated by the Collateral Agent to
which only the Collateral Agent shall have access, (B) if the Company shall
receive any rental or other payment in respect of any Financed Equipment covered
by any such Lease, or any Financed Equipment (including, without limitation, any
proceeds of insurance with respect to Financed Equipment), hold such payment in
trust by the Company for the benefit of the Purchasers and the Collateral Agent
and shall not commingle such payment with any other moneys or assets of the
Company, and (C) promptly turn over and remit to the Collateral Agent all sums
thus received, in the identical form as received, with all such endorsements
thereof as may be required, as contemplated by Section 8 hereof; in the event
---------
that the Company shall fail within three (3) Business Days of demand by the
Collateral Agent to notify the Lessees to make payments to the Collateral Agent
or to a post office designated by it, the Collateral Agent shall be entitled to
do so, either in the name of the Company pursuant to its power of attorney in
Section 11 hereof or in its own name.
- ----------
Section 7. Assignment of Insurance.
-----------------------
(a) The Company shall keep all its properties insured as provided in
Section 9.6 of the Note Purchase Agreement.
(b) As further security for the due payment and performance of the
Secured Obligations, the Company hereby assigns to the Collateral Agent all sums
relating to the Collateral, which may become payable under or in respect of any
policy of insurance owned by the Company or payable to the Company covering the
Collateral, and the Company hereby directs each insurance company issuing any
such policy owned by the Company to make payment of such sums directly to the
Collateral Agent upon notice from the Collateral Agent to such insurance company
of the occurrence of an Event of Default as defined in the Note Purchase
Agreement. The
6
<PAGE>
Company hereby appoints the Collateral Agent as the Company's attorney-in-fact
and in the Company's or in the Collateral Agent's name to do one or more of the
following upon the occurrence of an Event of Default and pursuant to
instructions by the Majority In Interest: (i) endorse any check or draft
representing any such payment or execute any proof of claim, subrogation receipt
or any other document required by such insurance company as a condition to or
otherwise in connection with such payment or (ii) assign the proceeds under any
such policies. All such sums received by the Collateral Agent shall be paid by
the Collateral Agent to the Purchasers pursuant to the Agency Agreement or, to
the extent that such sums represent unearned premiums in respect of any policy
of insurance on the Collateral refunded by reason of cancellation, toward
payment for similar insurance protecting the respective interests of the Company
and the Collateral Agent, or as otherwise required by applicable law. The
Company shall provide to the Collateral Agent evidence that the Collateral Agent
for the benefit of the Purchasers and the Purchasers have been named as
additional insureds and loss payees. On the date on which a policy of insurance
relating to the Collateral is issued or renewed, the Company shall promptly
provide to the Collateral Agent evidence that the Collateral Agent for the
benefit of the Purchasers together with the Purchasers have been named as
additional insureds and loss payees.
Section 8. Collections.
-----------
At any time if the Collateral Agent exercises the rights granted to it
under this Agreement, the Company shall, at the request of the Collateral Agent,
immediately upon receipt of any checks, drafts, cash or other remittances in
payment of any of its accounts, contract rights, or general intangibles
constituting part of the Collateral or in payment for any Collateral sold,
transferred, or otherwise disposed of, or in payment of or on account of its
accounts, contracts, contract rights, notes, drafts, acceptances, general
intangibles choses in action and all other forms of obligations relating to any
of the Collateral so sold, transferred or otherwise disposed of, deliver any
such items to the Collateral Agent accompanied by a remittance report in form
supplied or approved by the Collateral Agent, such items to be delivered to the
Collateral Agent in the same form received, endorsed or otherwise assigned by
the Company where necessary to permit collection of items and, regardless of the
form of such endorsement the Company hereby waives presentment, demand, notice
of dishonor, protest, notice of protest and all other notices with respect
thereto. All such remittances shall be applied and paid over by the Collateral
Agent to the Purchasers pursuant to the Agency Agreement or as otherwise
required by applicable law.
Section 9. Rights and Remedies on Default.
------------------------------
(a) In the event of the occurrence of any Event of Default and
pursuant to instructions by the Majority In Interest to enforce the Lien granted
hereunder:
7
<PAGE>
(i) the Collateral Agent shall at any time thereafter have
the right, itself or through any of its agents, as to any or all of the
Collateral (to the extent it is permissible to do so in view of the rights of
lessees who may have the right to possession of certain Collateral), by any
available judicial procedure, or without judicial process, to take possession of
the Collateral and without liability for trespass to enter any premises where
the Collateral may be located for the purpose of taking possession of or
removing the Collateral, and, generally, to exercise any and all rights afforded
to a secured party under the UCC or other applicable law;
(ii) without limiting the generality of the foregoing, the
Company agrees that the Collateral Agent shall have the right (subject to any
rights of lessees) to sell, lease, or otherwise dispose of all or any part of
the Collateral, whether in its then condition or after further preparation or
processing, either at public or private sale or at any broker's board, in lots
or in bulk, for cash or for credit, with or without warranties or
representations, and upon such terms and conditions, all as the Collateral Agent
in its sole discretion may deem advisable, and it shall have the right to
purchase at any such sale; and, if any Collateral shall require rebuilding,
repairing, maintenance, preparation, or is in process or other unfinished state,
the Collateral Agent shall have, the right, at its option, to do such
rebuilding, repairing, maintenance, preparation, processing or completion of
manufacturing, for the purpose of putting the Collateral in such salable or
disposable form as it shall deem appropriate;
(iii) the Collateral Agent shall at any time have the right
to require the Company to, and upon such demand the Company shall (A) instruct
each lessee under the Lease Collateral to make payment of all rentals and other
sums relating to the Collateral, due and becoming due under a Lease included in
the Lease Collateral directly to, in the Collateral Agent's sole discretion,
either the Collateral Agent or to a post office box designated by the Collateral
Agent to which only the Collateral Agent shall have access, (B) if the Company
shall receive any rental or other payment relating to the Collateral in respect
of any such Lease, or any Financed Equipment (including, without limitation, any
proceeds of insurance with respect to Financed Equipment), hold the amount of
such payment relating to the Collateral in trust by the Company for the benefit
of the Purchasers and the Collateral Agent and shall not commingle such payment
with any other moneys or assets of the Company, and (C) promptly turn over and
remit to the Collateral Agent all sums thus received, in the identical form as
received, with all such endorsements thereof as may be required, as contemplated
by Section 8 hereof; in the event that the Company shall fail within three (3)
---------
Business Days of demand by the Collateral Agent to notify the lessees to make
payments to the Collateral Agent or to a post office designated by it, the
Collateral Agent shall be entitled to
8
<PAGE>
do so, either in the name of the Company pursuant to its power of attorney in
Section 11 hereof, or in its own name; and
- ----------
(iv) at the Collateral Agent's request, the Company shall
assemble the Collateral and make the Collateral available to the Collateral
Agent at the Company's standard depots worldwide and make available to the
Collateral Agent, without rent or any other charge, all of the Company's
premises and facilities for the purpose of the Collateral Agent's taking
possession of, removing or putting the Collateral in salable or disposable form.
(b) The Company hereby agrees that a notice sent at least ten (10)
days before the time of any intended public sale or of the time after which any
private sale or other disposition of the Collateral is to be made, shall be
reasonable notice of such sale or other disposition.
(c) The proceeds of any collection, sale, lease or other disposition
of all or any part of the Collateral, and of all proceeds of the enforcement of
any Lien created under this Agreement or any other Transaction Document,
together with any sums then held by any Purchaser or the Collateral Agent as
part of the Collateral, shall be applied and paid over to the Purchasers
pursuant to the Agency Agreement.
(d) To the extent permitted by applicable law, the Company waives all
claims, damages and demands against the Collateral Agent arising out of the
repossession, removal, retention, sale or lease of the Collateral, provided that
the Company does not waive any claim, damages or demand it may have arising out
of the Collateral Agent's willful misconduct or gross negligence in connection
with any action taken in respect of the Note Purchase Agreement or this
Agreement.
Section 10. Costs and Expenses.
------------------
Any and all fees, costs and expenses, of whatever kind or nature,
including the reasonable attorneys, fees and legal expenses incurred by the
Collateral Agent in connection with the preparation of this Agreement and all
other documents relating hereto and the consummation of the transactions
contemplated by the Note Purchase Agreement, the filing or recording of UCC
financing statements, applications for notation of the Liens created hereunder
on certificates of title covering any of the Collateral and other documents
(including all Taxes in connection therewith) in public offices, the payment or
discharge of any Taxes, insurance premiums, encumbrances or otherwise
protecting, maintaining or preserving the Collateral, or the enforcing,
foreclosing, retaking, holding, storing, processing, selling, leasing or
otherwise realizing upon the Collateral and the Collateral Agent's Lien thereon,
whether through judicial proceedings or otherwise, or in defending or
prosecuting any actions or proceedings arising out of or relating to the
transaction to which this Agreement relates, shall be borne and paid by the
Company on demand by the Collateral Agent and if
9
<PAGE>
not paid within ten (10) days of such demand, the Collateral Agent shall provide
the notice to the Purchasers pursuant to the third sentence of Section 4 of the
Agency Agreement.
Section 11. Power of Attorney.
-----------------
(a) The Company authorizes the Collateral Agent and does hereby make,
constitute and appoint the Collateral Agent, and any officer, employee or agent
of the Collateral Agent, with full power of substitution, as the Company's true
and lawful attorney-in-fact, exercisable upon the occurrence of an Event of
Default or if the Collateral Agent exercises any of its rights under this
Agreement pursuant to instructions by the Majority In Interest, with power in
its own name or in the name of the Company:
(i) to endorse any notes, checks, drafts, money orders, or
other instruments of payment (including payments payable under or in respect of
any policy of insurance) in respect of the Collateral that may come into
possession of the Collateral Agent;
(ii) to sign and endorse any invoice, freight or express
bill, bill of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with accounts, and other
documents relating to the Collateral;
(iii) to pay or discharge Taxes, Liens, security interests or
other encumbrances at any time levied or placed on or threatened against the
Collateral;
(iv) to demand, collect, receive, compromise, settle and sue
for monies due in respect of the Collateral;
(v) to cause each lessee under the Lease Collateral to make
payment of rentals and other sums (to the extent that such rentals and other
sums relate to the Financed Equipment) due and becoming due under a Lease
included in the Lease Collateral to the Collateral Agent;
(vi) to notify lessees and other persons obligated with
respect to the Collateral to make payments directly to the Collateral Agent; and
(vii) generally, to do, at the Collateral Agent's option and
at the Company's expense, at any time, or from time to time, all acts and things
which the Collateral Agent reasonably deems necessary to protect, preserve and
realize upon the Collateral and the Collateral Agent's security interest therein
(including signing and filing any UCC Financing Statements, applications for the
notation of the Lien created hereunder upon certificates of title covering the
Collateral or other agreements, documents, instruments or notices in the name of
the Company or otherwise) in order to effect the intent of this Agreement and of
10
<PAGE>
the other Transaction Documents, all as fully and effectively as the Company
might or could do.
(b) The Company hereby ratifies all that said attorney shall lawfully
do or cause to be done by virtue hereof.
(c) This power of attorney, being coupled with an interest, shall be
irrevocable for the term of this Agreement and thereafter as long as any of the
Obligations shall be outstanding.
Section 12. Disposition of Collateral.
--------------------------
The Company shall not be entitled to sell or otherwise dispose of any
of the Collateral except such as shall have been released from the Lien granted
hereby in accordance with the terms hereof or as permitted by the Note Purchase
Agreement.
Section 13. Notices.
--------
Except as otherwise provided for herein, all communications and
notices provided for herein shall be in writing and delivered by hand, the
United States certified or registered mail or by telecopier, and any such notice
shall become effective (a) upon personal delivery thereof, including, without
limitation, by overnight mail courier service, (b) five (5) days after the date
on which it shall have been mailed by United States mail, certified or
registered, postage prepaid, return receipt requested, or (c) in the case of
notice by telecopier, when electronically or verbally confirmed, in each case
addressed as follows:
If to the Company:
Interpool, Inc.
211 College Road East
Princeton, New Jersey 08540
Telephone: (609) 452-8900
Fax: (609) 452-8211
Attention: Richard W. Gross
with a copy to:
633 Third Avenue, 17th Floor
New York, New York 10017
Fax: (212) 687-8403
Attention: President and Chief Financial Officer
If to the Collateral Agent:
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Department
Facsimile: (801) 246-5053
11
<PAGE>
Any party may change the person or address to whom or which notices are to be
given hereunder, by notice duly given hereunder; provided, however, that any
-----------------
such notice shall be deemed to have been given hereunder only when actually
received by the party to which it is addressed.
Section 14. Other Security.
---------------
To the extent that the Secured Obligations are now or hereafter
secured by property other than the Collateral or by the guarantee, endorsement
or property of any other person, firm, corporation or other entity, then the
Collateral Agent shall have the right in its sole discretion to pursue,
relinquish, subordinate, modify or take any other action with respect thereto,
without in any way modifying or affecting any of the Collateral Agent's rights
and remedies hereunder.
Section 15. Custody of the Collateral.
-------------------------
Except as expressly provided herein or in the Agency Agreement, the
Collateral Agent shall have no duty as to the collection of any Collateral in
its possession or control or in the possession or control of any agent or
nominee of the Collateral Agent, or any income thereon or as to the preservation
of rights against prior parties or any other rights pertaining thereto.
Section 16. Waivers; Obligations Absolute.
-----------------------------
(a) No course of dealing between the Company and the Collateral
Agent, nor any failure to exercise, nor any delay in exercising, on the part of
the Collateral Agent, of any right, power or privilege hereunder or under the
Note Purchase Agreement shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, power or privilege hereunder or thereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.
(b) The Company acknowledges that this Agreement is a continuing
obligation and that the obligations hereunder shall extend to each and every
extension or renewal of any Obligation of the Issuers, regardless of whether the
Obligations of the Company may, in successive transactions, be paid, repaid,
advanced or renewed from time to time and the Obligations shall be absolute,
independent and unconditional under any and all circumstances.
(c) The liability of the Company under this Agreement shall be
absolute and unconditional irrespective of the validity, legality or
enforceability of the Transaction Documents or other agreements evidencing or
securing the Obligations or any part thereof, or Collateral for any or all of
the Obligations or any part thereof or any other circumstance or circumstances
which might otherwise constitute a legal or equitable discharge of, or a defense
available to, a surety or guarantor and regardless of any law, rule, regulation,
order, writ, judgment, decree, award or
12
<PAGE>
other administrative or judicial pronouncement now or hereafter in effect in any
jurisdiction purporting to affect in any manner any of the terms of the
Transaction Documents. The Purchasers or the Collateral Agent, as applicable,
may at any time or times, in their absolute discretion, in the manner permitted
under the Transaction Documents (a) extend or change the time, manner, place or
other term of payment of any Obligation or any part thereof, (b) waive
compliance by either of the Obligors with any term, covenant, agreement or
condition on the part of such obligor to be complied with under any of the
Transaction Documents, (c) obtain or release Collateral for, any guarantor or
any obligor obligated with respect to, any Obligation or any part thereof, (d)
file, record, refile, rerecord or otherwise perfect, fail to do any of the
foregoing, or allow to lapse any Transaction Document, financing statement,
mortgage, deed of trust, pledge or other security document or interest, covering
or relating to Collateral for, or securing, any Obligation or any part thereof,
(e) settle or compromise with the Obligors under any Transaction Document, or
any other person or entity obligated with respect to any Obligation or any part
thereof, and subordinate upon any terms the Purchasers' right or rights to
receive payment or performance of any Obligation or any part thereof, and (f)
amend or otherwise modify any Obligation or any part thereof or the Transaction
Documents, or the liability of the Obligors or any entity obligated with respect
thereto, in any manner, all without notice to or the assent of the Company and
without affecting this Agreement or the liability of the Company hereunder,
which shall continue with respect to the Obligations as extended, changed,
modified, settled or compromised, until indefeasibly paid in full.
Section 17. Cumulative Remedies.
--------------------
All of the Collateral Agent's rights and remedies with respect to the
Collateral, whether established hereby or by any other agreements, instruments
or documents or by law shall be cumulative and may be exercised singly or
concurrently.
Section 18. Severability.
-------------
The provisions of this Agreement are severable, and if any clause or
provision shall be held invalid or unenforceable in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall affect only such
clause or provision, or part thereof, in such jurisdiction and shall not in any
manner affect such clause or provision in any other jurisdiction, or any other
clause or provision of this Agreement in any jurisdiction.
Section 19. Modification.
-------------
This Agreement may not be amended or modified, nor may any provisions
be waived, except by a writing signed by each of the parties hereto or, in the
case of a waiver, by the party so waiving its rights.
13
<PAGE>
Section 20. Counterparts.
-------------
This Agreement may be executed in as many counterparts as may be
deemed necessary or convenient, each of which, when so executed, shall be deemed
an original, but all such counterparts shall constitute one and the same
instrument.
Section 21. Binding Effect, Benefit of Agreement
and Assignment.
------------------------------------
The benefits and burdens of this Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
assigns; provided, however, that the rights and obligations of the Company under
-----------------
this Agreement shall not be assigned or delegated without the prior written
consent of the Collateral Agent, and any purported assignment or delegation
without such consent shall be void. The terms of this Agreement shall also
inure to the benefit of each of the Purchasers and their respective successors
and assigns.
Section 22. Governing Law.
-------------
This Agreement shall be governed and construed and enforced in
accordance with the laws of the State of New York, applicable to contracts
entered into and to be performed entirely within such State.
Section 23. Indemnity.
---------
(a) The Company covenants and agrees to indemnify and hold harmless
the Collateral Agent, the Purchasers and their respective officers, directors,
employees, agents, attorneys-in-fact and affiliates, from and against any and
all claims, suits, losses, penalties, demands, causes of action and judgments of
any nature whatsoever and all liabilities and indebtedness of any and every kind
and nature now or hereafter owing, arising, due or payable, including all costs
and expenses (including reasonable attorneys fees and expenses) (all of the
foregoing being herein collectively called "Liabilities"), which may be imposed
-----------
on, incurred by or asserted against any of them in connection with (i) the
ownership or use of any of the Collateral or the security interest of the
Collateral Agent in the Collateral, (ii) the failure on the part of the Company
to comply and to cause the lessees and users under all Leases to comply in all
respects with the laws of the United States of America and other jurisdictions
in which the Collateral or any part thereof may be operated and with all lawful
acts, rules, regulations and orders of any commissions, boards or other
legislative, executive, administrative or judicial bodies or officers having
power to regulate or supervise any of the Collateral, and (iii) the execution,
delivery, consummation, waiver, consent, amendment, enforcement, performance and
administration of this Agreement, the Note Purchase Agreement, the Security
Agreement Supplements and the other Transaction Documents, or the use by the
Company of the proceeds of the Notes or the Note
14
<PAGE>
Purchase Agreement; provided, however, that the Company shall not have any
-----------------
obligation to the Collateral Agent or a Purchaser with respect to liabilities
arising from such Person's own, gross negligence or willful misconduct.
(b) The Company agrees to defend and pay all costs, expenses and
judgments incurred by it, the Collateral Agent or the Purchasers in any action
brought against the Company under the Leases or in any actions brought by the
Collateral Agent pursuant to this Agreement whether under or pursuant to the
provision of any Lease or to enforce any provisions of the Leases.
(c) The obligations of the Company under this Section 23 shall
----------
survive the termination of this Agreement.
15
<PAGE>
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
duly executed on the day and year first above written.
INTERPOOL, INC.,
as an Obligor
By:
---------------------------
Title:
------------------------
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION, as
Collateral Agent
By:
---------------------------
Title:
------------------------
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On April __, 1995, before me personally came
, to me known, who, being by me duly sworn, did depose
- -------------------------
and say that he is of Interpool, Inc., the corporation
----------------
described in and which executed the foregoing instrument; that he knows the seal
of said corporation that the seal affixed to such instrument is such corporate
seal and that he signed his name and affixed such seal by order of the Board of
Directors of said corporation.
-------------------------
Notary Public
<PAGE>
STATE OF UTAH )
) ss.:
COUNTY OF )
-----
On April __, 1995, before me personally appeared
-----------
, to me personally known, who being by me duly sworn, did depose and say that he
is of FIRST SECURITY BANK OF UTAH,
-------------------------------------
NATIONAL ASSOCIATION that the seal affixed to the foregoing instrument is the
corporate seal of said national banking association, that said instrument was
signed and sealed on behalf of said corporation by authority of its Board of
Directors, and he acknowledged that the execution of the foregoing instrument
was the free act and deed of said national banking association.
------------------------------
Notary Public
My Commission expires
--------
<PAGE>
ANNEX A TO
SECURITY AGREEMENT
TYPE OF FINANCED UNIT NUMBER MANUFACTURER'S
EQUIPMENT SERIAL NUMBER
(FOR CHASSIS)
19
<PAGE>
ANNEX B TO
SECURITY AGREEMENT
FORM OF SECURITY AGREEMENT SUPPLEMENT
-------------------------------------
SUPPLEMENT NO.
--------
TO
SECURITY AGREEMENT
DATED ________ __, 1995
BETWEEN
INTERPOOL, INC.
(the "COMPANY")
AND
FIRST SECURITY BANK OF
UTAH, NATIONAL
ASSOCIATION
as COLLATERAL AGENT
(the "COLLATERAL AGENT")
-------------------------------------------------
WHEREAS:
A. Interpool, Inc. and Interpool Limited (the "Issuers"), the
-------
Collateral Agent and the Purchasers listed therein (the "Purchasers") entered
into a certain Note Purchase Agreement dated April 28, 1995 (which agreement,
as the same may have been or hereafter may be amended, supplemented, restated or
otherwise, the "Note Purchase Agreement");
-----------------------
B. Pursuant to the Note Purchase Agreement, each of the Issuers and
the Collateral Agent entered into certain Security Agreements dated April 28,
1995 (each a "Security Agreement" and collectively, the "Security Agreements");
------------------ -------------------
C. Pursuant to the Note Purchase Agreement, the Company is obligated
with the addition by the Company of any Equipment to the Collateral to deliver
to the Collateral Agent supplements to its Security Agreement (each, a "Security
--------
Agreement Supplement" and collectively, the "Security Agreement Supplements")
- -------------------- ------------------------------
describing the properties and assets which shall constitute the Collateral, and
it is therefore in consideration of the premises that the Company shall execute
and deliver to the Collateral Agent on behalf of the Purchasers this Security
Agreement Supplement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
The Security Agreement is hereby amended and supplemented by the
addition thereto (in addition to the Collateral covered by the Security
Agreement and in addition to any other Collateral added by previous Security
Agreement Supplements) of the following
20
<PAGE>
Collateral: the Financed Equipment listed or identified on Schedule I hereto.
----------
The Company hereby represents and warrants that upon the consummation
of this Security Agreement Supplement, no Default or Event of Default shall
exist under any of the Transaction Documents, and the Issuers will be in
compliance with the requirements of the Transactions Documents.
Capitalized terms used herein are used as defined herein or by
reference in the Security Agreement.
Except as supplemented by this Security Agreement Supplement, the
Security Agreement (as heretofore supplemented) shall continue unchanged and
remain in full force and effect.
21
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement Supplement to be duly executed this day of 19 .
---- --------- --
INTERPOOL, INC.
By:
--------------------------
Title
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION
as Collateral Agent on behalf
of the Purchasers
By:
--------------------------
Title
<PAGE>
SCHEDULE I TO
SECURITY AGREEMENT
SUPPLEMENT
TYPE OF FINANCED EQUIPMENT UNIT NUMBER MANUFACTURER'S
SERIAL NUMBER
(FOR CHASSIS)
23
Exhibit 10.22
CREDIT AGREEMENT
----------------
- AMENDMENT to the CREDIT AGREEMENT dated 29 May 1995 -
between
*, Basel / Switzerland
(hereafter referred to as LENDER)
and
Interpool Ltd., Barabados
(hereafter referred to as BORROWER)
Adjustment of working capital credit line
- -----------------------------------------
(global account No. 10-144'408):
- -------------------------------
Amount: - USD 50 Mio. (formerly 35 Mio.)
Purpose: - for working capital
- for the bridge financing of container purchasesincluding
positioning charges and insurance premiums
- for the opening to letters of credit in connection with
container purchases
- for special purposes on a case to case basis
Utilization: in US Dollars or other major currencies to the debit of current
accounts or by fixed term advances with duration of up to 13
months against the presentation of invoices and other
transaction related documents.
Interest Rate - the current accounts the standard rate for overdrafts for prime
customers of the LENDER
- for fixed term advances with duration of up to 360 days 3/4 %
above the Euro-Rate of the LENDER equivalent to the duration of
the advance
- for fixed term advances with duration of up to 13 months 1 1/2
% above the Euro-Rate of the LENDER equivalent to the duration
of the advance.
* Confidential Treatment Requested
<PAGE>
-2-
Amortization: USD 15 Mio. on 31 August 1996
Expiry date: 30 June 1997
All other conditions concerning the ''frame credit for the refinancing of
leasing agreements (global Account No. 10-361'560)' and the 'General conditions
for all credit facilities, which have been fixed in the CREDIT AGREEMENT dated
29 May 1995 remain unchanged.
This AMENDMENT to the CREDIT AGREEMENT enters into force as soon as it has been
duly signed by all parties concerned
Thus done and signed in two originals
Basel, 10 July 1995
*
* *
Senior Vice-President
Vice-President
place / date INTERPOOL LTD.
November 27, 1995 Raoul J. Witteveen
- ----------------- ----------------------------------
* Confidential Treatment Requested
<PAGE>
-3-
(Appendix I )
*
As security for credit lines of USD 75,000.00. -- which you will grant to
Interpool Ltd., Bridgetown, Barbados (borrower)
we, Interpool, Inc., Princeton, New Jersey, USA (guarantor) waiving all rights
of objection and defense arising from said credit relationship, hereby
irrevocably undertake to pay immediately to you, upon your first demand, any
amount up to .
USD 83'000'000.--
(including principal, interest and all other charges) upon receipt of your
written request for payment and your written confirmation stating that Interpool
Ltd. has not repaid the amount claimed under this guarantee 45 calendar days
after due date at.
Our guarantee is valid until .
1. December 2002
and expires in full and automatically, should your written request and your
confirmation not be in our possession by that date, irrespective of whether the
present instrument is returned to us or not.
With each payment under this guarantee our obligation will be reduced pro rata.
The legal relationships between Interpool Ltd. (borrower), Interpool, Inc.
(guarantor) and * (lender) shall be governed by Swiss law. All proceeding shall
be brought exclusively before the courts Basel-Stadt / Switzerland.
Interpool, Inc.
Raoul J. Witteveen
------------------------------
* Confidential Treatment Requested
<PAGE>
-4-
CREDIT AGREEMENT
----------------
between
*
(hereafter referred to as LENDER)
and
Interpool, Ltd., Barbados
(hereafter referred to as BORROWER)
1. Working capital credit line (global account No. 10-144'408)
Amount: new USD 35'000'000.
Purpose: - for working capital
- for the bridge financing of container purchases including
positioning charges and insurance premiums
- for the opening of letters of credit in connection with
container purchases.
- for special purposes on a case to case basis
Utilization: - in US Dollars or other major currencies to the debit of current
accounts or in the form of fixed term advances with
duration of up to 360 days against presentation of invoices and
other transaction related documents.
Interest Rate: - on the current accounts the standard rate for overdrafts for
prime customers of the LENDER
- for fixed term advances 3/4 % above the Euro-Rate of the
LENDER equivalent to the duration of the advance.
Expiry Date: - 30 June 1997
2. Frame credit for the refinancing of leasing agreements (global
account No. 10-361'560)
Amount: USD 25'000'000.
Purpose: The refinancing of leasing agreements concluded between the
BORROWER and lessees acceptable to the LENDER
Utilization: to be determined in individual loan agreements containing all
the pertinent details
*Confidential Treatment Requested
<PAGE>
-5-
Interest Rate: to be determined with each transaction
Expiry Date: 31 March 2002
Security: - assignment of the rights of coverage deriving from the physical
damage, recovery / repatriation coverages and loss of revenue
insurance for those transaction which are financed under this
line of credit.
- in principle notified assignments of the rights deriving from
container leasing agreements including the payments due under
such agreements. For short-term refinancing assignments may
not be notified. The assignment also includes the ownership of
the underlying containers.
General conditions for all credit facilities:
Guarantee: - unconditional and irrevocable guarantee (wording according to
appendix I) in the amount of USD 66'000'000. issued by
Interpool Inc., Princeton (hereafter referred to as GUARANTOR).
Undertaking: - The BORROWER undertakes to furnish to us yearly a copy of the
balance sheet and profit and loss statement as well as a copy
of the audited consolidated balance sheet and profit and loss
statement of the GUARANTOR as soon as available.
General
Conditions: These credit facilities are governed by the rules and
regulations set forth in the General Conditions governing
business relationships with the Swiss Offices of * of which the
BORROWER signed a copy at an earlier point in time.
This CREDIT AGREEMENT enters into force as soon as
1. this CREDIT AGREEMENT has been duly signed by all parties concerned.
2. the LENDER has received a guarantee over USD 66'000'000. issued by Interpool,
Inc., Princeton.
3. the LENDER has received the underlying Board Resolution and Legal Opinion
from the BORROWER and the GUARANTOR, giving evidence that they are legally
empowered to enter into the present CREDIT AGREEMENT i.e., to issue the
requested GUARANTEE and that CREDIT AGREEMENT and GUARANTEE constitute a
binding undertaking on their part.
* Confidential Treatment Requested
<PAGE>
-6-
This CREDIT AGREEMENT replaces the CREDIT AGREEMENT dated 8 July 1994.
Thus done and signed in two originals
at Basel on 29 May 1995 *
* *
Senior Vice President
Vice President
At New York on 9 June 1995 INTERPOOL LTD.
-------------------------------------------------
Raoul J. Witteveen, President
------------------------------
* Confidential Treatment Requested
<PAGE>
-7-
(Appendix I)
*
As security for credit lines of USD 60' 000'00. -- which you will grant to
INTERPOOL LTD., BRIDGETOWN, BARBADOS (BORROWER)
we, Interpool, Inc., Princeton, New Jersey, USA (guarantor) waiving all rights
of objection and defense arising from said credit relationship, hereby
irrevocably undertake to pay immediately to you, upon your first demand, any
amount up to .
USD 66'000'000.--
(including principal, interest and all other charges) upon receipt of your
written request for payment and your written confirmation stating that Interpool
Ltd. has not repaid the amount claimed under this guarantee 45 calendar days
after due date at.
Our guarantee is valid until .
1. December 2002
and expires in full and automatically, should your written request and your
confirmation not be in our possession by that date, irrespective of whether the
present instrument is returned to us or not.
With each payment under this guarantee our obilgation will be reduced pro rata.
The legal relationships between Interpool Ltd. (borrower), Interpool, Inc.
(quarantor) and * (lender) shall be governed by Swiss law. All proceeding shall
be brought exclusively before the courts Basel-Stadt / Switzerland.
Interpool, Inc.
GENERAL CONDITIONS GOVERNING BUSINESS
RELATIONSHIPS WITH THE SWISS OFFICES OF *
(1965 Edition)
Note: This is merely a translation which shall
not be deemed to affect the meaning or
construction of the off of a (ext in French,
German, or Italian)
Scope 1. The conditions set forth herein govern the
business relationships between the Bank and
its customers and thereby facilitate the
expeditious and economical handling of
customers' instructions. In addition,
special regulations of the Bank, as well as
the general agreements among the leading
Swiss Banks and relevant customers and
usages, apply to particular kinds of
business.
* Confidential Treatment Requested
<PAGE>
Authorized Signatures 2. The list of the signatures of persons
authorized to sign for the customer, which
Name of Account the customer has filed with the Bank, shall
be binding upon the customer until written notice
of a change shall have been received by the
Bank, notwithstanding any entries in the
Commercial Register or publications. The
customer will periodically receive statements
of deposit and custody accounts. Any
objections to such statements or to other
communications from the Bank must be made
immediately and, where practicable, by
telegram or telephone; and in case of delay
in making any such objection, any loss
resulting therefrom shall be borne by the
customer. In the same manner and with the
same affect as in the case of objections to
statements or other communications, notice
must be given immediately to the Bank, when an
expected notice is not received by the
customer in due time. If the customer does
not give the Bank notice of objection within
a period of one month, the statements of
accounts shall be deemed to be correct and
all items entered therein and all reservations
made by the Bank in credit advices covering
amounts which have not yet been received
shall be deemed to be approved. All
communications by the Bank shall be deemed to
have been transmitted when sent to or held at
the disposal of the customer in accordance
with his latest instructions, or, for his
protection, in a manner which deviates
therefrom. The date of the copies or mailing
lists in the possession of the Bank shall be
deemed to be the time of dispatch.
Errors in transmission 3. Damage resulting from delays, losses or
identification etc. mistakes in transportation and transmission
Delays shall be borne by the customer. Likewise,
the customer shall bear all losses resulting
from failure by the Bank to discover
forgeries or other defects, particularly
defects with respect to identification or
capacity to act, except to the extent that
the Bank shall be guilty of negligence. In
case of delay in the carrying out of payment
transaction, the Bank shall in no event be
liable for more than the payment of interest
for the period involved, except in cases
where its attention has been specifically
directed to the danger of additional damage.
Accounts in foreign 4. The bank's assets corresponding to customers'
currency credit balances in foreign currency are held
in the same currency in or outside of the
country whose currency is involved. The
customer bears proportionately in his share
at the economic and legal consequences
resulting from measures taken by the country
of the currency or by the country where the
funds are invested and affecting all the
bank's assets held in either country. The
obligations of the bank arising from accounts
in foreign currency shall be discharged
exclusively at the place of business of the
branch carrying the accounts and solely
through the establishment of the credit entry
in the country of the currency at the bank's
own branch, a correspondent or a bank named
by the customer.
Set Off 5. The Bank shall be entitled at any time either to
set off against each other the balances of all
accounts of the customer (irrespective of the
branch office in which the same may be
The Bank shall have a lien as to all assets which
are held for the customers, the Bank shall be
entitled at its discretion to realize such assets,
which assets are hereby transferred to the Bank
for such purpose.
<PAGE>
Drafts and Cheques 6. If drafts, cheques and other instruments
received for collections or discounted, are
not paid, or if the proceeds thereof cannot
be freely disposed of, the Bank shall be
entitled to cancel, credit advices and shall
retain all its rights in connection with such
instruments until the payment of all
indebtedness.
Adjustment of interest 7. Except to the extent otherwise agreed to by
rates the Bank in writing, the Bank shall be
Termination relationships entitled to adjust interest rates and
commissions, affective immediately, to the
prevailing conditions and at any time to
terminate business relationships, to cancel
credit lines and to demand immediate payment
of its claims.
Custom Accounts 8. Securities and other valuable shall be kept
in custody accounts with the same care as the
Bank's own property; the sale custody charges
as set forth in the Bank's separate Schedule
of Fee apply. The Bank shall be entitled to
have the property kept in custody abroad for
the account and risk of the customer. Unless
the customer specifies separate custody and
agrees to assume the expense thereof, the
Bank shall be deemed to be expressly
authorized to affect the safe keeping of
securities merely by kind or to have them kept
elsewhere in this manner, the customer as co-
owner being entitled to an equivalent number
of securities. The preceding sentence does
not apply to securities registered in the
name of the customer or to securities which
for other reasons must be kept separate. The
Bank undertakes to perform the customary
administrative duties such as collection of
coupons and redeemable securities obtaining
of new coupon sheets, exchange of provisional
certificate, etc., and also, will as a rule,
but without assuming any responsibility
therefor, give the customer notice of the
steps which he himself may carry out in
accordance with the next succeeding Paragraph
and in this connection, the Bank will rely on
publications and lists available to it,
without, however, assuming any
responsibility therefor. Unless otherwise
agreed, the customer must take all other
steps necessary to protect his rights in
connection with the property deposited, such
as, in particular the giving of instructions
for the exercise at sale of subscriptions
rights for the exercise of conversion rights
for the payment of calls on partly paid
shares, and for affecting exchanges of
securities. If no instructions are received
from the customer the Bank shall be entitled
to act in accordance with its own discretion.
Holidays 9. In all business relationships of the customer with
the Bank, Saturday shall be treated as a public
holiday.
10. The place of business of the Branch of the
Bank at which the deposit or custody account
is maintained shall be the place of
performance to the obligations of the Bank
and the customer, as well as the place for
special proceedings for the collections of
debts owned by customers domiciled abroad.
The legal relationships between customer and the
Bank shall be governed by Swiss law. All
proceedings against the Bank shall be brought
exclusively before the courts of the place of
business of the branch office of the Bank at which
the deposit of custody account is maintained. the
customer submits to such jurisdiction in the case
of any proceeding brought by the Bank against him,
but the Bank shall also be entitled to bring
proceedings against him at his domicile or in any
other competent jurisdiction, in which event,
however Swiss law shall remain applicable.
Exhibit 10.23
INTERPOOL, INC.
INTERPOOL LIMITED
INTERPOOL FINANCE CORP.
$103,000,000
GUARANTEED SENIOR SECURED 7.21% NOTES
DUE JULY 25, 2002
===============================
NOTE PURCHASE AGREEMENT
===============================
Dated: July 25, 1995
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1. AUTHORIZATION OF ISSUE OF NOTES . . . . . . . . . . . . . . 1
1.1 Issuance of Notes . . . . . . . . . . . . . . . . . . . . . 1
1.2 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Interest Rate Calculation . . . . . . . . . . . . . . . . . 1
SECTION 2. PURCHASE AND SALE OF NOTES; USE OF PROCEEDS . . . . . . . . 2
2.1 Purchase and Sale of Notes . . . . . . . . . . . . . . . . . 2
2.2 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 3. THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 4. CONDITIONS OF CLOSING . . . . . . . . . . . . . . . . . . . 2
4.1 Transaction Documents . . . . . . . . . . . . . . . . . . . 2
4.2 Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . 2
4.3 Representations and Warranties, No Default . . . . . . . . . 3
4.4 Evidence of Title to Collateral, Absence
of Liens on Collateral, Collateral
Certificate . . . . . . . . . . . . . . . . . . . . . . . 3
4.5 Corporate Proceedings and Documents . . . . . . . . . . . . 4
4.6 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.7 UCC Financing Statements; Applications
to Note Liens on Certificates of Title. . . . . . . . . . 4
4.8 Purchase Permitted By Applicable Laws . . . . . . . . . . . 5
4.9 Sale of Notes to Other Purchasers . . . . . . . . . . . . . 5
4.10 Other Documents . . . . . . . . . . . . . . . . . . . . . . 5
4.11 Legal Matters . . . . . . . . . . . . . . . . . . . . . . . 5
4.12 Legality . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.13 Information Certificate; Private
Placement Number . . . . . . . . . . . . . . . . . . . . . 6
4.14 Placement Agent Letter . . . . . . . . . . . . . . . . . . . 6
4.15 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.16 Compliance with This Agreement . . . . . . . . . . . . . . . 6
SECTION 5. REPAYMENT; PREPAYMENT; ASSUMPTION OF NOTES;
RELEASE OF COLLATERAL . . . . . . . . . . . . . . . . . . 7
5.1 Repayment of Principal and Interest
on the Notes . . . . . . . . . . . . . . . . . . . . . . . 7
5.2 Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.3 Method of Payment . . . . . . . . . . . . . . . . . . . . . 7
5.4 Registration of Notes; Transfer and
Exchange of Notes . . . . . . . . . . . . . . . . . . . . 7
5.5 Optional Prepayments . . . . . . . . . . . . . . . . . . . . 8
5.6 Interpool's and Ltd.'s Assumption of Notes;
Pledge of Equipment . . . . . . . . . . . . . . . . . . . 10
5.7 Termination of Collateral . . . . . . . . . . . . . . . . . 13
SECTION 6. RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE COLLATERAL . . . . . . . . . . . . . . . 15
6.1 Collateral . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.2 Payment of Moneys Received With Respect
to the Collateral . . . . . . . . . . . . . . . . . . . . 15
i
<PAGE>
Page
----
SECTION 7. REPRESENTATIONS AND WARRANTIES OF ISSUERS . . . . . . . . . 15
7.1 Organization and Power . . . . . . . . . . . . . . . . . . . 15
7.2 Trademarks, Licenses, etc. . . . . . . . . . . . . . . . . . 16
7.3 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . 16
7.4 Business . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.5 Financial Statements . . . . . . . . . . . . . . . . . . . . 16
7.6 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.7 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.8 Title, Liens . . . . . . . . . . . . . . . . . . . . . . . . 16
7.9 Consent, Approval . . . . . . . . . . . . . . . . . . . . . 17
7.10 Compliance with Other Instruments . . . . . . . . . . . . . 17
7.11 Corporate Existence; Place of Business;
Books and Records . . . . . . . . . . . . . . . . . . . . 17
7.12 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.13 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . 18
7.14 Governmental Licenses . . . . . . . . . . . . . . . . . . . 18
7.15 Event of Default . . . . . . . . . . . . . . . . . . . . . . 18
7.16 Offering of the Notes . . . . . . . . . . . . . . . . . . . 18
7.17 Margin Securities . . . . . . . . . . . . . . . . . . . . . 18
7.18 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . 18
7.19 Liabilities; Business . . . . . . . . . . . . . . . . . . . 18
7.20 Investment Company Act . . . . . . . . . . . . . . . . . . . 19
7.21 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.22 Foreign Assets Control Regulations . . . . . . . . . . . . . 19
7.23 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.24 Financed Equipment . . . . . . . . . . . . . . . . . . . . . 19
7.25 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 8. REPRESENTATIONS AND WARRANTIES OF PURCHASERS . . . . . . . 19
8.1 Purchase for Investment . . . . . . . . . . . . . . . . . . 19
8.2 Taxpayer Status . . . . . . . . . . . . . . . . . . . . . . 19
8.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 9. COVENANTS OF ISSUERS . . . . . . . . . . . . . . . . . . . 20
9.1 Maintenance of Corporate Existence . . . . . . . . . . . . . 20
9.2 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.3 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.4 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.5 Preservation of Assets . . . . . . . . . . . . . . . . . . . 21
9.6 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.7 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.8 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.9 Line of Business . . . . . . . . . . . . . . . . . . . . . . 22
9.10 Chief Offices; Places of Business;
Character of Collateral . . . . . . . . . . . . . . . . . 23
9.11 Financial Statements . . . . . . . . . . . . . . . . . . . . 23
9.12 Books and Records . . . . . . . . . . . . . . . . . . . . . 24
9.13 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.14 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.15 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . 25
9.16 Further Assurances . . . . . . . . . . . . . . . . . . . . . 25
9.17 Government Contracts . . . . . . . . . . . . . . . . . . . . 25
ii
<PAGE>
Page
----
9.18 Sell, Merge, Consolidate, etc. . . . . . . . . . . . . . . . 25
9.19 Financial Covenants . . . . . . . . . . . . . . . . . . . . 26
9.20 Payment of Obligations . . . . . . . . . . . . . . . . . . . 27
9.21 Notice of Default . . . . . . . . . . . . . . . . . . . . . 27
9.22 Lock Box . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.23 Additional Costs . . . . . . . . . . . . . . . . . . . . . . 27
9.24 Transactions with Related Parties . . . . . . . . . . . . . 28
9.25 Permitted Investments . . . . . . . . . . . . . . . . . . . 28
9.26 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.27 Acquisition of Notes . . . . . . . . . . . . . . . . . . . . 29
9.28 Private Offering . . . . . . . . . . . . . . . . . . . . . . 29
9.29 Security Interest in Leases . . . . . . . . . . . . . . . . 30
SECTION 10. DEFAULT; REMEDIES OF THE PURCHASERS . . . . . . . . . . . 30
10.1 Occurrence of Event of Default . . . . . . . . . . . . . . . 30
10.2 Action Upon Event of Default . . . . . . . . . . . . . . . . 32
10.3 Authorized to Execute Bills of Sale . . . . . . . . . . . . 33
10.4 Remedies Cumulative . . . . . . . . . . . . . . . . . . . . 34
10.5 Discontinuance of Proceedings . . . . . . . . . . . . . . . 34
10.6 Agreements with respect to Remedies
and Defaults . . . . . . . . . . . . . . . . . . . . . . . 34
10.7 Waiver of Existing Defaults . . . . . . . . . . . . . . . . 34
10.8 Rights of Purchasers to Receive Payment . . . . . . . . . . 34
SECTION 11. EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 12. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 13. PURCHASERS AND NOTES . . . . . . . . . . . . . . . . . . . 36
13.1 Withholding Taxes; Information Reporting . . . . . . . . . . 36
13.2 Satisfaction and Discharge of
Agreement; Termination of Obligations . . . . . . . . . . 36
13.3 Amendments to This Agreement With Consent
of Purchasers . . . . . . . . . . . . . . . . . . . . . . 36
13.4 Notification on or Exchange of Notes . . . . . . . . . . . . 37
SECTION 14. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 37
14.1 Oral Modification, Termination, etc. . . . . . . . . . . . . 37
14.2 Successors and Assigns . . . . . . . . . . . . . . . . . . . 37
14.3 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 37
14.4 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 37
14.5 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . 37
14.6 Governing Law; Severability . . . . . . . . . . . . . . . . 38
14.7 WAIVER OF JURY TRIAL; SUBMISSION TO
JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 15. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 38
iii
<PAGE>
Page
----
LIST OF SCHEDULES
Schedule 1 -- Purchasers Schedules
Schedule 2 -- Issuers Schedule
Schedule 3 -- Names, Addresses of and
Wiring Instructions for Each Purchaser
Schedule 7.1 -- Issuers' Jurisdictions of Incorporation;
Other Jurisdictions where Issuers are Qualified
to do Business; Chief Offices of Issuers and
Locations of Issuers' Books and Records;
Subsidiaries of Issuers; Capital Stock of
Issuers
Schedule 7.5 -- Indebtedness of Issuers
Schedule 9.29(x)(i) -- Lease Stamp Language
Schedule 9.29(x)(ii) -- Letter of secured third party to Collateral
Agent
Schedule 9.29(x)(iii) -- Letter of Collateral Agent to secured third
party
Schedule 15(a) -- Forms of Lease
Schedule 15(b) -- Forms of Direct Finance Lease
iv
<PAGE>
LIST OF EXHIBITS
Exhibit A Form of Note
Exhibit B Form of Collateral Agency Agreement
Exhibit C Form of Collateral Certificate
Exhibit D Form of Guaranty
Exhibit E Form of Security Agreement
Exhibit F Form of Assignment and Assumption Agreement
Exhibit G Form of Information Certificate
Exhibit H Form of Railcars Security Agreement
Exhibit I Form of Officer's Certificate
Exhibit J Form of Cash Collateral Agreement
Exhibit K Form of Collateral Administration Agreement
v
<PAGE>
NOTE PURCHASE AGREEMENT
July 25, 1995
To Each of the Purchasers Named in the
Purchaser Schedule Attached Hereto as
Schedule 1
Ladies and Gentlemen:
Interpool, Inc., a Delaware corporation ("Interpool"), Interpool
---------
Limited, a Barbados corporation ("Ltd.") and Interpool Finance Corp., a
----
Cayman Islands corporation ("Corp." and together with Interpool and Ltd.,
each, an "Issuer" and collectively, the "Issuers"), hereby agree with the
------ -------
purchasers named in Schedule 1 attached hereto (the "Purchasers") as
---------- ----------
follows:
SECTION 1. AUTHORIZATION OF ISSUE OF NOTES.
-------------------------------
1.1 Issuance of Notes. (a) The Issuers will authorize the issuance
-----------------
and sale to the Purchasers of secured promissory notes in the aggregate
principal amount of $103,000,000.00 (the "Notes") pursuant to Section 1.2
----- -----------
and as indicated on Schedule 1 attached hereto, each of which Notes is to
----------
be dated the Closing Date, (b) Interpool will authorize the assumption by
Interpool of any or all of the Notes of Ltd. and Corp. and the making of
Guaranties by Interpool and (c) Ltd. will authorize the assumption by Ltd.
of any or all of the Notes of Corp. and the making of Guaranties by Ltd.
1.2 Notes. Interpool will issue Notes in the aggregate principal
-----
amount of five million dollars ($5,000,000); Ltd. will issue Notes in the
aggregate principal amount of twenty-two million dollars ($22,000,000); and
Corp. will issue Notes in the aggregate principal amount of seventy-six
million dollars ($76,000,000); which Notes shall be in the aggregate
principal amount of one hundred three million dollars $103,000,000, shall
mature on the seventh (7th) anniversary of the Closing Date, shall bear
interest on the unpaid balance thereof from the Closing Date until the
principal thereof shall become due and payable at the rate of 7.21% per
annum quarterly in arrears commencing on October 25, 1995 and on overdue
payments at the rate specified therein, and shall be substantially in the
form of Exhibit A attached hereto. The term "Notes" as used herein shall
--------- -----
include each such Note delivered pursuant to any provision of this
Agreement and each such Note delivered in substitution or exchange for any
other Note pursuant to any such provision. Interpool will execute and
deliver an irrevocable guarantee to each Purchaser and the Collateral Agent
guaranteeing full and timely payment and performance of the Notes issued by
Ltd. and Corp. (in the form of Exhibit D and as described below) and all
---------
other obligations of Ltd. and Corp. under this Agreement and the other
Transaction Documents. Ltd. will execute and deliver an irrevocable
guarantee to each Purchaser and the Collateral Agent guaranteeing full and
timely payment and performance of the Notes issued by Corp. (in the form of
Exhibit D and as described below) and all other obligations of Corp. under
- ---------
this Agreement and the other Transaction Documents.
1.3 Interest Rate Calculation. Interest shall be calculated on the
-------------------------
basis of a 360-day year of twelve 30-day months.
<PAGE>
SECTION 2. PURCHASE AND SALE OF NOTES; USE OF PROCEEDS.
-------------------------------------------
2.1 Purchase and Sale of Notes. Each of the Issuers hereby agrees
--------------------------
to sell to each Purchaser and, subject to the terms and conditions herein
set forth, each Purchaser agrees to purchase from such Issuer one or more
Notes each in the respective principal amount set forth opposite such
Issuer's and Purchaser's respective name on Schedule 1 attached hereto at
----------
100% of such aggregate principal amount. Each purchase is a separate and
several purchase.
2.2 Use of Proceeds. The proceeds of the Notes will be used by the
---------------
Issuers (i) to retire outstanding indebtedness, (ii) to acquire New
Equipment and Direct Finance Leases and/or (iii) for the Issuers' general
corporate purposes.
SECTION 3. THE CLOSING. The closing (the "Closing") of the issuance
----------- -------
and sale of the Notes to be purchased by the Purchasers shall take place at
the offices of Rogers & Wells, 200 Park Avenue, New York, New York,
commencing at 10:00 a.m., New York time, on July , 1995 or such other date
and time as shall be agreed between the Issuers and the Majority in
Interest (the "Closing Date"). At the Closing, each Issuer will deliver to
------------
each Purchaser or a nominee designated by such Purchaser and set forth in
Schedule 3 attached hereto (each a "Nominee" and, collectively, the
- ---------- -------
"Nominees") one or more Notes as specified in Section 1.2 and on Schedule 1
-------- ----------- ----------
attached hereto registered on the books of such Issuer in such Purchaser's
name or in the name of such Nominee evidencing the aggregate principal
amount of such Purchaser's Commitment in respect of such Note against pay-
ment by such Purchaser of the purchase price for each such Note to be
purchased by such Purchaser by wire transfer thereof in immediately
available funds to account number 0170-9644 for Interpool, Inc., account
number 0174-3180 for Interpool Limited, and account number 1409-545051 for
Interpool Finance Corp., in each case at Core States Bank, N.A., Philadelphia,
Pennsylvania 19178, ABA # 0310-0001-1, on the Closing Date. If at the Closing
any Issuer shall fail to tender to any Purchaser the relevant Notes, as provided
herein, or any of the conditions specified in Section 4 shall not have been
---------
fulfilled to the reasonable satisfaction of each of the Purchasers, each
Purchaser shall, at its option, be relieved of its obligations under this
Agreement, without thereby waiving any other rights such Purchasers may have by
reason of such failure or nonfulfillment. If at the Closing each Purchaser does
not provide the purchase price for its respective Note(s), then the other
Purchasers may, but shall not be obligated to, purchase the Notes to be issued
to it by wiring funds to the respective Issuer.
SECTION 4. CONDITIONS OF CLOSING. The obligation of each of the
---------------------
Purchasers to purchase and pay for the Notes being purchased by such
Purchaser hereunder is subject to the satisfaction, on or before the
Closing Date, of the following conditions:
4.1 Transaction Documents. The Purchasers and the Collateral Agent
---------------------
shall have received a fully executed counterpart of each of the Transaction
Documents, each of which shall be in full force and effect and no term or
condition thereof shall have been amended, modified or waived, and the
transactions contemplated therein to be consummated hereunder and
thereunder (including the payment of all fees and other charges) on or
prior to the Closing shall have been consummated.
4.2 Legal Opinions. The Purchasers and the Collateral Agent shall
--------------
have received a legal opinion from each of (a) DeCampo, Diamond & Ash,
special counsel to the Issuers and the Guarantors; (b) Arthur L. Burns,
Esq., general counsel to the Issuers and the Guarantors; (c) David King,
Esq., special Barbados counsel to Ltd.; (d) Bruce Campbell & Co., special
Cayman Islands counsel to Corp.; and (e) Ray, Quinney & Nebeker, counsel to
the Collateral Agent (with a copy of such opinion to be delivered to the
Issuers); and the Purchasers shall have received a legal opinion from
Rogers & Wells,
2
<PAGE>
special counsel to the Purchasers, all of which legal opinions shall be in
form and substance satisfactory to the Purchasers.
4.3 Representations and Warranties, No Default. The representations
------------------------------------------
and warranties contained in Section 7 shall be true and correct and the
---------
conditions set forth in this Section 4 shall have been satisfied on and as
---------
of the Closing Date as if restated at and as of the Closing Date, there
shall exist on the Closing Date no Default or Event of Default, and each of
the Issuers shall have delivered to the Purchasers an Officer's
Certificate, dated the Closing Date, to each such effect.
4.4 Evidence of Title to Collateral, Absence of Liens on Collateral,
----------------------------------------------------------------
Collateral Certificate and Stamping of Original Leases.
- ------------------------------------------------------
(a) Prior to the Closing, the Purchasers shall have received
true, correct and complete copies of the certificates of title or similar
document for the Chassis covered by certificates of title included in the
Collateral.
(b) Prior to the Closing, the Purchasers shall have received
the following: (i) to the extent reasonably available, evidence of title to
the Containers included in the Collateral showing that the relevant Issuer
has good and marketable title to such Containers; (ii) search reports of
the records of the applicable offices where UCC financing statements,
Federal tax liens and judgments are filed showing that such Containers and
Chassis not covered by certificates of title included in the Collateral are
free and clear of Liens of record; (iii) an affidavit executed by an
officer of the relevant Issuer of such Issuer's ownership of, and good and
marketable title to such Containers and such Chassis free and clear of
Liens other than Permitted Liens, which affidavit shall be in form and
substance satisfactory to the Purchasers and their special counsel; and
(iv) a legal opinion of Arthur L. Burns, Esq., general counsel to the
Issuers, in form and substance satisfactory to the Purchasers and their
special counsel, as to the relevant Issuer's having good and marketable
title to such Containers and such Chassis free and clear of Liens of
record.
(c) Prior to the Closing, the Purchasers shall have received
the following:
(i) evidence of title to the Railcars showing that
Interpool has good and marketable title to such
Railcars;
(ii) search reports of the records of the Interstate
Commerce Commission and the applicable offices where
Federal tax liens and judgments are filed showing that
such Railcars are free and clear of Liens of record;
(iii) an affidavit executed by an officer of Interpool as to
Interpool's ownership of, and good and marketable
title to, such Railcars free and clear of Liens, other
than Permitted Liens, which affidavit shall be in form
and substance satisfactory to the Purchasers and their
special counsel; and
(iv) a legal opinion of Arthur L. Burns, Esq., general
counsel to Interpool, in form and substance
satisfactory to the Purchasers and their special
counsel, as to Interpool's having good and marketable
title to such Railcars free and clear of Liens of
record. The Purchasers shall have received search
reports of the records of the Interstate Commerce
Commission that Interpool has good and marketable
title to the Railcars
3
<PAGE>
included in the Collateral free and clear of Liens of
record and a Collateral Certificate executed by an
officer of Interpool with respect thereto.
(d) Prior to the Closing, the Purchasers shall have received
the following: (i) search reports of the records of the applicable offices
where UCC financing statements, Federal tax liens and judgments are filed
showing that the Leases and Direct Finance Leases are free and clear of
Liens of record; (ii) an affidavit executed by an officer of the relevant
Issuer of such Issuer's ownership of, and good and marketable title to the
Leases and Direct Finance Leases free and clear of Liens other than
Permitted Liens, which affidavit shall be in form and substance
satisfactory to the Purchasers and their special counsel; and (iii) a legal
opinion of Arthur L. Burns, Esq., general counsel to the Issuers, in form
and substance satisfactory to the Purchasers and their special counsel, as
to the relevant Issuer's having good and marketable title to such Leases
and Direct Finance Leases free and clear of Liens of record.
(e) Prior to the Closing, the Purchasers shall have received a
Collateral Certificate executed by an officer of each Issuer with respect
to all the Collateral referred to in paragraphs (a), (b) (c) and (d) above.
(f) The Leases. Prior to Closing, the Issuers shall have
----------
stamped the language set forth in Schedule 9.29(x)(i) on the front cover or
other conspicuous space of Leases and Direct Finance Leases relating to at
least 90% of the aggregate Collateral Value of Financed Equipment covered
by Leases and of Direct Finance Leases.
4.5 Corporate Proceedings and Documents. Each Issuer shall have
-----------------------------------
taken all necessary corporate action to authorize the transactions
contemplated by the Transaction Documents to the reasonable satisfaction of
the Purchasers and their special counsel, and the Purchasers and their
special counsel shall have received evidence of such proceedings, together
with such other corporate documents and certificates reasonably requested
by the Purchasers and their special counsel including, without limitation,
charter documents, certificates of good standing and certificates of
incumbency of officers, in form and substance satisfactory to the
Purchasers and their special counsel.
4.6 Taxes. All Taxes, fees and other charges payable in connection
-----
with the execution, delivery, recording, publishing and filing of the
Transaction Documents, and the issue, sale and delivery of the Notes to be
delivered on the Closing Date shall have been paid in full by the Issuers
and the Purchasers and their special counsel shall have received evidence
of any such payment or arrangements for any such payment satisfactory to
the Purchasers and their special counsel.
4.7 UCC Financing Statements; Applications to Note Liens on
-------------------------------------------------------
Certificates of Title.
- ----------------------
(a) At the Closing, all UCC financing statements (covering the
Collateral other than Chassis which are covered by certificates of title or
Railcars), naming the relevant Issuer, as debtor, and the Collateral Agent,
as secured party, all certificates of title for Chassis included in the
Collateral, applications to note the Lien of the Collateral Agent in any
Collateral covered by such certificates of title, the Railcars Security
Agreement and all other documents and instruments required under other
applicable laws, shall have been duly executed and delivered to special
counsel to the Purchasers and the Collateral Agent, in appropriate form for
filing together with the applicable filing fees with respect thereto, in
all jurisdictions that the Purchasers deem necessary or desirable in order
to perfect the Liens of the Collateral Agent on behalf of the Purchasers in
the Collateral.
4
<PAGE>
(b) By the Closing, the Issuers shall have filed one or more
precautionary UCC financing statements against the lessee and any sublessee
under all Direct Finance Leases of Equipment not subject to a certificate
of title and assignments of such UCC financing statements in favor of the
Collateral Agent.
(c) Not later than ninety (90) days subsequent to the Closing
Date, the Issuers shall have given to the Collateral Agent (i) the
certificates of title for the Chassis included in the Collateral and which
are covered by certificates of title evidencing the Lien of the Collateral
Agent therein and showing that such Chassis are free and clear of any Liens
of record other than Permitted Liens and (ii) not later than ninety (90)
days subsequent to the Closing Date, search reports of the records of the
applicable offices where UCC financing statements, Federal tax liens and
judgments are filed covering the period from the latest date covered by
both of the search reports delivered pursuant to Sections 4.4(b)(ii) and
-----------------------
4.4(d)(i) through a date subsequent to the Closing Date, evidencing the
- ---------
Lien of the Collateral Agent in the Collateral other than the Chassis which
are covered by certificates of title or Railcars, showing that such
Collateral is free and clear of any Liens of record other than Permitted
Liens and showing the filing information with respect to the UCC Financing
Statements referred to in Subsection 4.7(a) above.
4.8 Purchase Permitted By Applicable Laws. The purchase of and
-------------------------------------
payment for each of the Notes to be purchased by the relevant Purchasers on
the Closing Date on the terms and conditions herein provided (including the
use of the proceeds of such Notes by the Issuers pursuant to Section
-------
2.2) shall not violate any law or governmental regulation in any
- ---
jurisdiction to which any Purchaser is subject and shall not subject any
Purchaser or the Collateral Agent to any Tax, penalty, liability or to
jurisdiction as a domiciliary or resident of or other onerous condition
under or pursuant to any applicable law or governmental regulation in any
jurisdiction, and such Purchaser shall have received such certificates,
legal opinions or other evidence as it or its special counsel may request
to establish compliance with this condition.
4.9 Sale of Notes to Other Purchasers. Simultaneously with the
---------------------------------
purchase of and payment for Notes by each Purchaser, all of the other Notes
to be issued to, and purchased and paid for by, the other Purchasers, as
set forth on Schedule 1 attached hereto, shall be issued to, and purchased
----------
and paid for by, such other Purchasers.
4.10 Other Documents. The Purchasers and the Collateral Agent shall
---------------
have received all such other agreements, documents, instruments and
certificates and evidence that all action shall have been taken as is
reasonably requested by the Purchasers or their special counsel in order to
effect the transactions contemplated hereby and by the other Transaction
Documents.
4.11 Legal Matters. All legal matters incident to the purchase of
-------------
the Notes, the Collateral and the transactions relating thereto shall be
satisfactory to special counsel for the Purchasers and the Collateral
Agent.
4.12 Legality. The Notes shall on the Closing Date qualify as a
--------
legal investment for insurance companies under applicable insurance law
(without recourse to laws permitting limited investments by insurance
companies without restriction as to the character of the particular
investment) and the Purchasers shall have received a certificate from the
Issuers as to factual matters as the Purchasers or their special counsel
may reasonably request, to establish compliance with this condition.
5
<PAGE>
4.13 Information Certificate; Private Placement Number.
-------------------------------------------------
(a) Information Certificate. The Issuers shall have completed
-----------------------
and delivered to the Purchasers the information certificate in the form of
Exhibit G attached hereto, with a copy of the Issuers' most recent audited
- ---------
annual financial statements attached thereto, which certificate and
statements the Purchasers have informed the Issuers may be used as a basis
for filings which the Purchasers may be required to make with certain
regulatory bodies and with the National Association of Insurance
Commissioners (the "NAIC").
----
(b) Standard & Poor's Rating for the Notes. The Purchasers and
--------------------------------------
their special counsel shall have received evidence satisfactory to the
Purchasers and their special counsel that the Notes have been rated PPR2 or
better by Standard & Poor's.
(c) Private Placement Number. The Notes shall each have
------------------------
received a private placement number from Standard & Poor's Corporation
CUSIP Service Bureau.
4.14 Placement Agent Letter. The Issuers' counsel and the
----------------------
Purchasers' special counsel shall have received a letter from SBC Capital
Markets Inc. (the "Placement Agent"), placement agent with respect to the
---------------
Notes, which letter shall be in form and substance satisfactory to the
addressees thereof, to the effect that the offering of the Notes has been a
private offering as set forth in Section 7.16.
------------
4.15 Expenses. At the Closing, upon presentation of invoices
--------
therefor, the Issuers shall pay all fees and expenses relating to this
Agreement, all other Transaction Documents or the transactions contemplated
hereunder and thereunder including but not limited to:
(a) the reasonable fees and disbursements of all the
Purchasers' and the Collateral Agent's special counsel;
(b) all costs and expenses relating to this Agreement, all
other Transaction Documents, the transactions contemplated hereunder and
thereunder and the cost of the issuance, purchase and delivery of the
Notes;
(c) any broker's fees or finder's fees and placement costs of
the Placement Agent and any other Persons who acted as broker or placement
agent for or on behalf of an Issuer or who was retained by an Issuer to so
act relating to the sale of the Notes hereunder; and
(d) all costs and expenses associated with obtaining a private
placement number for the Notes.
4.16 Compliance with This Agreement. The Issuers shall have
------------------------------
performed and complied with all agreements and conditions contained herein
or in the other Transaction Documents which are required to be performed or
complied with by the Issuers before or at the Closing Date to the
satisfaction of the Purchasers and their special counsel.
4.17 Collateral Administration Agreement. Each Issuer shall execute
-----------------------------------
and use its best efforts to have the Collateral Administration Agreement
executed and delivered to the Purchasers and the Collateral Agent by all
holders of its Funded Debt secured by leases or similar agreements or
arrangements covering Financed Equipment and Direct Finance Leases.
6
<PAGE>
SECTION 5. REPAYMENT; PREPAYMENT; ASSUMPTION OF NOTES;
RELEASE OF COLLATERAL.
-------------------------------------------
5.1 Repayment of Principal and Interest on the Notes.
------------------------------------------------
(a) Each of the Issuers shall pay principal of the Notes issued
by it in quarterly installments on the dates and in the amounts set forth
in Schedule 1 attached to such Notes, in arrears.
----------
(b) The Issuers shall pay interest on the outstanding principal
balance of each Note issued by it on the dates, and at the rates, set forth
in such Note.
(c) If the date that any payment under the Notes is due is
other than a Business Day, the amount of principal and interest otherwise
payable on such date shall be payable on the next succeeding Business Day
together with interest accrued on the unpaid principal through such next
succeeding Business Day but only with respect to the final payment due at
maturity.
5.2 Maturity.
--------
The entire unpaid principal amount of the Notes, together with
accrued and any remaining unpaid interest thereon, shall be due and payable
on the seventh (7th) anniversary of the Closing Date, subject to
acceleration or prepayment as hereinafter provided.
5.3 Method of Payment. All payments (including optional prepayments
-----------------
pursuant to Section 5.5) by the Issuers on account of the Notes shall be
-----------
payable no later than 12:00 noon (New York time) by wire transmittal
thereof in immediately available funds to the Purchasers' accounts set
forth on Schedule 3 attached hereto or as the Purchasers shall specify in
----------
writing to the Issuers from time to time. Each of the Purchasers agrees
that in the event it shall sell or transfer such Note(s) (a) it shall,
prior to the delivery of such Note(s) (unless it shall have already done
so), make a notation thereon of all principal, if any, prepaid on such
Note(s) and shall also note thereon the date, if any, to which interest
shall have been paid on such Note(s) and (b) it shall promptly notify the
Issuers of the name and address of the transferee of any such Note(s) so
transferred.
5.4 Registration of Notes; Transfer and Exchange of Notes.
-----------------------------------------------------
(a) Each Issuer shall cause to be kept at its office,
maintained pursuant to Section 9.10, a register (each, a "Register") for
------------ --------
the registration and transfer of Notes. The name and address of each
holder of one or more Notes, each transfer thereof and the name and address
of each transferee of such Notes shall be registered in each Register. The
Person in whose name any Note shall be registered shall be deemed and
treated as the owner and holder thereof for all purposes of this Agreement.
(b) A Purchaser intending to transfer a Note shall surrender
such Note duly endorsed, or accompanied by a duly executed written
instrument of transfer, together with a written request for the issuance of
a new Note, and the name and address of the intended transferee and shall
provide such further information relating to such transferee and such
transfer as the relevant Issuer shall reasonably request. The Notes have
not been registered under the Securities Act and may not be resold or
transferred except as provided in this Section 5.4. The Notes shall not be
-----------
transferred to any Person whose principal business is operating or leasing
chassis, railcars or containers. No transfer of the Notes may be made
unless pursuant to an effective registration statement under the Securities
Act or unless exempt from the registration requirements under the
Securities Act. No Issuer shall be obligated to register the Notes under
the Securities Act or any other securities law. The Notes will not be
offered or
7
<PAGE>
sold in, nor will any offering material relating to the Notes be
distributed in Canada nor will any resale or other transfer in Canada be
made except in compliance with applicable securities laws of the dominions
or provinces of Canada (including any exemptions thereunder).
In connection with the transfer of any Note pursuant to the
foregoing and upon surrender of any Note at the office of the Issuer
maintained pursuant to Section 9.10, such Issuer, at the request of the
------------
holder thereof, shall execute and deliver, at such Issuer's expense (except
as provided below), new Notes in exchange therefor, in denominations of at
least $100,000 (except as may be necessary to reflect any principal amount
not evenly divisible by $100,000 or an aggregate principal amount equal to
the unpaid principal amount of the surrendered Note). Each such new Note
shall be payable to such transferee and shall be substantially in the form
of the Note set out in Exhibit A to this Agreement. Each such new Note
---------
shall be dated and bear interest from the date to which interest shall have
been paid on the surrendered Note or dated the date of the surrendered Note
if no interest shall have been paid thereon. Simultaneously with the
transfer of any Note issued by Ltd. to a transferee pursuant to the
foregoing provisions of this Section 5.4(b), upon the request of the
--------------
transferee or the Purchaser transferor, Interpool shall issue a Guaranty to
and in favor of such transferee in respect of all Obligations of Ltd. to
such transferee, and Ltd. and Interpool shall each issue a Guaranty to and
in favor of such transferee in respect of all Obligations of Corp. to such
transferee, and each such Guaranty shall be in the form of Exhibit D hereto
---------
and shall be secured by the Collateral granted by the relevant Guarantor
pursuant to the Security Agreement and the Railcars Security Agreement
executed and delivered by such relevant Guarantor to the Collateral Agent;
provided that the failure of the transferee or the Purchaser transferor to
request such a Guaranty shall not affect or limit such relevant Guarantor's
Obligations in favor of such Purchaser transferor under its Guaranty or
under this Agreement or the other Transaction Documents which shall inure
to the benefit of such transferee.
(c) Upon receipt by the Issuer of evidence reasonably
satisfactory to it of (i) the ownership and (ii) the loss, theft,
destruction or mutilation, of any Note, and
(A) in the case of loss, theft or destruction, an indemnity
reasonably satisfactory to it (provided that if the holder
of the Note is an institutional investor which is a
"Qualified Institutional Buyer" such institutional
-----------------------------
investor's own agreement of indemnity shall be deemed to be
satisfactory), or
(B) in the case of mutilation, upon surrender and cancellation
thereof,
the Issuer shall execute and deliver, in lieu thereof, a new Note of like
tenor, dated and bearing interest from the date to which interest shall
have been paid on such lost, stolen, destroyed or mutilated Note or dated
the date of such lost, stolen, destroyed or mutilated Note if no interest
shall have been paid thereon.
5.5 Optional Prepayments.
--------------------
(a) Prepayment. Each Issuer shall have the right to prepay the
----------
principal of the Notes issued by such Issuer at any time and from time to
time in whole or in part together with any accrued and unpaid interest on
such principal amount so prepaid plus a Make Whole Premium. The proceeds
of any such prepayment of the relevant Notes shall be applied ratably over
all Notes issued by such Issuer and then applied to the prepayment of such
Notes in inverse order of the scheduled principal payments thereof without
priority of any one such Note over any other in accordance with the terms
of this Agreement.
8
<PAGE>
(b) Notice of Optional Prepayments; Officers' Certificate.
-----------------------------------------------------
Each Issuer will give each Purchaser written notice of each optional
prepayment under Section 5.5(a) not less than thirty (30) days and not more
--------------
than sixty (60) days prior to the date fixed for such prepayment, in each
case specifying such date, the aggregate principal amount of the Notes to
be prepaid, the principal amount of each Note held by such Purchaser to be
prepaid, the aggregate accrued and unpaid interest due thereon calculated
to but not including the date of prepayment, an estimate of the aggregate
Make Whole Premium due with respect to such prepayment, calculations
showing how such estimated Make Whole Premium was calculated and the
amounts of principal, accrued interest and Make Whole Premium to be
received by each Purchaser in connection with such prepayment in inverse
order of the scheduled principal payments thereof without priority of any
one such Note over any other in accordance with the terms of the Agreement.
Each Purchaser shall receive on the Business Day immediately preceding the
date scheduled for any such prepayment an Officer's Certificate of the
Issuers certifying that all conditions of such prepayment have been
fulfilled and specifying the particulars of such fulfillment, and, setting
forth the calculations used in computing the amount of the Make Whole
Premium and, a copy of the market data used in determining the Reinvestment
Yield in accordance with the terms of this Agreement. In the event that
there shall have been a partial prepayment of the Notes under Section
-------
5.5(a), such Issuer shall promptly give notice to the Purchasers,
- ------
accompanied by an Officers' certificate setting forth the principal amount
of each of the Notes that was prepaid and specifying how each such amount
was determined, and if such prepayment was a prepayment in part, setting
forth the reduced amount of each required payment thereafter becoming due
with respect to each of the Notes under Section 5.1(a), and certifying that
--------------
such reduction has been computed in accordance with Section 5.5(a).
--------------
(c) Making of Prepayment. On or before the Prepayment Date,
--------------------
such Issuer (or any Persons on behalf of such Issuer) shall pay or cause to
be paid to the relevant Purchaser by 12:00 noon (New York City time) on the
Prepayment Date in immediately available funds the amount to be prepaid
with respect to the Notes in accordance with Section 5.3.
-----------
(d) Notes Payable on Prepayment Date. If notice of prepayment
--------------------------------
has been given in accordance with Section 5.5(b), the amount of the
--------------
prepayment of such Notes to be prepaid in accordance with the notice
described in Section 5.5(b) shall, on the Prepayment Date, become due and
--------------
payable at the principal offices of the respective Purchasers at the
addresses set forth in Schedule 3 attached hereto. If the amount of the
----------
prepayment of the Notes to be prepaid in accordance with the notice
described in Section 5.5(b) shall not be so prepaid, the amount of such
--------------
prepayment shall, until paid, continue to bear interest from the applicable
Prepayment Date at the Overdue Rate through the date upon which such Notes
are so prepaid.
(e) If there is more than one Purchaser, the aggregate
principal amount of each partial optional prepayment of the Notes shall be
allocated in units of One Thousand Dollars ($1,000) or multiples thereof
among the Purchasers at the time outstanding, in proportion, as nearly as
practicable, to the respective unpaid principal amounts of the Notes then
outstanding, with adjustments, to the extent practicable, to equalize for
any prior partial optional prepayments not in such proportion.
(f) Upon any partial prepayment of any Note, such Note may, at
the option of the Purchasers, be (i) surrendered to the relevant Issuer
pursuant to Section 5.4(b) in exchange for a new Note in a principal amount
--------------
equal to the principal amount then remaining unpaid on the surrendered
Note, (ii) made available to the relevant Issuer for notation thereon of
the portion of the principal so prepaid or (iii) marked with a notation
thereon by the holder thereof as to the portion of the principal so
prepaid. In case the entire principal amount of any Note is prepaid, such
Note shall be surrendered to the relevant Issuer promptly after such
prepayment for cancellation and shall not be reissued, and no Note shall be
issued in lieu of the prepaid principal amount of any Note.
9
<PAGE>
5.6 Interpool's and Ltd.'s Assumption of Notes; Pledge of Equipment.
---------------------------------------------------------------
(a) At any time and from time to time (but in the case of a
partial assumption not more often than once during any calendar quarter)
Interpool may assume the Obligations of Ltd. or Corp., in whole or in part,
including, but not limited to, the Notes of Ltd. and/or Corp., as the case
may be, pursuant to an assumption agreement in the form of Exhibit F
---------
attached hereto, provided that (i) Interpool's Collateral Value shall not
be less than an amount equal to 125% of the aggregate outstanding principal
amount of the Notes issued or assumed by Interpool after giving effect to
such assumption, (ii) no Default or Event of Default exists (unless such
Default shall be cured by the assumption by Interpool) and the Purchasers
shall have received an Officer's Certificate of Interpool to such effect,
and (iii) the Purchasers shall have received a legal opinion of Arthur L.
Burns Esq. or his successor, as general counsel to the Issuers, in form and
substance satisfactory to the Purchasers and their special counsel as to
the enforceability of the assumption agreement and the transactions
contemplated thereby. If Interpool assumes any Obligations of Ltd. and/or
Corp., Ltd. and/or Corp., as the case may be, will be released from its
and/or their Obligations hereunder and under the other Transaction
Documents to the extent such Obligations shall have been assumed by
Interpool except that the representations, warranties and indemnities of
each of Ltd. and Corp. shall survive the release of their other respective
Obligations.
(b) At any time and from time to time (but in the case of a
partial assumption not more often than once during any calendar quarter)
Ltd. may assume the Obligations of Corp., in whole or in part, including,
but not limited to, its Notes, pursuant to an assumption agreement in the
form of Exhibit F attached hereto, provided that (i) Ltd.'s Collateral
---------
Value shall not be less than an amount equal to 125% of the aggregate
outstanding principal amount of the Notes issued or assumed by Ltd. after
giving effect to such assumption, (ii) no Default or Event of Default
exists (unless such Default shall be cured by the assumption by Ltd.) and
the Purchasers shall have received an Officer's Certificate of Ltd. to such
effect, and (iii) the Purchasers shall have received a legal opinion of
Arthur L. Burns Esq. or his successor, as general counsel to the Issuers,
in form and substance satisfactory to the Purchasers and their special
counsel as to the enforceability of the assumption agreement and the
transactions contemplated thereto. If Ltd. assumes any Obligations of
Corp., Corp. will be released from its Obligations hereunder and under the
other Transaction Documents to the extent such Obligations shall have been
assumed by Ltd., except that the representations, warranties and
indemnities of Ltd. shall survive the release of its other Obligations.
(c) Any Issuer shall have the right to add Collateral to, or
obtain the partial release by the Collateral Agent of Collateral from, the
Lien created under the relevant Security Agreement at any time or from time
to time by the execution and delivery to the Collateral Agent with copies
to the Purchasers and special counsel to the Purchasers, at least ten (10)
Business Days prior to the proposed effective date of any addition or
partial release of Collateral of an appropriate Security Agreement
Supplement indicating specifically the Collateral to be added or released
from such lien provided, that no Default or Event of Default exists (other
than a Default which would be cured by such addition or release), or would
arise as a result of or after giving effect to, such addition or release of
Collateral and the Purchasers shall have received an Officer's Certificate
of such Issuer to such effect. The Collateral Agent shall countersign such
Security Agreement Supplement pursuant to instructions by the Purchasers to
do so which the Purchasers shall issue upon their being satisfied that the
conditions set forth herein have been fulfilled whereupon such Security
Agreement Supplement shall become effective. Interpool shall have the
right to add Railcars to, or obtain the partial release by the Collateral
Agent of Railcars from the Lien created under the Railcars Security
Agreement at any time or from time to time by the execution and delivery to
the Collateral Agent with copies to the Purchasers and special counsel to
the Purchasers, at least ten (10) Business Days prior to the proposed
effective date of any addition or partial release of such Collateral of an
appropriate Railcars Security Agreement Supplement (in the form attached
10
<PAGE>
as Annex A to Exhibit H hereto) indicating specifically the Collateral to
---------
be added to or released from such Lien; provided that no Default or Event
--------
of Default exists (other than a Default which would be cured by such
addition or release), or would arise as a result of or after giving affect
to, such addition or release of Collateral and the Purchasers shall have
received an Officer's certificate of Interpool to such effect. The
Collateral Agent shall countersign such Railcars Security Agreement
Supplement, pursuant to instructions by the Purchasers to do so which the
Purchasers shall issue upon their being satisfied that the conditions set
forth herein have been fulfilled whereupon such Railcars Security Agreement
Supplement shall become effective and shall be filed with the Interstate
Commerce Commission.
(d) At any time or from time to time Interpool shall have the
right, for the benefit of Ltd. and/or Corp., in order to enable Ltd. and/or
Corp., as the case may be, to avoid the occurrence of an Event of Default
under the provisions of Section 10.1(k), to add Collateral to the Lien
---------------
created by the relevant Security Agreement executed by Interpool in favor
of the Collateral Agent by the execution and delivery to the Collateral
Agent with copies to the Purchasers and special counsel to the Purchasers,
at least five (5) Business Days prior to the proposed effective date of any
addition of Collateral, of an appropriate Security Agreement Supplement
provided that (i) such Security Agreement Supplement indicates specifically
the Collateral being added to such Lien; (ii) such Security Agreement
Supplement or an Officer's Certificate delivered in connection therewith
specifically provides that such Collateral is being added for the benefit
of Ltd. and/or Corp., as the case may be, to avoid the occurrence of an
Event of Default under the provisions of Section 10.1(k) and that such
---------------
Collateral shall secure all the Obligations of Interpool (including
Obligations of Interpool under the Guaranty made by Interpool) and the
Obligations of Ltd. (including the Obligations of Ltd. under the Guaranty
made by Ltd.) and/or Corp., as the case may be; and (iii) no Default or
Event of Default exists (unless such Default shall be cured by the addition
of such Collateral) and the Purchasers shall have received an Officer's
Certificate of Interpool to such effect. The Collateral Agent shall
countersign such Security Agreement Supplement pursuant to instructions by
the Purchasers to do so which the Purchasers shall issue upon their being
satisfied that the conditions set forth in this Section 5.6(d) shall have
--------------
been fulfilled whereupon such Security Agreement Supplement shall become
effective.
(e) At any time or from time to time Ltd. shall have the right,
for the benefit of Corp., in order to enable Corp. to avoid the occurrence
of an Event of Default under the provisions of Section 10.1(k), to add
---------------
Collateral to the Lien created by the relevant Security Agreement executed
by Ltd. in favor of the Collateral Agent by the execution and delivery to
the Collateral Agent with copies to the Purchasers and special counsel to
the Purchasers, at least five (5) Business Days prior to the proposed
effective date of any addition of Collateral, of an appropriate Security
Agreement Supplement provided that (i) such Security Agreement Supplement
indicates specifically the Collateral being added to such Lien; (ii) such
Security Agreement Supplement or an Officer's Certificate delivered in
connection therewith specifically provides that such Collateral is being
added for the benefit of Corp. to avoid the occurrence of an Event of
Default under the provisions of Section 10.1(k) and that such Collateral
---------------
shall secure all the Obligations of Ltd. (including Obligations of Ltd.
under the Guaranty made by Ltd.) and the Obligations of Corp.; and (iii) no
Default or Event of Default exists (unless such Default shall be cured by
the addition of such Collateral) and the Purchasers shall have received an
Officer's Certificate of Ltd. to such effect. The Collateral Agent shall
countersign such Security Agreement Supplement pursuant to instructions by
the Purchasers to do so which the Purchasers shall issue upon their being
satisfied that the conditions set forth in this Section 5.6(e) shall have
--------------
been fulfilled whereupon such Security Agreement Supplement shall become
effective.
(f) In lieu of adding Collateral to the Lien created by the
relevant Security Agreement executed by an Issuer in favor of the
Collateral Agent, such Issuer shall have the right to grant to the
Collateral Agent for the ratable benefit of the Purchasers a first Lien on
Cash Collateral by the
11
<PAGE>
execution and delivery to the Collateral Agent with copies to the
Purchasers and special counsel to the Purchasers, at least ten (10)
Business Days prior to the proposed effective date of any such grant, of a
Cash Collateral Agreement covering such Cash Collateral, provided, that (i)
-------- ----
such agreement specifically designates the Issuer for whose benefit such
Cash Collateral is being granted and (ii) no Default or Event of Default
exists (unless such Default shall be cured by the grant of such Cash
Collateral) and the Purchasers shall have received an Officer's Certificate
of such Issuer to such effect. Such Issuer may thereafter add Collateral
to its Security Agreement pursuant to and in compliance with the provisions
of subsection (c) or (d) above and upon such addition of Collateral
becoming effective, such Issuer may request the release of Cash Collateral
from the Cash Collateral Agreement corresponding to the Cash Collateral so
added and upon the Purchasers having been satisfied that (x) such Cash
Collateral has been added to the relevant Security Agreement pursuant to
and in compliance with the provisions of subsection (c) of (d) above and
---------------------
(y) no Event of Default or Default exists and the Purchasers have received
an Officer's Certificate of such Issuer that no Event of Default or Default
exists, the Purchasers shall instruct the Collateral Agent to execute and
deliver to such Issuer a release of such Cash Collateral from the Cash
Collateral Agreement and the Collateral Agent shall execute and deliver
such release to such Issuer.
(g) In the event that Interpool determines that the Collateral
Value of the Collateral granted by it pursuant to its Security Agreement
(and not theretofore released) exceeds 125% of the sum of the aggregate
outstanding principal amount of the Notes issued by Interpool and the
aggregate outstanding principal amount of Notes issued by Ltd. and Corp.
and assumed by Interpool, then Interpool shall have the right, for the
benefit of Ltd. and/or Corp., as the case may be, in order to enable Ltd.
and/or Corp., as the case may be, to avoid the occurrence of an Event of
Default under the provisions of Section 10.1(k), to notify the Purchasers,
---------------
the Collateral Agent and their special counsel at least ten (10) business
days prior to the effective date thereof of its designation that the
Collateral representing such excess Collateral Value shall inure to the
benefit of Ltd. and/or Corp., as the case may be, to avoid the occurrence
of such an Event of Default, which notice shall be accompanied by (i) a
Collateral Certificate specifically calculating such excess and indicating
specifically the Collateral representing such excess Collateral Value and
(ii) an Officer's Certificate of Interpool that no Event of Default or
Default exists (unless such Default shall be cured by such designation by
Interpool of excess Collateral Value). Upon their satisfaction that the
conditions referred to above shall have been fulfilled, the Purchasers
shall instruct the Collateral Agent to countersign such notice and
designation and the Collateral Agent shall so countersign such notice and
designation, whereupon such designation by Interpool shall become
effective.
(h) In the event that Ltd. determines that the Collateral Value
of the Collateral granted by it pursuant to its Security Agreement and any
Collateral which Interpool pursuant to Section 5.6(g) has designated as
inuring to the benefit of Ltd. (and not theretofore released) exceeds 125%
of the sum of the aggregate outstanding principal amount of the Notes
issued by Ltd. and the aggregate outstanding principal amount of Notes
issued by Corp. and assumed by Ltd., then Ltd. shall have the right, for
the benefit of Corp. in order to enable Corp to avoid the occurrence of an
Event of Default under the provisions of Section 10.1(k), to notify the
---------------
Purchasers, the Collateral Agent and their special counsel at least ten
(10) business days prior to the effective date thereof of its designation
that the Collateral representing such excess Collateral Value shall inure
to the benefit of Corp. to avoid the occurrence of such an Event of
Default, which notice shall be accompanied by (i) a Collateral Certificate
specifically calculating such excess and indicating specifically the
Collateral representing such excess Collateral Value and (ii) an Officer's
Certificate of Ltd. that no Event of Default or Default exists (unless such
Default shall be cured by such designation by Ltd. of excess Collateral
Value). Upon their satisfaction that the conditions referred to above
shall have been fulfilled, the Purchasers shall instruct the Collateral
Agent to countersign such notice and designation and the Collateral Agent
shall so countersign such notice and designation, whereupon such
designation by Ltd. shall become effective.
12
<PAGE>
(i) All assumptions, additions, releases or substitutions of
Collateral and Cash Collateral pursuant to the provisions of this Section
-------
5.6 shall be accompanied by all such agreements, instruments, documents,
- ---
certificates, UCC financing statements, notations of Liens on certificates
of title or applications therefor and other lien instruments and the taking
of all such action (including the filing and recording of any of the
foregoing, searches of public records and confirmation of the stamping of
Leases and Direct Finance Leases required under Section 9.29(b)) as the
---------------
Purchasers, the Collateral Agent and their special counsel shall reasonably
require and all fees and expenses with respect thereto (including the fees
and expenses of special counsel to the Purchasers and the Collateral Agent)
shall be paid promptly by the Issuers upon presentation of invoices
therefor.
5.7 Termination of Collateral.
-------------------------
(a) If (i) based upon the financial statements and the related
certificates delivered to the Purchasers pursuant to Section 9.11 each of
------------
the financial conditions set forth in paragraph (b) below have been met by
the Issuers for the most recent six consecutive quarters as applied at the
end of each quarter and (ii) Interpool receives a private rating for the
Notes on an unsecured basis of greater than PPR2 from Standard & Poor's or,
if Standard & Poor's is not in existence or is not rating Interpool, then
an equivalent or higher rating from either Moody's or Duff & Phelps and
(iii) the holders of at least 80% of Interpool's outstanding recourse
Funded Debt other than the Obligations (excluding capitalized leases)
consent in writing to the release of the collateral securing such Funded
Debt, Interpool may request that the Purchasers waive the requirement that
the Obligations be secured by the Collateral and cause the Collateral Agent
to release the Liens of the Collateral Agent created by the Transaction
Documents. Upon (A) receipt of such consent from the holders of at least
86% of the outstanding principal amount of the Notes, which consent the
Purchasers agree shall not be unreasonably withheld (it being understood
that such consent may be reasonably withheld even if the financial
conditions set forth in paragraph (b) have been met) and (B) the
satisfaction of the conditions set forth in clauses (i), (ii) and (iii) of
this paragraph (a), the Purchasers shall instruct the Collateral Agent and
the Collateral Agent shall take any and all steps necessary to terminate
the Liens created under the Transaction Documents.
(b) The financial conditions referred to in paragraph (a) above
shall be as follows:
(i) Funded Debt did not exceed 300% of Tangible Net Worth;
(ii) the sum of Fixed Charges for Interpool and its
Restricted Subsidiaries would have been covered at
least 1.75 times by the sum of Earnings Available for
Fixed Charges for Interpool and its Restricted
Subsidiaries for the sum of the four (4) fiscal
quarters preceding the date of determination; and
(iii) Tangible Net Worth exceeded $125,000,000;
(c) In the event that the Liens of the Collateral Agent shall
have been terminated in accordance with the provisions of Section 5.7(a),
--------------
then at all times thereafter unless and until the Obligations become
secured pursuant to the provisions of Section 5.7(d), neither Interpool nor
--------------
any Restricted Subsidiary will cause, incur or suffer to be incurred or to
exist any Lien on any of its or their property or assets other than:
(i) Permitted Liens;
(ii) judgment Liens contested with execution stayed on
appeal;
13
<PAGE>
(iii) Liens securing indebtedness between Interpool and the
Restricted Subsidiaries;
(iv) Liens existing on property as at the date of such
termination of Collateral after the release of
collateral referred to in Section 5.7(a)(iii) which
-------------------
Liens were not prohibited under this Agreement at such
date;
(v) Liens incurred subsequent to the date of such release
of Collateral on property acquired after such date
securing up to 100% of the lower of cost or fair
market value; Liens existing on property at the time
of acquisition; and Liens on the property of a corpo-
ration at the time such corporation becomes a
Restricted Subsidiary;
(vi) Subject to the provisions of Section 9.19(b), other
---------------
Liens if the amount of indebtedness secured by such
Liens when added to Funded Debt incurred subsequent to
the date of such release of Collateral which is
secured by Liens does not exceed 20% of Tangible Net
Worth; and
(vii) extensions, renewals and refundings of the Liens and
indebtedness referred to in clauses (i), (ii), (iii),
(iv), (v) and (vi) above.
(d) In the event that following the release of Collateral
pursuant to Section 5.7(a) the Issuers determine that they may be unable to
--------------
continue to meet the financial conditions referred to in Section 9.19(e),
---------------
they may notify the Purchasers that they will no longer be able to comply
with the financial conditions of Section 9.19(e) but that they will
---------------
continue to comply with the financial conditions as set forth in Section
-------
9.19(a), (b), (c) and (d) then from and after the twentieth (20th) Business
- -------------------------
Day following such notice such financial conditions as set forth in Section
-------
9.19(a), (b), (c) and (d) shall become applicable to the Issuers, provided
- ------------------------- --------
that on or prior to the twentieth (20th) Business Day following such notice
- ----
(i) the Issuers shall each grant to the Collateral Agent a first priority
perfected security interest in Collateral in accordance with the provisions
of this Agreement and the other Transaction Documents having a Collateral
Value of at least 125% of the aggregate outstanding principal amount of the
Notes pursuant to Security Agreements and a Railcars Security Agreement
executed and delivered by the Issuers to the Purchasers, the Collateral
Agent and their special counsel; (ii) the Issuers shall have executed and
delivered to the Purchasers, the Collateral Agent and their special counsel
all such legal opinions, agreements, documents, instruments, certificates,
UCC financing statements and other lien instruments and take all such
actions (including notations on certificates of title) as the Purchasers,
the Collateral Agent and their special counsel shall reasonably require in
connection therewith; (iii) no Default or Event of Default shall exist
(other than a Default which would be cured by such reinstatement of the
original provisions of Section 9.19(a), (b), (c) and (d)) and the
---------------------------------
Purchasers shall have received an Officer's Certificate of the Issuers to
the foregoing effect; and (iv) the Issuers shall be able to effect such
reversion of the financial conditions from Section 9.19(e) to the original
---------------
provisions of Section 9.19(a), (b) and (c) only once during the term of
----------------------------
this Agreement. All reasonable fees and expenses relating to the foregoing
(including the fees and expenses of special counsel to the Purchasers and
the Collateral Agent) shall be paid by the Issuers promptly upon
presentation of invoices therefor.
(e) If (i) the Collateral Value of an Issuer is greater than
125% of the outstanding aggregate principal amount of the Notes issued or
assumed by such Issuer or, in the case of Interpool and Ltd., subject to a
designation pursuant to Sections 5.6(g), and 5.6(h), respectively, as
---------------
evidenced by a Collateral Certificate delivered to the Purchasers and the
Collateral Agent and (ii) no Default or Event of Default exists (other than
a Default which would be cured by a release of Collateral referred to
below),
14
<PAGE>
then an Issuer may request the Purchasers to instruct the Collateral Agent
to partially release Collateral (including Cash Collateral) to the extent
of the excess of the Collateral Value over 125% of the aggregate principal
amount of such Notes and upon receipt of such instructions the Collateral
Agent shall partially release such Collateral from the Lien created by the
relevant Security Agreement in accordance with the provisions of Section
2(b)(ii) of such Security Agreement or the relevant provision of the Cash
Collateral Agreement; provided that after giving effect to such partial
release the Collateral Value of such Issuer is not less than 125% of the
outstanding principal amount of the Notes issued or assumed by such Issuer
or, in the case of Interpool and Ltd., subject to a designation pursuant to
Sections 5.6(g) and 5.6(h), respectively.
- --------------------------
SECTION 6. RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE COLLATERAL.
-------------------------------------
6.1 Collateral. The payment and performance of the Obligations
----------
shall be secured by the Collateral. Notwithstanding any other provision
hereof or any provision of any other Transaction Document to the contrary,
no Collateral of Ltd. or Corp. shall secure the Obligations of Interpool,
and no Collateral of Corp. shall secure the Obligations of Ltd.
6.2 Payment of Moneys Received With Respect to the Collateral. Each
---------------------------------------------------------
of the Issuers hereby irrevocably covenants and agrees to cause all amounts
payable or realized in respect of the Collateral to be paid to the
Collateral Agent on behalf of the Purchasers if and to the extent required
by any of the Transaction Documents. Pursuant to Section 12 of the Agency
Agreement, the Collateral Agent, on behalf of the Purchasers, shall pay to
the Purchasers all such amounts. Except as otherwise provided in this
Agreement or the other Transaction Documents, if an Event of Default shall
have occurred and be continuing moneys received by the Purchasers pursuant
to this Section 6.2, shall be applied, first, to the payment of accrued
----------- -----
interest (including any default interest) on the Notes on a pro rata basis
--- ----
to the due date of such payments and any Make Whole Premium, and second, to
------
the payment of the principal amount of the Notes pro rata based upon the
--- ----
outstanding principal amounts thereof and third, to the other Obligations
-----
in such order as the Purchasers shall determine. Prior to the occurrence
of an Event of Default the Issuers may continue to collect and receive such
monies. All payments with respect to the Notes pursuant to this Section
-------
6.2 shall be applied to such Notes on a pro rata basis in inverse order of
- --- --- ----
the scheduled principal payments thereof.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF ISSUERS.
-----------------------------------------
Each of the Issuers hereby represents and warrants to the Purchasers
as follows:
7.1 Organization and Power. Each of the Issuers (a) (i) is a
----------------------
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of incorporation and qualified to do business as a
foreign corporation in the jurisdictions set forth in Schedule 7.1 attached
------------
hereto for each Issuer, (ii) is not required to be qualified as a foreign
corporation in any jurisdiction where the failure to so qualify would have
a material adverse effect on such Issuer, its business operations or its
property and (iii) has its chief executive office and chief place of
business at the respective Chief Office set forth on Schedule 7.1 attached
------------
hereto; and (b) has all requisite corporate power and authority and all
necessary licenses and permits to enter into and perform this Agreement and
the other Transaction Documents to which such Issuer is a party and to
issue and deliver its Notes. This Agreement, the Notes and the other
Transaction Documents to which such Issuer is a party have been duly
authorized, executed and delivered by such Issuer and, assuming the due
authorization, execution and delivery thereof by the other parties thereto,
such documents constitute the legal, valid and binding obligations of such
Issuer, enforceable against such Issuer in accordance with their respective
terms.
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7.2 Trademarks, Licenses, etc. Each of the Issuers possesses, in
--------------------------
full force and effect, all necessary franchises, patents, licenses,
trademarks, trademark rights, trade names, trade name rights, fictitious
name authorizations or certificates and copyrights material to conduct its
business as now being conducted, without any conflict, to its knowledge,
with the franchises, patents, licenses, trademarks, trademark rights, trade
name, trade name rights, fictitious name authorizations or certificates and
copyrights of others.
7.3 Subsidiaries. Each of the Issuers has no Subsidiaries, other
------------
than those set forth in Schedule 7.1 attached hereto.
------------
7.4 Business. Each of the Issuers is engaged principally in the
--------
businesses of leasing, financing or managing containers, chassis, railcars
or other transportation equipment and business related to the foregoing.
In addition, a Subsidiary of one of the Issuers is engaged in the business
of leasing micro computers and related accessories and businesses related
to the foregoing.
7.5 Financial Statements. Interpool has furnished to the Purchasers
--------------------
balance sheets of Interpool and its consolidated subsidiaries as of
December 31, 1993 and December 31, 1994, and the related statements of
income, statements of cash flows and statements of the stockholders'
equity, for the years ended December 31, 1992, December 31, 1993 and
December 31, 1994, respectively, all of which were audited by Arthur
Andersen LLP, and has furnished to the Purchasers unaudited balance sheets
of Interpool and its consolidated subsidiaries and the related statements
of income, statements of cash flows and statements of the stockholders'
equity for the quarter ended March 31, 1995. All such financial statements
present fairly, in all material respects, the financial position,
stockholders' equity, results of operations and cash flows of the entities
covered thereby for the periods involved. Since the date of the most
recent financial statements, there has been no material and adverse change
in the financial position of any Issuer not reflected in the most recent
financial statements as of that date, and, since such date, the business of
each Issuer has not been materially and adversely affected by any
occurrence, whether or not insured against. Except as otherwise disclosed
on Schedule 7.5 attached hereto, the Issuers have issued no other
------------
indebtedness for borrowed money which is still outstanding on the date
hereof, except indebtedness which is reflected in the most recent financial
statements referred to above or restructuring or refinancing thereof.
7.6 Taxes. All tax returns of the Issuers which are due have been
-----
duly filed and are correct in all material respects, and all Taxes and
other governmental charges upon the Issuers which are shown to be due and
payable thereon have been paid.
7.7 Litigation. There are no outstanding judgments against any
----------
Issuer or any actions, proceedings, claims or investigations pending or, to
any Issuer's knowledge, threatened before any court or governmental body
which, if adversely determined, would materially and adversely affect the
business, properties, prospects, operations or affairs of any Issuer or
impair any Issuer's ability to perform its Obligations under this Agreement
and the other Transaction Documents.
7.8 Title, Liens. Each of the Issuers owns and has good and
------------
marketable title to all of the Collateral included in the Collateral Value
relating to such Issuer, and there are no Liens on the Collateral of any
Issuer other than those Liens created pursuant to this Agreement and the
other Transaction Documents and except for Permitted Liens. The Liens
granted in the Security Agreements and the Railcars Security Agreements
constitute valid first priority perfected Liens on the Collateral subject
to no other mortgage, Lien or security interest. The laws of Barbados and
the Cayman Islands do not, as to Ltd. and Corp., respectively, necessitate,
require or, other than the Cayman Islands' provision for registration of
details of the Collateral in Corp.'s internal register of charges, provide
for the recording,
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registration or filing of any mortgage or Lien in any of the Equipment,
Leases or any other types or items of property or proceeds thereof which
are included in the Collateral covered by or provided for in the
Transaction Documents executed and delivered by each of Ltd. and Corp.
7.9 Consent, Approval. No consent or approval of any Person,
-----------------
shareholder, landlord or mortgagee, no waiver of any Lien or right of
distraint or other similar right, and no consent, license, approval or
authorization of or registration, qualification, designation, declaration
or filing (except any recordations required in connection with the
perfection of the Liens granted in the Security Agreements and any required
filings or notices under applicable securities laws, rules or regulations
or the rules of the New York Stock Exchange) with or payment of any
withholding or other tax to any governmental authority by or on the part of
the Issuers is required in connection with the execution, delivery and
performance of this Agreement or any other Transaction Document, the
issuance and sale or payment of the Notes or the consummation of any other
transactions contemplated hereby or thereby.
7.10 Compliance with Other Instruments. None of the Issuers is a
---------------------------------
party to any contract, commitment or agreement or subject to any re-
striction or to any order, rule, regulation, writ, injunction or decree of
any court or governmental authority or to any statute which materially and
adversely affects its business, property, prospects, operations, assets or
financial condition as now conducted or as proposed to be conducted.
Neither the execution, delivery or performance by any Issuer of this
Agreement, the Notes or the other Transaction Documents to be delivered by
such Issuer nor compliance herewith or therewith (a) conflicts with or
results in a breach of (i) any law, statute, rule or regulation in effect
as of the date of delivery of this Agreement, (ii) any order, writ, injunc-
tion or decree of any court or other governmental authority, or (b) results
or will result in the creation or imposition of any Lien, charge or
encumbrance upon its property pursuant to such agreement or instrument,
except for Liens created hereunder and Permitted Liens. Neither the
execution, delivery or performance by any Issuer of this Agreement, the
Notes or the other Transaction Documents nor compliance by any Issuer
herewith or therewith conflicts or will conflict with the certificate of
incorporation, by-laws or other organizational document of any Issuer or
results or will result in a breach of or constitutes or will constitute a
default under any agreement or instrument to which any Issuer is a party or
by which it is bound.
7.11 Corporate Existence; Place of Business; Books and Records.
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Except as disclosed in Schedule 7.1 attached hereto, none of the Issuers
------------
has at any time within the last five (5) years, (i) changed its name;
(ii) used any fictitious name, (iii) been the surviving corporation of a
merger or consolidation, or (iv) acquired all or substantially all of the
assets of any Person. The Chief Offices, all other offices of the Issuers
and the only places of business of each of the Issuers where commercial
affairs are conducted and books and records are maintained are set forth on
Schedule 7.1 attached hereto. None of the Issuers is in violation of any
- ------------
charter instrument or by-law, and none of the Issuers is in violation in
any material respect of any term in any agreement or other instrument to
which it is a party or by which it or any of its property may be bound
which violation could have a material adverse effect on any Issuer or its
business, assets, operations, leaseholds and equipment.
7.12 ERISA.
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(a) No Reportable Event has occurred with respect to any Plan
maintained for employees of (i) any Issuer or (ii) any member of a
Controlled Group of which any Issuer is a part.
(b) None of the Issuers is entering into the Transaction
Documents or any other transaction contemplated hereby, directly or
indirectly, in connection with any arrangement in any way involving any
employee benefit plan or fund or trust which holds assets of any employee
benefit plan with
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respect to which it in its individual capacity is a party-in-interest, all
within the meaning of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA") and the Internal Revenue Code of 1986, as amended (the
-----
"Code").
----
7.13 Capital Stock. All of the issued and outstanding capital stock
-------------
of Ltd. and Corp. is owned and registered as set forth in Schedule 7.1
------------
attached hereto.
7.14 Governmental Licenses. Each of the Issuers has been issued all
---------------------
required federal, state, local and foreign licenses, certificates or
permits relating to, and each of the Issuers and its facilities, business,
assets, property, prospects, operations, leaseholds and equipment are in
compliance in all respects with, all applicable federal, state, local and
foreign laws, rules and regulations relating to air emissions, water
discharge, noise emissions, solid or liquid disposal, hazardous waste or
materials, or other environmental health or safety matters, where the
failure to so comply could have a material adverse effect on any Issuer or
its business, assets, operations, leaseholds and equipment.
7.15 Event of Default. No Event of Default or Default has occurred
----------------
and is continuing.
7.16 Offering of the Notes. Neither the Issuers nor anyone acting on
---------------------
their behalf has offered, directly or indirectly, the Notes or any part
thereof or any similar security for sale to, solicited offers to buy any
thereof from or otherwise approached or negotiated with anyone other than
the Purchasers and the institutional investors listed in the letters of the
Placement Agent delivered pursuant to Section 4.14. In connection with the
------------
sale of the Notes hereunder, none of the Issuers has engaged in general
solicitation or advertising. Neither the Issuers nor anyone on their
behalf will sell or offer the Notes or any part thereof or any similar
security for sale to, solicit any offers to buy any thereof from or
otherwise approach or negotiate in respect thereof with any other Person or
Persons so as thereby to require registration of the Notes under Section 5
of the Securities Act.
7.17 Margin Securities.
-----------------
(a) None of the Issuers will, directly or indirectly, apply any
part of the proceeds of the Notes for the purpose (whether immediate,
incidental or ultimate) of purchasing or carrying any "margin stock" as
defined in Regulation G of the Federal Reserve Board (12 C.F.R. 207) or any
security issued by any investment company registered pursuant to Section 8
of the Investment Company Act of 1940 or for the purpose of repaying any
indebtedness originally incurred for such purpose.
(b) None of the Issuers is, in any way, engaged in the business
of extending credit for the purpose of purchasing or carrying Margin Stock;
nor has any Issuer secured the payment of the Notes by an assignment of any
stock (as such term is defined in Regulation U) or by any arrangement under
which any Issuer's right or ability to sell, pledge or otherwise dispose of
stock owned by it is in any way restricted or under which the exercise of
such right, whether by written agreement or otherwise, is or may be cause
for acceleration of the Notes.
7.18 Use of Proceeds. None of the Issuers is, directly or in-
---------------
directly, applying any part of the proceeds of the Notes for any purpose
other than for the purposes described in Section 2.2.
-----------
7.19 Liabilities; Business. None of the Issuers has any liabilities
---------------------
or obligations which are material to its business, property, prospects,
operations, assets or financial condition as now conducted or as proposed
to be conducted which are prohibited by this Agreement and by the other
Transaction Documents to which it is a party. None of the Issuers' assets
are less than its liabilities, both determined in accordance with GAAP, and
each of the Issuers is solvent.
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7.20 Investment Company Act. None of the Issuers is, and is not
----------------------
directly or indirectly controlled by or acting on behalf of any Person
which is, an "investment company" within the meaning of the Investment
Company Act of 1940.
7.21 Disclosure. The Issuers have delivered to the Purchasers the
----------
Private Placement Memorandum. Neither this Agreement nor any other
Transaction Document nor the Private Placement Memorandum nor any other
document, certificate or instrument delivered to the Purchasers by or on
behalf of any Issuer in connection with the transactions contemplated by
this Agreement contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
in this Agreement, any other Transaction Document and in such other
documents, certificates or instruments not misleading. There is no fact
known to any Issuer which materially and adversely affects or in the future
may (so far as any Issuer can now reasonably foresee) materially and
adversely affect the business, prospects, operations, affairs, condition
(financial or otherwise), properties or assets of any Issuer which has not
been set forth in the financial statements or in this Agreement, any other
Transaction Document or the other documents, certificates and instruments
delivered to the Purchasers by or on behalf of any Issuer specifically for
use in connection with the transactions contemplated by this Agreement.
7.22 Foreign Assets Control Regulations. Neither the issuance and
----------------------------------
sale by any Issuer of the Notes under this Agreement nor its use of the
proceeds thereof will violate the Foreign Assets Control Regulations, the
Foreign Funds Control Regulations, the Transaction Control Regulations, the
Cuban Assets Control Regulations, or the Iranian Assets Control Regulations
of the Office of Foreign Assets Control, United States Department of the
Treasury (31 C.F.R., Chapter V, Subpart B, as amended) or any other order,
regulation or ruling thereunder or pursuant thereto.
7.23 Leases. The Leases which are in effect on the date of this
------
Agreement each constitute legal, valid and binding obligations of such
relevant Issuer and, to the best of the Issuers' knowledge, each of the
respective lessees thereunder, enforceable in accordance with their
respective terms.
7.24 Financed Equipment. As of the date hereof no Person has a Lien
------------------
on any Financed Equipment which represents a replacement or a substitution
of equipment.
7.25 Insurance. Each of the Issuers is, as of the date of this
---------
Agreement, in compliance with the provisions of Section 9.6.
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SECTION 8. REPRESENTATIONS AND WARRANTIES OF PURCHASERS.
--------------------------------------------
8.1 Purchase for Investment. Each Purchaser represents and warrants
-----------------------
it is purchasing the Notes being purchased by it for its own account, and
that each such Note is being purchased for the purpose of investment and
not with a view to the distribution thereof, subject, nevertheless, to any
requirement of law that the disposition of its property shall be at all
times within such Purchaser's control. Such Purchaser will not, in any
event, make any sale or other disposition of such Notes except in
accordance with the Securities Act and the rules and regulations of the
Securities and Exchange Commission thereunder, or pursuant to an exemption
under such Securities Act and rules and regulations and of the terms of
this Agreement. Each Purchaser represents and warrants it is an
institutional "accredited investor" as defined in the Securities Act.
8.2 Taxpayer Status. Each Purchaser represents and warrants that it
---------------
is a United States person within the meaning of Section 7701(a)(30) of the
Code.
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8.3 Purchasers' ERISA Representation. Each Purchaser represents and
--------------------------------
warrants that, with respect to each source of funds to be used by it to
purchase the Notes (respectively, the "Source"), at least one of the
following statements is accurate as of the Closing Date:
(i) the Source is an "insurance company general
account," as such term is defined in section V(e) of Prohibited
Transaction Class Exemption 95-60 (issued July 12, 1995) (PTCE 95-60),
and the purchase is exempt under the provisions of PTE 95-60.
(ii) the Source is a "governmental plan" as defined in
Title I, Section 3(32) of ERISA;
(iii) the Source is either (i) an insurance company
pooled separate account, and the purchase is exempt in accordance with
Prohibited Transaction Exemption ("PTE") 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, in which case the
purchase is exempt in accordance with PTE 91-38 (issued July 12,
1991);
(iv) the Source is an "investment fund" managed by a
"qualified professional asset manager' or "QPAM" (as defined in Part V
of PTE 84-14, issued March 13, 1984) which QPAM has been identified in
writing, and the purchase is exempt under PTE 84-14 provided that no
other party to the transactions described in this Agreement and no
"affiliate" of such other party (as defined in Section V(c) of PTE 84-
14) has at this time, and has not exercised at any time during the
immediately preceding year, the authority to appoint or terminate said
QPAM as manager of the assets of any "plan" identified in writing
pursuant to this paragraph (d) or to negotiate the terms of said
QPAM's management agreement on behalf of any such identified "plans";
(v) the Source is one or more "plans," or a separate
account or trust fund comprised of one or more "plans," each of which
has been identified in writing pursuant to this paragraph (v).
As used in this section, "plan" or "plans" shall have the
meanings set forth in Title I, Section 3(3) of ERISA and Section 4975(e)(1)
of the Code.
SECTION 9. COVENANTS OF ISSUERS. Each of the Issuers hereby
--------------------
covenants and agrees that from the date of this Agreement and so long as
any Obligations or other amounts under the Notes and hereunder are
outstanding, such Issuers will comply with the following covenants:
9.1 Maintenance of Corporate Existence. Each of the Issuers shall
----------------------------------
preserve and keep in full force and effect its corporate existence and all
franchises, rights and privileges necessary to the proper conduct of its
business, including, without limitation, all necessary franchises, patents,
licenses, trademarks, trademark rights, trade names, trade name rights,
fictitious name authorizations or certificates and copyrights, without any
unlawful conflict with franchises, patents, licenses, trademarks, trademark
rights, trade names, trade name rights, fictitious name authorizations or
certificates and copyrights of others which conflict may materially and
adversely affect such Issuer or interfere with the conduct of such Issuer's
business or may result in an action brought against such Issuer for such
violation which action may materially and adversely affect such Issuer or
interfere with the conduct of such Issuer's business.
9.2 Amendments. Each of the Issuers shall (a) promptly deliver to
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the Purchasers and the Collateral Agent copies of any amendments or
modifications to its certificate of incorporation, bylaws and
organizational documents and/or other documents of formation, as the case
may be, certified, with
20
<PAGE>
respect to the certificate of incorporation, by the Secretary of State of
the jurisdiction of incorporation, or by the appropriate official of its
jurisdiction of formation, as the case may be, and, with respect to the by-
laws, by the secretary of such Issuer and (b) on a quarterly basis deliver
to the Purchasers and the Collateral Agent a certificate of the incumbency
of its officers.
9.3 Compliance. Each of the Issuers shall comply with all laws,
----------
ordinances, rules and regulations of any foreign, federal, state or local
government, or any instrumentality or agency thereof, applicable to it,
including, without limitation, the Fair Labor Standards Act, now or
hereafter in effect, and all international laws, ordinances, rules and
regulations, the failure to comply with which may have a materially adverse
effect on any Issuer or on its ability to perform its Obligations under any
of the Transaction Documents, any material agreement, document or
instrument to which it is a party, or on the Collateral or on the
Purchasers or the Collateral Agent in enforcing their rights hereunder
against any Issuer or the Collateral.
9.4 Taxes. Each of the Issuers shall pay and discharge, as they
-----
become due, all Taxes, assessments, debts, claims and other governmental or
non-governmental charges lawfully imposed upon it or incurred by it or its
properties and assets, except Taxes, assessments, debts, claims and charges
contested in good faith in appropriate proceedings and for which any Issuer
shall have set aside adequate reserves for the payment of such Tax,
assessment, debts, claims or charges. Such Issuer shall provide the
Collateral Agent, upon the Collateral Agent's request, evidence of payment
of such Taxes, assessments, debts, claims and charges. If such Issuer
fails to pay such Taxes, assessments, debts, claims or charges when due,
and is not contesting the same in good faith or has not set aside adequate
reserves for the payment thereof, the Collateral Agent may discharge the
same, and any amounts so advanced by the Collateral Agent for such purposes
shall be added to the Obligations of such Issuer secured by the Collateral
and shall bear interest at the overdue rate set forth in such Notes
relating to such Taxes, assessments, debts, claims or charges.
9.5 Preservation of Assets. Each of the Issuers shall maintain,
----------------------
preserve and keep or cause to be maintained, preserved and kept, all its
properties, Equipment and assets, including the Collateral, in accordance
with industry standards, and make, or cause to be made, all necessary or
appropriate repairs, renewals, replacements, substitutions, additions,
betterments and improvements thereto so that efficiency of all such
property and assets shall at all times be properly preserved and maintained
in accordance with industry standards.
9.6 Insurance. Each of the Issuers shall maintain, with financially
---------
sound and reputable insurance companies, such insurance on its properties,
businesses and assets, including, without limitation, the Collateral,
against casualty, general liability, worker's compensation and such other
insurable interests and in such amounts as is consistent with practices
generally followed in the container industry for companies of comparable
size and shall pay all premiums thereon when due. The all risk insurance
policies with respect to the Collateral shall initially cover $3,500,000 in
physical damage in respect of any one occurrence, shall name the Collateral
Agent for the benefit of the Purchasers and the Purchasers as additional
insureds and loss payees, and the liability insurance policies with respect
to the Collateral shall initially cover $50,000,000 any one occurrence and
in the aggregate and shall name the Collateral Agent and the Purchasers, as
additional insureds. All such policies of insurance shall provide for at
least thirty (30) days' advance notice in writing to the Collateral Agent
of any cancellation or modification thereof and, with respect to all risk
casualty insurance only, contain a "breach of warranty clause" whereby the
insurer agrees that a breach of the insuring conditions or any negligence
by any Issuer, or any other Person, shall not invalidate the insurance as
to the Collateral Agent, the Purchasers and their respective successors and
assigns. If any Issuer fails to pay the premiums on any such insurance or
maintain such insurance in effect, the Collateral Agent shall have the
right (but shall be under no duty)
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to pay such premiums for such Issuer's account and take all such action (at
such Issuer's expense) as the Collateral Agent deems necessary to keep such
insurance in effect. Such Issuer shall repay to the Collateral Agent any
sums which the Collateral Agent shall have so paid, together with interest
thereon at the rate then payable by such Issuer under the Notes. Such
Issuer, upon the Collateral Agent's request, shall (a) deliver to the
Collateral Agent a detailed list of insurance then in effect, stating the
names of the insurance companies, the amounts and rates of the insurance,
dates of expiration thereof and the properties and risks covered thereby;
(b) obtain, within thirty (30) days after notice from the Collateral Agent,
such additional insurance as described in this Section 9.6 which is
-----------
reasonably required by the Collateral Agent and which is consistent with
practices generally followed in the container industry for companies of
comparable size; (c) provide to the Collateral Agent and Purchasers copies
of all insurance policies relating to its properties, business and assets;
and (d) assign to the Collateral Agent all rights to receive proceeds of
any such insurance with respect to the Collateral and direct all insurers
to pay all proceeds directly to the Collateral Agent. Each of the Issuers
hereby authorizes the Collateral Agent to endorse any draft for such
proceeds. Notwithstanding anything contained herein, each of the Issuers
shall have the option to (i) use all said proceeds received by the
Collateral Agent with respect to the Collateral to pay down the outstanding
amount of its Notes on a pro rata basis in inverse order of the scheduled
--- ----
principal payments thereof without priority of any one such Note over any
other such Note together with any Make Whole Premium pursuant to Section
-------
5.5, or (ii) receive said proceeds from the Collateral Agent; provided,
- --- --------
that (a) no Default or Event of Default shall have occurred and be
- ----
continuing and (b) such Issuer shall provide the Purchasers with substitute
Collateral if it is necessary to ensure that the Collateral Value of such
Issuer is greater than 125% of the aggregate outstanding principal amount
of the Notes issued by such Issuer which Collateral may be purchased with
the proceeds of such insurance, provided said substitute Collateral shall
be the subject of a valid first perfected Lien in favor of the Collateral
Agent for the benefit of the Purchasers subject to no other Liens.
9.7 Liens. None of the Issuers shall, directly or indirectly, (a)
-----
permit to exist any Liens with respect to the Collateral other than Liens
in favor of the Purchasers or the Collateral Agent or Permitted Liens; nor
(b) pledge any shares owned by it in Restricted Subsidiaries. The relevant
Issuer shall ensure that appropriate notations of the Liens of the
Collateral Agent are made on the relevant certificates of title for Chassis
which are included in the Collateral and which are covered by certificates
of title and that UCC financing statements, naming the relevant Issuer, as
debtor and the Collateral Agent, as secured party, are filed for Chassis
which are included in the Collateral and which are not covered by
certificates of title, for Containers, for Leases and for Direct Finance
Leases, and that Leases and Direct Finance Leases have been stamped
pursuant to Section 9.29(b), in each case with respect to Chassis,
---------------
Containers, Leases and Direct Finance Leases which are included in the
Collateral after the Closing Date.
9.8 Litigation. The Issuers shall promptly notify all of the
----------
Purchasers and, with respect to the Collateral, the Collateral Agent (a) of
any litigation, actions, proceedings, claims or investigations
(collectively, "Claims") pending or threatened, in which a recovery of in
------
excess of $2,000,000 is sought against any Issuer or of the entry of any
judgment in excess of $2,000,000 against any Issuer, which Claims or
judgments are not fully covered by insurance (subject to deductibles) in
respect of which the carrier has not disclaimed liability or (b) of any of
the Collateral becoming subject to any Liens securing or relating to Claims
or judgments in excess of $500,000, other than Liens in favor of the
Purchasers or the Collateral Agent.
9.9 Line of Business. None of the Issuers shall materially change
----------------
its present lines of business as described in Section 7.4 nor will
-----------
Interpool permit any Restricted Subsidiary to engage in any business other
than such present lines of business or any other business related thereto.
22
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9.10 Chief Offices; Places of Business; Character of Collateral. The
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Issuers shall notify the Collateral Agent in writing at least thirty (30)
days in advance of (a) any change of location of its Chief Office and
(b) the change, elimination or opening of any chief executive office of any
Issuer or (c) any change in the place where such Issuer maintains its
records as to the Collateral such that such records are not located at such
Issuer's Chief Office. Each Issuer shall notify the Collateral Agent in
writing promptly following a change in the character, use or location of
any of the Financed Equipment such that any of such Financed Equipment
ceases to be either "mobile goods" or "goods covered by a certificate of
title", in each case within the meaning of the UCC. Each Issuer shall
notify the Collateral Agent in writing within five (5) days if there is a
change in the character of any of the Collateral such that it constitutes
an "instrument" (other than an "instrument" which constitutes part of
"chattel paper") within the meaning of the UCC.
9.11 Financial Statements. The Issuers shall deliver to the
--------------------
Purchasers the following:
(a) Within forty-five (45) days after the end of each quarterly
fiscal period of Interpool (commencing with June 30, 1995 and continuing
until all of the Obligations under this Agreement and the other Transaction
Documents are satisfied), company prepared unaudited consolidated financial
statements for Interpool and its consolidated subsidiaries in comparative
form showing the corresponding figures for the preceding year prepared in
accordance with GAAP, along with a certificate by an authorized officer of
Interpool which shall include an attestation by such officer briefly
stating he has reviewed such unaudited consolidated financial statements
and that he has reviewed the relevant provisions of this Agreement
including Section 9 together with supporting computations and stating
whether his examination has disclosed the existence of any Default or Event
of Default and, if so, specifying the nature and period of existence
thereof and actions management proposes to undertake to cure the same.
(b) Within ninety (90) days after the end of each fiscal year
of Interpool, a consolidated balance sheet of Interpool and its
consolidated subsidiaries as of the end of such year and the related
consolidated statements of income, statements of cash flows and statements
of shareholders' equity for such year audited, without qualification, by
Arthur Andersen LLP. or another independent "Big Six" certified public
accounting firm, in comparative form the corresponding figures as at the
end of and for the preceding financial year. In addition, such accountants
shall issue a statement in connection with their audit as to whether
anything has come to their attention that would cause them to believe that
the Issuers were not in compliance with any of the terms, covenants or
conditions of Sections 9.19 or 9.25 of this Agreement it being understood
---------------------
that their audit was not directed primarily to obtaining knowledge of such
non-compliance and if any such non-compliance is indicated, specifying the
nature and period of existence thereof, together with a certificate of an
authorized officer with respect to such financial statements covering the
same matters referred to in the first three quarters' attestations
delivered pursuant to Section 9.11(a) and actions management proposes to
---------------
undertake to cure the same.
(c) (i) Within sixty (60) days after the end of each calendar
quarter until all of the Obligations outstanding are satisfied, a
Collateral Certificate showing excess or shortfall of Collateral Value to
125% of the unpaid principal amounts outstanding on the Notes, an equipment
status report sent to the Collateral Agent for Collateral (indicating the
Collateral located at depots or under lease) and an aging of all accounts
receivable (including lease receivables covering the Equipment and other
equipment) of Interpool and its consolidated subsidiaries, as at the end of
such calendar quarter, in form and substance reasonably satisfactory to the
Purchasers.
(ii) Within sixty (60) days after the end of each quarterly
fiscal period of Interpool (commencing with June 30, 1995 and continuing
until all of the Obligations under this
23
<PAGE>
Agreement and the other Transaction Documents are satisfied), an Equipment
utilization report (showing the percentage of Equipment under lease) with
respect to Equipment owned and managed by Interpool and its consolidated
subsidiaries.
(d) Copies of all formal, written notices or reports, if any,
furnished to an Issuer by its independent certified public accountants in
connection with each fiscal year audit of the financial statements of such
Issuer made by such accountants.
(e) Such additional financial information with respect to the
Issuers and information with respect to the Collateral as the Purchasers
may from time to time reasonably require.
(f) Promptly after the filing thereof, copies of all financial
statements and reports (including all exhibits or schedules annexed thereto
or filed therewith) which are material to any Issuer and which such Issuer
may file with the Securities and Exchange Commission of the United States
or any public body succeeding to the functions of that Commission and which
are generally available to the public.
(g) Upon the addition of any Direct Finance Leases to the
Collateral pursuant to Section 5.6 or any other provision of this Agreement
or the other Transaction Documents, the related Issuer shall furnish to the
Purchasers and the Collateral Agent a certificate of such Issuer (in the
form of Exhibit I attached hereto).
---------
9.12 Books and Records. Each of the Issuers shall, at all times and
-----------------
in accordance with GAAP keep complete and accurate books and records
concerning its business, affairs and operations and concerning its
properties and assets, including, without limitation, the Collateral, and
shall deliver, or cause to be delivered to the Collateral Agent promptly
upon the Collateral Agent's request, from time to time, with respect to the
Collateral (i) after an Event of Default occurs, to the extent in its
possession, all instruments and chattel paper (including all executed
copies thereof, representing or evidencing the Collateral or proceeds of
the Collateral subject to the Collateral Agent's compliance with the last
sentence of Section 9.29(a); (ii) after an Event of Default occurs, to the
extent in its possession or control, all original invoices, original bills
of lading, documents of title, all Leases covering Financed Equipment
included in the Collateral, original contracts, chattel paper, instruments,
and any other writings relating to the Collateral; and (iii) such other
information to the extent in its possession or control with respect to any
of the Collateral as the Collateral Agent may, in its sole discretion, deem
to be necessary or effectual to evidence the transactions contemplated
hereby or to evidence, enforce or perfect the Collateral Agent's Lien in
the Collateral, or to carry into effect the provisions and intent of this
Agreement or other Transaction Documents delivered pursuant hereto, all at
the sole expense of the Issuers.
9.13 Inspection. The Issuers shall, from time to time and during
----------
normal business hours, on reasonable notice, permit the Purchasers or the
Collateral Agent to inspect or examine the properties and assets of the
Issuers, including, without limitation, the Collateral, to the extent the
Collateral is in the possession or control of the Issuers or could be so
inspected or examined under the terms of applicable Leases with respect
thereto, and further to examine, check, make copies of, or extracts from,
any of the Issuers' books, records, journals, receipts, orders, correspon-
dence, other data, or orders and accounts receivable of the Issuers and to
permit the Purchasers and the Collateral Agent to hold discussions with the
Issuers' officers and auditors and the Issuers shall instruct such officers
and request such auditors to hold such discussions. If a Default or Event
of Default has occurred and is continuing (a) all of the foregoing shall be
at the Issuers' expense, (b) the Purchasers or the Collateral Agent may
independently verify the orders and accounts receivable of the Issuers at
the Issuers' expense, and (c) the Purchasers
24
<PAGE>
shall have the right to audit (or cause to be audited by certified public
accountants) all of the foregoing items of the Issuers at the Issuers'
expense.
9.14 ERISA. Each of the Issuers shall furnish to the Purchasers and,
-----
with respect to the Collateral, the Collateral Agent (a) as soon as
possible and in any event within thirty (30) days after such Issuer or a
duly appointed administrator of a Plan knows or has reason to believe that
any Reportable Event has occurred with respect to any Plan, a statement of
the principal financial officer of such Issuer setting forth details as to
such Reportable Event and the action which such Issuer proposes to take
with respect thereto, together with a copy of the notice of such Reportable
Event given to the PBGC or a statement that said notice will be filed with
the annual report to the United States Department of Labor with respect to
such Plan if required under applicable regulations; (b) promptly after
receipt thereof, a copy of any notice an Issuer or any other member of a
Controlled Group may receive from the United States Department of Labor,
the Internal Revenue Service or the PBGC with respect to any deficiency
with respect to any Plan; (c) in the event any stock of any Issuer is ever
offered pursuant to a registration statement filed with the Securities and
Exchange Commission, promptly after the sending of, making available or
filing of the same, copies of any proxy statements and financial statements
which such Issuer shall send or make available to all of its stockholders,
and any registration statements and any reports which such Issuer shall
file with the Securities and Exchange Commission; and (d) promptly after
receipt thereof, a copy of any notice an Issuer may receive indicating an
actual or potential violation of any environmental law or regulation.
9.15 Use of Proceeds. The Issuers shall use the proceeds of the
---------------
Notes solely in accordance with the provisions of Section 2.2.
-----------
9.16 Further Assurances. The Issuers shall procure, execute and
------------------
deliver to the Collateral Agent any security agreement, financing
statement, or other writing and take all such other actions as the
Collateral Agent may reasonably require to evidence, preserve, protect or
enforce the Collateral Agent's rights and interests to or in the
Collateral.
9.17 Government Contracts. No Financed Equipment covered by
--------------------
contracts with the United States or any other governmental entity or any of
their respective departments, agencies or instrumentalities shall be deemed
to constitute Collateral unless and until (a) the Issuers shall have
notified the Collateral Agent and executed any writings and taken all such
other actions as the Collateral Agent may require in order that all money
due or to become due under such contracts shall be assigned to the
Collateral Agent and (b) proper notice of the assignment has been given
under and all other actions have been taken which are required under the
Federal Assignment of Claims Act or other applicable law to the reasonable
satisfaction of the Purchasers.
9.18 Sell, Merge, Consolidate, etc. None of the Issuers shall:
------------------------------
(a) Sell, abandon, or otherwise dispose of all or any
substantial part (which shall be deemed to constitute an amount in excess
of 20% of the consolidated assets of Interpool and its Restricted
Subsidiaries), of its properties or assets in any 12 month period unless
(i) it either (A) reinvests the proceeds from such transactions in excess
of 20% of such consolidated assets in its principal businesses as described
in Section 7.4 or other investments permitted hereunder provided that such
-----------
investments are fully liquidated and the proceeds thereof are invested in
such principal businesses within twelve (12) months from the date of such
transaction, and/or (B) prepays the Notes on a pro rata basis in inverse
--------
order of the scheduled principal payments thereof without priority of any
one such Note over any other such Note in the amount of such excess of 20%
of such consolidated assets, together with a Make Whole Premium, if any, or
(ii) such transaction occurs entirely among the Issuers.
25
<PAGE>
(b) Consolidate with or merge into any Person or permit any
merger of any other Person into any Issuer or acquire all or substantially
all the assets of any Person, unless such Issuer is the surviving
corporation (and if one of the Issuers involved in such transaction is
Interpool, Interpool is the surviving corporation) or the survivor
expressly assumes the Obligations of such Issuer and following and giving
effect to such merger, consolidation or acquisition, no Default or Event of
Default exists or shall result under any Transaction Document, the
Collateral Agent continues to have a first perfected security interest in
the Collateral under the UCC, reflected on the certificates of title or
through a filing with the Interstate Commerce Commission, as applicable to
the relevant Collateral subject to no other Liens, other than Permitted
Liens and the Issuers, including the surviving corporation, may issue at
least $1.00 of additional Funded Debt without any Default or Event of
Default resulting hereunder.
(c) Alter the existing capital stock structure of any Issuer
such that (i) Interpool owns less than 75% of the common stock of Ltd. or
75% of the common stock of Trac Lease, Inc. or (ii) Interpool holds less
than 75% of the voting rights in Ltd. or 75% of the voting rights in Trac
Lease, Inc. or (iii) Ltd. owns less than 75% of Corp. or (iv) Ltd. holds
less than 75% of the voting rights in Corp.
(d) Sell, assign, transfer, discount, securitize or otherwise
dispose of any Lease, or any interest therein, with or without recourse,
except in the ordinary course of its business as presently conducted.
9.19 Financial Covenants. So long as the Obligations remain
-------------------
outstanding under any of the Transaction Documents (subject to the
provisions of Section 9.19(e)):
---------------
(a) Interpool shall cause Tangible Net Worth to be greater than
$100,000,000 for the period commencing on the Closing Date to December 31,
1995; and $125,000,000 at all times from and after January 1, 1996.
(b) Neither Interpool nor any of its Restricted Subsidiaries
shall incur any Funded Debt unless after giving effect to such incurrence
of Funded Debt (i) the ratio of Funded Debt to Tangible Net Worth is not
greater than 4 to 1; and (ii) the sum of Pro-Forma Fixed Charges for
Interpool and its Restricted Subsidiaries would have been covered at least
1.5 times by the sum of Earnings Available for Fixed Charges for Interpool
and its Restricted Subsidiaries for the most recent four (4) fiscal
quarters preceding the date of determination.
(c) Interpool shall not permit the ratio, which shall be
calculated on a quarterly basis, of (i) the sum of Earnings Available for
Fixed Charges plus Depreciation for Interpool and its Restricted
Subsidiaries for the sum of the four (4) fiscal quarters immediately
preceding the date of determination to (ii) the sum of Fixed Charges for
Interpool and its Restricted Subsidiaries for the sum of the four (4)
fiscal quarters immediately preceding the date of determination to be less
than 1.5 to 1.
(d) Neither Interpool nor its Restricted Subsidiaries shall
make any Restricted Payments if the aggregate amount of all Restricted
Payments made subsequent to June 30, 1993 would exceed the sum of
$5,000,000 plus 75% of the sum of (i) Net Earnings of Interpool and its
Restricted Subsidiaries (minus 100% of any net loss) subsequent to June 30,
1993 and (ii) the net cash proceeds received after June 30, 1993 from the
sales (other than to Interpool or its Subsidiaries) of shares of common
stock and preferred stock of Interpool or any Restricted Subsidiary which
does not provide for mandatory redemption thereof or sinking fund payments
with respect thereto.
26
<PAGE>
(e) If the Collateral is terminated pursuant to Section 5.7(a)
--------------
then, from and after the date of such termination up to and until such
time, if any, as the Issuers again secure the Obligations with Collateral
in accordance with Section 5.7(d), the Issuers shall not be required to
--------------
comply with the financial covenants set forth in Sections 9.19(a), (b) and
-------------------------
(c) and shall, instead be required to comply with the following financial
- ---
covenants:
(i) Interpool shall cause Tangible Net Worth to be greater
than $125,000,000;
(ii) Neither Interpool nor any of its Restricted
Subsidiaries shall incur any Funded Debt unless after giving effect to such
incurrence of Funded Debt (A) the ratio of Funded Debt to Tangible Net
Worth is not greater than 3 to 1; and (B) the sum of Pro-Forma Fixed
Charges for Interpool and its Restricted Subsidiaries would have been
covered at least 1.75 times by the sum of Earnings Available for Fixed
Charges for Interpool and its Restricted Subsidiaries for the most recent
four (4) fiscal quarters preceding the date of determination;
(iii) Interpool shall not permit the ratio, which shall be
calculated on a quarterly basis, of (i) the sum of Earnings Available for
Fixed Charges plus Depreciation for Interpool and its Restricted
Subsidiaries for the sum of the four (4) fiscal quarters immediately
preceding the date of determination to (ii) the sum of the Fixed Charges
for Interpool and its Restricted Subsidiaries for the sum of the four (4)
fiscal quarters immediately preceding the date of determination to be less
than 1.75 to 1.
9.20 Payment of Obligations. Each Issuer shall pay all obligations
----------------------
material to its business when due (taking into account any grace periods
granted in respect thereof) other than those disputed by it in good faith,
if failure to pay might have a material adverse affect on the business,
conditions (financial or otherwise), prospects or creditworthiness of an
Issuer.
9.21 Notice of Default. Each Issuer shall promptly but in any event
-----------------
within three (3) Business Days after obtaining knowledge thereof furnish
the Collateral Agent and the Purchasers with a statement of the occurrence
of any Event of Default or Default, specifying the nature and period of
existence thereof and what action management of such Issuer proposes to
take with respect thereto. If an Issuer receives a notice of Default from
any creditor or Person other than the Collateral Agent and the Purchasers,
such Issuer shall deliver to the Collateral Agent and the Purchasers a copy
of such notice of Default, immediately upon receipt thereof. In the event
that the Issuers have cured such Default within any applicable cure period
provided therefor, such cure shall have the effect of remedying any failure
of the Issuers to give notice relating to such Default.
9.22 Lock Box. Upon the occurrence of an Event of Default and at the
--------
request of the Majority In Interest or the Collateral Agent acting on the
instructions of the Majority In Interest, the Issuers will establish a lock
box in respect of the Collateral and all proceeds thereof at a location
satisfactory to the Purchasers and the Collateral Agent, and take all such
action and execute all agreements, documents, letters and instruments which
the Collateral Agent deems appropriate in its sole discretion to establish
and maintain said lock box.
9.23 Additional Costs. (a) In the event that any change in or
----------------
adoption of any applicable law, regulation or guideline, or any
interpretation thereof by any governmental authority charged with the
administration thereof, not published on or prior to the date hereof,
subjects a Purchaser to any Tax of any kind whatsoever with respect to the
Notes issued to such Purchaser, or changes the basis of taxation of
payments to such Purchaser of any fees, principal or interest payable on
such Notes (except for
27
<PAGE>
changes in the rate of tax based solely on the overall net income of such
Purchaser) or imposes, modifies or deems applicable any reserve requirement
against assets held by, or other liabilities in or for the account of, or
loans by, such Purchaser, or imposes on such Purchaser, directly or
indirectly, any of the conditions affecting the relevant Notes, and the
result of any of the foregoing is to increase the cost to such Purchaser of
purchasing or holding the relevant Notes by an amount which such Purchaser
deems to be material, then upon demand by such Purchaser made promptly upon
such event, the Issuers will pay to such Purchaser, upon its demand, the
additional amount or amounts necessary to compensate such Purchaser for
such additional cost. Absent manifest error, such Purchaser's statement
shall be conclusive as to any additional amount to be paid. Such Purchaser
shall supply the Issuers with such information related to any such Taxes,
taxation or reserve requirement as is available to such Purchaser and is
not confidential. In the event that any such additional cost arises and is
demanded by a Purchaser from an Issuer, the Issuer shall have the right to
prepay the Notes of such Purchaser, together with payment of accrued
interest thereon and any Make Whole Premium.
The Issuers shall pay to the Purchasers all principal of, and interest
on, the amount outstanding on the Notes and all their other Obligations
under the Transaction Documents free and clear of and without deduction or
withholding for any present or future license, registration or other fees,
taxes or other amounts for or on account of levies, imposts, duties,
deductions, withholdings or other charges assessed by any governmental or
taxing authority, excluding income and franchise taxes imposed on a
Purchaser by a jurisdiction under which such Purchaser is organized or
operating in connection with this Agreement or any political subdivision
thereof (the "Taxes"). In the event any Issuer is or may become required
-----
to pay any such costs, such Issuer may elect to prepay the Notes, together
with accrued interest thereon, Make Whole Premium, and any additional costs
associated with such prepayment.
(b) If an Issuer shall be required to withhold or deduct Taxes
from any sum payable hereunder, (i) the sum payable shall be increased as
may be necessary so that the amount received is equal to the sum which
would have been received had no withholdings or deductions been made,
(ii) such Issuer shall make such necessary withholdings and deductions, and
(iii) such Issuer shall pay the full amount withheld or deducted to the
relevant authority according to applicable law so that any Purchaser shall
not be required to make any deduction or payment of Taxes.
9.24 Transactions with Related Parties. The Issuers will not and
---------------------------------
will not permit any Restricted Subsidiary to enter into any transaction or
arrangement with any Related Party, including the purchase from, sale to or
exchange of property with or lease of Financed Equipment to or from (as
Lessor or lessee, respectively) or rendering of any service by or for, any
Related Party, except in the ordinary course of business and pursuant to
the reasonable requirements of the Issuers and such Restricted Subsidiary
and upon fair and reasonable terms no less favorable than would be obtained
in a comparable arm's length transaction with a Person other than a Related
Party.
9.25 Permitted Investments. Neither Interpool nor any of its
---------------------
Restricted Subsidiaries shall make cash or cash equivalent investments in,
loans or advances to or guarantee the obligations of, any Person except the
following ("Permitted Investments"):
---------------------
(a) Purchases of obligations of the United States Government
and its agencies, U.S. dollar denominated obligations of the Canadian
Government, and those "obligations of supranationals," which includes
government issued securities and World Bank securities, that are rated at
least AAA by Standard & Poor's or Moody's, all such purchases having
maturities not in excess of five (5) years;
(b) Purchases of prime commercial paper rated A1/P1 or higher
by Standard & Poor's or Moody's maturing in 270 days or less;
28
<PAGE>
(c) Purchases of certificates of deposit or bankers'
acceptances issued by a bank with capital, surplus and undivided profits of
at least $100,000,000, having a term of one year or less;
(d) Investments in or advances to Restricted Subsidiaries or
any legal entity which after such investments or advances would become a
Restricted Subsidiary;
(e) Advances to employees for expenses incurred by such
employees in the ordinary course of the Issuers' business;
(f) Carrying lease or notes receivable arising from
transactions with customers and suppliers in the normal course of the
Issuers' business;
(g) Guarantees of obligations of Unrestricted Subsidiaries
provided that such guarantees would be permitted under Section 9.19(b);
---------------
(h) Other Investments subject to the limitations set forth in
Section 9.19(d);
- ---------------
(i) Purchases of corporate debt securities rated A3/A- or
higher by Moody's or Standard & Poor's and which mature within five (5)
years after the date of acquisition in an amount not to exceed 15% of the
sum of cash and marketable securities as reflected on the Issuers'
quarterly financial statements of the most recently completed fiscal
quarter;
(j) Purchases of tax exempt securities which are rated Aa3/AA-
or higher by Moody's or Standard & Poor's and which mature within five (5)
years after the date of acquisition; and
(k) Any other investments up to an aggregate of $10,000,000 at
any one time outstanding.
To the extent the Issuers have Permitted Investments and prior to any
investment by any Issuers in marketable securities with maturities greater
than one year, or investments described in subsections (h) and (k) above,
the Issuers shall have caused the greater of (i) 5% of Tangible Net Worth
and (ii) $10,000,000.00 to have been invested in investments described in
subsections (a), (b), (c), (i) or (j) above with final maturities not
exceeding one year.
The foregoing provisions of this Section 9.25 shall not be deemed to
------------
limit the transactions in which the Issuers are permitted to engage in
accordance with the provisions of Section 9.18.
------------
9.26 Leases. At all times following the occurrence and during the
------
continuance of an Event of Default and upon the lock box provided for in
Section 9.22 being established, the Issuers shall immediately notify the
- ------------
Collateral Agent of the cancellation of any Lease with a term of one (1)
year or more.
9.27 Acquisition of Notes. No Issuer shall, nor shall such Issuer
--------------------
permit any Subsidiary or any Affiliate to, directly or indirectly, acquire
or make any offer to acquire any Notes unless such Issuer or such
Subsidiary or Affiliate shall have offered to acquire Notes, pro rata, from
--- ----
all of the Purchasers and upon the same terms. In case an Issuer, or any
Subsidiary or Affiliate, acquires any Notes, such Notes shall thereafter be
cancelled and no Notes shall be issued in substitution thereof.
9.28 Private Offering. The Issuers agree that none of the Issuers
----------------
nor anyone acting on such Issuers' behalf shall offer the Notes or any part
thereof or any similar securities for issue or sale to, or
29
<PAGE>
solicit any offer to acquire any of the same from, any Person so as to
bring the issuance and sale of the Notes within the provisions of Section 5
of the Securities Act.
9.29 Security Interest in Leases.
---------------------------
(a) Notwithstanding anything to the contrary contained herein,
the Issuers agree that they shall not deliver any Lease relating to any
Collateral to any Person, (other than a signed counterpart of a Lease to
the lessee under such Lease), unless an Issuer is in default with respect
to its obligations to a secured party having a security interest in such
Lease and is required under its agreement with such secured party to
deliver possession of such Lease to such secured party, and either (x) (i)
prior to delivering possession of any such Leases, such Issuer shall stamp
on the front cover or other conspicuous space in any such Leases the
language set forth in Schedule 9.29(x)(i) and furnish written evidence
-------------------
satisfactory to the Collateral Agent that such stamping has been effected,
provided that such stamping shall not be in derogation or limitation of the
requirements of Section 9.29(b), and (ii) such other secured party shall,
---------------
as a condition of obtaining possession of such Lease, furnish to the
Issuers and the Collateral Agent its agreement substantially in the form of
Schedule 9.29(x)(ii) that it is receiving possession of and holding
- --------------------
possession of such Leases both for its own benefit and as agent of and for
the benefit of the Collateral Agent to the extent of their respective
security interests in such Leases or (y) such Leases and any related
Equipment is released from the Lien of the applicable Security Agreement,
provided that the aggregate Collateral Value of such Issuer after such
release is equal to or greater than 125% of the aggregate outstanding
principal amount of the Notes issued by such Issuer. If a Default or Event
of Default has occurred and is continuing, each Issuer shall immediately
deliver possession of all its Leases to the Collateral Agent (unless such
Issuer shall have previously delivered possession of such Leases to another
secured party under a prior obligation), similarly stamped with respect to
the security interest of any other secured party in such Lease and provided
the Collateral Agent shall have furnished the Issuer with its agreement in
the form of Schedule 9.29(x)(ii) that it is receiving possession of and
--------------------
holding possession of such Leases both for its own benefit and as agent of
and for the benefit of such other secured party to the extent of their
respective security interests in such Lease.
(b) Each Issuer shall stamp and maintain the language set forth
in Schedule 9.29(x)(i) on the front cover or other conspicuous space of
Leases and Direct Finance Leases relating to at least 90% of the aggregate
Collateral Value of Financed Equipment covered by Leases and of Direct
Finance Leases.
9.30 Collateral Administration Agreement. Each Issuer shall use its
-----------------------------------
best efforts to have the Collateral Administration Agreement executed and
delivered to the Purchasers and the Collateral Agent by all existing and
future holders of its Funded Debt secured by leases or similar agreements
or arrangements covering Financed Equipment and Direct Finance Leases.
SECTION 10. DEFAULT; REMEDIES OF THE PURCHASERS.
-----------------------------------
10.1 Occurrence of Event of Default. Any one of the following events
------------------------------
or conditions shall constitute an Event of Default:
(a) any Issuer shall fail to pay, when due, at maturity
(whether as stated or by acceleration) or otherwise, any payment of
principal, interest, fees, Make Whole Premium or other charges or amounts
due and owing to the Purchasers with respect to the Obligations, and such
failure shall continue for five (5) Business Days or more; or
30
<PAGE>
(b) any Issuer shall fail to observe or perform the covenants
set forth in Sections 9.6, 9.18, 9.19, 9.21 or 9.25; or
--------------------------------------
(c) any Issuer shall fail to observe or perform any other
covenant or agreement of such Issuer in this Agreement or any other
Transaction Document which shall remain unremedied for thirty (30) days; or
(d) any representation or warranty made by any Issuer
hereunder, under any Transaction Document or in any other document to any
Purchaser or the Collateral Agent shall be incorrect as at the date made in
any material respect; or
(e) if any Issuer shall (i) file, or consent by answer or
otherwise to the filing against it of, a petition for relief or
reorganization or arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy or insolvency law of any
jurisdiction or if there shall be commenced against any Issuer any such
proceeding and such action or proceeding remains undismissed for a period
of sixty (60) days, (ii) make an assignment for the benefit of its
creditors, (iii) consent to the appointment of a custodian, receiver,
trustee or other officer with similar powers for itself or any substantial
part of its property, (iv) be adjudicated a bankrupt or insolvent, or
(v) take any action for the purpose of any of the foregoing; or
(f) if a court or governmental authority of competent
jurisdiction shall enter an order appointing, without consent by any
Issuer, a custodian, receiver, trustee or other officer with similar powers
with respect to it or with respect to any substantial part of its property,
or constituting an order for relief or approving a petition for relief or
reorganization or any other petition in bankruptcy or for liquidation or to
take advantage of any bankruptcy or insolvency law of any jurisdiction, or
ordering its dissolution, winding-up or liquidation and such order shall
not have been stayed or dismissed within sixty (60) days; or
(g) if any Lien (other than a Lien in favor of the Purchasers
or the Collateral Agent or a Permitted Lien) or attachment, levy or
garnishment exists or is issued against the Collateral or any property of
any Issuer securing any of the Obligations in respect of indebtedness or
obligations of $2,000,000 or more in the case of Ltd. or Corp. or
$1,000,000 or more in the case of Interpool and is not released,
discharged, dismissed, stayed or fully bonded within a period of thirty
(30) days after its creation, attachment, issue or levy or if any such
Lien, attachment, levy or garnishment against the Collateral or any
property of any Issuer securing Obligations shall have priority over the
security interest of the Collateral Agent in the Collateral, and such Lien,
attachment, levy or garnishment is not released, discharged, dismissed,
stayed or fully bonded within a period of fifteen (15) days after its
creation, attachment, issue or levy; or
(h) if any judgment or tax lien is entered against any Issuer
and remains unsatisfied after thirty (30) days, unless said judgment or tax
lien is being contested in good faith by appropriate proceedings and is
stayed in the interim; or
(i) a Person or outside group of related Persons which is not
listed on Schedule 7.1 attached hereto obtains voting control of fifty one
------------
percent (51%) or more of the voting securities of Interpool; or
(j) any Issuer (as principal, guarantor or other surety)
defaults in the payment of any principal or interest of any indebtedness
for borrowed money in excess of $4,000,000 with respect to Interpool and in
excess of $1,000,000 with respect to each of Ltd. and Corp. (including any
31
<PAGE>
indebtedness of Interpool, Ltd. or Corp. to the Purchasers other than the
Obligations) or defaults in any other manner in respect of such
indebtedness, in either case, beyond the period of grace, if any, specified
therefor so as to give the holder of any such indebtedness the right to
cause the acceleration of such indebtedness including any grace period
provided to such holder; or
(k) if the aggregate Collateral Value for an Issuer shall be
less than 125% of the aggregate outstanding principal amount of the Notes
issued by such Issuer by (i) an amount of $2,000,000 or more in respect of
Ltd., $3,000,000 or more in respect of Corp. or of $500,000 or more for
Interpool or (ii) an amount less than $2,000,000 for Ltd., less than
$3,000,000 for Corp. or less than $500,000 for Interpool and such
deficiency shall not have been fully eliminated (A) in the case of the
deficiency described in clause (i) hereof within fifteen (15) days from the
date that such deficiency arises or (B) in the case of the deficiency
described in clause (ii) hereof within fifteen (15) days following the date
that the next Collateral Certificate is required to be delivered pursuant
to Section 9.11(c); by the prepayment of Notes pursuant to Section 5.5; by
--------------- -----------
the assumption of Notes by Interpool pursuant to Section 5.6(a) or by Ltd.
--------------
pursuant to Section 5.6(b); by the grant of additional Collateral pursuant
--------------
to Section 5.6(c), Section 5.6(d) or Section 5.6(e); by the grant of Cash
-------------- -------------- --------------
Collateral pursuant to Section 5.6(f); by the designation by Interpool of
--------------
Collateral in respect of excess Collateral Value of Interpool for the
benefit of Ltd. pursuant to Section 5.6(g) or by the designation by Ltd. of
--------------
Collateral in respect of excess Collateral Value of Ltd. for the benefit of
Corp. pursuant to Section 5.6(h).
10.2 Action Upon Event of Default.
----------------------------
(a) Declaration of Acceleration of Each Note. If an Event of
----------------------------------------
Default under Section 10.1(a) occurs and is continuing, any of the
---------------
Purchasers may by notice to the Issuers, declare the principal of its Notes
to be immediately due and payable together with accrued interest thereon
and a Make Whole Premium with respect thereto. At any time after such
acceleration, and prior to the sale or disposition of any of the
Collateral, such Purchaser may rescind such a declaration or automatic
acceleration, as the case may be, and thereby annul its consequences if
(i) the Issuers pay an amount sufficient to pay all principal of, Make
Whole Premium, if any, and interest on such Note, to the extent each such
amount is due or past due without regard to the acceleration hereof, if
any, in respect of the outstanding Note otherwise than by reason of such
acceleration and all sums due and payable to such Purchaser or the
Collateral Agent, (ii) the rescission would not conflict with any judgment
or decree and (iii) all existing Events of Default relating to such Note
have been cured or waived except nonpayment of principal of, Make Whole
Premium or interest on the Note that has become due solely because of such
acceleration.
(b) Declaration of Acceleration of All Notes. If an Event of
----------------------------------------
Default occurs and is continuing, the Majority In Interest may, by notice
to the Issuers, declare the principal of all Notes to be immediately due
and payable together with accrued interest thereon and a Make Whole Premium
with respect thereto; provided that the Notes will automatically become due
--------
and payable together with accrued interest thereon and a Make Whole Premium
with respect thereto without any action of the Purchasers in the case of an
Event of Default under Section 10.1(e) or Section 10.1(f) and, provided
--------------- --------------- --------
further that this Section 10.2(b) shall not be in derogation of the rights
- -------
of each of the Purchasers under Section 10.2(a). At any time after such
acceleration, and prior to the sale or disposition of any of the
Collateral, the Majority In Interest may rescind such a declaration or
automatic acceleration, as the case may be, and thereby annul its
consequences if (i) the Issuers pay an amount sufficient to pay all
principal of, Make Whole Premium, if any, and interest on the Notes, to the
extent each such amount is due or past due without regard to the
acceleration hereof, if any, in respect of the outstanding Notes otherwise
than by reason of such acceleration and all sums due and payable to the
Purchasers or the Collateral Agent, (ii) the rescission would not conflict
with any judgment or decree and (iii) all existing Events of Default
32
<PAGE>
have been cured or waived except nonpayment of principal of, Make Whole
Premium or interest on the Notes that has become due solely because of such
acceleration.
(c) Payments after Acceleration of Notes. All payments
------------------------------------
received and all amounts held or realized by the Purchasers after the
outstanding principal of any of the Notes shall have been declared to be
due and payable pursuant to Section 10.2(a) or Section 10.2(b), and all
--------------- ---------------
payments or amounts then held or thereafter received by the Purchasers
hereunder, shall be applied by each such Purchaser in the following order
of priority:
First, to reimburse the Purchasers for any costs and expenses not
-----
reimbursed by the Issuers;
Second, so much of such payments or amounts remaining as shall be
------
required to pay in full any interest at the Overdue Rate, the accrued but
unpaid interest on the Notes to the date of distribution and any Make Whole
Premium;
Third, so much of such amounts remaining as shall be required to pay
-----
in full the aggregate unpaid principal amount of the Notes on a pro rata
--- ----
basis for all the Notes for each Issuer and then applied to such Notes in
inverse order of the scheduled principal payments thereof and all other
amounts payable hereunder;
Fourth, so much of such amounts remaining as shall be required to pay
------
in full all other outstanding Obligations; and
Fifth, the balance, if any, of such payments or amounts remaining
-----
thereafter shall be distributed to each of the relevant Issuers, upon its
written direction or to any other Person entitled thereto as a matter of
law.
All payments and proceeds received by the Collateral Agent or the
Purchasers shall be applied to the Obligations secured thereby pursuant to
the applicable Security Agreement, Railcars Security Agreement or security
and pledge agreement in respect of the Cash Collateral.
(d) Other Remedies. The Issuers agree, to the full extent that
--------------
they lawfully may, that if one or more Events of Default shall have
occurred and be continuing, then, and in every such case the Purchasers or
upon the instructions of the Majority In Interest the Collateral Agent on
behalf of the Purchasers pursuant to the Agency Agreement, as secured
party, mortgagee or collateral assignee hereunder or under the Collateral
Documents, or otherwise, may exercise any or all of the rights and powers
and pursue any and all of the remedies available to the Purchasers
hereunder or under any of the Transaction Documents or with respect to the
Collateral Agent, under the Collateral Documents.
10.3 Authorized to Execute Bills of Sale. Each of the Issuers hereby
-----------------------------------
irrevocably appoints the Collateral Agent the true and lawful attorney-in-
fact of such Issuer in its respective name and stead and on its respective
behalf, for the purpose of effectuating any sale, assignment, transfer or
delivery for the enforcement of the Lien in connection with this Agreement
and any other Transaction Documents, following the occurrence of an Event
of Default to execute and deliver all such bills of sale, assignments, UCC
financing statements and other instruments as the Collateral Agent may
consider necessary or appropriate, with full power of substitution, each of
the Issuers hereby ratifying and confirming all that such attorney or any
substitute shall lawfully do by virtue hereof. After the Collateral Agent
has exercised its rights hereunder, if so requested by the Collateral Agent
or any Purchaser, each of the Issuers shall ratify and confirm any such
sale, assignment, transfer or delivery, by executing and delivering to the
Collateral Agent or such purchaser all bills of sale, assignments,
releases, UCC financing
33
<PAGE>
statements and other proper instruments to effect such ratification and
confirmation as may be designated in any such request.
10.4 Remedies Cumulative. Each and every right, power and remedy
-------------------
herein specifically given to the Purchasers or the Collateral Agent or
otherwise in this Agreement or any other Transaction Documents shall be
cumulative and shall be in addition to every other right, power and remedy
herein specifically given or now or hereafter existing at law, in equity or
by statute, and each and every right, power and remedy whether specifically
herein given or otherwise existing may be exercised from time to time and
as often and in such order as may be deemed expedient by the Purchasers or
the Collateral Agent, and the exercise or the beginning of the exercise of
any power or remedy shall not be construed to be a waiver of the right to
exercise at the same time or thereafter any other right, power or remedy.
No delay or omission by the Purchasers or the Collateral Agent in the
exercise of any right, remedy or power or in the pursuance of any remedy
shall impair any such right, power or remedy or be construed to be a waiver
of any Default or Event of Default on the part of any Issuer or to be an
acquiescence therein.
10.5 Discontinuance of Proceedings. In case any of the Purchasers or
-----------------------------
the Collateral Agent shall have proceeded to enforce any right, power or
remedy under this Agreement or any other Transaction Documents and such
proceedings shall have been discontinued or abandoned for any reason or
shall have been determined adversely to such Purchaser or the Collateral
Agent, then and in every such case the Issuers and the Collateral Agent
shall be restored to their former positions and rights hereunder with
respect to the Collateral, and all rights, remedies and powers of such
Purchaser or the Collateral Agent shall continue as if no such proceedings
had been taken.
10.6 Agreements with respect to Remedies and Defaults.
------------------------------------------------
Notwithstanding any provisions of this Agreement or the Collateral
Documents to the contrary,
(a) If an Event of Default shall have occurred and is
continuing under this Agreement or any other Transaction Documents (whether
declared or not), the Collateral Agent shall in accordance with
instructions from the Majority In Interest, to the extent remedies are
available to do so and the Collateral Agent is not stayed from exercising
such remedies, pursue such remedies as are available under the Leases and
the Collateral Documents and at law in respect of the Collateral in
accordance with the Collateral Documents and with respect to the Issuers.
(b) If an Event of Default shall have occurred and is
continuing, the Collateral Agent shall act in a commercially reasonable
manner in respect of the Collateral and with respect to the exercise of the
remedies provided under the Collateral Documents and at law related to the
Collateral.
10.7 Waiver of Existing Defaults. The Issuers, upon written
---------------------------
confirmation that the Majority In Interest waive an existing Event of
Default, shall notify all the Purchasers that the Majority In Interest has
provided such waiver; provided, however, no such waiver shall be effective
-------- -------
in the case of (i) an Event of Default in the payment of the principal of,
Make Whole Premium, if any, or interest on, any Note or (ii) in respect of
a covenant or provision of Section 9.18 and Section 9.19 unless such waiver
------------ ------------
is made by all the Purchasers.
10.8 Rights of Purchasers to Receive Payment. Each Purchaser, or
---------------------------------------
with respect to all the Notes, the Majority In Interest, shall have the
right to bring suit for the enforcement of such Purchaser's, or with
respect to all Notes, all of Purchasers' rights to receive payment of
principal of, Make Whole Premium, if any, and interest on such Note or
Notes on or after the due date expressed in such Note or
34
<PAGE>
Notes. Notwithstanding any other provision of this Agreement or the Agency
Agreement, the right of any Purchaser to receive payment of principal of,
Make Whole Premium, if any, and interest on a Note on or after the
respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Purchaser.
SECTION 11. EXPENSES.
--------
Each of the Issuers agrees, whether or not the transactions
contemplated by this Agreement are consummated, for the sole benefit of
each of the Purchasers and the Collateral Agent, to pay (or reimburse each
Purchaser for the payment of) all costs and expenses, of the negotiation,
execution and delivery of this Agreement and each of the other Transaction
Documents and every other related agreement, instrument and document, and
the perfection by the Collateral Agent of a valid first priority Lien in
the Collateral including all reasonable legal fees and expenses, and
expenses of lien searches, filing fees of UCC financing statements,
Railcars Security Agreement and other lien instruments, and fees and
expenses relating to the titling and registration of the Collateral and
noting Liens on certificates of title, incurred by or on behalf of each
Purchaser and the Collateral Agent, including without limitation, the fees
and disbursements of Rogers & Wells, special counsel for the Purchasers and
of Ray, Quinney & Nebeker, counsel to the Collateral Agent. Each of the
Issuers further agrees to pay (or reimburse each Purchaser for the payment
of) all costs and expenses including all reasonable legal fees and
expenses, and expenses of lien searches, filing fees, and fees and expenses
relating to the titling and registration of the Collateral and noting the
Liens on the certificates of title, incurred on behalf of each Purchaser
and the Collateral Agent, including without limitation, the fees and
disbursements of special counsel to the Purchasers incurred in connection
with (a) the negotiation, execution and delivery of any amendments,
supplements or modifications to this Agreement, the other Transaction
Documents and other related agreements, instruments and documents, and any
amendment of, supplement to or waiver of rights under any provision hereof
or thereof, (b) workouts, restructurings or fees of financial advisors with
respect to the Transaction Documents or the transactions referred to
therein or contemplated thereby, (c) the perfection by the Collateral Agent
by filing, recording, possession or otherwise in any jurisdiction whose
laws are applicable to an Issuer or any of the Collateral of a valid first
priority Lien in the Collateral, both initially and with regard to any
substitute or additional Collateral including but not limited to Cash
Collateral and other Collateral granted pursuant to any provision of
Section 5 and any release of any Collateral, and (d) the enforcement of the
- ---------
provisions of this Agreement, the other Transaction Documents or any of the
other related agreements, instruments and documents, by or on behalf of any
Purchaser or the Collateral Agent, including the exercise of any rights and
remedies provided herein or in the Agency Agreement.
SECTION 12. NOTICES.
-------
All communications and notices provided for herein shall be in
writing and delivered by hand, by the United States certified or registered
mail or by telecopier, and any such notice shall become effective (a) upon
personal delivery thereof, including, without limitation, by overnight mail
and courier service, (b) five (5) days after the date on which it shall
have been mailed by United States mail, certified or registered, postage
prepaid, return receipt requested, or (c) in the case of notice by
telecopier, when electronically or verbally confirmed, in each case
addressed to (i) if to a Purchaser, at the address set forth under such
Purchaser's name on Schedule 3 attached hereto with a copy to Purchaser's
----------
special counsel, Rogers & Wells, 200 Park Avenue, New York, New York 10166,
Telecopier: (212) 878-8375, Attn. Shephard W. Melzer, Esq., or (ii) if to
Issuers, at the address set forth under such Issuer's name on Schedule 2
----------
attached hereto, or at such other address as such Person may from time to
time designate by written notice to the other parties hereto. Any party
may change the person or address to whom or
35
<PAGE>
which notices are to be given hereunder, by notice duly given hereunder;
provided, however, that any such notice shall be deemed to have been given
- -------- -------
hereunder only when actually received by the party to which it is
addressed.
SECTION 13. PURCHASERS AND NOTES.
--------------------
13.1 Withholding Taxes; Information Reporting. Notwithstanding and
----------------------------------------
subject to the Issuers' obligation to ensure that the Purchasers are reim-
bursed for any withholding Taxes pursuant to Section 9.23 (b), if required
----------------
by applicable statute, regulation or other governing authority, the Issuers
shall exclude and withhold from each distribution of principal, Make Whole
Premium, if any, and interest and other amounts due hereunder or under the
Notes (including, without limitation, any additional payments required
pursuant to Section 9.23 (b)) any and all withholding taxes applicable
----------------
thereto as required by law. Any such withholding shall in no event give
rise to an Event of Default. The Issuers agree (a) to act as such with-
holding agent and, in connection therewith, whenever any present or future
taxes or similar charges are required to be withheld with respect to any
such amounts payable in respect of the Notes, to withhold such amounts and
timely pay the same to the appropriate authority in the name of and on
behalf of the Purchasers, (b) that it will file any necessary withholding
tax returns or statements when due and (c) that, as promptly as possible
after the payment of such amounts, it will deliver to each Purchaser
appropriate documentation showing the payment of such amounts, together
with such additional documentary evidence as such Purchasers may reasonably
request from time to time. Each of the Issuers agrees to file any other
information reports as it may be required to file under United States law.
To the extent that any Issuer fails to exclude and withhold from any
distribution to any Purchaser any amount paid by such Issuer to any taxing
authority under this Section 13.1 with respect to which such Purchaser has
no right of reimbursement under Section 9.23, upon such Issuer furnishing
written evidence satisfactory to such Purchaser that such payment was made
by such Issuer and that such Purchaser had no right of reimbursement, then,
provided that no Default or Event of Default shall have occurred and be
continuing, such Purchaser shall reimburse such Issuer for such amounts or
such Issuer may exclude and withhold such amounts from future distributions
to such Purchaser.
13.2 Satisfaction and Discharge of Agreement; Termination of
-------------------------------------------------------
Obligations. Subject to Section 13.3, the Issuers shall, except as herein
- ----------- ------------
provided, be deemed to have been discharged from their respective
Obligations with respect to the Notes, when
1 (a) the principal of, Make Whole Premium, if any, and interest
on the Notes and all other amounts due and payable under the Notes, this
Agreement and other Transaction Documents have been paid in full or there
shall have been deposited with the Purchaser an amount equal to the amount
required to discharge such indebtedness and other Obligations; and
(b) each Purchaser shall have received evidence that all
conditions precedent provided for relating to the satisfaction and
discharge of this Agreement contemplated by this Section 13.2 have been
------------
complied with.
13.3 Amendments to This Agreement With Consent of
Purchasers.
--------------------------------------------
(a) With the written consent of the Majority In Interest, the
Issuers may enter into such supplemental agreements to add any provisions
to or to change or eliminate any provisions of this Agreement or of any
such supplemental agreements or any of the other Transaction Documents or
to modify the rights of the Purchasers; provided, however, that, without
-------- -------
the consent of each Purchaser affected thereby, an amendment under this
Section 13.3 may not:
- ------------
36
<PAGE>
(i) reduce the amount of principal, interest or Make
Whole Premium due or owing on the Notes held by
such Purchaser; or
(ii) affect the terms of payment of any Note; or
(iii) reduce the amount of Purchasers which constitutes
the Majority In Interest; or
(iv) make any change in Section 5.1, 5.6, 5.7, 9.19,
----------------------------
10, or this Section 13.3(a); or
-- ---------------
(v) affect the preference between Purchasers and/or
Purchasers and other creditors.
(b) Promptly after the execution of any supplemental agreement
pursuant to the provisions of this Section 13.3, the Issuers shall transmit
------------
by first-class mail a copy of such supplemental agreement to all
Purchasers, as the names and addresses of such Purchasers appear on the
Register. Any failure of the Issuers to mail such copy, or any defect
therein, shall not, however, in any way impair or affect the validity of
any such supplemental agreement.
13.4 Notification on or Exchange of Notes. Each of the Purchasers may
------------------------------------
place an appropriate notation about an amendment or waiver on any Note
hereafter executed. Each of the Purchasers in exchange for such Notes
shall request that the relevant Issuer shall execute new Notes that reflect
the amendment or waiver.
SECTION 14. MISCELLANEOUS.
-------------
14.1 Oral Modification, Termination, etc. This Agreement cannot be
------------------------------------
changed, discharged or terminated orally.
14.2 Successors and Assigns. All the terms of this Agreement shall be
----------------------
binding upon, inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto, and, in particular, shall
inure to the benefit of and be enforceable by any registered owner or
holder of a Note; provided, however, the liabilities and Obligations of the
-------- -------
Issuers may not be assigned or otherwise transferred except by any merger
permitted under Section 9.18(b) or an assumption by Interpool or Ltd.
---------------
provided under Section 5.6.
-----------
14.3 Headings. The headings to the various sections of this Agreement
--------
have been inserted for the convenience of reference only and shall not
limit or otherwise affect any of the terms hereof.
14.4 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
14.5 Survival. All warranties, representation, indemnities and
--------
covenants made by any Person hereto, herein or in any certificate or other
instrument delivered by any such Person or on the behalf of any such Person
under this Agreement shall be considered to have been relied upon by each
other Person hereto and shall survive the consummation of the transactions
contemplated hereby on the Closing Date regardless of any investigation
made by any such Person or on the behalf of any such Person. All state-
37
<PAGE>
ments in any such certificate or other instrument shall constitute warran-
ties and representations by the Person so making the same.
14.6 Governing Law; Severability. This Agreement shall be governed by
---------------------------
and construed and enforced in accordance with the internal laws (as opposed
to conflicts of law provisions) of the State of New York. Whenever
possible, each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under appli-
cable law, such provision shall be ineffective to the extent of such prohi-
bition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
14.7 WAIVER OF JURY TRIAL; SUBMISSION TO JURISDICTION. EACH OF THE
------------------------------------------------
ISSUERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT TO A JURY TRIAL IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY. In any action or proceeding arising out of or
relating to this Agreement, each of the Issuers hereby accepts, for itself
and its property, the non-exclusive jurisdiction of the courts of the State
of New York, and the federal courts in New York City, and agrees that
effective service of process may be made on each Issuer by mailing same to
such Issuer's address set in Schedule 2 attached hereto. The Collateral
----------
Agent or any Purchaser may proceed against any Issuer in any other
applicable jurisdiction, and may serve process in any other manner
permitted by applicable law. Each of the Issuers hereby irrevocably waives
any objection to the laying of venue in the aforesaid courts, and any claim
of an inconvenient forum. To the extent that such Issuer or its property
may have or hereafter acquire immunity, on the grounds of sovereignty or
otherwise, from any judicial process in connection with this Agreement,
each Issuer hereby irrevocably waives, to the fullest extent permitted by
law, any such immunity and agrees not to claim same. Each of the Issuers
agrees that a final judgment in any such action or proceeding shall be
conclusive, and may be enforced in any other jurisdiction by suit on the
judgment or in any other permitted manner.
Interpool and Corp. each hereby irrevocably designates and
appoints Interpool Limited of 633 Third Avenue, New York, New York 10017 as
its agent to receive on its behalf and its property service of copies of
the summons and complaint and any other process which may be served upon
Interpool or Corp., as the case may be, in the State of New York in
connection with any action or proceeding in the courts of the State of New
York or of the United States of America for the Southern District of New
York.
SECTION 15. DEFINITIONS.
-----------
The following terms used herein shall have the following respective
meanings (such definitions to be equally applicable to both the singular
and plural forms of the terms defined):
"Affiliate" of any Person shall mean any other Person which directly
---------
or indirectly controls, or is controlled by, or is under a common control
with, such Person, including, without limitation, Related Parties.
"Agency Agreement" shall mean the Collateral Agency Agreement dated
----------------
the date hereof among the Collateral Agent, the Issuers and the Purchasers,
as the same may be amended, supplemented or modified from time to time,
substantially in the form of Exhibit B hereto.
---------
38
<PAGE>
"Approved Investments" shall mean the investments listed in paragraphs
--------------------
(a) or (b) of Section 9.25 hereof, provided that such investments have
------------
maturities of less than one (1) year and provided that the Purchasers can,
in their judgment, obtain a perfected lien in such investments under the
laws of the United States or any political subdivision thereof. So long as
no Default or Event of Default shall have occurred, the Issuer pledging
Cash Collateral shall have the option of designating the specific Approved
Investment in which such Cash Collateral shall be maintained. If a Default
or Event of Default shall have occurred, such Approved Investment shall be
designated by the Collateral Agent.
"Business Day" shall mean any day other than a Saturday, Sunday or
------------
other day on which commercial banking institutions in the State of New York
are authorized or obligated by law to close.
"Cash Collateral" shall mean
---------------
(i) all bank accounts in the name of the Collateral Agent
as agent for the ratable benefit of the Purchasers, all funds held therein
and all certificates and instruments representing or evidencing such bank
accounts which are maintained by the Collateral Agent;
(ii) all Approved Investments made from time to time in
accordance with the provisions of this Agreement and the applicable
Transaction Documents which are properly perfected and pledged to the
Collateral Agent;
(iii) all interest, dividends and other property from time to
time received, receivable or otherwise distributed in respect of any
amounts on deposit in any of the accounts or the Approved Investments
described in subparagraphs (i) or (ii) above; and
(iv) all proceeds of any or all of the foregoing.
The Issuers shall, at all times, cause all Cash Collateral to be
subject to a first priority perfected security interest in favor of the
Collateral Agent for the ratable benefit of the Purchasers, subject to no
other Liens.
"Cash Collateral Agreement" shall mean the Cash Collateral Agreement
-------------------------
substantially in the form of Exhibit J hereto between the Collateral Agent
and one or more of the Issuers in respect of Cash Collateral as may be
amended, supplemented or modified from time to time.
"Chassis" shall mean wheeled steel frames used to carry containers
-------
over the road.
"Chief Offices" shall mean, for each Issuer, those offices listed on
-------------
Schedule 7.1 attached hereto.
- ------------
"Claims" shall have the meaning set forth in Section 9.8 hereof.
------ -----------
"Closing" shall have the meaning set forth in Section 3 hereof.
------- ---------
"Closing Date" shall have the meaning set forth in Section 3 hereof.
------------ ---------
"Code" shall have the meaning set forth in Section 7.12 hereof.
---- ------------
"Collateral" shall mean all Equipment, Leases, Direct Finance Leases
----------
and other property subject to the Lien of the Collateral Documents,
including, without limitation, insurance policies as required pursuant to
Section 9.6.
- -----------
39
<PAGE>
"Collateral Administration Agreement" shall mean the Collateral
-----------------------------------
Administration Agreement dated the date hereof among the collateral
administration agent named therein, the Issuers, the Purchasers, as the
same may be amended, supplemented or modified from time to time,
substantially in the form of Exhibit K hereto.
---------
"Collateral Agent" shall mean First Security Bank Of Utah, National
----------------
Association not in its individual capacity but solely as agent under the Agency
Agreement, and its successors thereof.
"Collateral Certificate" shall mean the Collateral Value certificate,
----------------------
substantially in the form of Exhibit C.
---------
"Collateral Documents" shall mean the Security Agreements, together
--------------------
with any Security Agreement Supplements, the Railcars Security Agreements,
the Cash Collateral Agreement and the Guaranties.
"Collateral Value" shall mean with respect to Collateral of each
----------------
Issuer (including an Issuer for whose benefit Collateral is added or
designated pursuant to Section 5.6): (a) in respect of Containers pledged
to the Collateral Agent, the cost basis of the individual Containers less
depreciation of $56.67 per $1,000 of the cost of the Containers per year of
age calculated on a straight line basis over a fifteen (15) year life until
their estimated salvage value of 15% of cost basis is reached as reflected
on the books and records of an Issuer, in accordance with GAAP, (b) with
respect to Chassis pledged to the Collateral Agent, the depreciated
calculated value using a depreciable basis of $6,800 per Chassis, less
annual depreciation of $240 per Chassis per year of age, and calculated on
a straight line basis over a twenty (20) year life until a floor value of
no less than $2,000 per Chassis is reached, (c) with respect to Railcars
pledged to the Collateral Agent, the cost basis of the individual Railcar
less depreciation on a straight line basis until their estimated salvage
value is reached, as reflected on the books and records of an Issuer in
accordance with GAAP, (d) with respect to Direct Finance Leases pledged to
the Collateral Agent, such Direct Finance Leases at their Unamortized
Portion and (e) with respect to Cash Collateral pledged to the Collateral
Agent, the Cash Collateral shall have the value ascribed to it in the Cash
Collateral Agreement or as is otherwise agreed between the Purchasers and
the Issuers.
"Commitment" shall mean the amount set forth opposite the name of each
----------
Purchaser on Schedule 1 attached hereto.
----------
"Containers" shall mean general purpose standard, inter-modal dry
----------
cargo containers, each in 20, 40 or 48 foot lengths and having a configu-
ration suitable for shipping small packages or bulk material that confines
the contents and can be handled in transit as a unit, for road transport on
chassis, or for rail transport deck-mounted to appropriate rail cars.
"Control" shall mean the possession, directly or indirectly, of the
-------
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Controlled Group" shall have the meaning as defined in the Code.
----------------
"Default" shall mean an event or condition which, with the passage of
-------
time or with the giving of notice, or both, would constitute an Event of
Default.
"Depreciation" shall be determined in accordance with GAAP.
------------
40
<PAGE>
"Direct Finance Leases" shall mean for purposes of determining
---------------------
Collateral Value under this Agreement and the other Transaction Documents,
leases which have been classified as direct finance leases in the financial
statements of Interpool and its consolidated Subsidiaries in accordance
with GAAP. For all other purposes of this Agreement and the other
Transaction Documents, Direct Finance Leases shall mean leases which have
been classified as direct finance leases in the financial statements of
Interpool and its consolidated Subsidiaries in accordance with GAAP and
leases which are construed as leases intended as security in accordance
with New York UCC Section 1-201(37), as such section may be revised,
amended or supplemented from time to time and which are leases or similar
agreements or arrangements with respect to equipment, but only to the
extent that they relate to equipment which is included in the Collateral,
and all extensions, substitutions and modifications thereto, and only to
the extent that they either (a) are in the form of one of the forms of
lease contained in Schedule 15(b) hereto or (b) vary from any of such forms
only in respects that, individually or collectively, do not (i) cause such
leases to provide other than that the lessees thereunder are generally
required to pay and perform all obligations in respect of the equipment
covered thereby, (ii) prohibit the assignment thereof by the lessor, (iii)
provide for or permit setoffs or defenses by the lessee or (iv) provide for
any obligations of lessor other than to provide for quiet enjoyment to the
lessee absent a default thereunder.
"Duff & Phelps" shall mean Duff & Phelps Credit Rating Co.
-------------
"Earnings Available for Fixed Charges" shall mean the sum of Fixed
------------------------------------
Charges plus Net Earnings before income taxes.
"Equipment" shall mean Containers, Chassis and Railcars, excluding
---------
those subject to Direct Finance Leases.
"ERISA" shall have the meaning set forth in Section 7.12 hereof.
----- ------------
"Event of Default" shall mean any of the events specified in Section
---------------- -------
10.1, provided there has been satisfied any requirement in connection with
- ----
such event for the giving of notice, or the lapse of time, or the happening
of any further condition, event or act.
"Financed Equipment" shall mean all Equipment now owned or hereafter
------------------
acquired by any of the Issuers, including New Equipment and Used Equipment
which is included in the Collateral pursuant to this Agreement.
"Fixed Charges" shall mean the sum of interest expense (including
-------------
capitalized interest, if any) plus lease rentals on Long-Term Leases and
the interest component of capitalized leases.
"Funded Debt" shall mean all indebtedness for money borrowed with
-----------
recourse to Interpool and its Restricted Subsidiaries, including purchase
money mortgages, leases capitalized in accordance with Statement 13 of the
Financial Accounting Standards Board and conditional sales contracts and
similar title retention debt in instruments (excluding any current
maturities of such indebtedness) which by its terms matures more than one
year from the date of any calculation thereof and/or which is renewable or
extendible under any revolving or similar agreement. The calculation of
Funded Debt shall include all Funded Debt of Interpool and its Restricted
Subsidiaries, plus any Funded Debt of another Person, other than a
Restricted Subsidiary, which has been guaranteed by Interpool or its
Restricted Subsidiaries. Funded Debt shall exclude all Indebtedness of
Interpool or any of its Restricted Subsidiaries which is non-recourse to
Interpool or any of its Restricted Subsidiaries, as the case may be.
41
<PAGE>
"GAAP" shall mean generally accepted accounting principles, in effect
----
from time to time, consistently applied in the United States.
"Guarantor" shall mean Interpool or Ltd.
---------
"Guaranties" shall mean the Guaranties by each of the Guarantors in
----------
favor of each Purchaser, substantially in the form of Exhibit D.
---------
"Initial Advance Amount" shall mean for each Direct Finance Lease, the
----------------------
amount equal to 100% of the net present value of all remaining Lease
payments at the time such Direct Finance Lease or a portion thereof becomes
a part of the Collateral Value where such Lease payments are present valued
at the interest rate of the Notes.
"Investment Company Act of 1940" shall mean the Investment Company Act
------------------------------
of 1940, as amended.
"Issuer(s)" shall have the meaning set forth in the introductory
---------
paragraph hereof.
"Leases" shall mean all leases or similar agreements or arrangements
------
with respect to the Financed Equipment, but only to the extent that they
relate to the Financed Equipment, and all extensions, substitutions and
modifications thereto, and only to the extent that they either (a) are in
the form of one of the forms of lease contained in Schedule 15(a) hereto or
(b) vary from any of such forms only in respects that, individually or
collectively, do not (i) cause such leases to provide other than that the
lessees thereunder are generally required to pay and perform all
obligations in respect of the Financed Equipment covered thereby, (ii)
prohibit the assignment thereof by the lessor, (iii) provide for or permit
setoffs or defenses by the lessee or (iv) provide for any obligations of
lessor other than to provide for quiet enjoyment to the lessee absent a
default thereunder.
"Liens" shall mean all mortgages, liens, judicial liens, encumbrances,
-----
security interests, charges, pledges, hypothecations, assignments,
conditional sale or other title retention agreements and the like, relating
to any real or personal property interest of any Issuer, whether legal or
equitable.
"Long-Term Leases" shall mean minimum lease rentals of non-capitalized
----------------
leases whereunder Interpool or any Restricted Subsidiary is the lessee with
an initial term in excess of three years, excluding leases of office
---------
equipment and motor vehicles used in the ordinary course of business.
"Majority In Interest", as of a particular date of determination,
--------------------
shall mean the holders of more than 66 2/3% of the aggregate outstanding
principal amount of the Notes.
"Make Whole Premium" and related definitions. For all purposes of
------------------
this Section 15, the following terms shall have the following meanings
----------
(such definitions to be equally applicable to both the singular and plural
forms of the terms defined):
"Discounted Value" shall mean, as of any Settlement Date, the sum
----------------
of amounts obtained by discounting all Remaining Scheduled Payments as
of such Settlement Date from their respective scheduled due dates to
the Settlement Date in accordance with accepted financial practice and
using a discount factor based on the Reinvestment Yield restated on an
equivalent quarterly compounded basis. The Reinvestment Yield
restated on an equivalent quarterly compounded basis ("Yq") shall be
equal to the product of (a) four, and (b) one subtracted from the
square root of the sum of one plus a fraction, the numerator of which
is the Reinvestment
42
<PAGE>
Yield and the denominator of which is two, it being understood that the
foregoing calculation is expressed as the formula below where RY equals the
Reinvestment Yield:
________
Yq = 4 x ( 1 + RY - 1)
--
2
Such discount factor for each Remaining Scheduled Payment shall be applied
by dividing such Remaining Scheduled Payment ("RSP") by an amount equal to
(A) the sum of one plus a fraction, the numerator of which is the
Reinvestment Yield restated on an equivalent quarterly compounded basis
(Yq) and the denominator of which is four, (B) which sum shall be raised to
an exponent equal to the number of quarterly payments or portions thereof
from the Settlement Date to the scheduled due date of such Remaining
Scheduled Payment ("n"), it being understood that the foregoing calculation
is expressed as the formula below:
Discounted RSP
----------
Value of RSP = (1 + Yq)n
--
4
"Make Whole Premium" shall mean, as of any Settlement Date, an
------------------
amount equal to the excess, if any, of the Discounted Value over the
unpaid principal amount of the Note (or the portion thereof being
prepaid or accelerated) then outstanding (determined immediately prior
to any prepayment made on such Settlement Date). The Make Whole
Premium shall in no event be less than zero.
"Reinvestment Yield" shall mean, as of any Settlement Date,
------------------
0.50% over the yield to maturity (computed to the fifth decimal place
(one thousandth of a percentage point) and then rounded to the fourth
decimal place (one hundredth of a percentage point)) implied by the
yields reported, as of 10:00 a.m. (New York City time) two Business
Days next preceding such Settlement Date on the display designated as
"Page 500" on the Telerate Service for actively traded U.S. Treasury
securities having a maturity equal to the Remaining Average Life of
the Notes as of such Settlement Date (or if such data services are no
longer available or if such yields shall not be reported as of such
time or the yields reported as of such time shall not be
ascertainable, then any publicly available source of similar market
data acceptable to at least 51% of the Purchasers of the outstanding
Notes being prepaid or accelerated, as the case may be). It is
understood that the yield to maturity for actively traded U.S.
Treasury securities and the Reinvestment Yield are stated on a semi-
annual bond equivalent basis in accordance with accepted financial
practice. Such implied yield shall be determined, if necessary, by
(a) converting U.S. Treasury bill/note quotations to bond-equivalent
yields in accordance with accepted financial practice and (b)
interpolating linearly (calculated to the nearest one-twelfth of a
year) between yields reported for (i) the actively traded U.S.
Treasury security with a maturity closest to and less than the
Remaining Average Life and (ii) the actively traded U.S. Treasury
security with a maturity closest to and greater than the Remaining
Average Life, except that if the Remaining Average Life is less than
one year, the yield on actively traded U.S. Treasury securities
adjusted to a constant maturity of one year shall be used.
"Remaining Average Life" shall mean, as of any Settlement Date,
----------------------
the number of years (calculated to the nearest one-twelfth year)
obtained by dividing (i) the principal amount of the Notes then
outstanding (or if less than all Notes are to be prepaid, the
principal amount to be prepaid) (determined prior to any prepayment or
acceleration required or made on such
43
<PAGE>
Settlement Date) into (ii) the sum of the products obtained by multiplying
(a) each Remaining Scheduled Payment (but not of interest thereon) by (b)
the number of years (calculated to the nearest one-twelfth year) which will
elapse between such Settlement Date and the scheduled due date of such
Remaining Scheduled Payment.
"Remaining Scheduled Payments" shall mean, as of any Settlement
----------------------------
Date, all payments of principal to be prepaid or accelerated on such
Settlement Date and interest on such payments that would be due on or
after such Settlement Date if such Note (or such payments of
principal) were not prepaid or accelerated prior to its scheduled due
date (excluding accrued interest from the last date that interest was
payable to and including the date prior to the Settlement Date).
"Settlement Date" shall mean each Prepayment Date and the date of
---------------
any other prepayment or acceleration of the Notes with respect to
which prepayment or acceleration the Make Whole Premium is payable.
"Margin Stock" shall have the meaning as defined in Regulation U.
------------
"Moody's" shall mean Moody's Investors Services, Inc.
-------
"NAIC" shall have the meaning set forth in Section 4.13(a) hereof.
---- ---------------
"Net Book Value" shall have the meaning as determined in accordance
--------------
with GAAP.
"Net Earnings" shall mean the consolidated net income before
------------
extraordinary items of Interpool and its Restricted Subsidiaries for any
period, determined in conformity with GAAP applied on a basis consistent
with those applied in preparing Interpool's audited annual reports.
"New Equipment" shall mean newly manufactured Equipment owned at any
-------------
time by either of the Issuers that have not yet been put into use and free
of all Liens.
"Nominee(s)" shall have the meaning set forth in Section 3 hereof.
---------- ---------
"Obligations" shall mean (i) any and all indebtedness, obligations,
-----------
liabilities and agreements of any kind and nature of the Issuers pursuant
to this Agreement, the Notes or any other Transaction Document to or with
any of the Purchasers, or to or with any Nominees of any of the Purchasers,
or of any guarantor of any of such Issuers' indebtedness, obligations,
liabilities and agreements, now existing or hereafter arising, and now or
hereafter incurred, whether in the form of loans, guarantees, interest,
charges, expenses, fees (including, without limitation, attorneys' fees) or
otherwise, direct or indirect, (including, without limitation, any
participation or interest of any of the Purchasers (or of a Nominee of any
of the Purchasers) in any such Issuers' indebtedness) acquired outright,
conditionally or as collateral security from another, absolute or
contingent, joint and/or several, liquidated or unliquidated, due or not
due, contractual or tortious, secured or unsecured, arising by operation of
law or otherwise, whether incurred by the Issuers as principal, surety,
endorser, guarantor, accommodation party or otherwise; (ii) all other sums
and charges to be paid to the Purchasers pursuant to this Agreement; and
(iii) all interest and late charges on any of the foregoing.
"Officer's Certificate" shall mean a certificate signed by the
---------------------
President, any Vice President, the Treasurer or an Assistant Treasurer and,
in the case of a commercial bank or trust company, by any other officer
customarily performing the functions similar to those performed by the
Persons who at the time
44
<PAGE>
shall be such officers, or to whom any corporate trust matter is referred
because of his knowledge of and familiarity with the particular subject;
provided, however, that in the case of the Collateral Agent, "Officer's
- -------- -------
Certificate" shall mean a certificate signed by any Vice President, any
Trust Officer or any Assistant Trust Officer who is, in each case,
responsible for corporate trust administration.
"Other Investments" shall mean investments in excess of an aggregate
-----------------
of $10,000,000.00 (other investments up to an aggregate of $10,000,000.00
being provided for in Section 9.25(k) hereof) in anything other than those
---------------
investments listed in paragraphs (a) through (g) and (i) and (j) of Section
-------
9.25 hereof, which shall be deemed to be Unrestricted Subsidiaries for
- ----
purposes of calculating the financial covenants in connection with Section
-------
9.19 hereof.
- ----
"Overdue Rate" shall have the meaning set forth in the Notes.
------------
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
----
Person succeeding to the functions thereof.
"Permitted Investments" shall have the meaning set forth in Section
--------------------- -------
9.25 hereof.
- ----
"Permitted Liens" shall mean
---------------
(i) Liens for Taxes not yet delinquent or which are being
contested in good faith by appropriate proceedings and the enforcement of
which has been stayed (and for the payment of which adequate reserves are
provided);
(ii) carriers', seamen's, stevedores', wharfinger's,
warehousemen's, mechanics', suppliers', materialmen's, repairmen's or other
like Liens arising in the ordinary course of business and relating to
amounts not yet due or which shall not have been overdue for a period of
more than sixty (60) days or which are being contested in good faith by
appropriate proceedings or for the payment of which adequate reserves have
been provided;
(iii) leases, lease agreements, and other contracts entered into
in the ordinary course of business providing for the leasing, sale or
exchange of Equipment owned by the Company;
(iv) deposits and other forms of security given to any
governmental agency or body created or approved by law or governmental
regulation as a condition to the transaction of business or the exercise of
any privilege, franchise or license;
(v) deposits and other forms of security in connection with
worker's compensation, unemployment insurance and other social security
legislation; and
(vi) deposits and other forms of security to secure the
performance of bids, trade contracts (other than for borrowed money),
leases, surety and appeal bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business.
"Person" shall mean and include an individual, a partnership, a joint
------
venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
"Placement Agent" shall have the meaning set forth in Section 4.14
--------------- ------------
hereof.
45
<PAGE>
"Plan" shall mean any plan subject to the minimum funding requirements
----
of Section 412 of the Code.
"Prepayment Date" shall mean the date of an optional prepayment of any
---------------
of the Notes by any Issuer pursuant to Section 5.5 hereof.
-----------
"Private Placement Memorandum" shall mean the Private Placement
----------------------------
Memorandum of the Issuers dated June 6, 1995.
"Pro-Forma Fixed Charges" for any period shall mean the aggregate
-----------------------
amount of Fixed Charges as adjusted to reflect an increase or decrease in
Funded Debt for such period.
"Purchasers" shall have the meaning set forth in the introductory
----------
paragraph hereof and shall include the successors and assigns of each
Purchaser.
"Qualified Institutional Buyer" shall mean
-----------------------------
(i) A duly authorized domestic bank, savings and loan
association, insurance company, registered investment company, registered
investment adviser or registered dealer, acting for its own account, which
in the aggregate owns and invests on a discretionary basis at least $100
million in securities and, in each case, which has a net worth of at least
$100 million; or
(ii) A foreign bank, savings and loan association or
insurance company or equivalent institution, acting for its own account,
which in the aggregate owns and invests on a discretionary basis at least
$100 million in securities and, in each case, has a net worth of at least
$100 million; or
(iii) Any other entity which also constitutes a "qualified
institutional buyer" as defined in Rule 144A under the Securities Act of
1933 (or any successor statute) and the rules and regulations thereunder,
all as from time to time in effect.
"QPAM Exemption" shall have the meaning set forth in Section 8.3(c)
-------------- --------------
hereof.
"Railcars" shall mean steel wheeled vehicles for use on railroad
--------
tracks.
"Railcars Security Agreement" shall mean the Railcars Security
---------------------------
Agreement between the Collateral Agent and Interpool in respect of the
Railcars (as may be amended, supplemented or modified from time to time),
substantially in the form of Exhibit H.
---------
"Railcars Security Agreement Supplement" shall mean any Supplement to
--------------------------------------
the Railcars Security Agreement between the Collateral Agent and Interpool
substantially in the form of Annex A to Exhibit H.
---------
"Record Date" shall have the meaning specified in the relevant Note.
-----------
"Register" shall have the meaning specified in Section 5.4(a) hereof.
-------- --------------
"Regulation U" shall mean Regulation U of the Board of Governors of
------------
the Federal Reserve System, as the same may be amended or supplemented from
time to time.
46
<PAGE>
"Related Party" shall mean the following: The Ivy Group, Radcliff
-------------
Group, Princeton Intermodal Equipment Trust I, Eurochassis L.P., three New
Jersey limited partnerships called Microtech Three, Microtech Four and
Microtech Five, Princeton International Properties, Inc., Martom
Associates, and 211 College Road Associates, a New Jersey general
partnership and any other Affiliates of Interpool or its Restricted
Subsidiaries.
"Reportable Event" shall have the meaning as such term is defined in
----------------
Title IV of ERISA.
"Responsible Officer" shall mean, with respect to the subject matter
-------------------
of any covenant, agreement or obligation of any Person contained in any
Transaction Document, the President, or any Vice President, Treasurer,
Assistant Treasurer or other officer thereof, who in the normal performance
of his or her operational responsibility would have knowledge of such
matters and the requirements with respect thereto.
"Restricted Payments" shall mean cash dividends, redemption of capital
-------------------
stock, Other Investments, and investments in Unrestricted Subsidiaries.
"Restricted Subsidiary" shall mean any Subsidiary which has not been
---------------------
designated as an Unrestricted Subsidiary, provided that (i) Ltd. shall be a
Restricted Subsidiary unless and until (a) it shall be fully released from
all its Obligations (other that its representations, warranties and
indemnities) upon Interpool's assumption of all such Obligations pursuant
to Section 5.6(a) hereof, or (b) its Notes and all its other Obligations
--------------
shall have been paid in full, provided further that Ltd. may not be
----------------
designated as an Unrestricted Subsidiary if a Default or an Event of
Default shall have occurred and be continuing or would result from Ltd.
being designated as an Unrestricted Subsidiary and (ii) Corp. shall be a
Restricted Subsidiary unless and until (a) it shall be fully released from
all its Obligations (other that its representations, warranties and
indemnities) upon Interpool's and/or Ltd.'s assumption of all such
Obligations pursuant to Sections 5.6(a) and 5.6(b) hereof, or (b) its Notes
--------------------------
and all its other Obligations shall have been paid in full, provided
--------
further that Corp. may not be designated as an Unrestricted Subsidiary if a
- -------
Default or an Event of Default shall have occurred and be continuing or
would result from Corp. being designated as an Unrestricted Subsidiary.
"Securities Act" shall mean the Securities Act of 1933, as amended.
--------------
"Security Agreement(s)" shall mean each of the Security Agreements
---------------------
between the Collateral Agent and an Issuer in respect of the Collateral,
excluding the Railcars, substantially in the form of Exhibit E.
---------
"Security Agreement Supplement(s)" shall have the meaning set forth in
--------------------------------
the Security Agreement.
"Standard & Poor's" shall mean Standard & Poor's Corporation.
-----------------
"Subsidiary" shall mean any Person (other than an individual) with
----------
respect to which Interpool or any one or more of its subsidiaries has
Control.
"Tangible Net Worth" shall mean stockholders' equity as set forth on a
------------------
consolidated financial statement for Interpool and its Restricted
Subsidiaries, reduced by all items of goodwill and other intangible assets
(other than deferred charges).
"Taxes" shall have the meaning set forth in Section 9.23(a) hereof.
----- ---------------
47
<PAGE>
"Transaction Documents" shall mean this Agreement, the Notes, the
---------------------
Agency Agreement, the Collateral Administration Agreement and the
Collateral Documents.
"UCC" shall mean the Uniform Commercial Code as enacted in any state
---
of the United States or in the District of Columbia or the United States
Virgin Islands insofar as any such statute, as in effect from time to time,
may be relevant to the creation, perfection continuation and enforcement of
Liens on Collateral.
"Unamortized Portion" shall mean for each Direct Finance Lease, the
-------------------
amount equal to 100% of the net present value of all remaining Lease
payments as of the date such calculation is made, where such Lease payments
are present valued at the interest rate of the Notes.
"Unrestricted Subsidiary" shall mean any Subsidiary which is
-----------------------
designated by Interpool as an Unrestricted Subsidiary and/or any Other
Investment. Unrestricted Subsidiaries and Other Investments shall not be
restricted by the provisions of this Agreement applicable to Restricted
Subsidiaries, and the debt, other liabilities, earnings and assets of the
Unrestricted Subsidiaries and Other Investments will not be consolidated
with those of Interpool and its Restricted Subsidiaries in calculating
consolidated Net Earnings, Tangible Net Worth and Funded Debt.
"Used Equipment" shall mean all Equipment owned at any time by any of
--------------
the Issuers that is not New Equipment.
48
<PAGE>
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterparts of this Agreement and return the
same to the Issuers, whereupon this Agreement shall become a binding
agreement among the Issuers and the Purchasers.
Very truly yours,
INTERPOOL, INC.
By:
------------------------------
Name:
Title:
INTERPOOL LIMITED
By:
------------------------------
Name:
Title:
INTERPOOL FINANCE CORP.
By:
------------------------------
Name:
Title:
The foregoing Agreement is
hereby accepted as of the
date first above written.
NOTE PURCHASERS:
*
By:
---------------------------------------------
Name:
Title:
* Confidential Treatment Requested
<PAGE>
*
By:
---------------------------------------------
Name:
Title:
*
By:
---------------------------------------------
Name:
Title:
*
By:
---------------------------------------------
Name:
Title:
*
By:
---------------------------------------------
Name:
Title:
*
By:
---------------------------------------------
Name:
Title:
* Confidential Treatment Requested
<PAGE>
*
By:
---------------------------------------------
Name:
Title:
*
By:
---------------------------------------------
Name:
Title:
*
By:
---------------------------------------------
Name:
Title:
*
By:
---------------------------------------------
Name:
Title:
*
By:
---------------------------------------------
Name:
Title:
* Confidential Treatment Requested
<PAGE>
*
By:
---------------------------------------------
Name:
Title:
*
By:
---------------------------------------------
Name:
Title:
*
By:
---------------------------------------------
Name:
Title:
*
By:
---------------------------------------------
Name:
Title:
*
By:
---------------------------------------------
Name:
Title:
* Confidential Treatment Requested
<PAGE>
*
By:
---------------------------------------------
Name:
Title:
By:
---------------------------------------------
Name:
Title:
* Confidential Treatment Requested
<PAGE>
<TABLE>
Schedule 1 to the Note Purchase Agreement
-----------------------------------------
Purchasers Schedule
-------------------
<CAPTION>
SUB-ACCOUNT INVESTOR SUB-ACCOUNT INTERPOOL, INC.
TOTAL ($MM) TOTAL
<S> <C> <C> <C> <C>
ALL INVESTORS ($MM) $103 $5.00
(UNDERLINE DENOTES NOTE PURCHASER)
--------------------------------
* $20
* GB Subaccount $8,500,000.00 $412,621.36
--------------------------
* General Account $11,500,000.00 $558,252.43
--------------------------
* $10
* $10,000,000.00 $485,436.89
--------------------------
*
--------------------------
* $15
* $6,000,000.00 $291,262.14
--------------------------
*
--------------------------
* $4,000,000.00 $194,174.76
--------------------------
<CAPTION>
INTERPOOL INTERPOOL FINANCE
LIMITED CORP.
<S> <C> <C>
ALL INVESTORS ($MM) $22.00 $76.00
(UNDERLINE DENOTES NOTE PURCHASER)
--------------------------------
*
- -----------------------------
* $1,815,533.98 $6,271,844.66
--------------------------
* $2,456,310.68 $8,485,436.89
--------------------------
*
* $2,135,922.33 $7,378,640.78
--------------------------
*
--------------------------
*
* $1,281,553.40 $4,427,184.46
*
--------------------------
* $854,368.93 $2,951,456.31
--------------------------
</TABLE>
1-1
* Confidential Treatment Requested
<PAGE>
<TABLE><CAPTION>
SUB-ACCOUNT INVESTOR SUB-ACCOUNT INTERPOOL, INC.
TOTAL ($MM) TOTAL
<S> <C> <C> <C> <C>
* $3,000,000.00 $145,631.07
-----------------------------
* $2,000,000.00 $97,087.37
-------------------------------------
* $15
* ILG $1,000,000.00 $48,543.69
-------------------------------------------
* IAL $4,000,000.00 $194,174.76
-------------------------------------------
* IAD $1,000,000.00 $48,543.69
-------------------------------------------
* REO $2,000,000.00 $97,087.37
-------------------------------------------
* GAI $2,500,000.00 $121,359.23
-------------------------------------------
* UIN $1,500,000.00 $72,815.53
-------------------------------------------
* GAN $1,000,000.00 $48,543.69
-------------------------------------------
* FPB $900,000.00 $43,689.32
-------------------------------------------
* $600,000.00 $29,126.21
-----------------------------
* $200,000.00 $9,708.74
-------------------------------------
* $300,000.00 $14,563.11
---------------------------------------
<CAPTION>
INTERPOOL INTERPOOL FINANCE
LIMITEDD CORP.
<S> <C> <C>
* $640,776.70 $2,213,592.23
-----------------------------
* $427,184.47 $1,475,728.16
-------------------------------------
*
* $213,592.23 $737,864.08
-------------------------------------------
* $854,368.93 $2,951,456.31
-------------------------------------------
* $213,592.23 $737,864.08
-------------------------------------------
* $427,184.47 $1,475,728.16
-------------------------------------------
* $533,980.58 $1,844,660.19
-------------------------------------------
* $320,388.35 $1,106,796.12
-------------------------------------------
* $213,592.23 $737,864.08
-------------------------------------------
* $192,233.01 $664,077.67
-------------------------------------------
* $128,155.34 $442,718.45
-----------------------------
* $42,718.44 $147,572.82
-------------------------------------
* $64,077.67 $221,359.22
---------------------------------------
</TABLE>
* Confidential Treatment Requested
1-2
<PAGE>
<TABLE><CAPTION>
SUB-ACCOUNT INVESTOR SUB-ACCOUNT INTERPOOL, INC.
TOTAL ($MM) TOTAL
<S> <C> <C> <C> <C>
* $11
* General Account $3,000,000.00 $145,631.07
------------------------------------------
* Flex Account $5,000,000.00 $242,718.45
------------------------------------------
*
Universal Account $3,000,000.00 $145,631.07
------------------------------------------
* $10
* $3,000,000.00 $145,631.07
-----------------------------------------
* $3,000,000.00 $145,631.07
-----------------------------------------
* $4,000,000.00 $194,174.76
-------------------------
* $10 $10,000,000.00 $485,436.89
-----------------------------------------
* $7
* $3,000,000.00 $145,631.07
------------------------------------
* $4,000,000.00 $194,174.76
--------------------------------------
* $5 $5,000,000.00 $242,718.44
---------------------------------
* .01
ALL PURCHASERS $103 $103,000,000.00 $5,000,000.00
<CAPTION>
INTERPOOL INTERPOOL FINANCE
LIMITEDD CORP.
<S> <C> <C>
* $11
* $640,776.70 $2,213,592.23
------------------------------------------
* $1,067,961.16 $3,689,320.39
------------------------------------------
*
$640,776.70 $2,213,592.23
------------------------------------------
*
* $640,776.70 $2,213,592.23
-----------------------------------------
* $640,776.70 $2,213,592.23
-----------------------------------------
* $854,368.93 $2,951,456.31
-------------------------
* $2,135,922.33 $7,378,640.78
-----------------------------------------
*
* $640,776.70 $2,213,592.23
------------------------------------
* $854,368.93 $2,951,456.31
--------------------------------------
* $1,067,961.17 $3,689,320.39
---------------------------------
* .01
ALL PURCHASERS $22,000,000.00 $76,000.00.00
</TABLE>
* Confidential Treatment Requested
1-3
Exhibit 10.25
FORM OF SECURITY AGREEMENT
SECURITY AGREEMENT (the "Agreement"), dated [ ], 1995 between
---------
[Interpool, Inc., a Delaware corporation][Interpool Limited, a Barbados
corporation][Interpool Finance Corp., a Cayman Islands corporation] (the
"Company"), and FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION, as collateral
-------
agent for the Purchasers and each other holder of a Note from time to time (in
such capacity, together with its successors in such capacity, the "Collateral
-----------
Agent").
- -----
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Interpool, Inc., Interpool Limited and Interpool Finance
Corp. (the "Obligors") have entered into that certain Note Purchase
Agreement, of even date herewith, with the Purchasers, as purchasers of the
Notes (as it may be amended and supplemented from time to time, (the "Note
----
Purchase Agreement"); and
- ------------------
WHEREAS, it is a condition precedent to the obligation of the
Purchasers to purchase the Notes provided for in the Note Purchase
Agreement that the Company shall execute and deliver this Agreement;
NOW, THEREFORE, in consideration of the premises and in order to
induce the Purchasers to purchase the Notes pursuant to the Note Purchase
Agreement, the parties hereto agree as follows:
SECTION 1. DEFINITIONS.
-----------
Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Note Purchase Agreement. The terms
"equipment," "inventory," "accounts," "chattel paper," "instruments,"
--------- --------- -------- ------------- -----------
"documents," "general intangibles," "products" and "proceeds" shall have
--------- ------------------- -------- --------
the respective meanings ascribed thereto in the UCC.
SECTION 2. SECURITY INTEREST.
-----------------
(a) To secure the due payment and performance of all of the
Obligations of the Company (the "Secured Obligations"), including, without
-------------------
limitation, the strict performance and observance by the Company of all
representations, warranties, agreements, covenants and conditions contained
in this Agreement, the Note Purchase Agreement, the Notes and the other
Transaction
<PAGE>
Documents, and any and all amendments thereto and replacements therefor,
the Company hereby assigns, mortgages, pledges, hypothecates, transfers and
sets over to the Collateral Agent, for the benefit of the Purchasers and
the Collateral Agent, and grants to the Collateral Agent, for the benefit
of the Purchasers and the Collateral Agent, a duly perfected first priority
Lien upon the Company's right, title and interest in and to (i) all
equipment and inventory now owned by the Company listed on Annex A attached
-------
hereto and all equipment and inventory hereafter listed on each of the
Security Agreement Supplements (the "Security Agreement Supplements")
------------------------------
executed from time to time in the form attached hereto as Annex B,
-------
including all accessions, additions, improvements and upgrades to, and
parts of, such equipment and inventory and all substitutions and
replacements therefor, all guarantees, warranties and rights against
manufacturers under purchase agreements or otherwise and other parties in
connection therewith, all insurance thereon and all insurance proceeds
payable in connection therewith; (ii) all lease rental schedules, master
leases as they relate to such lease rental schedules, Leases, Direct
Finance Leases, agreements for use and chattel paper to the extent that
they relate to the leasing by the Company of such equipment and inventory
now or hereafter in effect or executed from time to time, and any and all
renewals, extensions, modifications and substitutions thereof and therefor
(all such lease rental schedules, master leases, Leases, Direct Finance
Leases, agreements for use and chattel paper, to the extent that they cover
such equipment and inventory now or hereafter in effect or executed from
time-to time, and any and all renewals, extensions, modifications and
substitutions thereof and therefor, are hereinafter referred to
collectively as the "Lease Collateral"), all of its rights to all rentals
----------------
and additional rentals and all other amounts, monies or payments due or to
become due under the Lease Collateral, to the extent applicable to such
equipment and inventory, including, without limitation, amounts, monies or
payments representing rent, principal, interest, Taxes, insurance premiums,
condemnation awards, delinquency charges, together with rights evidenced by
an account, note, contract, security agreement, chattel paper or other
evidence of indebtedness or security, all guaranties, warranties and
indemnities in respect thereof, and all of its accounts, contract rights
and general intangibles arising thereunder; (iii) all security pledged,
assigned, hypothecated or granted to or held by the Company to secure the
obligations of any lessees or other obligors under any Lease Collateral;
(iv) all powers of attorney for the execution of any evidence of
indebtedness or security or other writing in connection with the Lease
Collateral or such equipment and inventory; (v) all books, records, ledger
cards, invoices and certificates of title relating to the Lease Collateral
or such equipment and inventory; (vi) all evidences of the filing of
financing statements and other statements, if any, and the registration and
notation of Liens on certificates of title or of other instruments in
connection with any of the foregoing and all amendments thereto, notices to
other creditors or secured parties, and certificates from filing or other
registration offices; (vii) all credit information, reports and memoranda
relating to such
2
<PAGE>
Lease Collateral; (viii) all maintenance contracts relating to such
equipment and inventory; and (ix) all proceeds, including without
limitation insurance proceeds, and products of any and all of the foregoing
(all of the items described in preceding parts (i) through (ix) being
hereinafter referred to as the "Collateral").
----------
(b) (i) This Agreement shall create a present and continuing
collateral assignment of and security interest in the Collateral and shall
remain in full force and effect until payment in full of the Obligations to
the Purchasers. Upon receipt by the Collateral Agent of written advice
from the Purchasers that the Notes and all the Secured Obligations have
been paid or satisfied in full, the Collateral Agent shall, upon the
Company's written request, promptly execute and deliver to the Company, at
the Company's expense, termination statements for all financing statements
filed by the Collateral Agent against the Company and such assignments and
reassignments as the Company shall reasonably require in order to terminate
the security interests created hereunder and any collateral assignments of
Collateral to the Collateral Agent, in each case with the Collateral
Agent's sole representation and warranty that the Collateral is being
reconveyed free and clear of any Lien created by or as a result of any act
of the Collateral Agent.
(ii) Notwithstanding the foregoing to the contrary, the
Collateral Agent agrees that the Company shall be permitted to add
Collateral to, and obtain the partial or full release of Collateral from,
the Lien created under this Agreement from time to time on the terms and
subject to the conditions set forth in the Note Purchase Agreement.
SECTION 3. COMPANY'S TITLE; LIENS AND ENCUMBRANCES; SECURITY INTEREST.
-----------------------------------------------------------
(a) The Company represents and warrants that the Company is or,
to the extent that Collateral is acquired after the date hereof, agrees
that it will be, on the date on which such Collateral is included in the
Lien created under this Agreement, the owner of the Collateral, having good
and marketable title thereto free from any and all Liens except for the
Lien created and granted pursuant to this Agreement and Permitted Liens.
(b) The Company will not create or assume or permit to exist any
Lien or claim on or against the Collateral, except for the Lien hereof and
Permitted Liens, and the Company will promptly notify the Collateral Agent
of any such Lien, except for the Lien hereof and Permitted Liens, made or
asserted against the Collateral, and will defend the Collateral against,
and take all such action as may be necessary to remove, any such Lien,
other than the Lien hereof and Permitted Liens.
(c) The Company represents and warrants that the Liens which
have been created in favor of the Collateral Agent on behalf of the
Purchasers under this Agreement and granted to the
3
<PAGE>
Collateral Agent on behalf of the Purchasers upon the execution of this
Agreement, constitute, or which will be created and granted upon the
execution and delivery of a Security Agreement Supplement, will constitute,
first priority Liens, and with respect to Containers and non-titled
Chassis, upon the filing of appropriate UCC financing statements, duly
perfected Liens in favor of the Collateral Agent on behalf of the
Purchasers on the Collateral subject to no other Lien other than the Lien
hereof and Permitted Liens on such Collateral, and with respect to titled
Chassis, upon the notation of Liens on certificates of title, duly
perfected Liens in favor of the Collateral Agent on behalf of the
Purchasers on the Collateral subject to no other Lien other than the Lien
hereof and Permitted Liens on such Collateral.
SECTION 4. LOCATION OF COLLATERAL AND RECORDS; NAMES OF COMPANY.
-----------------------------------------------------
(a) The Company represents and warrants that it has, and during
at least the past four months, has had, no place of business or office
where the Company's books of account and records are kept other than its
Chief Office set forth on Schedule 7.1 of the Note Purchase Agreement.
------------
(b) The Company shall maintain all its properties in good
working order and condition and, in the ordinary course of business, make
all repairs, replacements, additions and improvements in accordance with
the provisions of Section 9.5 of the Note Purchase Agreement.
(c) The Company shall notify the Collateral Agent in writing at
least thirty (30) days in advance of (a) any change of location of its
Chief Office, (b) the change, elimination or opening of any chief executive
office of the Company, or (c) any change in the place where the Company
maintains its records as to the Collateral such that such records are not
located at the Company's Chief Office. The Company shall notify the
Collateral Agent in writing promptly following a change in the character,
use or location of any of the Financed Equipment such that any of such
Financed Equipment ceases to be either "mobile goods" or "goods covered by
a certificate of title", in each case within the meaning of the UCC. The
Company shall notify the Collateral Agent in writing within five (5) days
if there is a change in the character of any of the Collateral such that it
constitutes an "instrument" (other than an "instrument" which constitutes
part of "chattel paper") within the meaning of the UCC.
SECTION 5. PERFECTION OF SECURITY INTEREST.
-------------------------------
The Company will join with the Collateral Agent in executing one
or more UCC financing statements, applications for the notation of the
Liens created hereunder on certificates of title covering any of the
Collateral or other notices, agreements, documents or instruments
appropriate under applicable law in form satisfactory to the Collateral
Agent and shall pay all filing or
4
<PAGE>
recording costs with respect thereto, and all costs of filing or recording
this Agreement or any other instrument, agreement or document executed and
delivered pursuant hereto (including the cost of all Federal, state or
local mortgage, documentary, stamp or other Taxes), in each case, in all
public offices where filing or recording is deemed by the Purchasers to be
necessary or desirable. The Company hereby authorizes the Collateral Agent
to take all action at the expense of the Company (including, without
limitation, the filing of any UCC financing statements or amendments
thereto, applications for the notation of the Liens created hereunder on
certificates of title covering any of the Collateral and any other
documents or instruments without the signature of the Company) which the
Purchasers may deem reasonably necessary or desirable to perfect or
otherwise protect the Liens created hereunder and to obtain the benefits of
this Agreement. The Collateral Agent shall endeavor to give the Company
notice prior to taking such action if such notice is practicable; provided,
--------
however, the Collateral Agent shall take such action whether or not such
- -------
notice is received by the Company. Without limiting the generality of the
foregoing, the Company shall, at the Company's expense, take and cause to
be taken all such actions as the Collateral Agent by instructions from the
Purchasers may reasonably request in order to perfect and continue the
perfection of the Liens granted to the Collateral Agent in the Collateral.
The Collateral Agent shall have the right at any time at the Company's
expense to cause the perfection of the Liens granted to the Collateral
Agent in the Collateral by whatever means reasonably deemed by the
Purchasers to be necessary, and the Company shall cooperate fully with the
Collateral Agent in connection therewith.
SECTION 6. GENERAL COVENANTS.
-----------------
The Company covenants and agrees that it shall:
(a) furnish the Collateral Agent, and the Collateral Agent shall
deliver to each Purchaser upon request by such Purchaser, from time to time
at the Collateral Agent's request, with written statements and schedules
further identifying and describing the Collateral in such detail as the
Collateral Agent may reasonably require;
(b) comply or, with respect to the Collateral, require the
lessees thereof to comply, with all acts, rules, regulations and orders of
any legislative, administrative or judicial body or official applicable to
the Collateral or any part thereof or to the operation of the Company's
business;
(c) at all times use, or require the lessees to use, the
Collateral for lawful purposes only, with all reasonable care and caution;
(d) cause the Lien granted pursuant to this Agreement to be at
all times a first priority duly perfected Lien upon the Collateral, subject
to no Liens other than Permitted Liens; and
5
<PAGE>
(e) promptly execute and deliver to the Collateral Agent, and the
Collateral Agent shall deliver to each Purchaser upon request by such
Purchaser, such further deeds, mortgages, assignments, security agreements
or other instruments, documents, certificates and assurances and take such
further action as the Collateral Agent may from time to time in its
reasonable discretion deem necessary to perfect, protect or enforce its
Lien on the Collateral or otherwise to effectuate the intent of this
Agreement, including, without limitation, the right of the Collateral Agent
upon the occurrence of an Event of Default and pursuant to instructions by
the Majority In Interest to enforce such rights to (i) take possession of
the Collateral and without liability for trespass to enter any premises
where the Collateral may be located for the purpose of taking possession of
or removing the Collateral, as to any or all of the Collateral, by any
available judicial procedure, or without judicial process, and, in
connection therewith, the Company shall, upon request of the Collateral
Agent and at the Company's expense, assemble the Collateral and make it
available to the Collateral Agent at the Company's standard depot locations
worldwide, and (ii) to require the Company to, and upon such demand the
Company shall (A) instruct each lessee under the Lease Collateral to make
payment of rentals and other sums (to the extent that such rentals and
other sums relate to the Financed Equipment) due and becoming due under a
Lease included in the Lease Collateral directly to, in the Collateral
Agent's sole discretion, either the Collateral Agent or to a post office
box designated by the Collateral Agent to which only the Collateral Agent
shall have access, (B) if the Company shall receive any rental or other
payment in respect of any Financed Equipment covered by any such Lease, or
any Financed Equipment (including, without limitation, any proceeds of
insurance with respect to Financed Equipment), hold such payment in trust
by the Company for the benefit of the Purchasers and the Collateral Agent
and shall not commingle such payment with any other moneys or assets of the
Company, and (C) promptly turn over and remit to the Collateral Agent all
sums thus received, in the identical form as received, with all such
endorsements thereof as may be required, as contemplated by Section 8
---------
hereof; in the event that the Company shall fail within three (3) Business
Days of demand by the Collateral Agent to notify the Lessees to make
payments to the Collateral Agent or to a post office designated by it, the
Collateral Agent shall be entitled to do so, either in the name of the
Company pursuant to its power of attorney in Section 11 hereof or in its
----------
own name.
SECTION 7. ASSIGNMENT OF INSURANCE.
-----------------------
(a) The Company shall keep all its properties insured as
provided in Section 9.6 of the Note Purchase Agreement.
(b) As further security for the due payment and performance of
the Secured Obligations, the Company hereby assigns to the Collateral Agent
all sums relating to the Collateral, which may become payable under or in
respect of any policy of insurance owned by the Company or payable to the
Company covering the
6
<PAGE>
Collateral, and the Company hereby directs each insurance company issuing
any such policy owned by the Company to make payment of such sums directly
to the Collateral Agent upon notice from the Collateral Agent to such
insurance company of the occurrence of an Event of Default as defined in
the Note Purchase Agreement. The Company hereby appoints the Collateral
Agent as the Company's attorney-in-fact and in the Company's or in the
Collateral Agent's name to do one or more of the following upon the
occurrence of an Event of Default and pursuant to instructions by the
Majority In Interest: (i) endorse any check or draft representing any such
payment or execute any proof of claim, subrogation receipt or any other
document required by such insurance company as a condition to or otherwise
in connection with such payment or (ii) assign the proceeds under any such
policies. All such sums received by the Collateral Agent shall be paid by
the Collateral Agent to the Purchasers pursuant to the Agency Agreement or,
to the extent that such sums represent unearned premiums in respect of any
policy of insurance on the Collateral refunded by reason of cancellation,
toward payment for similar insurance protecting the respective interests of
the Company and the Collateral Agent, or as otherwise required by
applicable law. The Company shall provide to the Collateral Agent evidence
that the Collateral Agent for the benefit of the Purchasers and the
Purchasers have been named as additional insureds and loss payees. On the
date on which a policy of insurance relating to the Collateral is issued or
renewed, the Company shall promptly provide to the Collateral Agent
evidence that the Collateral Agent for the benefit of the Purchasers
together with the Purchasers have been named as additional insureds and
loss payees.
SECTION 8. COLLECTIONS.
-----------
At any time if the Collateral Agent exercises the rights granted
to it under this Agreement, the Company shall, at the request of the
Collateral Agent, immediately upon receipt of any checks, drafts, cash or
other remittances in payment of any of its accounts, contract rights, or
general intangibles constituting part of the Collateral or in payment for
any Collateral sold, transferred, or otherwise disposed of, or in payment
of or on account of its accounts, contracts, contract rights, notes,
drafts, acceptances, general intangibles choses in action and all other
forms of obligations relating to any of the Collateral so sold, transferred
or otherwise disposed of, deliver any such items to the Collateral Agent
accompanied by a remittance report in form supplied or approved by the
Collateral Agent, such items to be delivered to the Collateral Agent in the
same form received, endorsed or otherwise assigned by the Company where
necessary to permit collection of items and, regardless of the form of such
endorsement the Company hereby waives presentment, demand, notice of
dishonor, protest, notice of protest and all other notices with respect
thereto. All such remittances shall be applied and paid over by the
Collateral Agent to the Purchasers pursuant to the Agency Agreement or as
otherwise required by applicable law.
7
<PAGE>
SECTION 9. RIGHTS AND REMEDIES ON DEFAULT.
------------------------------
(a) In the event of the occurrence of any Event of Default and
pursuant to instructions by the Majority In Interest to enforce the Lien
granted hereunder:
(i) the Collateral Agent shall at any time thereafter
have the right, itself or through any of its agents, as to any or all of
the Collateral (to the extent it is permissible to do so in view of the
rights of lessees who may have the right to possession of certain
Collateral), by any available judicial procedure, or without judicial
process, to take possession of the Collateral and without liability for
trespass to enter any premises where the Collateral may be located for the
purpose of taking possession of or removing the Collateral, and, generally,
to exercise any and all rights afforded to a secured party under the UCC or
other applicable law;
(ii) without limiting the generality of the foregoing,
the Company agrees that the Collateral Agent shall have the right (subject
to any rights of lessees) to sell, lease, or otherwise dispose of all or
any part of the Collateral, whether in its then condition or after further
preparation or processing, either at public or private sale or at any
broker's board, in lots or in bulk, for cash or for credit, with or without
warranties or representations, and upon such terms and conditions, all as
the Collateral Agent in its sole discretion may deem advisable, and it
shall have the right to purchase at any such sale; and, if any Collateral
shall require rebuilding, repairing, maintenance, preparation, or is in
process or other unfinished state, the Collateral Agent shall have, the
right, at its option, to do such rebuilding, repairing, maintenance,
preparation, processing or completion of manufacturing, for the purpose of
putting the Collateral in such salable or disposable form as it shall deem
appropriate;
(iii) the Collateral Agent shall at any time have the
right to require the Company to, and upon such demand the Company shall (A)
instruct each lessee under the Lease Collateral to make payment of all
rentals and other sums relating to the Collateral, due and becoming due
under a Lease included in the Lease Collateral directly to, in the
Collateral Agent's sole discretion, either the Collateral Agent or to a
post office box designated by the Collateral Agent to which only the
Collateral Agent shall have access, (B) if the Company shall receive any
rental or other payment relating to the Collateral in respect of any such
Lease, or any Financed Equipment (including, without limitation, any
proceeds of insurance with respect to Financed Equipment), hold the amount
of such payment relating to the Collateral in trust by the Company for the
benefit of the Purchasers and the Collateral Agent and shall not commingle
such payment with any other moneys or assets of the Company, and (C)
promptly turn over and remit to the Collateral Agent all sums thus
received, in the identical form as received, with all such
8
<PAGE>
endorsements thereof as may be required, as contemplated by Section 8
---------
hereof; in the event that the Company shall fail within three (3) Business
Days of demand by the Collateral Agent to notify the lessees to make
payments to the Collateral Agent or to a post office designated by it, the
Collateral Agent shall be entitled to do so, either in the name of the
Company pursuant to its power of attorney in Section 11 hereof, or in its
----------
own name; and
(iv) at the Collateral Agent's request, the Company
shall assemble the Collateral and make the Collateral available to the
Collateral Agent at the Company's standard depots worldwide and make
available to the Collateral Agent, without rent or any other charge, all of
the Company's premises and facilities for the purpose of the Collateral
Agent's taking possession of, removing or putting the Collateral in salable
or disposable form.
(b) The Company hereby agrees that a notice sent at least ten
(10) days before the time of any intended public sale or of the time after
which any private sale or other disposition of the Collateral is to be
made, shall be reasonable notice of such sale or other disposition.
(c) The proceeds of any collection, sale, lease or other
disposition of all or any part of the Collateral, and of all proceeds of
the enforcement of any Lien created under this Agreement or any other
Transaction Document, together with any sums then held by any Purchaser or
the Collateral Agent as part of the Collateral, shall be applied and paid
over to the Purchasers pursuant to the Agency Agreement.
(d) To the extent permitted by applicable law, the Company
waives all claims, damages and demands against the Collateral Agent arising
out of the repossession, removal, retention, sale or lease of the
Collateral, provided that the Company does not waive any claim, damages or
demand it may have arising out of the Collateral Agent's willful misconduct
or gross negligence in connection with any action taken in respect of the
Note Purchase Agreement or this Agreement.
SECTION 10. COSTS AND EXPENSES.
------------------
Any and all fees, costs and expenses, of whatever kind or nature,
including the reasonable attorneys, fees and legal expenses incurred by the
Collateral Agent in connection with the preparation of this Agreement and
all other documents relating hereto and the consummation of the
transactions contemplated by the Note Purchase Agreement, the filing or
recording of UCC financing statements, applications for notation of the
Liens created hereunder on certificates of title covering any of the
Collateral and other documents (including all Taxes in connection
therewith) in public offices, the payment or discharge of any Taxes,
insurance premiums, encumbrances or otherwise protecting, maintaining or
preserving the Collateral, or the enforcing, foreclosing, retaking,
holding, storing, processing, selling, leasing or otherwise realizing upon
9
<PAGE>
the Collateral and the Collateral Agent's Lien thereon, whether through
judicial proceedings or otherwise, or in defending or prosecuting any
actions or proceedings arising out of or relating to the transaction to
which this Agreement relates, shall be borne and paid by the Company on
demand by the Collateral Agent and if not paid within ten (10) days of such
demand, the Collateral Agent shall provide the notice to the Purchasers
pursuant to the third sentence of Section 4 of the Agency Agreement.
SECTION 11. POWER OF ATTORNEY.
-----------------
(a) The Company authorizes the Collateral Agent and does hereby
make, constitute and appoint the Collateral Agent, and any officer,
employee or agent of the Collateral Agent, with full power of substitution,
as the Company's true and lawful attorney-in-fact, exercisable upon the
occurrence of an Event of Default or if the Collateral Agent exercises any
of its rights under this Agreement pursuant to instructions by the Majority
In Interest, with power in its own name or in the name of the Company:
(i) to endorse any notes, checks, drafts, money
orders, or other instruments of payment (including payments payable under
or in respect of any policy of insurance) in respect of the Collateral that
may come into possession of the Collateral Agent;
(ii) to sign and endorse any invoice, freight or
express bill, bill of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications and notices in connection with
accounts, and other documents relating to the Collateral;
(iii) to pay or discharge Taxes, Liens, security
interests or other encumbrances at any time levied or placed on or
threatened against the Collateral;
(iv) to demand, collect, receive, compromise, settle
and sue for monies due in respect of the Collateral;
(v) to cause each lessee under the Lease Collateral to
make payment of rentals and other sums (to the extent that such rentals and
other sums relate to the Financed Equipment) due and becoming due under a
Lease included in the Lease Collateral to the Collateral Agent;
(vi) to notify lessees and other persons obligated with
respect to the Collateral to make payments directly to the Collateral
Agent; and
(vii) generally, to do, at the Collateral Agent's option
and at the Company's expense, at any time, or from time to time, all acts
and things which the Collateral Agent reasonably deems necessary to
protect, preserve and realize upon the Collateral and the Collateral
Agent's security interest therein
10
<PAGE>
(including signing and filing any UCC Financing Statements, applications
for the notation of the Lien created hereunder upon certificates of title
covering the Collateral or other agreements, documents, instruments or
notices in the name of the Company or otherwise) in order to effect the
intent of this Agreement and of the other Transaction Documents, all as
fully and effectively as the Company might or could do.
(b) The Company hereby ratifies all that said attorney shall
lawfully do or cause to be done by virtue hereof.
(c) This power of attorney, being coupled with an interest,
shall be irrevocable for the term of this Agreement and thereafter as long
as any of the Obligations shall be outstanding.
SECTION 12. DISPOSITION OF COLLATERAL.
--------------------------
The Company shall not be entitled to sell or otherwise dispose of
any of the Collateral except such as shall have been released from the Lien
granted hereby in accordance with the terms hereof or as permitted by the
Note Purchase Agreement.
SECTION 13. NOTICES.
--------
Except as otherwise provided for herein, all communications and
notices provided for herein shall be in writing and delivered by hand, the
United States certified or registered mail or by telecopier, and any such
notice shall become effective (a) upon personal delivery thereof,
including, without limitation, by overnight mail courier service, (b) five
(5) days after the date on which it shall have been mailed by United States
mail, certified or registered, postage prepaid, return receipt requested,
or (c) in the case of notice by telecopier, when electronically or
verbally confirmed, in each case addressed as follows:
If to the Company:
Interpool, Inc.
211 College Road East
Princeton, New Jersey 08540
Telephone: (609) 452-8900
Fax: (609) 452-8211
Attention: Richard W. Gross
with a copy to:
633 Third Avenue, 17th Floor
New York, New York 10017
Fax: (212) 687-8403
Attention: President and Chief Financial Officer
If to the Collateral Agent:
First Security Bank Of Utah,
National Association
79 South Main Street
Salt Lake City, Utah 84111
11
<PAGE>
Attention: Corporate Trust Department
Facsimile: (801) 246-5053
Any party may change the person or address to whom or which notices are to
be given hereunder, by notice duly given hereunder; provided, however, that
-----------------
any such notice shall be deemed to have been given hereunder only when
actually received by the party to which it is addressed.
SECTION 14. OTHER SECURITY.
---------------
To the extent that the Secured Obligations are now or hereafter
secured by property other than the Collateral or by the guarantee,
endorsement or property of any other person, firm, corporation or other
entity, then the Collateral Agent shall have the right in its sole
discretion to pursue, relinquish, subordinate, modify or take any other
action with respect thereto, without in any way modifying or affecting any
of the Collateral Agent's rights and remedies hereunder.
SECTION 15. CUSTODY OF THE COLLATERAL.
-------------------------
Except as expressly provided herein or in the Agency Agreement,
the Collateral Agent shall have no duty as to the collection of any
Collateral in its possession or control or in the possession or control of
any agent or nominee of the Collateral Agent, or any income thereon or as
to the preservation of rights against prior parties or any other rights
pertaining thereto.
SECTION 16. WAIVERS; OBLIGATIONS ABSOLUTE.
-----------------------------
(a) No course of dealing between the Company and the Collateral
Agent, nor any failure to exercise, nor any delay in exercising, on the
part of the Collateral Agent, of any right, power or privilege hereunder or
under the Note Purchase Agreement shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege
hereunder or thereunder preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.
(b) The Company acknowledges that this Agreement is a
continuing obligation and that the obligations hereunder shall extend to
each and every extension or renewal of any Obligation of the Issuers,
regardless of whether the Obligations of the Company may, in successive
transactions, be paid, repaid, advanced or renewed from time to time and
the Obligations shall be absolute, independent and unconditional under any
and all circumstances.
(c) The liability of the Company under this Agreement shall be
absolute and unconditional irrespective of the validity, legality or
enforceability of the Transaction Documents or other agreements evidencing
or securing the Obligations or any part
12
<PAGE>
thereof, or Collateral for any or all of the Obligations or any part
thereof or any other circumstance or circumstances which might otherwise
constitute a legal or equitable discharge of, or a defense available to, a
surety or guarantor and regardless of any law, rule, regulation, order,
writ, judgment, decree, award or other administrative or judicial
pronouncement now or hereafter in effect in any jurisdiction purporting to
affect in any manner any of the terms of the Transaction Documents. The
Purchasers or the Collateral Agent, as applicable, may at any time or
times, in their absolute discretion, in the manner permitted under the
Transaction Documents (a) extend or change the time, manner, place or other
term of payment of any Obligation or any part thereof, (b) waive compliance
by any of the Obligors with any term, covenant, agreement or condition on
the part of such obligor to be complied with under any of the Transaction
Documents, (c) obtain or release Collateral for, any guarantor or any
obligor obligated with respect to, any Obligation or any part thereof, (d)
file, record, refile, rerecord or otherwise perfect, fail to do any of the
foregoing, or allow to lapse any Transaction Document, financing statement,
mortgage, deed of trust, pledge or other security document or interest,
covering or relating to Collateral for, or securing, any Obligation or any
part thereof, (e) settle or compromise with the Obligors under any
Transaction Document, or any other person or entity obligated with respect
to any Obligation or any part thereof, and subordinate upon any terms the
Purchasers' right or rights to receive payment or performance of any
Obligation or any part thereof, and (f) amend or otherwise modify any
Obligation or any part thereof or the Transaction Documents, or the
liability of the Obligors or any entity obligated with respect thereto, in
any manner, all without notice to or the assent of the Company and without
affecting this Agreement or the liability of the Company hereunder, which
shall continue with respect to the Obligations as extended, changed,
modified, settled or compromised, until indefeasibly paid in full.
SECTION 17. CUMULATIVE REMEDIES.
--------------------
All of the Collateral Agent's rights and remedies with respect to
the Collateral, whether established hereby or by any other agreements,
instruments or documents or by law shall be cumulative and may be exercised
singly or concurrently.
SECTION 18. SEVERABILITY.
-------------
The provisions of this Agreement are severable, and if any clause
or provision shall be held invalid or unenforceable in whole or in part in
any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction and
shall not in any manner affect such clause or provision in any other
jurisdiction, or any other clause or provision of this Agreement in any
jurisdiction.
SECTION 19. MODIFICATION.
-------------
13
<PAGE>
This Agreement may not be amended or modified, nor may any
provisions be waived, except by a writing signed by each of the parties
hereto or, in the case of a waiver, by the party so waiving its rights.
SECTION 20. COUNTERPARTS.
-------------
This Agreement may be executed in as many counterparts as may be
deemed necessary or convenient, each of which, when so executed, shall be
deemed an original, but all such counterparts shall constitute one and the
same instrument.
SECTION 21. BINDING EFFECT, BENEFIT OF AGREEMENT
AND ASSIGNMENT.
------------------------------------
The benefits and burdens of this Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns; provided, however, that the rights and obligations
-----------------
of the Company under this Agreement shall not be assigned or delegated
without the prior written consent of the Collateral Agent, and any
purported assignment or delegation without such consent shall be void. The
terms of this Agreement shall also inure to the benefit of each of the
Purchasers and their respective successors and assigns.
SECTION 22. GOVERNING LAW.
-------------
This Agreement shall be governed and construed and enforced in
accordance with the laws of the State of New York, applicable to contracts
entered into and to be performed entirely within such State.
SECTION 23. INDEMNITY.
---------
(a) The Company covenants and agrees to indemnify and hold
harmless the Collateral Agent, the Purchasers and their respective
officers, directors, employees, agents, attorneys-in-fact and affiliates,
from and against any and all claims, suits, losses, penalties, demands,
causes of action and judgments of any nature whatsoever and all liabilities
and indebtedness of any and every kind and nature now or hereafter owing,
arising, due or payable, including all costs and expenses (including
reasonable attorneys fees and expenses) (all of the foregoing being herein
collectively called "Liabilities"), which may be imposed on, incurred by or
-----------
asserted against any of them in connection with (i) the ownership or use of
any of the Collateral or the security interest of the Collateral Agent in
the Collateral, (ii) the failure on the part of the Company to comply and
to cause the lessees and users under all Leases to comply in all respects
with the laws of the United States of America and other jurisdictions in
which the Collateral or any part thereof may be operated and with all
lawful acts, rules, regulations and orders of any commissions, boards or
other legislative, executive, administrative or judicial bodies or officers
having power to regulate or supervise any of the
14
<PAGE>
Collateral, and (iii) the execution, delivery, consummation, waiver,
consent, amendment, enforcement, performance and administration of this
Agreement, the Note Purchase Agreement, the Security Agreement Supplements
and the other Transaction Documents, or the use by the Company of the
proceeds of the Notes or the Note Purchase Agreement; provided, however,
-----------------
that the Company shall not have any obligation to the Collateral Agent or a
Purchaser with respect to liabilities arising from such Person's own, gross
negligence or willful misconduct.
(b) The Company agrees to defend and pay all costs, expenses
and judgments incurred by it, the Collateral Agent or the Purchasers in any
action brought against the Company under the Leases or in any actions
brought by the Collateral Agent pursuant to this Agreement whether under or
pursuant to the provision of any Lease or to enforce any provisions of the
Leases.
(c) The obligations of the Company under this Section 23 shall
----------
survive the termination of this Agreement.
15
<PAGE>
IN WITNESS WHEREOF the parties hereto have caused this Agreement
to be duly executed on the day and year first above written.
INTERPOOL, INC.,
as an Obligor
By:
---------------------------
Title:
------------------------
INTERPOOL LIMITED,
as an Obligor
By:
---------------------------
Title:
------------------------
INTERPOOL FINANCE CORP.,
as an Obligor
By:
---------------------------
Title:
------------------------
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION, as
Collateral Agent
By:
---------------------------
Title:
------------------------
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On July __, 1995, before me personally came
-----------
, to me known, who, being by me duly sworn, did depose and say
- ----------
that he is of [Interpool, Inc.][Interpool
----------------
Limited][Interpool Finance Corp.] (the "Company"), the corporation
described in and which executed the foregoing instrument; that he knows the
seal of said corporation that the seal affixed to such instrument is such
corporate seal and that he signed his name and affixed such seal by order
of the Board of Directors of said corporation.
-------------------------
Notary Public
<PAGE>
STATE OF UTAH )
) ss.:
COUNTY OF )
-----
On July __, 1995, before me personally appeared
-------
, to me personally known, who being by me duly sworn, did depose and
- -----
say that he is of FIRST SECURITY BANK
----------------------------------------
OF UTAH, NATIONAL ASSOCIATION, that the seal affixed to the foregoing instrument
is the corporate seal of said national banking association, that said instrument
was signed and sealed on behalf of said corporation by authority of its Board of
Directors, and he acknowledged that the execution of the foregoing instrument
was the free act and deed of said national banking association.
------------------------------
Notary Public
My Commission expires
--------
<PAGE>
ANNEX A TO
SECURITY AGREEMENT
TYPE OF FINANCED UNIT NUMBER MANUFACTURER'S
EQUIPMENT SERIAL NUMBER
(FOR CHASSIS)
19
<PAGE>
ANNEX B TO
SECURITY AGREEMENT
FORM OF SECURITY AGREEMENT SUPPLEMENT
-------------------------------------
SUPPLEMENT NO.
--------
TO
SECURITY AGREEMENT
DATED ________ __, 1995
BETWEEN
[INTERPOOL, INC.][INTERPOOL LIMITED][INTERPOOL FINANCE CORP.]
(the "COMPANY")
AND
FIRST SECURITY BANK OF
UTAH, NATIONAL
ASSOCIATION
as COLLATERAL AGENT
(the "COLLATERAL AGENT")
-------------------------------------------------
WHEREAS:
A.Interpool, Inc., Interpool Limited and Interpool Finance Corp.
(the "Issuers"), the Collateral Agent and the Purchasers listed therein
-------
(the "Purchasers") entered into a certain Note Purchase Agreement dated
[ ], 1995 (which agreement, as the same may have been or hereafter may
be amended, supplemented, restated or otherwise, the "Note Purchase
-------------
Agreement");
- ---------
B. Pursuant to the Note Purchase Agreement, each of the Issuers
and the Collateral Agent entered into certain Security Agreements dated
[ ], 1995 (each a "Security Agreement" and collectively, the "Security
------------------ --------
Agreements");
- ----------
C. Pursuant to the Note Purchase Agreement, the Company is
obligated with the addition by the Company of any Equipment to the
Collateral to deliver to the Collateral Agent supplements to its Security
Agreement (each, a "Security Agreement Supplement" and collectively, the
-----------------------------
"Security Agreement Supplements") describing the properties and assets
------------------------------
which shall constitute the Collateral, and it is therefore in consideration
of the premises that the Company shall execute and deliver to the
Collateral Agent on behalf of the Purchasers this Security Agreement
Supplement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
The Security Agreement is hereby amended and supplemented by the
addition thereto (in addition to the Collateral covered by the Security
Agreement and in addition to any other Collateral added by previous
Security Agreement Supplements) of the following
20
<PAGE>
Collateral: the Financed Equipment listed or identified on Schedule I
----------
hereto.
The Company hereby represents and warrants that upon the
consummation of this Security Agreement Supplement, no Default or Event of
Default shall exist under any of the Transaction Documents, and the Issuers
will be in compliance with the requirements of the Transactions Documents.
Capitalized terms used herein are used as defined herein or by
reference in the Security Agreement.
Except as supplemented by this Security Agreement Supplement, the
Security Agreement (as heretofore supplemented) shall continue unchanged
and remain in full force and effect.
21
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement Supplement to be duly executed this day of 19 .
---- --------- --
[ ]
By:
--------------------------
Title
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION
as Collateral Agent on behalf
of the Purchasers
By:
--------------------------
Title
<PAGE>
SCHEDULE I TO
SECURITY AGREEMENT
SUPPLEMENT
TYPE OF FINANCED EQUIPMENT UNIT NUMBER MANUFACTURER'S SERIAL
NUMBER
(FOR CHASSIS)
23
Exhibit 10.28
EXECUTION COPY
INTERPOOL, INC.
INTERPOOL LIMITED
INTERPOOL FINANCE CORP.
$30,000,000
GUARANTEED SENIOR SECURED 6.69% NOTES
DUE December 12, 2002
===============================
NOTE PURCHASE AGREEMENT
===============================
Dated: December 12, 1995
<PAGE>
NOTE PURCHASE AGREEMENT
December 12, 1995
To Each of the Purchasers Named in the
Purchaser Schedule Attached Hereto as
Schedule 1
Ladies and Gentlemen:
Interpool, Inc., a Delaware corporation ("Interpool"), Interpool
---------
Limited, a Barbados corporation ("Ltd.") and Interpool Finance Corp., a
----
Cayman Islands corporation ("Corp." and together with Interpool and Ltd.,
each, an "Issuer" and collectively, the "Issuers"), hereby agree with the
------ -------
purchasers named in Schedule 1 attached hereto (the "Purchasers") as
---------- ----------
follows:
SECTION 1. AUTHORIZATION OF ISSUE OF NOTES.
-------------------------------
1.1 Issuance of Notes. (a) The Issuers will authorize the issuance
-----------------
and sale to the Purchasers of secured promissory notes in the aggregate
principal amount of $30,000,000.00 (the "Notes") pursuant to Section 1.2
----- -----------
and as indicated on Schedule 1 attached hereto, each of which Notes is to
----------
be dated the Closing Date, (b) Interpool will authorize the assumption by
Interpool of any or all of the Notes of Ltd. and Corp. and the making of
Guaranties by Interpool and (c) Ltd. will authorize the assumption by Ltd.
of any or all of the Notes of Corp. and the making of Guaranties by Ltd.
1.2 Notes. Interpool will issue Notes in the aggregate principal
-----
amount of ten million seven hundred thousand dollars ($10,700,000); Ltd.
will issue Notes in the aggregate principal amount of eleven million
dollars ($11,000,000); and Corp. will issue Notes in the aggregate
principal amount of eight million three hundred thousand dollars
($8,300,000); which Notes shall be in the aggregate principal amount of
thirty million dollars ($30,000,000), shall mature on the seventh (7th)
anniversary of the Closing Date, shall bear interest on the unpaid balance
thereof from the Closing Date until the principal thereof shall become due
and payable at the rate of 6.69% per annum quarterly in arrears commencing
on March 12, 1996, and shall be substantially in the form of Exhibit A
---------
attached hereto. The term "Notes" as used herein shall include each such
-----
Note delivered pursuant to any provision of this Agreement and each such
Note delivered in substitution or exchange for any other Note pursuant to
any such provision. Interpool will execute and deliver an irrevocable
guarantee to each Purchaser and the Collateral Agent guaranteeing full and
timely payment and performance of the Notes issued by Ltd. and Corp. (in
the form of Exhibit D and as described below) and all other obligations of
---------
Ltd. and Corp. under this Agreement and the other Transaction Documents.
Ltd. will execute and deliver an irrevocable guarantee to each Purchaser
and the Collateral Agent guaranteeing full and timely payment and
performance of the Notes issued by Corp. (in the form of Exhibit D and as
---------
described below) and all other obligations of Corp. under this Agreement
and the other Transaction Documents.
1.3 Interest Rate Calculation. Interest shall be calculated on the
-------------------------
basis of a 360-day year of twelve 30-day months.
<PAGE>
SECTION 2. PURCHASE AND SALE OF NOTES; USE OF PROCEEDS.
-------------------------------------------
2.1 Purchase and Sale of Notes. Each of the Issuers hereby agrees
--------------------------
to sell to each Purchaser and, subject to the terms and conditions herein
set forth, each Purchaser agrees to purchase from such Issuer one or more
Notes each in the respective principal amount set forth opposite such
Issuer's and Purchaser's respective name on Schedule 1 attached hereto at
----------
100% of such aggregate principal amount. Each purchase is a separate and
several purchase.
2.2 Use of Proceeds. The proceeds of the Notes will be used by the
---------------
Issuers (i) to retire outstanding indebtedness, (ii) to acquire New
Equipment and Direct Finance Leases and/or (iii) for the Issuers' general
corporate purposes.
SECTION 3. THE CLOSING. The closing (the "Closing") of the issuance
----------- -------
and sale of the Notes to be purchased by the Purchasers shall take place at
the offices of Rogers & Wells, 200 Park Avenue, New York, New York,
commencing at 10:00 a.m., New York time, on December [ ], 1995 or such
other date and time as shall be agreed between the Issuers and the
Purchasers (the "Closing Date"). At the Closing, each Issuer will deliver
------------
to each Purchaser or a nominee designated by such Purchaser and set forth
in Schedule 3 attached hereto (each, a "Nominee" and, collectively, the
---------- -------
"Nominees") one or more Notes as specified in Section 1.2 and on Schedule 1
-------- ----------- ----------
attached hereto registered on the books of such Issuer in such Purchaser's
name or in the name of such Nominee evidencing the aggregate principal
amount of such Purchaser's Commitment in respect of such Note against pay-
ment by such Purchaser of the purchase price for each such Note to be
purchased by such Purchaser by wire transfer thereof in immediately
available funds to account number 0001709644 for Interpool, Inc., account
number 0001743180 for Interpool Limited, and account number 1409545051 for
Interpool Finance Corp., in each case at Core States Bank, N.A., Philadelphia,
Pennsylvania 19178, ABA # 031-000-011, on the Closing Date. If at the Closing
any Issuer shall fail to tender to any Purchaser the relevant Notes, as provided
herein, or any of the conditions specified in Section 4 shall not have been
---------
fulfilled to the reasonable satisfaction of each of the Purchasers, each
Purchaser shall, at its option, be relieved of its obligations under this
Agreement, without thereby waiving any other rights such Purchasers may have by
reason of such failure or nonfulfillment. If at the Closing each Purchaser does
not provide the purchase price for its respective Note(s), then the other
Purchasers may, but shall not be obligated to, purchase the Notes to be issued
to it by wiring funds to the respective Issuer.
SECTION 4. CONDITIONS OF CLOSING. The obligation of each of the
---------------------
Purchasers to purchase and pay for the Notes being purchased by such
Purchaser hereunder is subject to the satisfaction, on or before the
Closing Date, of the following conditions:
4.1 Transaction Documents. The Purchasers and the Collateral Agent
---------------------
shall have received a fully executed counterpart of each of the Transaction
Documents, each of which shall be in full force and effect and no term or
condition thereof shall have been amended, modified or waived, and the
transactions contemplated therein to be consummated hereunder and
thereunder (including the payment of all fees and other charges) on or
prior to the Closing shall have been consummated.
4.2 Legal Opinions. The Purchasers and the Collateral Agent shall
--------------
have received a legal opinion from each of (a) DeCampo, Diamond & Ash,
special counsel to the Issuers and the Guarantors; (b) Arthur L. Burns,
Esq., general counsel to the Issuers and the Guarantors; (c) David King,
Esq., special Barbados counsel to Ltd.; (d) Bruce Campbell & Co., special
Cayman Islands counsel to Corp.; and (e) Ray, Quinney & Nebeker, counsel to
the Collateral Agent (with a copy of such opinion to be delivered to the
Issuers); and the Purchasers shall have received a legal opinion from
Rogers & Wells,
2
<PAGE>
special counsel to the Purchasers, all of which legal opinions shall be in
form and substance satisfactory to the Purchasers.
4.3 Representations and Warranties, No Default. The representations
------------------------------------------
and warranties contained in Section 7 shall be true and correct and the
---------
conditions set forth in this Section 4 shall have been satisfied on and as
---------
of the Closing Date as if restated at and as of the Closing Date, there
shall exist on the Closing Date no Default or Event of Default, and each of
the Issuers shall have delivered to the Purchasers an Officer's
Certificate, dated the Closing Date, to each such effect.
4.4 Evidence of Title to Collateral, Absence of Liens on Collateral,
----------------------------------------------------------------
Collateral Certificate and Stamping of Original Leases.
- ------------------------------------------------------
(a) Prior to the Closing, the Purchasers shall have received
true, correct and complete copies of the certificates of title or similar
document for the Chassis and Trailers covered by certificates of title
included in the Collateral.
(b) Prior to the Closing, the Purchasers shall have received
the following: (i) to the extent reasonably available, evidence of title to
the Containers included in the Collateral showing that the relevant Issuer
has good and marketable title to such Containers; (ii) search reports of
the records of the applicable offices where UCC financing statements,
Federal tax liens and judgments are filed showing that such Containers,
Trailers and Chassis not covered by certificates of title included in the
Collateral are free and clear of Liens of record; (iii) an affidavit
executed by an officer of the relevant Issuer of such Issuer's ownership
of, and good and marketable title to such Containers, Trailers and Chassis
free and clear of Liens other than Permitted Liens, which affidavit shall
be in form and substance satisfactory to the Purchasers and their special
counsel; and (iv) a legal opinion of Arthur L. Burns, Esq., general counsel
to the Issuers, in form and substance satisfactory to the Purchasers and
their special counsel, as to the relevant Issuer's having good and
marketable title to such Containers, Trailers and Chassis free and clear of
Liens of record.
(c) Prior to the Closing, the Purchasers shall have received
the following:
(i) evidence of title to the Railcars showing that
Interpool has good and marketable title to such
Railcars;
(ii) search reports of the records of the Interstate
Commerce Commission and the applicable offices where
Federal tax liens and judgments are filed showing that
such Railcars are free and clear of Liens of record;
(iii) an affidavit executed by an officer of Interpool as to
Interpool's ownership of, and good and marketable
title to, such Railcars free and clear of Liens, other
than Permitted Liens, which affidavit shall be in form
and substance satisfactory to the Purchasers and their
special counsel; and
(iv) a legal opinion of Arthur L. Burns, Esq., general
counsel to Interpool, in form and substance
satisfactory to the Purchasers and their special
counsel, as to Interpool's having good and marketable
title to such Railcars free and clear of Liens of
record. The Purchasers shall have received search
reports of the records of the Interstate Commerce
Commission that Interpool has good and marketable
title to the Railcars
3
<PAGE>
included in the Collateral free and clear of Liens of
record and a Collateral Certificate executed by an
officer of Interpool with respect thereto.
(d) Prior to the Closing, the Purchasers shall have received
the following: (i) search reports of the records of the applicable offices
where UCC financing statements, Federal tax liens and judgments are filed
showing that the Leases and Direct Finance Leases are free and clear of
Liens of record; (ii) an affidavit executed by an officer of the relevant
Issuer of such Issuer's ownership of, and good and marketable title to the
Leases and Direct Finance Leases free and clear of Liens other than
Permitted Liens, which affidavit shall be in form and substance
satisfactory to the Purchasers and their special counsel; and (iii) a legal
opinion of Arthur L. Burns, Esq., general counsel to the Issuers, in form
and substance satisfactory to the Purchasers and their special counsel, as
to the relevant Issuer's having good and marketable title to such Leases
and Direct Finance Leases free and clear of Liens of record.
(e) Prior to the Closing, the Purchasers shall have received a
Collateral Certificate executed by an officer of each Issuer with respect
to all the Collateral referred to in paragraphs (a), (b) (c) and (d) above.
(f) The Leases. Prior to Closing, the Issuers shall have
----------
stamped the language set forth in Schedule 9.29(x)(i) on the front cover or
other conspicuous space of Leases and Direct Finance Leases relating to at
least 90% of the aggregate Collateral Value of Financed Equipment covered
by Leases and of Direct Finance Leases.
4.5 Corporate Proceedings and Documents. Each Issuer shall have
-----------------------------------
taken all necessary corporate action to authorize the transactions
contemplated by the Transaction Documents to the reasonable satisfaction of
the Purchasers and their special counsel, and the Purchasers and their
special counsel shall have received evidence of such proceedings, together
with such other corporate documents and certificates reasonably requested
by the Purchasers and their special counsel including, without limitation,
charter documents, certificates of good standing and certificates of
incumbency of officers, in form and substance satisfactory to the
Purchasers and their special counsel.
4.6 Taxes. All Taxes, fees and other charges payable in connection
-----
with the execution, delivery, recording, publishing and filing of the
Transaction Documents, and the issue, sale and delivery of the Notes to be
delivered on the Closing Date shall have been paid in full by the Issuers
and the Purchasers and their special counsel shall have received evidence
of any such payment or arrangements for any such payment satisfactory to
the Purchasers and their special counsel.
4.7 UCC Financing Statements; Applications to Note Liens on
-------------------------------------------------------
Certificates of Title.
- ----------------------
(a) At the Closing, all UCC financing statements (covering the
Collateral other than Chassis and Trailers which are covered by
certificates of title or Railcars), naming the relevant Issuer, as debtor,
and the Collateral Agent, as secured party, all certificates of title for
Chassis and Trailers included in the Collateral, applications to note the
Lien of the Collateral Agent in any Collateral covered by such certificates
of title, the Railcars Security Agreement and all other documents and
instruments required under other applicable laws, shall have been duly
executed and delivered to special counsel to the Purchasers and the
Collateral Agent, in appropriate form for filing together with the
applicable filing fees with respect thereto, in all jurisdictions that the
Purchasers deem necessary or desirable in order to perfect the Liens of the
Collateral Agent on behalf of the Purchasers in the Collateral.
4
<PAGE>
(b) By the Closing, the Issuers shall have filed one or more
precautionary UCC financing statements against the lessee and any sublessee
under all Direct Finance Leases of Equipment not subject to a certificate
of title and assignments of such UCC financing statements in favor of the
Collateral Agent.
(c) Not later than ninety (90) days subsequent to the Closing
Date, the Issuers shall have given to the Collateral Agent (i) the
certificates of title for the Chassis and Trailers included in the
Collateral and which are covered by certificates of title evidencing the
Lien of the Collateral Agent therein and showing that such Chassis and
Trailers are free and clear of any Liens of record other than Permitted
Liens and (ii) search reports of the records of the applicable offices
where UCC financing statements, Federal tax liens and judgments are filed
covering the period from the latest date covered by both of the search
reports delivered pursuant to Sections 4.4(b)(ii) and 4.4(d)(i) through a
---------------------------------
date subsequent to the Closing Date, evidencing the Lien of the Collateral
Agent in the Collateral other than the Chassis and Trailers which are
covered by certificates of title or Railcars, showing that such Collateral
is free and clear of any Liens of record other than Permitted Liens and
showing the filing information with respect to the UCC Financing Statements
referred to in Subsection 4.7(a) above.
4.8 Purchase Permitted By Applicable Laws. The purchase of and
-------------------------------------
payment for each of the Notes to be purchased by the relevant Purchasers on
the Closing Date on the terms and conditions herein provided (including the
use of the proceeds of such Notes by the Issuers pursuant to Section
-------
2.2) shall not violate any law or governmental regulation in any
- ---
jurisdiction to which any Purchaser is subject and shall not subject any
Purchaser or the Collateral Agent to any Tax, penalty, liability or to
jurisdiction as a domiciliary or resident of or other onerous condition
under or pursuant to any applicable law or governmental regulation in any
jurisdiction, and such Purchaser shall have received such certificates,
legal opinions or other evidence as it or its special counsel may request
to establish compliance with this condition.
4.9 Sale of Notes to Other Purchasers. Simultaneously with the
---------------------------------
purchase of and payment for Notes by each Purchaser, all of the other Notes
to be issued to, and purchased and paid for by, the other Purchasers, as
set forth on Schedule 1 attached hereto, shall be issued to, and purchased
----------
and paid for by, such other Purchasers.
4.10 Other Documents. The Purchasers and the Collateral Agent shall
---------------
have received all such other agreements, documents, instruments and
certificates and evidence that all action shall have been taken as is
reasonably requested by the Purchasers or their special counsel in order to
effect the transactions contemplated hereby and by the other Transaction
Documents.
4.11 Legal Matters. All legal matters incident to the purchase of
-------------
the Notes, the Collateral and the transactions relating thereto shall be
satisfactory to special counsel for the Purchasers and the Collateral
Agent.
4.12 Legality. The Notes shall on the Closing Date qualify as a
--------
legal investment for insurance companies under applicable insurance law
(without recourse to laws permitting limited investments by insurance
companies without restriction as to the character of the particular
investment) and the Purchasers shall have received a certificate from the
Issuers as to factual matters as the Purchasers or their special counsel
may reasonably request, to establish compliance with this condition.
5
<PAGE>
4.13 Information Certificate; Private Placement Number.
-------------------------------------------------
(a) Information Certificate. The Issuers shall have completed
-----------------------
and delivered to the Purchasers the information certificate in the form of
Exhibit G attached hereto, with a copy of the Issuers' most recent audited
- ---------
annual financial statements attached thereto, which certificate and
statements the Purchasers have informed the Issuers may be used as a basis
for filings which the Purchasers may be required to make with certain
regulatory bodies and with the National Association of Insurance
Commissioners (the "NAIC").
----
(b) Standard & Poor's Rating for Prior Private Placement. The
----------------------------------------------------
Purchasers and their special counsel shall have received evidence
satisfactory to the Purchasers and their special counsel that the Prior
Private Placement has received ratings of PPR2+ or better by Standard &
Poor's.
(c) Private Placement Number. The Notes shall each have
------------------------
received a private placement number from Standard & Poor's Corporation
CUSIP Service Bureau.
4.14 Placement Agent Letter. The Issuers' counsel and the
----------------------
Purchasers' special counsel shall have received a letter from CoreStates
Investment Banking (the "Placement Agent"), placement agent with respect to
---------------
the Notes, which letter shall be in form and substance satisfactory to the
addressees thereof, to the effect that the offering of the Notes has been a
private offering as set forth in Section 7.16.
------------
4.15 Expenses. At the Closing, upon presentation of invoices
--------
therefor, the Issuers shall pay all fees and expenses relating to this
Agreement, all other Transaction Documents or the transactions contemplated
hereunder and thereunder including but not limited to:
(a) the reasonable fees and disbursements of all the
Purchasers' and the Collateral Agent's special counsel;
(b) all costs and expenses relating to this Agreement, all
other Transaction Documents, the transactions contemplated hereunder and
thereunder and the cost of the issuance, purchase and delivery of the
Notes;
(c) any broker's fees or finder's fees and placement costs of
the Placement Agent and any other Persons who acted as broker or placement
agent for or on behalf of an Issuer or who was retained by an Issuer to so
act relating to the sale of the Notes hereunder; and
(d) all costs and expenses associated with obtaining private
placement numbers for the Notes.
4.16 Compliance with this Agreement. The Issuers shall have
------------------------------
performed and complied with all agreements and conditions contained herein
or in the other Transaction Documents which are required to be performed or
complied with by the Issuers before or at the Closing Date to the
satisfaction of the Purchasers and their special counsel.
4.17 Collateral Administration Agreement. Each Issuer shall have
-----------------------------------
executed and delivered the Collateral Administration Agreement and a
Joinder Agreement to the Purchasers and the Collateral Agent and used its
best efforts to have a Joinder Agreement executed and delivered to the
Purchasers and the Collateral Agent by all holders of its Funded Debt
secured by leases or similar agreements or arrangements covering Financed
Equipment and Direct Finance Leases.
6
<PAGE>
SECTION 5. REPAYMENT; PREPAYMENT; ASSUMPTION OF NOTES;
RELEASE OF COLLATERAL.
-------------------------------------------
5.1 Repayment of Principal and Interest on the Notes.
------------------------------------------------
(a) Each of the Issuers shall pay principal on the Notes issued
by it in quarterly installments on the dates and in the amounts set forth
in Schedule 1 attached to such Notes, in arrears.
----------
(b) The Issuers shall pay interest on the outstanding principal
balance of each Note issued by it on the dates, and at the rates, set forth
in such Note.
(c) If the date that any payment under the Notes is due is
other than a Business Day, the amount of principal and interest otherwise
payable on such date shall be payable on the next succeeding Business Day.
5.2 Maturity.
--------
The entire unpaid principal amount of the Notes, together with
accrued and any remaining unpaid interest thereon, shall be due and payable
on the seventh (7th) anniversary of the Closing Date, subject to
acceleration or prepayment as hereinafter provided.
5.3 Method of Payment. All payments (including optional prepayments
-----------------
pursuant to Section 5.5) by the Issuers on account of the Notes shall be
-----------
payable no later than 12:00 noon (New York time) by wire transmittal
thereof in immediately available funds to the Purchasers' accounts set
forth on Schedule 3 attached hereto or as the Purchasers shall specify in
----------
writing to the Issuers from time to time. Each of the Purchasers agrees
that in the event it shall sell or transfer such Note(s) (a) it shall,
prior to the delivery of such Note(s) (unless it shall have already done
so), make a notation thereon of all principal, if any, prepaid on such
Note(s) and shall also note thereon the date, if any, to which interest
shall have been paid on such Note(s) and (b) it shall promptly notify the
Issuers of the name and address of the transferee of any such Note(s) so
transferred.
5.4 Registration of Notes; Transfer and Exchange of Notes.
-----------------------------------------------------
(a) Each Issuer shall cause to be kept at its office,
maintained pursuant to Section 9.10, a register (each, a "Register") for
------------ --------
the registration and transfer of Notes. The name and address of each
holder of one or more Notes, each transfer thereof and the name and address
of each transferee of such Notes shall be registered in each Register. The
Person in whose name any Note shall be registered shall be deemed and
treated as the owner and holder thereof for all purposes of this Agreement.
(b) A Purchaser intending to transfer a Note shall surrender
such Note duly endorsed, or accompanied by a duly executed written
instrument of transfer, together with a written request for the issuance of
a new Note, and the name and address of the intended transferee and shall
provide such further information relating to such transferee and such
transfer as the relevant Issuer shall reasonably request. The Notes have
not been registered under the Securities Act and may not be resold or
transferred except as provided in this Section 5.4. The Notes shall not be
-----------
transferred to any Person whose principal business is operating or leasing
chassis, railcars, trailers or containers. No transfer of the Notes may be
made unless pursuant to an effective registration statement under the
Securities Act or unless exempt from the registration requirements under
the Securities Act. No Issuer shall be obligated to register the Notes
under the Securities Act or any other securities law. The Notes will not
be offered or sold in, nor will any offering material relating to the Notes
be distributed in Canada nor will any resale
7
<PAGE>
or other transfer in Canada be made except in compliance with applicable
securities laws of the dominions or provinces of Canada (including any
exemptions thereunder).
In connection with the transfer of any Note pursuant to the
foregoing and upon surrender of any Note at the office of the Issuer
maintained pursuant to Section 9.10, such Issuer, at the request of the
------------
holder thereof, shall execute and deliver, at such Issuer's expense (except
as provided below), new Notes in exchange therefor, in denominations of at
least $100,000 (except as may be necessary to reflect any principal amount
not evenly divisible by $100,000 or an aggregate principal amount equal to
the unpaid principal amount of the surrendered Note). Each such new Note
shall be payable to such transferee and shall be substantially in the form
of the Note set out in Exhibit A to this Agreement. Each such new Note
---------
shall be dated and bear interest from the date to which interest shall have
been paid on the surrendered Note or dated the date of the surrendered Note
if no interest shall have been paid thereon. Simultaneously with the
transfer of any Note issued by Ltd. to a transferee pursuant to the
foregoing provisions of this Section 5.4(b), upon the request of the
--------------
transferee or the Purchaser transferor, Interpool shall issue a Guaranty to
and in favor of such transferee in respect of all Obligations of Ltd. to
such transferee, and Ltd. and Interpool shall each issue a Guaranty to and
in favor of such transferee in respect of all Obligations of Corp. to such
transferee, and each such Guaranty shall be in the form of Exhibit D hereto
---------
and shall be secured by the Collateral granted by the relevant Guarantor
pursuant to the Security Agreement and the Railcars Security Agreement
executed and delivered by such relevant Guarantor to the Collateral Agent;
provided that the failure of either Interpool or Ltd. to issue such a
Guaranty shall not affect or limit such relevant Guarantor's Obligations in
favor of such Purchaser transferor under its Guaranty or under this
Agreement or the other Transaction Documents which shall inure to the
benefit of such transferee.
(c) Upon receipt by the Issuer of evidence reasonably
satisfactory to it of (i) the ownership and (ii) the loss, theft,
destruction or mutilation, of any Note, and
(A) in the case of loss, theft or destruction, an indemnity
reasonably satisfactory to it (provided that if the holder
of the Note is an institutional investor which is a
"Qualified Institutional Buyer" such institutional
-----------------------------
investor's own agreement of indemnity shall be deemed to be
satisfactory), or
(B) in the case of mutilation, upon surrender and cancellation
thereof,
the Issuer shall execute and deliver, in lieu thereof, a new Note of like
tenor, dated and bearing interest from the date to which interest shall
have been paid on such lost, stolen, destroyed or mutilated Note or dated
the date of such lost, stolen, destroyed or mutilated Note if no interest
shall have been paid thereon.
5.5 Optional Prepayments.
--------------------
(a) Prepayment. Each Issuer shall have the right to prepay the
----------
principal of the Notes issued by such Issuer at any time and from time to
time in whole or in part together with any accrued and unpaid interest on
such principal amount so prepaid plus a Make Whole Premium. The proceeds
of any such prepayment of the relevant Notes shall be applied ratably over
all Notes issued by such Issuer and then applied to the prepayment of such
Notes in inverse order of the scheduled principal payments thereof without
priority of any one such Note over any other in accordance with the terms
of this Agreement.
(b) Notice of Optional Prepayments; Officers' Certificate.
-----------------------------------------------------
Each Issuer will give each Purchaser written notice of each optional
prepayment under Section 5.5(a) not less than thirty (30)
--------------
8
<PAGE>
days and not more than sixty (60) days prior to the date fixed for such
prepayment, in each case specifying such date, the aggregate principal
amount of the Notes to be prepaid, the principal amount of each Note held
by such Purchaser to be prepaid, the aggregate accrued and unpaid interest
due thereon calculated to but not including the date of prepayment, an
estimate of the aggregate Make Whole Premium due with respect to such
prepayment, calculations showing how such estimated Make Whole Premium was
calculated and the amounts of principal, accrued interest and Make Whole
Premium to be received by each Purchaser in connection with such prepayment
in inverse order of the scheduled principal payments thereof without
priority of any one such Note over any other in accordance with the terms
of the Agreement. Each Purchaser shall receive on the Business Day
immediately preceding the date scheduled for any such prepayment an
Officer's Certificate of the Issuers certifying that all conditions of such
prepayment have been fulfilled and specifying the particulars of such
fulfillment, and, setting forth the calculations used in computing the
amount of the Make Whole Premium and, a copy of the market data used in
determining the Reinvestment Yield in accordance with the terms of this
Agreement. In the event that there shall have been a partial prepayment of
the Notes under Section 5.5(a), such Issuer shall promptly give notice to
--------------
the Purchasers, accompanied by an Officers' Certificate setting forth the
principal amount of each of the Notes that was prepaid and specifying how
each such amount was determined, and if such prepayment was a prepayment in
part, setting forth the reduced amount of each required payment thereafter
becoming due with respect to each of the Notes under Section 5.1(a), and
--------------
certifying that such reduction has been computed in accordance with Section
-------
5.5(a).
- ------
(c) Making of Prepayment. On or before the Prepayment Date,
--------------------
such Issuer (or any Persons on behalf of such Issuer) shall pay or cause to
be paid to the relevant Purchaser by 12:00 noon (New York City time) on the
Prepayment Date in immediately available funds the amount to be prepaid
with respect to the Notes in accordance with Section 5.3.
-----------
(d) Notes Payable on Prepayment Date. If notice of prepayment
--------------------------------
has been given in accordance with Section 5.5(b), the amount of the
--------------
prepayment of such Notes to be prepaid in accordance with the notice
described in Section 5.5(b) shall, on the Prepayment Date, become due and
--------------
payable at the principal offices of the respective Purchasers at the
addresses set forth in Schedule 3 attached hereto. If the amount of the
----------
prepayment of the Notes to be prepaid in accordance with the notice
described in Section 5.5(b) shall not be so prepaid, the amount of such
--------------
prepayment shall, until paid, continue to bear interest from the applicable
Prepayment Date at the Overdue Rate through the date upon which such Notes
are so prepaid.
(e) If there is more than one Purchaser, the aggregate
principal amount of each partial optional prepayment of the Notes shall be
allocated in units of One Thousand Dollars ($1,000) or multiples thereof
among the Purchasers at the time outstanding, in proportion, as nearly as
practicable, to the respective unpaid principal amounts of the Notes then
outstanding, with adjustments, to the extent practicable, to equalize for
any prior partial optional prepayments not in such proportion.
(f) Upon any partial prepayment of any Note, such Note may, at
the option of the Purchasers, be (i) surrendered to the relevant Issuer
pursuant to Section 5.4(b) in exchange for a new Note in a principal amount
--------------
equal to the principal amount then remaining unpaid on the surrendered
Note, (ii) made available to the relevant Issuer for notation thereon of
the portion of the principal so prepaid or (iii) marked with a notation
thereon by the holder thereof as to the portion of the principal so
prepaid. In case the entire principal amount of any Note is prepaid, such
Note shall be surrendered to the relevant Issuer promptly after such
prepayment for cancellation and shall not be reissued, and no Note shall be
issued in lieu of the prepaid principal amount of any Note.
9
<PAGE>
5.6 Interpool's and Ltd.'s Assumption of Notes; Pledge of Equipment.
---------------------------------------------------------------
(a) At any time and from time to time (but in the case of a
partial assumption not more often than once during any calendar quarter)
Interpool may assume the Obligations of Ltd. or Corp., in whole or in part,
including, but not limited to, the Notes of Ltd. and/or Corp., as the case
may be, pursuant to an assumption agreement in the form of Exhibit F
---------
attached hereto, provided that (i) Interpool's Collateral Value shall not
be less than an amount equal to 125% of the aggregate outstanding principal
amount of the Notes issued or assumed by Interpool after giving effect to
such assumption, (ii) no Default or Event of Default exists (unless such
Default shall be cured by the assumption by Interpool) and the Purchasers
shall have received an Officer's Certificate of Interpool to such effect,
and (iii) the Purchasers shall have received a legal opinion of Arthur L.
Burns Esq. or his successor, as general counsel to the Issuers, in form and
substance satisfactory to the Purchasers and their special counsel as to
the enforceability of the assumption agreement and the transactions
contemplated thereby. If Interpool assumes any Obligations of Ltd. and/or
Corp., Ltd. and/or Corp., as the case may be, will be released from its
and/or their Obligations hereunder and under the other Transaction
Documents to the extent such Obligations shall have been assumed by
Interpool except that the representations, warranties and indemnities of
each of Ltd. and Corp. shall survive the release of their other respective
Obligations.
(b) At any time and from time to time (but in the case of a
partial assumption not more often than once during any calendar quarter)
Ltd. may assume the Obligations of Corp., in whole or in part, including,
but not limited to, its Notes, pursuant to an assumption agreement in the
form of Exhibit F attached hereto, provided that (i) Ltd.'s Collateral
---------
Value shall not be less than an amount equal to 125% of the aggregate
outstanding principal amount of the Notes issued or assumed by Ltd. after
giving effect to such assumption, (ii) no Default or Event of Default
exists (unless such Default shall be cured by the assumption by Ltd.) and
the Purchasers shall have received an Officer's Certificate of Ltd. to such
effect, and (iii) the Purchasers shall have received a legal opinion of
Arthur L. Burns Esq. or his successor, as general counsel to the Issuers,
in form and substance satisfactory to the Purchasers and their special
counsel as to the enforceability of the assumption agreement and the
transactions contemplated thereto. If Ltd. assumes any Obligations of
Corp., Corp. will be released from its Obligations hereunder and under the
other Transaction Documents to the extent such Obligations shall have been
assumed by Ltd., except that the representations, warranties and
indemnities of Corp. shall survive the release of its other Obligations.
(c) Any Issuer shall have the right to add Collateral to, or
obtain the partial release by the Collateral Agent of Collateral from, the
Lien created under the relevant Security Agreement at any time or from time
to time by the execution and delivery to the Collateral Agent with copies
to the Purchasers and special counsel to the Purchasers, at least ten (10)
Business Days prior to the proposed effective date of any addition or
partial release of Collateral of an appropriate Security Agreement
Supplement indicating specifically the Collateral to be added or released
from such Lien provided, that no Default or Event of Default exists (other
than a Default which would be cured by such addition or release), or would
arise as a result of or after giving effect to, such addition or release of
Collateral and such addition or release shall not result in such Issuer's
Collateral Value to be less than an amount equal to 125% of the aggregate
outstanding principal amount of the Notes issued or assumed by such Issuer,
and the Purchasers shall have received an Officer's Certificate of such
Issuer to such effect. The Collateral Agent shall countersign such
Security Agreement Supplement pursuant to instructions by the Purchasers to
do so which the Purchasers shall issue upon their being satisfied that the
conditions set forth herein have been fulfilled whereupon such Security
Agreement Supplement shall become effective. Interpool shall have the
right to add Railcars to, or obtain the partial release by the Collateral
Agent of Railcars from the Lien created under the Railcars Security
Agreement at any time or from time to time by the execution and delivery to
the Collateral Agent with copies to the Purchasers and special counsel
10
<PAGE>
to the Purchasers, at least ten (10) Business Days prior to the proposed
effective date of any addition or partial release of such Collateral of an
appropriate Railcars Security Agreement Supplement (in the form attached as
Annex A to Exhibit H hereto) indicating specifically the Collateral to be
---------
added to or released from such Lien; provided that no Default or Event of
--------
Default exists (other than a Default which would be cured by such addition
or release), or would arise as a result of or after giving affect to, such
addition or release of Collateral and the Purchasers shall have received an
Officer's Certificate of Interpool to such effect. The Collateral Agent
shall countersign such Railcars Security Agreement Supplement, pursuant to
instructions by the Purchasers to do so which the Purchasers shall issue
upon their being satisfied that the conditions set forth herein have been
fulfilled whereupon such Railcars Security Agreement Supplement shall
become effective and shall be filed with the Interstate Commerce
Commission.
(d) At any time or from time to time Interpool shall have the
right, for the benefit of Ltd. and/or Corp., in order to enable Ltd. and/or
Corp., as the case may be, to avoid the occurrence of an Event of Default
under the provisions of Section 10.1(k), to add Collateral to the Lien
---------------
created by the relevant Security Agreement executed by Interpool in favor
of the Collateral Agent by the execution and delivery to the Collateral
Agent with copies to the Purchasers and special counsel to the Purchasers,
at least five (5) Business Days prior to the proposed effective date of any
addition of Collateral, of an appropriate Security Agreement Supplement
provided that (i) such Security Agreement Supplement indicates specifically
the Collateral being added to such Lien; (ii) such Security Agreement
Supplement or an Officer's Certificate delivered in connection therewith
specifically provides that such Collateral is being added for the benefit
of Ltd. and/or Corp., as the case may be, to avoid the occurrence of an
Event of Default under the provisions of Section 10.1(k) and that such
---------------
Collateral shall secure all the Obligations of Interpool (including
Obligations of Interpool under the Guaranty made by Interpool) and the
Obligations of Ltd. (including the Obligations of Ltd. under the Guaranty
made by Ltd.) and/or Corp., as the case may be; and (iii) no Default or
Event of Default exists (unless such Default shall be cured by the addition
of such Collateral) and the Purchasers shall have received an Officer's
Certificate of Interpool to such effect. The Collateral Agent shall
countersign such Security Agreement Supplement pursuant to instructions by
the Purchasers to do so which the Purchasers shall issue upon their being
satisfied that the conditions set forth in this Section 5.6(d) shall have
--------------
been fulfilled whereupon such Security Agreement Supplement shall become
effective.
(e) At any time or from time to time Ltd. shall have the right,
for the benefit of Corp., in order to enable Corp. to avoid the occurrence
of an Event of Default under the provisions of Section 10.1(k), to add
---------------
Collateral to the Lien created by the relevant Security Agreement executed
by Ltd. in favor of the Collateral Agent by the execution and delivery to
the Collateral Agent with copies to the Purchasers and special counsel to
the Purchasers, at least five (5) Business Days prior to the proposed
effective date of any addition of Collateral, of an appropriate Security
Agreement Supplement provided that (i) such Security Agreement Supplement
indicates specifically the Collateral being added to such Lien; (ii) such
Security Agreement Supplement or an Officer's Certificate delivered in
connection therewith specifically provides that such Collateral is being
added for the benefit of Corp. to avoid the occurrence of an Event of
Default under the provisions of Section 10.1(k) and that such Collateral
---------------
shall secure all the Obligations of Ltd. (including Obligations of Ltd.
under the Guaranty made by Ltd.) and the Obligations of Corp.; and (iii) no
Default or Event of Default exists (unless such Default shall be cured by
the addition of such Collateral) and the Purchasers shall have received an
Officer's Certificate of Ltd. to such effect. The Collateral Agent shall
countersign such Security Agreement Supplement pursuant to instructions by
the Purchasers to do so which the Purchasers shall issue upon their being
satisfied that the conditions set forth in this Section 5.6(e) shall have
--------------
been fulfilled whereupon such Security Agreement Supplement shall become
effective.
11
<PAGE>
(f) In lieu of adding Collateral to the Lien created by the
relevant Security Agreement executed by an Issuer in favor of the
Collateral Agent, such Issuer shall have the right to grant to the
Collateral Agent for the ratable benefit of the Purchasers a first Lien on
Cash Collateral by the execution and delivery to the Collateral Agent with
copies to the Purchasers and special counsel to the Purchasers, at least
ten (10) Business Days prior to the proposed effective date of any such
grant, of a Cash Collateral Agreement covering such Cash Collateral,
provided, that (i) such agreement specifically designates the Issuer for
- -------- ----
whose benefit such Cash Collateral is being granted and (ii) no Default or
Event of Default exists (unless such Default shall be cured by the grant of
such Cash Collateral) and the Purchasers shall have received an Officer's
Certificate of such Issuer to such effect. Such Issuer may thereafter add
Collateral to its Security Agreement pursuant to and in compliance with the
provisions of subsection (c) or (d) above and upon such addition of
Collateral becoming effective, such Issuer may request the release of Cash
Collateral from the Cash Collateral Agreement corresponding to the Cash
Collateral so added and upon the Purchasers having been satisfied that
(x) such Collateral has been added to the relevant Security Agreement
pursuant to and in compliance with the provisions of subsection (c) or (d)
above and (y) no Event of Default or Default exists and the Purchasers have
received an Officer's Certificate of such Issuer that no Event of Default
or Default exists, the Purchasers shall instruct the Collateral Agent to
execute and deliver to such Issuer a release of such Cash Collateral from
the Cash Collateral Agreement and the Collateral Agent shall execute and
deliver such release to such Issuer.
(g) In the event that Interpool determines that the Collateral
Value of the Collateral granted by it pursuant to its Security Agreement
(and not theretofore released) exceeds 125% of the sum of the aggregate
outstanding principal amount of the Notes issued by Interpool and the
aggregate outstanding principal amount of Notes issued by Ltd. and Corp.
and assumed by Interpool, then Interpool shall have the right, for the
benefit of Ltd. and/or Corp., as the case may be, in order to enable Ltd.
and/or Corp., as the case may be, to avoid the occurrence of an Event of
Default under the provisions of Section 10.1(k), to notify the Purchasers,
---------------
the Collateral Agent and their special counsel at least ten (10) business
days prior to the effective date thereof of its designation that the
Collateral representing such excess Collateral Value shall inure to the
benefit of Ltd. and/or Corp., as the case may be, to avoid the occurrence
of such an Event of Default, which notice shall be accompanied by (i) a
Collateral Certificate specifically calculating such excess and indicating
specifically the Collateral representing such excess Collateral Value and
(ii) an Officer's Certificate of Interpool that no Event of Default or
Default exists (unless such Default shall be cured by such designation by
Interpool of excess Collateral Value). Upon their satisfaction that the
conditions referred to above shall have been fulfilled, the Purchasers
shall instruct the Collateral Agent to countersign such notice and
designation and the Collateral Agent shall so countersign such notice and
designation, whereupon such designation by Interpool shall become
effective.
(h) In the event that Ltd. determines that the Collateral Value
of the Collateral granted by it pursuant to its Security Agreement and any
Collateral which Interpool pursuant to Section 5.6(g) has designated as
inuring to the benefit of Ltd. (and not theretofore released) exceeds 125%
of the sum of the aggregate outstanding principal amount of the Notes
issued by Ltd. and the aggregate outstanding principal amount of Notes
issued by Corp. and assumed by Ltd., then Ltd. shall have the right, for
the benefit of Corp. in order to enable Corp. to avoid the occurrence of an
Event of Default under the provisions of Section 10.1(k), to notify the
---------------
Purchasers, the Collateral Agent and their special counsel at least ten
(10) business days prior to the effective date thereof of its designation
that the Collateral representing such excess Collateral Value shall inure
to the benefit of Corp. to avoid the occurrence of such an Event of
Default, which notice shall be accompanied by (i) a Collateral Certificate
specifically calculating such excess and indicating specifically the
Collateral representing such excess Collateral Value and (ii) an Officer's
Certificate of Ltd. that no Event of Default or Default exists (unless such
Default shall be cured by such designation by Ltd. of excess Collateral
Value). Upon their satisfaction that the conditions referred to above
shall have been fulfilled, the Purchasers shall instruct
12
<PAGE>
the Collateral Agent to countersign such notice and designation and the
Collateral Agent shall so countersign such notice and designation,
whereupon such designation by Ltd. shall become effective.
(i) All assumptions, additions, releases or substitutions of
Collateral and Cash Collateral pursuant to the provisions of this Section
-------
5.6 shall be accompanied by all such agreements, instruments, documents,
- ---
certificates, UCC financing statements, notations of Liens on certificates
of title or applications therefor and other lien instruments and the taking
of all such action (including the filing and recording of any of the
foregoing, searches of public records and confirmation of the stamping of
Leases and Direct Finance Leases required under Section 9.29(b)) as the
---------------
Purchasers, the Collateral Agent and their special counsel shall reasonably
require and all fees and expenses with respect thereto (including the fees
and expenses of special counsel to the Purchasers and the Collateral Agent)
shall be paid promptly by the Issuers upon presentation of invoices
therefor.
5.7 Termination of Collateral.
-------------------------
(a) If (i) based upon the financial statements and the related
certificates delivered to the Purchasers pursuant to Section 9.11 each of
------------
the financial conditions set forth in paragraph (b) below have been met by
the Issuers for the most recent six consecutive quarters as applied at the
end of each quarter and (ii) Interpool receives a private rating for the
Notes on an unsecured basis of greater than PPR2 from Standard & Poor's or,
if Standard & Poor's is not in existence or is not rating Interpool, then
an equivalent or higher rating from either Moody's or Duff & Phelps and
(iii) the holders of at least 80% of Interpool's outstanding recourse
Funded Debt other than the Obligations (excluding capitalized leases)
consent in writing to the release of the collateral securing such Funded
Debt, Interpool may request that the Purchasers waive the requirement that
the Obligations be secured by the Collateral and cause the Collateral Agent
to release the Liens of the Collateral Agent created by the Transaction
Documents. Upon (A) receipt of such consent from the holders of more than
66 2/3% of the outstanding principal amount of the Notes, which consent the
Purchasers agree shall not be unreasonably withheld (it being understood
that such consent may be reasonably withheld even if the financial
conditions set forth in paragraph (b) have been met) and (B) the
satisfaction of the conditions set forth in clauses (i), (ii) and (iii) of
this paragraph (a), the Purchasers shall instruct the Collateral Agent and
the Collateral Agent shall take any and all steps necessary to terminate
the Liens created under the Transaction Documents.
(b) The financial conditions referred to in paragraph (a) above
shall be as follows:
(i) Funded Debt did not exceed 300% of Tangible Net Worth;
(ii) the sum of Fixed Charges for Interpool and its
Restricted Subsidiaries would have been covered at
least 1.75 times by the sum of Earnings Available for
Fixed Charges for Interpool and its Restricted
Subsidiaries for the sum of the four (4) fiscal
quarters preceding the date of determination; and
(iii) Tangible Net Worth exceeded $125,000,000;
(c) In the event that the Liens of the Collateral Agent shall
have been terminated in accordance with the provisions of Section 5.7(a),
--------------
then at all times thereafter unless and until the Obligations become
secured pursuant to the provisions of Section 5.7(d), neither Interpool nor
--------------
any Restricted Subsidiary will cause, incur or suffer to be incurred or to
exist any Lien on any of its or their property or assets other than:
13
<PAGE>
(i) Permitted Liens;
(ii) judgment Liens contested with execution stayed on
appeal for which adequate reserves are set aside;
(iii) Liens securing indebtedness between Interpool and the
Restricted Subsidiaries;
(iv) Liens existing on property as at the date of such
termination of Collateral after the release of
collateral referred to in Section 5.7(a)(iii) which
-------------------
Liens were not prohibited under this Agreement at such
date;
(v) Subject to the provision of Section 9.19(b), Liens
incurred subsequent to the date of such release of
Collateral on property acquired after such date
securing up to 100% of the lower of cost or fair
market value; Liens existing on property at the time
of acquisition; and Liens on the property of a corpo-
ration at the time such corporation becomes a
Restricted Subsidiary;
(vi) Subject to the provisions of Section 9.19(b), other
---------------
Liens if the amount of indebtedness secured by such
Liens when added to Funded Debt incurred subsequent to
the date of such release of Collateral which is
secured by Liens does not exceed 20% of Tangible Net
Worth; and
(vii) extensions, renewals and refundings of the Liens and
indebtedness referred to in clauses (i), (ii), (iii),
(iv), (v) and (vi) above.
(d) In the event that following the release of Collateral
pursuant to Section 5.7(a) the Issuers determine that they may be unable to
--------------
continue to meet the financial conditions referred to in Section 9.19(e),
---------------
they may notify the Purchasers that they will no longer be able to comply
with the financial conditions of Section 9.19(e) but that they will
---------------
continue to comply with the financial conditions as set forth in Section
-------
9.19(a), (b), (c) and (d) then from and after the twentieth (20th) Business
- -------------------------
Day following such notice such financial conditions as set forth in Section
-------
9.19(a), (b), (c) and (d) shall become applicable to the Issuers, provided
- ------------------------- --------
that on or prior to the twentieth (20th) Business Day following such notice
- ----
(i) the Issuers shall each grant to the Collateral Agent a first priority
perfected security interest in Collateral in accordance with the provisions
of this Agreement and the other Transaction Documents having a Collateral
Value of at least 125% of the aggregate outstanding principal amount of the
Notes pursuant to Security Agreements and a Railcars Security Agreement
executed and delivered by the Issuers to the Purchasers, the Collateral
Agent and their special counsel; (ii) the Issuers shall have executed and
delivered to the Purchasers, the Collateral Agent and their special counsel
all such legal opinions, agreements, documents, instruments, certificates,
UCC financing statements and other lien instruments and take all such
actions (including notations on certificates of title) as the Purchasers,
the Collateral Agent and their special counsel shall reasonably require in
connection therewith; (iii) no Default or Event of Default shall exist
(other than a Default which would be cured by such reinstatement of the
original provisions of Section 9.19(a), (b), (c) and (d)) and the
---------------------------------
Purchasers shall have received an Officer's Certificate of the Issuers to
the foregoing effect; and (iv) the Issuers shall be able to effect such
reversion of the financial conditions from Section 9.19(e) to the original
---------------
provisions of Section 9.19(a), (b), (c) and (d) only once during the term
---------------------------------
of this Agreement. All reasonable fees and expenses relating to the
foregoing (including the fees and expenses of special counsel to the
Purchasers and the Collateral Agent) shall be paid by the Issuers promptly
upon presentation of invoices therefor.
14
<PAGE>
(e) If (i) the Collateral Value of an Issuer is greater than
125% of the outstanding aggregate principal amount of the Notes issued or
assumed by such Issuer or, in the case of Interpool and Ltd., subject to a
designation pursuant to Sections 5.6(g), and 5.6(h), respectively, as
---------------
evidenced by a Collateral Certificate delivered to the Purchasers and the
Collateral Agent and (ii) no Default or Event of Default exists (other than
a Default which would be cured by a release of Collateral referred to
below), then an Issuer may request the Purchasers to instruct the
Collateral Agent to partially release Collateral (including Cash
Collateral) to the extent of the excess of the Collateral Value over 125%
of the aggregate principal amount of such Notes and upon receipt of such
instructions the Collateral Agent shall partially release such Collateral
from the Lien created by the relevant Security Agreement in accordance with
the provisions of Section 2(b)(ii) of such Security Agreement or the
relevant provision of the Cash Collateral Agreement; provided that after
giving effect to such partial release the Collateral Value of such Issuer
is not less than 125% of the outstanding principal amount of the Notes
issued or assumed by such Issuer or, in the case of Interpool and Ltd.,
subject to a designation pursuant to Sections 5.6(g) and 5.6(h),
--------------------------
respectively.
5.8 Sale/Leaseback Arrangements. The Issuers may from time to time
---------------------------
desire to enter into sale/leaseback arrangements with private offshore
investors (the "Investors") relating to various items of Equipment. If the
Purchasers are requested in writing by an Issuer to give their consent to
such Issuer's use of certain Equipment in such sale/leaseback arrangements,
then, so long as no Event of Default or Default shall have occurred and be
continuing or shall occur, the Purchasers shall consider, in good faith,
but shall not be obligated to consent to such arrangement; pro
vided, that such transaction will not adversely affect, diminish or impair
their rights, security interest or priority in the Equipment, the
Collateral or under the Transaction Documents. Each such Issuer and
Investor shall, at its sole cost and expense, execute and deliver any
document, agreement or instrument and take all such action reasonably
requested by the Purchasers in connection with any such transaction. All
costs and expenses of the Purchasers (including the legal fees and
disbursements of Purchasers' counsel) in connection with such proposed
transactions shall be paid by the Issuers.
SECTION 6. RECEIPT, DISTRIBUTION AND APPLICATION
OF INCOME FROM THE COLLATERAL.
-------------------------------------
6.1 Collateral. The payment and performance of the Obligations
----------
shall be secured by the Collateral. Notwithstanding any other provision
hereof or any provision of any other Transaction Document to the contrary,
no Collateral of Ltd. or Corp. shall secure the Obligations of Interpool,
and no Collateral of Corp. shall secure the Obligations of Ltd.
6.2 Payment of Moneys Received With Respect to the Collateral. Each
---------------------------------------------------------
of the Issuers hereby irrevocably covenants and agrees to cause all amounts
payable or realized in respect of the Collateral to be paid to the
Collateral Agent on behalf of the Purchasers if and to the extent required
by any of the Transaction Documents. Pursuant to Section 12 of the Agency
Agreement, the Collateral Agent, on behalf of the Purchasers, shall pay to
the Purchasers all such amounts. Except as otherwise provided in this
Agreement or the other Transaction Documents, if an Event of Default shall
have occurred and be continuing moneys received by the Purchasers pursuant
to this Section 6.2, shall be applied, first, to the payment of accrued
----------- -----
interest (including any default interest) on the Notes on a pro rata basis
--- ----
to the due date of such payments and any Make Whole Premium, and second, to
------
the payment of the principal amount of the Notes pro rata based upon the
--- ----
outstanding principal amounts thereof and third, to the other Obligations
-----
in such order as the Purchasers shall determine. Prior to the occurrence
of an Event of Default the Issuers may continue to collect and receive such
monies. All payments with respect to the Notes pursuant to this Section
-------
6.2 shall be applied to such Notes on a pro rata basis in inverse order of
- --- --- ----
the scheduled principal payments thereof.
15
<PAGE>
SECTION 7. REPRESENTATIONS AND WARRANTIES OF ISSUERS.
-----------------------------------------
Each of the Issuers hereby represents and warrants to the Purchasers
as follows:
7.1 Organization and Power. Each of the Issuers (a) (i) is a
----------------------
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and qualified to do business as a
foreign corporation in the jurisdictions set forth in Schedule 7.1 attached
------------
hereto for each Issuer, (ii) is not required to be qualified as a foreign
corporation in any jurisdiction where the failure to so qualify would have
a material adverse effect on such Issuer, its business operations or its
property and (iii) has its chief executive office and chief place of
business at the respective Chief Office set forth on Schedule 7.1 attached
------------
hereto; and (b) has all requisite corporate power and authority and all
necessary licenses and permits to enter into and perform this Agreement and
the other Transaction Documents to which such Issuer is a party and to
issue and deliver its Notes. This Agreement, the Notes and the other
Transaction Documents to which such Issuer is a party have been duly
authorized, executed and delivered by such Issuer and, assuming the due
authorization, execution and delivery thereof by the other parties thereto,
such documents constitute the legal, valid and binding obligations of such
Issuer, enforceable against such Issuer in accordance with their respective
terms.
7.2 Trademarks, Licenses, etc. Each of the Issuers possesses, in
--------------------------
full force and effect, all necessary franchises, patents, licenses,
trademarks, trademark rights, trade names, trade name rights, fictitious
name authorizations or certificates and copyrights material to the conduct
of its business as now being conducted, without any conflict, to its
knowledge, with the franchises, patents, licenses, trademarks, trademark
rights, trade name, trade name rights, fictitious name authorizations or
certificates and copyrights of others.
7.3 Subsidiaries. Each of the Issuers has no Subsidiaries, other
------------
than those set forth in Schedule 7.1 attached hereto.
------------
7.4 Business. Each of the Issuers is engaged principally in the
--------
businesses of leasing, financing or managing containers, chassis, railcars,
trailers or other transportation equipment and business related to the
foregoing. In addition, a Subsidiary of one of the Issuers is engaged in
the business of leasing micro computers and related accessories and
businesses related to the foregoing.
7.5 Financial Statements. Interpool has furnished to the Purchasers
--------------------
balance sheets of Interpool and its consolidated subsidiaries as of
December 31, 1993 and December 31, 1994, and the related statements of
income, statements of cash flows and statements of the stockholders'
equity, for the years ended December 31, 1992, December 31, 1993 and
December 31, 1994, respectively, all of which were audited by Arthur
Andersen LLP, and has furnished to the Purchasers unaudited balance sheets
of Interpool and its consolidated subsidiaries and the related statements
of income, statements of cash flows and statements of the stockholders'
equity for the quarter ended September 30, 1995. All such financial
statements present fairly, in all material respects, the financial
position, stockholders' equity, results of operations and cash flows of the
entities covered thereby for the periods involved. Since the date of the
most recent financial statements, there has been no material and adverse
change in the financial position of any Issuer not reflected in the most
recent financial statements as of that date, and, since such date, the
business of each Issuer has not been materially and adversely affected by
any occurrence, whether or not insured against. Except as otherwise
disclosed on Schedule 7.5 attached hereto, the Issuers have issued no other
------------
indebtedness for borrowed money which is still outstanding on the date
hereof, except indebtedness which is reflected in the most recent financial
statements referred to above or restructuring or refinancing thereof.
16
<PAGE>
7.6 Taxes. All tax returns of the Issuers which are due have been
-----
duly filed and are correct in all material respects, and all Taxes and
other governmental charges upon the Issuers which are shown to be due and
payable thereon have been paid.
7.7 Litigation. There are no outstanding judgments against any
----------
Issuer or any actions, proceedings, claims or investigations pending or, to
any Issuer's knowledge, threatened before any court or governmental body
which, if adversely determined, would materially and adversely affect the
business, properties, prospects, operations or affairs of any Issuer or
impair any Issuer's ability to perform its Obligations under this Agreement
and the other Transaction Documents.
7.8 Title, Liens. Each of the Issuers owns and has good and
------------
marketable title to all of the Collateral included in the Collateral Value
relating to such Issuer, and there are no Liens on the Collateral of any
Issuer other than those Liens created pursuant to this Agreement and the
other Transaction Documents and except for Permitted Liens. The Liens
granted in the Security Agreements and the Railcars Security Agreements
constitute valid first priority perfected Liens on the Collateral subject
to no other mortgage, Lien or security interest. The laws of Barbados and
the Cayman Islands do not, as to Ltd. and Corp., respectively, necessitate,
require or, other than the Cayman Islands' provision for registration of
details of the Collateral in Corp.'s internal register of charges, provide
for the recording, registration or filing of any mortgage or Lien in any of
the Equipment, Leases or any other types or items of property or proceeds
thereof which are included in the Collateral covered by or provided for in
the Transaction Documents executed and delivered by each of Ltd. and Corp.
7.9 Consent, Approval. No consent or approval of any Person,
-----------------
shareholder, landlord or mortgagee, no waiver of any Lien or right of
distraint or other similar right, and no consent, license, approval or
authorization of or registration, qualification, designation, declaration
or filing (except any recordations required in connection with the
perfection of the Liens granted in the Security Agreements and any required
filings or notices under applicable securities laws, rules or regulations
or the rules of the New York Stock Exchange) with or payment of any
withholding or other tax to any governmental authority by or on the part of
the Issuers is required in connection with the execution, delivery and
performance of this Agreement or any other Transaction Document, the
issuance and sale or payment of the Notes or the consummation of any other
transactions contemplated hereby or thereby.
7.10 Compliance with Other Instruments. None of the Issuers is a
---------------------------------
party to any contract, commitment or agreement or subject to any re-
striction or to any order, rule, regulation, writ, injunction or decree of
any court or governmental authority or to any statute which materially and
adversely affects its business, property, prospects, operations, assets or
financial condition as now conducted or as proposed to be conducted.
Neither the execution, delivery or performance by any Issuer of this
Agreement, the Notes or the other Transaction Documents to be delivered by
such Issuer nor compliance herewith or therewith (a) conflicts with or
results in a breach of (i) any law, statute, rule or regulation in effect
as of the date of delivery of this Agreement, (ii) any order, writ, injunc-
tion or decree of any court or other governmental authority, or (b) results
or will result in the creation or imposition of any Lien, charge or
encumbrance upon its property pursuant to such agreement or instrument,
except for Liens created hereunder and Permitted Liens. Neither the
execution, delivery or performance by any Issuer of this Agreement, the
Notes or the other Transaction Documents nor compliance by any Issuer
herewith or therewith conflicts or will conflict with the certificate of
incorporation, by-laws or other organizational document of any Issuer or
results or will result in a breach of or constitutes or will constitute a
default under any agreement or instrument to which any Issuer is a party or
by which it is bound.
17
<PAGE>
7.11 Corporate Existence; Place of Business; Books and Records.
---------------------------------------------------------
Except as disclosed in Schedule 7.1 attached hereto, none of the Issuers
------------
has at any time within the last five (5) years, (i) changed its name;
(ii) used any fictitious name, (iii) been the surviving corporation of a
merger or consolidation, or (iv) acquired all or substantially all of the
assets of any Person. The Chief Offices, all other offices of the Issuers
and the only places of business of each of the Issuers where commercial
affairs are conducted and books and records are maintained are set forth on
Schedule 7.1 attached hereto. None of the Issuers is in violation of any
- ------------
charter instrument or by-law, and none of the Issuers is in violation in
any material respect of any term in any agreement or other instrument to
which it is a party or by which it or any of its property may be bound
which violation could have a material adverse effect on any Issuer or its
business, assets, operations, leaseholds and equipment.
7.12 ERISA.
-----
(a) No Reportable Event has occurred with respect to any Plan
maintained for employees of (i) any Issuer or (ii) any member of a
Controlled Group of which any Issuer is a part.
(b) None of the Issuers is entering into the Transaction
Documents or any other transaction contemplated hereby, directly or
indirectly, in connection with any arrangement in any way involving any
employee benefit plan or fund or trust which holds assets of any employee
benefit plan with respect to which it in its individual capacity is a
party-in-interest, all within the meaning of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") and the Internal Revenue Code of
-----
1986, as amended (the "Code").
----
7.13 Capital Stock. All of the issued and outstanding capital stock
-------------
of Ltd. and Corp. is owned and registered as set forth in Schedule 7.1
------------
attached hereto.
7.14 Governmental Licenses. Each of the Issuers has been issued all
---------------------
required federal, state, local and foreign licenses, certificates or
permits relating to, and each of the Issuers and its facilities, business,
assets, property, prospects, operations, leaseholds and equipment are in
compliance in all respects with, all applicable federal, state, local and
foreign laws, rules and regulations relating to air emissions, water
discharge, noise emissions, solid or liquid disposal, hazardous waste or
materials, or other environmental health or safety matters, where the
failure to so comply could have a material adverse effect on any Issuer or
its business, assets, operations, leaseholds and equipment.
7.15 Event of Default. No Event of Default or Default has occurred
----------------
and is continuing.
7.16 Offering of the Notes. Neither the Issuers nor anyone acting on
---------------------
their behalf has offered, directly or indirectly, the Notes or any part
thereof or any similar security for sale to, solicited offers to buy any
thereof from or otherwise approached or negotiated with anyone other than
the Purchasers and the institutional investors listed in the letter of the
Placement Agent delivered pursuant to Section 4.14. In connection with the
------------
sale of the Notes hereunder, none of the Issuers has engaged in general
solicitation or advertising. Neither the Issuers nor anyone on their
behalf will sell or offer the Notes or any part thereof or any similar
security for sale to, solicit any offers to buy any thereof from or
otherwise approach or negotiate in respect thereof with any other Person or
Persons so as thereby to require registration of the Notes under Section 5
of the Securities Act.
7.17 Margin Securities.
-----------------
(a) None of the Issuers will, directly or indirectly, apply any
part of the proceeds of the Notes for the purpose (whether immediate,
incidental or ultimate) of purchasing or carrying any
18
<PAGE>
"margin stock" as defined in Regulation G of the Federal Reserve Board (12
C.F.R. 207) or any security issued by any investment company registered
pursuant to Section 8 of the Investment Company Act of 1940 or for the
purpose of repaying any indebtedness originally incurred for such purpose.
(b) None of the Issuers is, in any way, engaged in the business
of extending credit for the purpose of purchasing or carrying Margin Stock;
nor has any Issuer secured the payment of the Notes by an assignment of any
stock (as such term is defined in Regulation U) or by any arrangement under
which any Issuer's right or ability to sell, pledge or otherwise dispose of
stock owned by it is in any way restricted or under which the exercise of
such right, whether by written agreement or otherwise, is or may be cause
for acceleration of the Notes.
7.18 Use of Proceeds. None of the Issuers is, directly or in-
---------------
directly, applying any part of the proceeds of the Notes for any purpose
other than for the purposes described in Section 2.2.
-----------
7.19 Liabilities; Business. None of the Issuers has any liabilities
---------------------
or obligations which are material to its business, property, prospects,
operations, assets or financial condition as now conducted or as proposed
to be conducted which are prohibited by this Agreement and by the other
Transaction Documents to which it is a party. None of the Issuers' assets
are less than its liabilities, both determined in accordance with GAAP, and
each of the Issuers is solvent.
7.20 Regulated Company. Neither any Issuer nor any of its
-----------------
Subsidiaries is (i) an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of
1940, as amended, (ii) a "holding company" or a "Subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a
"Subsidiary company" of a "holding company," within the meaning of the
Public Utility Holding Company Act of 1935, as amended, or (iii) subject to
any other law which purports to regulate or restrict its ability to borrow
money or to consummate the transactions contemplated by this Agreement or
the other Transaction Documents or to perform its obligations hereunder or
thereunder other than usuary laws or other statutes generally applicable to
borrowers.
7.21 Disclosure. The Issuers have delivered to the Purchasers the
----------
Private Placement Memorandum. Neither this Agreement nor any other
Transaction Document nor the Private Placement Memorandum nor any other
document, certificate or instrument delivered to the Purchasers by or on
behalf of any Issuer in connection with the transactions contemplated by
this Agreement contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
in this Agreement, any other Transaction Document and in such other
documents, certificates or instruments not misleading. There is no fact
known to any Issuer which materially and adversely affects or in the future
may (so far as any Issuer can now reasonably foresee) materially and
adversely affect the business, prospects, operations, affairs, condition
(financial or otherwise), properties or assets of any Issuer which has not
been set forth in the financial statements or in this Agreement, any other
Transaction Document or the other documents, certificates and instruments
delivered to the Purchasers by or on behalf of any Issuer specifically for
use in connection with the transactions contemplated by this Agreement.
7.22 Foreign Assets Control Regulations. Neither the issuance and
----------------------------------
sale by any Issuer of the Notes under this Agreement nor its use of the
proceeds thereof will violate the Foreign Assets Control Regulations, the
Foreign Funds Control Regulations, the Transaction Control Regulations, the
Cuban Assets Control Regulations, or the Iranian Assets Control Regulations
of the Office of Foreign Assets Control, United States Department of the
Treasury (31 C.F.R., Chapter V, Subpart B, as amended) or any other order,
regulation or ruling thereunder or pursuant thereto.
19
<PAGE>
7.23 Leases. The Leases which are in effect on the date of this
------
Agreement each constitute legal, valid and binding obligations of such
relevant Issuer and, to the best of the Issuers' knowledge, each of the
respective lessees thereunder, enforceable in accordance with their
respective terms.
7.24 Financed Equipment. As of the date hereof no Person has a Lien
------------------
on any Financed Equipment which represents a replacement or a substitution
of equipment.
7.25 Insurance. Each of the Issuers is, as of the date of this
---------
Agreement, in compliance with the provisions of Section 9.6.
-----------
SECTION 8. REPRESENTATIONS AND WARRANTIES OF PURCHASERS.
--------------------------------------------
8.1 Purchase for Investment. Each Purchaser represents and warrants
-----------------------
it is purchasing the Notes being purchased by it for its own account, and
that each such Note is being purchased for the purpose of investment and
not with a view to the distribution thereof, subject, nevertheless, to any
requirement of law that the disposition of its property shall be at all
times within such Purchaser's control. Such Purchaser will not, in any
event, make any sale or other disposition of such Notes except in
accordance with the Securities Act and the rules and regulations of the
Securities and Exchange Commission thereunder, or pursuant to an exemption
under such Securities Act and rules and regulations and of the terms of
this Agreement. Each Purchaser represents and warrants it is an
institutional "insurance company" as defined in Section 2(13) of the
Securities Act.
8.2 Taxpayer Status. Each Purchaser represents and warrants that it
---------------
is a United States person within the meaning of Section 7701(a)(30) of the
Code.
8.3 Purchasers' ERISA Representation. Each Purchaser represents and
--------------------------------
warrants that, with respect to each source of funds to be used by it to
purchase the Notes (respectively, the "Source"), at least one of the
following statements is accurate as of the Closing Date:
(i) the Source is an "insurance company general
account," as such term is defined in section V(e) of Prohibited
Transaction Class Exemption 95-60 (issued July 12, 1995) (PTCE 95-60),
and the purchase is exempt under the provisions of Prohibited
Transaction Exemption ("PTE") 95-60.
(ii) the Source is a "governmental plan" as defined in
Title I, Section 3(32) of ERISA;
(iii) the Source is either (i) an insurance company
pooled separate account, and the purchase is exempt in accordance with
PTE 90-1 (issued January 29, 1990), or (ii) a bank collective
investment fund, in which case the purchase is exempt in accordance
with PTE 91-38 (issued July 12, 1991);
(iv) the Source is an "investment fund" managed by a
"qualified professional asset manager" or "QPAM" (as defined in Part V
of PTE 84-14, issued March 13, 1984) which QPAM has been identified in
writing, and the purchase is exempt under PTE 84-14 provided that no
other party to the transactions described in this Agreement and no
"affiliate" of such other party (as defined in Section V(c) of PTE 84-
14) has at this time, and has not exercised at any time during the
immediately preceding year, the authority to appoint or terminate said
QPAM as manager of the assets of any "plan" identified in writing
pursuant to this paragraph (iv)
20
<PAGE>
or to negotiate the terms of said QPAM's management agreement on
behalf of any such identified "plans"; or
(v) the Source is one or more "plans," or a separate
account or trust fund comprised of one or more "plans," each of which
has been identified in writing pursuant to this paragraph (v).
As used in this section, "plan" or "plans" shall have the
meanings set forth in Title I, Section 3(3) of ERISA and Section 4975(e)(1)
of the Code.
SECTION 9. COVENANTS OF ISSUERS. Each of the Issuers hereby
--------------------
covenants and agrees that from the date of this Agreement and so long as
any Obligations or other amounts under the Notes and hereunder are
outstanding, such Issuers will comply with the following covenants:
9.1 Maintenance of Corporate Existence. Each of the Issuers shall
----------------------------------
preserve and keep in full force and effect its corporate existence and all
franchises, rights and privileges necessary to the proper conduct of its
business, including, without limitation, all necessary franchises, patents,
licenses, trademarks, trademark rights, trade names, trade name rights,
fictitious name authorizations or certificates and copyrights, without any
unlawful conflict with franchises, patents, licenses, trademarks, trademark
rights, trade names, trade name rights, fictitious name authorizations or
certificates and copyrights of others which conflict may materially and
adversely affect such Issuer or interfere with the conduct of such Issuer's
business or may result in an action brought against such Issuer for such
violation which action may materially and adversely affect such Issuer or
interfere with the conduct of such Issuer's business.
9.2 Amendments. Each of the Issuers shall (a) promptly deliver to
----------
the Purchasers and the Collateral Agent copies of any amendments or
modifications to its certificate of incorporation, bylaws and
organizational documents and/or other documents of formation, as the case
may be, certified, with respect to the certificate of incorporation, by the
Secretary of State of the jurisdiction of incorporation, or by the
appropriate official of its jurisdiction of formation, as the case may be,
and, with respect to the bylaws, by the secretary of such Issuer and (b) on
a quarterly basis deliver to the Purchasers and the Collateral Agent a
certificate of the incumbency of its officers.
9.3 Compliance. Each of the Issuers shall comply with all laws,
----------
ordinances, rules and regulations of any foreign, federal, state or local
government, or any instrumentality or agency thereof, applicable to it,
including, without limitation, the Fair Labor Standards Act, now or
hereafter in effect, and all international laws, ordinances, rules and
regulations, the failure to comply with which may have a materially adverse
effect on any Issuer or on its ability to perform its Obligations under any
of the Transaction Documents, any material agreement, document or
instrument to which it is a party, or on the Collateral or on the
Purchasers or the Collateral Agent in enforcing their rights hereunder
against any Issuer or the Collateral.
9.4 Taxes. Each of the Issuers shall pay and discharge, as they
-----
become due, all Taxes, assessments, debts, claims and other governmental or
non-governmental charges lawfully imposed upon it or incurred by it or its
properties and assets, except Taxes, assessments, debts, claims and charges
contested in good faith in appropriate proceedings and for which any Issuer
shall have set aside adequate reserves for the payment of such Tax,
assessment, debts, claims or charges. Such Issuer shall provide the
Collateral Agent, upon the Collateral Agent's request, evidence of payment
of such Taxes, assessments, debts, claims and charges. If such Issuer
fails to pay such Taxes, assessments, debts, claims or charges when due,
and is not contesting the same in good faith or has not set aside adequate
reserves for the payment thereof, the Collateral Agent may discharge the
same, and any amounts so advanced by the
21
<PAGE>
Collateral Agent for such purposes shall be added to the Obligations of
such Issuer secured by the Collateral and shall bear interest at the
overdue rate set forth in such Notes relating to such Taxes, assessments,
debts, claims or charges.
9.5 Preservation of Assets. Each of the Issuers shall maintain,
----------------------
preserve and keep or cause to be maintained, preserved and kept, all its
properties, Equipment and assets, including the Collateral, in accordance
with industry standards, and make, or cause to be made, all necessary or
appropriate repairs, renewals, replacements, substitutions, additions,
betterments and improvements thereto so that efficiency of all such
property and assets shall at all times be properly preserved and maintained
in accordance with industry standards.
9.6 Insurance. Each of the Issuers shall maintain, with financially
---------
sound and reputable insurance companies, such insurance on its properties,
businesses and assets, including, without limitation, the Collateral,
against casualty, general liability, worker's compensation and such other
insurable interests and in such amounts as is consistent with practices
generally followed in the container industry for companies of comparable
size and shall pay all premiums thereon when due. The all risk insurance
policies with respect to the Collateral shall initially cover $3,500,000 in
physical damage in respect of any one occurrence, shall name the Collateral
Agent for the benefit of the Purchasers and the Purchasers as additional
insureds and loss payees, and the liability insurance policies with respect
to the Collateral shall initially cover $50,000,000 in any one occurrence
and in the aggregate and shall name the Collateral Agent and the
Purchasers, as additional insureds. All such policies of insurance shall
provide for at least thirty (30) days' advance notice in writing to the
Collateral Agent of any cancellation or modification thereof and, with
respect to all risk casualty insurance only, contain a "breach of warranty
clause" whereby the insurer agrees that a breach of the insuring conditions
or any negligence by any Issuer, or any other Person, shall not invalidate
the insurance as to the Collateral Agent, the Purchasers and their
respective successors and assigns. If any Issuer fails to pay the premiums
on any such insurance or maintain such insurance in effect, the Collateral
Agent shall have the right (but shall be under no duty) to pay such
premiums for such Issuer's account and take all such action (at such
Issuer's expense) as the Collateral Agent deems necessary to keep such
insurance in effect. Such Issuer shall repay to the Collateral Agent any
sums which the Collateral Agent shall have so paid, together with interest
thereon at the rate then payable by such Issuer under the Notes. Such
Issuer, upon the Collateral Agent's request, shall (a) deliver to the
Collateral Agent a detailed list of insurance then in effect, stating the
names of the insurance companies, the amounts and rates of the insurance,
dates of expiration thereof and the properties and risks covered thereby;
(b) obtain, within thirty (30) days after notice from the Collateral Agent,
such additional insurance as described in this Section 9.6 which is
-----------
reasonably required by the Collateral Agent and which is consistent with
practices generally followed in the container industry for companies of
comparable size; (c) provide to the Collateral Agent and Purchasers copies
of all insurance policies relating to its properties, business and assets;
and (d) assign to the Collateral Agent all rights to receive proceeds of
any such insurance with respect to the Collateral and direct all insurers
to pay all proceeds directly to the Collateral Agent. Each of the Issuers
hereby authorizes the Collateral Agent to endorse any draft for such
proceeds. Notwithstanding anything contained herein, each of the Issuers
shall have the option to (i) use all said proceeds received by the
Collateral Agent with respect to the Collateral to pay down the outstanding
amount of its Notes on a pro rata basis in inverse order of the scheduled
--- ----
principal payments thereof without priority of any one such Note over any
other such Note together with any Make Whole Premium pursuant to Section
-------
5.5, or (ii) receive said proceeds from the Collateral Agent; provided,
- --- --------
that (a) no Default or Event of Default shall have occurred and be
- ----
continuing and (b) such Issuer shall provide the Purchasers with substitute
Collateral if it is necessary to ensure that the Collateral Value of such
Issuer is greater than 125% of the aggregate outstanding principal amount
of the Notes issued by such Issuer which Collateral may be purchased with
the proceeds of such insurance,
22
<PAGE>
provided said substitute Collateral shall be the subject of a valid first
perfected Lien in favor of the Collateral Agent for the benefit of the
Purchasers subject to no other Liens.
9.7 Liens. None of the Issuers shall, directly or indirectly, (a)
-----
permit to exist any Liens with respect to the Collateral other than Liens
in favor of the Purchasers or the Collateral Agent or Permitted Liens; nor
(b) pledge any shares owned by it in Restricted Subsidiaries. The relevant
Issuer shall ensure that appropriate notations of the Liens of the
Collateral Agent are made on the relevant certificates of title for Chassis
and Trailers which are included in the Collateral and which are covered by
certificates of title and that UCC financing statements, naming the
relevant Issuer, as debtor and the Collateral Agent, as secured party, are
filed for Chassis and Trailers which are included in the Collateral and
which are not covered by certificates of title, for Containers, for Leases
and for Direct Finance Leases, and that Leases and Direct Finance Leases
have been stamped pursuant to Section 9.29(b), in each case with respect to
---------------
Chassis, Containers, Trailers, Leases and Direct Finance Leases which are
included in the Collateral after the Closing Date.
9.8 Litigation. The Issuers shall promptly notify all of the
----------
Purchasers and, with respect to the Collateral, the Collateral Agent (a) of
any litigation, actions, proceedings, claims or investigations
(collectively, "Claims") pending or threatened, in which a recovery of in
------
excess of $2,000,000 is sought against any Issuer or of the entry of any
judgment in excess of $2,000,000 against any Issuer, which Claims or
judgments are not fully covered by insurance (subject to deductibles) in
respect of which the carrier has not disclaimed liability or (b) of any of
the Collateral becoming subject to any Liens securing or relating to Claims
or judgments in excess of $500,000, other than Liens in favor of the
Purchasers or the Collateral Agent.
9.9 Line of Business. None of the Issuers shall materially change
----------------
its present lines of business as described in Section 7.4 nor will
-----------
Interpool permit any Restricted Subsidiary to engage in any business other
than such present lines of business or any other business related thereto.
9.10 Chief Offices; Places of Business; Character of Collateral. The
----------------------------------------------------------
Issuers shall notify the Collateral Agent in writing at least thirty (30)
days in advance of (a) any change of location of its Chief Office and
(b) the change, elimination or opening of any chief executive office of any
Issuer or (c) any change in the place where such Issuer maintains its
records as to the Collateral such that such records are not located at such
Issuer's Chief Office. Each Issuer shall notify the Collateral Agent in
writing promptly following a change in the character, use or location of
any of the Financed Equipment such that any of such Financed Equipment
ceases to be either "mobile goods" or "goods covered by a certificate of
title", in each case within the meaning of the UCC. Each Issuer shall
notify the Collateral Agent in writing within five (5) days if there is a
change in the character of any of the Collateral such that it constitutes
an "instrument" (other than an "instrument" which constitutes part of
"chattel paper") within the meaning of the UCC.
9.11 Financial Statements. The Issuers shall deliver to the
--------------------
Purchasers the following:
(a) Within forty-five (45) days after the end of each quarterly
fiscal period of Interpool (commencing with December 31, 1995 and
continuing until all of the Obligations under this Agreement and the other
Transaction Documents are satisfied), company prepared unaudited
consolidated financial statements for Interpool and its consolidated
subsidiaries in comparative form showing the corresponding figures for the
preceding year prepared in accordance with GAAP, along with a certificate
by an authorized officer of Interpool which shall include an attestation by
such officer briefly stating he has reviewed such unaudited consolidated
financial statements and that he has reviewed the relevant provisions of
this Agreement including Section 9 together with supporting computations
and stating
23
<PAGE>
whether his examination has disclosed the existence of any Default or Event
of Default and, if so, specifying the nature and period of existence
thereof and actions management proposes to undertake to cure the same.
(b) Within ninety (90) days after the end of each fiscal year
of Interpool, a consolidated balance sheet of Interpool and its
consolidated subsidiaries as of the end of such year and the related
consolidated statements of income, statements of cash flows and statements
of shareholders' equity for such year audited, without qualification, by
Arthur Andersen LLP. or another independent "Big Six" certified public
accounting firm, showing in comparative form the corresponding figures as
at the end of and for the preceding financial year. In addition, such
accountants shall issue a statement in connection with their audit as to
whether anything has come to their attention that would cause them to
believe that the Issuers were not in compliance with any of the terms,
covenants or conditions of Sections 9.19 or 9.25 of this Agreement it being
---------------------
understood that their audit was not directed primarily to obtaining
knowledge of such non-compliance and if any such non-compliance is
indicated, specifying the nature and period of existence thereof, together
with a certificate of an authorized officer with respect to such financial
statements covering the same matters referred to in the first three
quarters' attestations delivered pursuant to Section 9.11(a) and actions
---------------
management proposes to undertake to cure the same.
(c) (i) Within sixty (60) days after the end of each calendar
quarter until all of the Obligations outstanding are satisfied, a
Collateral Certificate showing excess or shortfall of Collateral Value to
125% of the unpaid principal amounts outstanding on the Notes, an equipment
status report sent to the Collateral Agent for Collateral (indicating the
Collateral located at depots or under lease) and an aging of all accounts
receivable (including lease receivables covering the Equipment and other
equipment) of Interpool and its consolidated subsidiaries, as at the end of
such calendar quarter, in form and substance reasonably satisfactory to the
Purchasers.
(ii) Within sixty (60) days after the end of each quarterly
fiscal period of Interpool (commencing with December 31, 1995 and
continuing until all of the Obligations under this Agreement and the other
Transaction Documents are satisfied), an Equipment utilization report
(showing the percentage of Equipment under lease) with respect to Equipment
owned and managed by Interpool and its consolidated subsidiaries.
(d) Copies of all formal, written notices or reports, if any,
furnished to an Issuer by its independent certified public accountants in
connection with each fiscal year audit of the financial statements of such
Issuer made by such accountants.
(e) Such additional financial information with respect to the
Issuers and information with respect to the Collateral as the Purchasers
may from time to time reasonably require.
(f) Promptly after the filing thereof, copies of all financial
statements and reports (including all exhibits or schedules annexed thereto
or filed therewith) which are material to any Issuer and which such Issuer
may file with the Securities and Exchange Commission of the United States
or any public body succeeding to the functions of that Commission and which
are generally available to the public.
(g) Upon the addition of any Direct Finance Leases to the
Collateral pursuant to Section 5.6 or any other provision of this Agreement
or the other Transaction Documents, the related Issuer shall furnish to the
Purchasers and the Collateral Agent a certificate of such Issuer (in the
form of Exhibit I attached hereto).
---------
24
<PAGE>
9.12 Books and Records. Each of the Issuers shall, at all times and
-----------------
in accordance with GAAP keep complete and accurate books and records
concerning its business, affairs and operations and concerning its
properties and assets, including, without limitation, the Collateral, and
shall deliver, or cause to be delivered to the Collateral Agent promptly
upon the Collateral Agent's request, from time to time, with respect to the
Collateral (i) after an Event of Default occurs, to the extent in its
possession, all instruments and chattel paper (including all executed
copies thereof, representing or evidencing the Collateral or proceeds of
the Collateral subject to the Collateral Agent's compliance with the last
sentence of Section 9.29(a); (ii) after an Event of Default occurs, to the
extent in its possession or control, all original invoices, original bills
of lading, documents of title, all Leases covering Financed Equipment
included in the Collateral, original contracts, chattel paper, instruments,
and any other writings relating to the Collateral; and (iii) such other
information to the extent in its possession or control with respect to any
of the Collateral as the Collateral Agent may, in its sole discretion, deem
to be necessary or effectual to evidence the transactions contemplated
hereby or to evidence, enforce or perfect the Collateral Agent's Lien in
the Collateral, or to carry into effect the provisions and intent of this
Agreement or other Transaction Documents delivered pursuant hereto, all at
the sole expense of the Issuers.
9.13 Inspection. The Issuers shall, from time to time and during
----------
normal business hours, on reasonable notice, permit the Purchasers or the
Collateral Agent to inspect or examine the properties and assets of the
Issuers, including, without limitation, the Collateral, to the extent the
Collateral is in the possession or control of the Issuers or could be so
inspected or examined under the terms of applicable Leases with respect
thereto, and further to examine, check, make copies of, or extracts from,
any of the Issuers' books, records, journals, receipts, orders, correspon-
dence, other data, or orders and accounts receivable of the Issuers and to
permit the Purchasers and the Collateral Agent to hold discussions with the
Issuers' officers and auditors and the Issuers shall instruct such officers
and request such auditors to hold such discussions. If a Default or Event
of Default has occurred and is continuing (a) all of the foregoing shall be
at the Issuers' expense, (b) the Purchasers or the Collateral Agent may
independently verify the orders and accounts receivable of the Issuers at
the Issuers' expense, and (c) the Purchasers shall have the right to audit
(or cause to be audited by certified public accountants) all of the
foregoing items of the Issuers at the Issuers' expense.
9.14 ERISA. Each of the Issuers shall furnish to the Purchasers and,
-----
with respect to the Collateral, the Collateral Agent (a) as soon as
possible and in any event within thirty (30) days after such Issuer or a
duly appointed administrator of a Plan knows or has reason to believe that
any Reportable Event has occurred with respect to any Plan, a statement of
the principal financial officer of such Issuer setting forth details as to
such Reportable Event and the action which such Issuer proposes to take
with respect thereto, together with a copy of the notice of such Reportable
Event given to the PBGC or a statement that said notice will be filed with
the annual report to the United States Department of Labor with respect to
such Plan if required under applicable regulations; (b) promptly after
receipt thereof, a copy of any notice an Issuer or any other member of a
Controlled Group may receive from the United States Department of Labor,
the Internal Revenue Service or the PBGC with respect to any deficiency
with respect to any Plan; (c) in the event any stock of any Issuer is ever
offered pursuant to a registration statement filed with the Securities and
Exchange Commission, promptly after the sending of, making available or
filing of the same, copies of any proxy statements and financial statements
which such Issuer shall send or make available to all of its stockholders,
and any registration statements and any reports which such Issuer shall
file with the Securities and Exchange Commission; and (d) promptly after
receipt thereof, a copy of any notice an Issuer may receive indicating an
actual or potential violation of any environmental law or regulation.
9.15 Use of Proceeds. The Issuers shall use the proceeds of the
---------------
Notes solely in accordance with the provisions of Section 2.2.
-----------
25
<PAGE>
9.16 Further Assurances. The Issuers shall procure, execute and
------------------
deliver to the Collateral Agent any security agreement, financing
statement, or other writing and take all such other actions as the
Collateral Agent may reasonably require to evidence, preserve, protect or
enforce the Collateral Agent's rights and interests to or in the
Collateral.
9.17 Government Contracts. No Financed Equipment covered by
--------------------
contracts with the United States or any other governmental entity or any of
their respective departments, agencies or instrumentalities shall be deemed
to constitute Collateral unless and until (a) the Issuers shall have
notified the Collateral Agent and executed any writings and taken all such
other actions as the Collateral Agent may require in order that all money
due or to become due under such contracts shall be assigned to the
Collateral Agent and (b) proper notice of the assignment has been given
under and all other actions have been taken which are required under the
Federal Assignment of Claims Act or other applicable law to the reasonable
satisfaction of the Purchasers.
9.18 Sell, Merge, Consolidate, etc. None of the Issuers shall:
------------------------------
(a) Sell, abandon, or otherwise dispose of all or any
substantial part (which shall be deemed to constitute an amount in excess
of 20% of the consolidated assets of Interpool and its Restricted
Subsidiaries), of its properties or assets in any 12 month period unless
(i) it either (A) reinvests the proceeds from such transactions in excess
of 20% of such consolidated assets in its principal businesses as described
in Section 7.4 or other investments permitted hereunder provided that such
-----------
investments are fully liquidated and the proceeds thereof are invested in
such principal businesses within twelve (12) months from the date of such
transaction, and/or (B) prepays the Notes on a pro rata basis in inverse
--------
order of the scheduled principal payments thereof without priority of any
one such Note over any other such Note in the amount of such excess of 20%
of such consolidated assets, together with a Make Whole Premium, if any, or
(ii) such transaction occurs entirely among the Issuers and the Restricted
Subsidiaries.
(b) Consolidate with or merge into any Person or permit any
merger of any other Person into any Issuer or acquire all or substantially
all the assets of any Person, unless such Issuer is the surviving
corporation (and if one of the Issuers involved in such transaction is
Interpool, Interpool is the surviving corporation) or the survivor
expressly assumes the Obligations of such Issuer and following and giving
effect to such merger, consolidation or acquisition, no Default or Event of
Default exists or shall result under any Transaction Document, the
Collateral Agent continues to have a first perfected security interest in
the Collateral under the UCC, reflected on the certificates of title or
through a filing with the Interstate Commerce Commission, as applicable to
the relevant Collateral subject to no other Liens, other than Permitted
Liens and the Issuers, including the surviving corporation, may issue at
least $1.00 of additional Funded Debt without any Default or Event of
Default resulting hereunder.
(c) Alter the existing capital stock structure of any Issuer or
take any other action such that (i) Interpool owns less than 75% of the
common stock of Ltd. or 75% of the common stock of Trac Lease, Inc.,
(ii) Interpool holds less than 75% of the voting rights in Ltd. or 75% of
the voting rights in Trac Lease, Inc., (iii) Interpool owns directly or
indirectly less than 75% of the common stock of Corp. or (iv) Interpool
holds directly or indirectly, less than 75% of the voting rights in Corp.
(d) Sell, assign, transfer, discount, securitize or otherwise
dispose of any Lease, or any interest therein, with or without recourse,
except in the ordinary course of its business as presently conducted.
26
<PAGE>
9.19 Financial Covenants. So long as the Obligations remain
-------------------
outstanding under any of the Transaction Documents (subject to the
provisions of Section 9.19(e)):
---------------
(a) Interpool shall cause Tangible Net Worth to be greater than
$100,000,000 for the period commencing on the Closing Date through
December 31, 1995; and $125,000,000 at all times from and after January 1,
1996.
(b) Neither Interpool nor any of its Restricted Subsidiaries
shall incur any Funded Debt unless after giving effect to such incurrence
of Funded Debt (i) the ratio of Funded Debt to Tangible Net Worth is not
greater than 4 to 1; and (ii) the sum of Pro-Forma Fixed Charges for
Interpool and its Restricted Subsidiaries would have been covered at least
1.5 times by the sum of Earnings Available for Fixed Charges for Interpool
and its Restricted Subsidiaries for the most recent four (4) fiscal
quarters preceding the date of determination.
(c) Interpool shall not permit the ratio, which shall be
calculated on a quarterly basis, of (i) the sum of Earnings Available for
Fixed Charges plus Depreciation for Interpool and its Restricted
Subsidiaries for the sum of the four (4) fiscal quarters immediately
preceding the date of determination to (ii) the sum of Fixed Charges for
Interpool and its Restricted Subsidiaries for the sum of the four (4)
fiscal quarters immediately preceding the date of determination to be less
than 1.5 to 1.
(d) Neither Interpool nor its Restricted Subsidiaries shall
make any Restricted Payments if the aggregate amount of all Restricted
Payments made subsequent to June 30, 1993 would exceed the sum of
$5,000,000 plus 75% of the sum of (i) Net Earnings of Interpool and its
Restricted Subsidiaries (minus 100% of any net loss) subsequent to June 30,
1993, (ii) the net cash proceeds received after June 30, 1993 from the
sales (other than to Interpool or its Subsidiaries) of shares of common
stock and preferred stock of Interpool or any Restricted Subsidiary which
does not provide for mandatory redemption thereof or sinking fund payments
with respect thereto and (iii) the full face value of any debt exchanged or
converted into common or preferred stock which preferred stock does not
provide for mandatory redemption thereof or sinking fund payments with
respect thereto.
(e) If the Collateral is terminated pursuant to Section 5.7(a)
--------------
then, from and after the date of such termination up to and until such
time, if any, as the Issuers again secure the Obligations with Collateral
in accordance with Section 5.7(d), the Issuers shall not be required to
--------------
comply with the financial covenants set forth in Sections 9.19(a), (b) and
-------------------------
(c) and shall, instead be required to comply with the following financial
- ---
covenants:
(i) Interpool shall cause Tangible Net Worth to be greater
than $125,000,000;
(ii) Neither Interpool nor any of its Restricted
Subsidiaries shall incur any Funded Debt unless after giving effect to such
incurrence of Funded Debt (A) the ratio of Funded Debt to Tangible Net
Worth is not greater than 3 to 1; and (B) the sum of Pro-Forma Fixed
Charges for Interpool and its Restricted Subsidiaries would have been
covered at least 1.75 times by the sum of Earnings Available for Fixed
Charges for Interpool and its Restricted Subsidiaries for the most recent
four (4) fiscal quarters preceding the date of determination;
(iii) Interpool shall not permit the ratio, which shall be
calculated on a quarterly basis, of (i) the sum of Earnings Available for
Fixed Charges plus Depreciation for Interpool and its Restricted
Subsidiaries for the sum of the four (4) fiscal quarters immediately
preceding the date of determination to (ii) the sum of the Fixed Charges
for Interpool and its Restricted Subsidiaries for the
27
<PAGE>
sum of the four (4) fiscal quarters immediately preceding the date of
determination to be less than 1.75 to 1.
9.20 Payment of Obligations. Each Issuer shall pay all obligations
----------------------
material to its business when due (taking into account any grace periods
granted in respect thereof) other than those disputed by it in good faith,
if failure to pay might have a material adverse affect on the business,
conditions (financial or otherwise), prospects or creditworthiness of an
Issuer.
9.21 Notice of Default. Each Issuer shall promptly but in any event
-----------------
within three (3) Business Days after obtaining knowledge thereof furnish
the Collateral Agent and the Purchasers with a statement of the occurrence
of any Event of Default or Default, specifying the nature and period of
existence thereof and what action management of such Issuer proposes to
take with respect thereto. If an Issuer receives a notice of Default from
any creditor or Person other than the Collateral Agent and the Purchasers,
such Issuer shall deliver to the Collateral Agent and the Purchasers a copy
of such notice of Default, immediately upon receipt thereof. In the event
that the Issuers have cured such Default within any applicable cure period
provided therefor, such cure shall have the effect of remedying any failure
of the Issuers to give notice relating to such Default.
9.22 Lock Box. Upon the occurrence of an Event of Default and at the
--------
request of the Majority In Interest or the Collateral Agent acting on the
instructions of the Majority In Interest, the Issuers will establish a lock
box in respect of the Collateral and all proceeds thereof at a location
satisfactory to the Purchasers and the Collateral Agent, and take all such
action and execute all agreements, documents, letters and instruments which
the Collateral Agent deems appropriate in its sole discretion to establish
and maintain said lock box.
9.23 Additional Costs. (a) In the event that any change in or
----------------
adoption of any applicable law, regulation or guideline, or any
interpretation thereof by any governmental authority charged with the
administration thereof, not published on or prior to the date hereof,
subjects a Purchaser to any Tax of any kind whatsoever with respect to the
Notes issued to such Purchaser, or changes the basis of taxation of
payments to such Purchaser of any fees, principal or interest payable on
such Notes (except for changes in the rate of tax based solely on the
overall net income of such Purchaser) or imposes, modifies or deems
applicable any reserve requirement against assets held by, or other
liabilities in or for the account of, or loans by, such Purchaser, or
imposes on such Purchaser, directly or indirectly, any of the conditions
affecting the relevant Notes, and the result of any of the foregoing is to
increase the cost to such Purchaser of purchasing or holding the relevant
Notes by an amount which such Purchaser deems to be material, then upon
demand by such Purchaser made promptly upon such event, the Issuers will
pay to such Purchaser, upon its demand, the additional amount or amounts
necessary to compensate such Purchaser for such additional cost. Absent
manifest error, such Purchaser's statement shall be conclusive as to any
additional amount to be paid. Such Purchaser shall supply the Issuers with
such information related to any such Taxes, taxation or reserve requirement
as is available to such Purchaser and is not confidential. In the event
that any such additional cost arises and is demanded by a Purchaser from an
Issuer, the Issuer shall have the right to prepay the Notes of such
Purchaser, together with payment of accrued interest thereon and any Make
Whole Premium.
The Issuers shall pay to the Purchasers all principal of, and interest
on, the amount outstanding on the Notes and all their other Obligations
under the Transaction Documents free and clear of and without deduction or
withholding for any present or future license, registration or other fees,
taxes or other amounts for or on account of levies, imposts, duties,
deductions, withholdings or other charges assessed by any governmental or
taxing authority, excluding income and franchise taxes imposed on a
Purchaser by a jurisdiction under which such Purchaser is organized or
operating in connection with this
28
<PAGE>
Agreement or any political subdivision thereof (the "Taxes"). In the event
-----
any Issuer is or may become required to pay any such costs, such Issuer may
elect to prepay the Notes, together with accrued interest thereon, Make
Whole Premium, and any additional costs associated with such prepayment.
(b) If an Issuer shall be required to withhold or deduct Taxes
from any sum payable hereunder, (i) the sum payable shall be increased as
may be necessary so that the amount received is equal to the sum which
would have been received had no withholdings or deductions been made,
(ii) such Issuer shall make such necessary withholdings and deductions, and
(iii) such Issuer shall pay the full amount withheld or deducted to the
relevant authority according to applicable law so that any Purchaser shall
not be required to make any deduction or payment of Taxes.
9.24 Transactions with Related Parties. The Issuers will not and
---------------------------------
will not permit any Restricted Subsidiary to enter into any transaction or
arrangement with any Related Party, including the purchase from, sale to or
exchange of property with or lease of Financed Equipment to or from (as
lessor or lessee, respectively) or rendering of any service by or for, any
Related Party, except in the ordinary course of business and pursuant to
the reasonable requirements of the Issuers and such Restricted Subsidiary
and upon fair and reasonable terms no less favorable than would be obtained
in a comparable arm's length transaction with a Person other than a Related
Party.
9.25 Permitted Investments. Neither Interpool nor any of its
---------------------
Restricted Subsidiaries shall make cash or cash equivalent investments in,
loans or advances to or guarantee the obligations of, any Person except the
following ("Permitted Investments"):
---------------------
(a) Purchases of obligations of the United States Government
and its agencies, U.S. dollar denominated obligations of the Canadian
Government, and those "obligations of supranationals," which includes
government issued securities and World Bank securities, that are rated at
least AAA by Standard & Poor's or Moody's, all such purchases having
maturities not in excess of five (5) years;
(b) Purchases of prime commercial paper rated A1/P1 or higher
by Standard & Poor's or Moody's maturing in 270 days or less;
(c) Purchases of certificates of deposit or bankers'
acceptances issued by a bank with capital, surplus and undivided profits of
at least $100,000,000, having a term of one year or less;
(d) Investments in or advances to Restricted Subsidiaries or
any legal entity which after such investments or advances would become a
Restricted Subsidiary;
(e) Advances to employees for expenses incurred by such
employees in the ordinary course of the Issuers' business;
(f) Carrying lease or notes receivable arising from
transactions with customers and suppliers in the normal course of the
Issuers' business;
(g) Guarantees of obligations of Unrestricted Subsidiaries
provided that such guarantees would be permitted under Section 9.19(b);
---------------
(h) Other Investments subject to the limitations set forth in
Section 9.19(d);
- ---------------
(i) Purchases of corporate debt securities rated A3/A- or
higher by Moody's or Standard & Poor's and which mature within five (5)
years after the date of acquisition in an amount not
29
<PAGE>
to exceed 15% of the sum of cash and marketable securities as reflected on
the Issuers' quarterly financial statements of the most recently completed
fiscal quarter;
(j) Purchases of tax exempt securities which are rated Aa3/AA-
or higher by Moody's or Standard & Poor's and which mature within five (5)
years after the date of acquisition; and
(k) Any other investments up to an aggregate of $10,000,000 at
any one time outstanding.
To the extent the Issuers have Permitted Investments and prior to any
investment by any Issuers in marketable securities with maturities greater
than one year, or investments described in subsections (h) and (k) above,
the Issuers shall have caused the greater of (i) 5% of Tangible Net Worth
and (ii) $10,000,000.00 to have been invested in investments described in
subsections (a), (b), (c), (i) or (j) above with final maturities not
exceeding one year.
The foregoing provisions of this Section 9.25 shall not be deemed to
------------
limit the transactions in which the Issuers are permitted to engage in
accordance with the provisions of Section 9.18.
------------
9.26 Leases. At all times following the occurrence and during the
------
continuance of an Event of Default and upon the lock box provided for in
Section 9.22 being established, the Issuers shall immediately notify the
- ------------
Collateral Agent of the cancellation of any Lease with a term of one (1)
year or more.
9.27 Acquisition of Notes. No Issuer shall, nor shall such Issuer
--------------------
permit any Subsidiary or any Affiliate to, directly or indirectly, acquire
or make any offer to acquire any Notes unless such Issuer or such
Subsidiary or Affiliate shall have offered to acquire Notes, pro rata, from
--- ----
all of the Purchasers and upon the same terms. In case an Issuer, or any
Subsidiary or Affiliate, acquires any Notes, such Notes shall thereafter be
cancelled and no Notes shall be issued in substitution thereof.
9.28 Private Offering. The Issuers agree that none of the Issuers
----------------
nor anyone acting on such Issuers' behalf shall offer the Notes or any part
thereof or any similar securities for issue or sale to, or solicit any
offer to acquire any of the same from, any Person so as to bring the
issuance and sale of the Notes within the provisions of Section 5 of the
Securities Act.
9.29 Security Interest in Leases.
---------------------------
(a) Notwithstanding anything to the contrary contained herein,
the Issuers agree that they shall not deliver any Lease relating to any
Collateral to any Person, (other than a signed counterpart of a Lease to
the lessee under such Lease), unless an Issuer is in default with respect
to its obligations to a secured party having a security interest in such
Lease and is required under its agreement with such secured party to
deliver possession of such Lease to such secured party, and either (x) (i)
prior to delivering possession of any such Leases, such Issuer shall stamp
on the front cover or other conspicuous space in any such Leases the
language set forth in Schedule 9.29(x)(i) and furnish written evidence
-------------------
satisfactory to the Collateral Agent that such stamping has been effected,
provided that such stamping shall not be in derogation or limitation of the
requirements of Section 9.29(b), and (ii) such other secured party shall,
---------------
as a condition of obtaining possession of such Lease, furnish to the
Issuers and the Collateral Agent its agreement substantially in the form of
Schedule 9.29(x)(ii) that it is receiving possession of and holding
- --------------------
possession of such Leases both for its own benefit and as agent of and for
the benefit of the Collateral Agent to the extent of their respective
security interests in such Leases or (y) such Leases and any related
Equipment is released from the Lien of the applicable Security Agreement,
provided that the
30
<PAGE>
aggregate Collateral Value of such Issuer after such release is equal to or
greater than 125% of the aggregate outstanding principal amount of the
Notes issued by such Issuer. If a Default or Event of Default has occurred
and is continuing, each Issuer shall immediately deliver possession of all
its Leases to the Collateral Agent (unless such Issuer shall have
previously delivered possession of such Leases to another secured party
under a prior obligation), similarly stamped with respect to the security
interest of any other secured party in such Lease and provided the
Collateral Agent shall have furnished the Issuer with its agreement in the
form of Schedule 9.29(x)(ii) that it is receiving possession of and holding
--------------------
possession of such Leases both for its own benefit and as agent of and for
the benefit of such other secured party to the extent of their respective
security interests in such Lease.
(b) Each Issuer shall stamp and maintain the language set forth
in Schedule 9.29(x)(i) on the front cover or other conspicuous space of
Leases and Direct Finance Leases relating to at least 90% of the aggregate
Collateral Value of Financed Equipment covered by Leases and of Direct
Finance Leases.
9.30 Collateral Administration Agreement. Each Issuer shall use its
-----------------------------------
best efforts to have a Joinder Agreement executed and delivered to the
Purchasers and the Collateral Agent by all existing and future holders of
its Funded Debt secured by leases or similar agreements or arrangements
covering Financed Equipment and Direct Finance Leases.
SECTION 10. DEFAULT; REMEDIES OF THE PURCHASERS.
-----------------------------------
10.1 Occurrence of Event of Default. Any one of the following events
------------------------------
or conditions shall constitute an Event of Default:
(a) any Issuer shall fail to pay, when due, at maturity
(whether as stated or by acceleration) or otherwise, any payment of
principal, interest, fees, Make Whole Premium or other charges or amounts
due and owing to the Purchasers with respect to the Obligations, and such
failure shall continue for five (5) Business Days or more; or
(b) any Issuer shall fail to observe or perform the covenants
set forth in Sections 9.6, 9.18, 9.19, 9.21 or 9.25; or
--------------------------------------
(c) any Issuer shall fail to observe or perform any other
covenant or agreement of such Issuer in this Agreement or any other
Transaction Document which shall remain unremedied for thirty (30) days; or
(d) any representation or warranty made by any Issuer
hereunder, under any Transaction Document or in any other document to any
Purchaser or the Collateral Agent shall be incorrect as at the date made in
any material respect; or
(e) if any Issuer shall (i) file, or consent by answer or
otherwise to the filing against it of, a petition for relief or
reorganization or arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy or insolvency law of any
jurisdiction or if there shall be commenced against any Issuer any such
proceeding and such action or proceeding remains undismissed for a period
of sixty (60) days, (ii) make an assignment for the benefit of its
creditors, (iii) consent to the appointment of a custodian, receiver,
trustee or other officer with similar powers for itself or any substantial
part of its property, (iv) be adjudicated a bankrupt or insolvent, or
(v) take any action for the purpose of any of the foregoing; or
31
<PAGE>
(f) if a court or governmental authority of competent
jurisdiction shall enter an order appointing, without consent by any
Issuer, a custodian, receiver, trustee or other officer with similar powers
with respect to it or with respect to any substantial part of its property,
or constituting an order for relief or approving a petition for relief or
reorganization or any other petition in bankruptcy or for liquidation or to
take advantage of any bankruptcy or insolvency law of any jurisdiction, or
ordering its dissolution, winding-up or liquidation and such order shall
not have been stayed or dismissed within sixty (60) days; or
(g) if any Lien (other than a Lien in favor of the Purchasers
or the Collateral Agent or a Permitted Lien) or attachment, levy or
garnishment exists or is issued against the Collateral or any property of
any Issuer securing any of the Obligations in respect of indebtedness or
obligations of $2,000,000 or more in the case of Ltd. or Corp. or
$1,000,000 or more in the case of Interpool and is not released,
discharged, dismissed, stayed or fully bonded within a period of thirty
(30) days after its creation, attachment, issue or levy or if any such
Lien, attachment, levy or garnishment against the Collateral or any
property of any Issuer securing Obligations shall have priority over the
security interest of the Collateral Agent in the Collateral, and such Lien,
attachment, levy or garnishment is not released, discharged, dismissed,
stayed or fully bonded within a period of fifteen (15) days after its
creation, attachment, issue or levy; or
(h) if any judgment or tax lien is entered against any Issuer
and remains unsatisfied after thirty (30) days, unless said judgment or tax
lien is being contested in good faith by appropriate proceedings and is
stayed in the interim; or
(i) a Person or outside group of related Persons which is not
listed on Schedule 7.1 attached hereto obtains voting control of fifty one
------------
percent (51%) or more of the voting securities of Interpool; or
(j) any Issuer (as principal, guarantor or other surety)
defaults in the payment of any principal or interest of any indebtedness
for borrowed money in excess of $4,000,000 with respect to Interpool and in
excess of $1,000,000 with respect to each of Ltd. and Corp. (including any
indebtedness of Interpool, Ltd. or Corp. to the Purchasers other than the
Obligations) or defaults in any other manner in respect of such
indebtedness, in either case, beyond the period of grace, if any, specified
therefor so as to give the holder of any such indebtedness the right to
cause the acceleration of such indebtedness including any grace period
provided to such holder; or
(k) if the aggregate Collateral Value for an Issuer shall be
less than 125% of the aggregate outstanding principal amount of the Notes
issued by such Issuer by (i) an amount of $2,000,000 or more in respect of
Ltd., $3,000,000 or more in respect of Corp. or of $500,000 or more for
Interpool or (ii) an amount less than $2,000,000 for Ltd., less than
$3,000,000 for Corp. or less than $500,000 for Interpool and such
deficiency shall not have been fully eliminated (A) in the case of the
deficiency described in clause (i) hereof within fifteen (15) days from the
date that such deficiency arises or (B) in the case of the deficiency
described in clause (ii) hereof within fifteen (15) days following the date
that the next Collateral Certificate is required to be delivered pursuant
to Section 9.11(c); by the prepayment of Notes pursuant to Section 5.5; by
--------------- -----------
the assumption of Notes by Interpool pursuant to Section 5.6(a) or by Ltd.
--------------
pursuant to Section 5.6(b); by the grant of additional Collateral pursuant
--------------
to Section 5.6(c), Section 5.6(d) or Section 5.6(e); by the grant of Cash
-------------- -------------- --------------
Collateral pursuant to Section 5.6(f); by the designation by Interpool of
--------------
Collateral in respect of excess Collateral Value of Interpool for the
benefit of Ltd. pursuant to Section 5.6(g) or by the designation by Ltd. of
--------------
Collateral in respect of excess Collateral Value of Ltd. for the benefit of
Corp. pursuant to Section 5.6(h).
32
<PAGE>
10.2 Action Upon Event of Default.
----------------------------
(a) Declaration of Acceleration of Each Note. If an Event of
----------------------------------------
Default under Section 10.1(a) occurs and is continuing, either of the
---------------
Purchasers may by notice to the Issuers, declare the principal of its Notes
to be immediately due and payable together with accrued interest thereon
and a Make Whole Premium with respect thereto. At any time after such
acceleration, and prior to the sale or disposition of any of the
Collateral, such Purchaser may rescind such a declaration or automatic
acceleration, as the case may be, and thereby annul its consequences if
(i) the Issuers pay an amount sufficient to pay all principal of, Make
Whole Premium, if any, and interest on such Note, to the extent each such
amount is due or past due without regard to the acceleration hereof, if
any, in respect of the outstanding Note otherwise than by reason of such
acceleration and all sums due and payable to such Purchaser or the
Collateral Agent, (ii) the rescission would not conflict with any judgment
or decree and (iii) all existing Events of Default relating to such Note
have been cured or waived except nonpayment of principal of, Make Whole
Premium or interest on the Note that has become due solely because of such
acceleration.
(b) Declaration of Acceleration of All Notes. If an Event of
----------------------------------------
Default occurs and is continuing, the Majority In Interest may, by notice
to the Issuers, declare the principal of all Notes to be immediately due
and payable together with accrued interest thereon and a Make Whole Premium
with respect thereto; provided that the Notes will automatically become due
--------
and payable together with accrued interest thereon and a Make Whole Premium
with respect thereto without any action of the Purchasers in the case of an
Event of Default under Section 10.1(e) or Section 10.1(f) and, provided
--------------- --------------- --------
further that this Section 10.2(b) shall not be in derogation of the rights
- -------
of each of the Purchasers under Section 10.2(a). At any time after such
acceleration, and prior to the sale or disposition of any of the
Collateral, the Majority In Interest may rescind such a declaration or
automatic acceleration, as the case may be, and thereby annul its
consequences if (i) the Issuers pay an amount sufficient to pay all
principal of, Make Whole Premium, if any, and interest on the Notes, to the
extent each such amount is due or past due without regard to the
acceleration hereof, if any, in respect of the outstanding Notes otherwise
than by reason of such acceleration and all sums due and payable to the
Purchasers or the Collateral Agent, (ii) the rescission would not conflict
with any judgment or decree and (iii) all existing Events of Default have
been cured or waived except nonpayment of principal of, Make Whole Premium
or interest on the Notes that has become due solely because of such
acceleration.
(c) Payments after Acceleration of Notes. All payments
------------------------------------
received and all amounts held or realized by the Purchasers after the
outstanding principal of any of the Notes shall have been declared to be
due and payable pursuant to Section 10.2(a) or Section 10.2(b), and all
--------------- ---------------
payments or amounts then held or thereafter received by the Purchasers
hereunder, shall be applied by each such Purchaser in the following order
of priority:
First, to reimburse the Purchasers for any costs and expenses not
-----
reimbursed by the Issuers;
Second, so much of such payments or amounts remaining as shall be
------
required to pay in full any interest at the Overdue Rate, the accrued but
unpaid interest on the Notes to the date of distribution and any Make Whole
Premium;
Third, so much of such amounts remaining as shall be required to pay
-----
in full the aggregate unpaid principal amount of the Notes on a pro rata
--- ----
basis for all the Notes for each Issuer and then applied to such Notes in
inverse order of the scheduled principal payments thereof and all other
amounts payable hereunder;
33
<PAGE>
Fourth, so much of such amounts remaining as shall be required to pay
------
in full all other outstanding Obligations; and
Fifth, the balance, if any, of such payments or amounts remaining
-----
thereafter shall be distributed to each of the relevant Issuers, upon its
written direction or to any other Person entitled thereto as a matter of
law.
All payments and proceeds received by the Collateral Agent or the
Purchasers shall be applied to the Obligations secured thereby pursuant to
the applicable Security Agreement, Railcars Security Agreement or security
and pledge agreement in respect of the Cash Collateral.
(d) Other Remedies. The Issuers agree, to the full extent that
--------------
they lawfully may, that if one or more Events of Default shall have
occurred and be continuing, then, and in every such case the Purchasers or
upon the instructions of the Majority In Interest the Collateral Agent on
behalf of the Purchasers pursuant to the Agency Agreement, as secured
party, mortgagee or collateral assignee hereunder or under the Collateral
Documents, or otherwise, may exercise any or all of the rights and powers
and pursue any and all of the remedies available to the Purchasers
hereunder or under any of the Transaction Documents or with respect to the
Collateral Agent, under the Collateral Documents.
10.3 Authorized to Execute Bills of Sale. Each of the Issuers hereby
-----------------------------------
irrevocably appoints the Collateral Agent the true and lawful attorney-in-
fact of such Issuer in its respective name and stead and on its respective
behalf, for the purpose of effectuating any sale, assignment, transfer or
delivery for the enforcement of the Lien in connection with this Agreement
and any other Transaction Documents, following the occurrence of an Event
of Default to execute and deliver all such bills of sale, assignments, UCC
financing statements and other instruments as the Collateral Agent may
consider necessary or appropriate, with full power of substitution, each of
the Issuers hereby ratifying and confirming all that such attorney or any
substitute shall lawfully do by virtue hereof. After the Collateral Agent
has exercised its rights hereunder, if so requested by the Collateral Agent
or any Purchaser, each of the Issuers shall ratify and confirm any such
sale, assignment, transfer or delivery, by executing and delivering to the
Collateral Agent or such purchaser all bills of sale, assignments,
releases, UCC financing statements and other proper instruments to effect
such ratification and confirmation as may be designated in any such
request.
10.4 Remedies Cumulative. Each and every right, power and remedy
-------------------
herein specifically given to the Purchasers or the Collateral Agent or
otherwise in this Agreement or any other Transaction Documents shall be
cumulative and shall be in addition to every other right, power and remedy
herein specifically given or now or hereafter existing at law, in equity or
by statute, and each and every right, power and remedy whether specifically
herein given or otherwise existing may be exercised from time to time and
as often and in such order as may be deemed expedient by the Purchasers or
the Collateral Agent, and the exercise or the beginning of the exercise of
any power or remedy shall not be construed to be a waiver of the right to
exercise at the same time or thereafter any other right, power or remedy.
No delay or omission by the Purchasers or the Collateral Agent in the
exercise of any right, remedy or power or in the pursuance of any remedy
shall impair any such right, power or remedy or be construed to be a waiver
of any Default or Event of Default on the part of any Issuer or to be an
acquiescence therein.
10.5 Discontinuance of Proceedings. In case any of the Purchasers or
-----------------------------
the Collateral Agent shall have proceeded to enforce any right, power or
remedy under this Agreement or any other Transaction Documents and such
proceedings shall have been discontinued or abandoned for any reason or
shall have been determined adversely to such Purchaser or the Collateral
Agent, then and in every such
34
<PAGE>
case the Issuers and the Collateral Agent shall be restored to their former
positions and rights hereunder with respect to the Collateral, and all
rights, remedies and powers of such Purchaser or the Collateral Agent shall
continue as if no such proceedings had been taken.
10.6 Agreements with respect to Remedies and Defaults.
------------------------------------------------
Notwithstanding any provisions of this Agreement or the Collateral
Documents to the contrary,
(a) If an Event of Default shall have occurred and is
continuing under this Agreement or any other Transaction Documents (whether
declared or not), the Collateral Agent shall in accordance with
instructions from the Majority In Interest, to the extent remedies are
available to do so and the Collateral Agent is not stayed from exercising
such remedies, pursue such remedies as are available under the Leases and
the Collateral Documents and at law in respect of the Collateral in
accordance with the Collateral Documents and with respect to the Issuers.
(b) If an Event of Default shall have occurred and is
continuing, the Collateral Agent shall act in a commercially reasonable
manner in respect of the Collateral and with respect to the exercise of the
remedies provided under the Collateral Documents and at law related to the
Collateral.
10.7 Waiver of Existing Defaults. The Issuers, upon written
---------------------------
confirmation that the Majority In Interest waive an existing Event of
Default, shall notify all the Purchasers that the Majority In Interest has
provided such waiver; provided, however, no such waiver shall be effective
-------- -------
in the case of (i) an Event of Default in the payment of the principal of,
Make Whole Premium, if any, or interest on, any Note or (ii) in respect of
a covenant or provision of Section 9.18 and Section 9.19 unless such waiver
------------ ------------
is made by all the Purchasers.
10.8 Rights of Purchasers to Receive Payment. Each Purchaser, or
---------------------------------------
with respect to all the Notes, the Majority In Interest, shall have the
right to bring suit for the enforcement of such Purchaser's, or with
respect to all Notes, all of the Purchasers' rights to receive payment of
principal of, Make Whole Premium, if any, and interest on such Note or
Notes on or after the due date expressed in such Note or Notes.
Notwithstanding any other provision of this Agreement or the Agency Agree-
ment, the right of any Purchaser to receive payment of principal of, Make
Whole Premium, if any, and interest on a Note on or after the respective
due dates expressed in such Note, or to bring suit for the enforcement of
any such payment on or after such respective dates, shall not be impaired
or affected without the consent of such Purchaser.
SECTION 11. EXPENSES.
--------
Each of the Issuers agrees, whether or not the transactions
contemplated by this Agreement are consummated, for the sole benefit of
each of the Purchasers and the Collateral Agent, to pay (or reimburse each
Purchaser for the payment of) all costs and expenses, of the negotiation,
execution and delivery of this Agreement and each of the other Transaction
Documents and every other related agreement, instrument and document, and
the perfection by the Collateral Agent of a valid first priority Lien in
the Collateral including all reasonable legal fees and expenses, and
expenses of lien searches, filing fees of UCC financing statements,
Railcars Security Agreement and other lien instruments, and fees and
expenses relating to the titling and registration of the Collateral and
noting Liens on certificates of title, incurred by or on behalf of each
Purchaser and the Collateral Agent, including without limitation, the fees
and disbursements of Rogers & Wells, special counsel for the Purchasers and
of Ray, Quinney & Nebeker, counsel to the Collateral Agent. Each of the
Issuers further agrees to pay (or reimburse each Purchaser for the payment
of) all costs and expenses including all reasonable legal fees and
expenses, and
35
<PAGE>
expenses of lien searches, filing fees, and fees and expenses relating to
the titling and registration of the Collateral and noting the Liens on the
certificates of title, incurred on behalf of each Purchaser and the
Collateral Agent, including without limitation, the fees and disbursements
of special counsel to the Purchasers incurred in connection with (a) the
negotiation, execution and delivery of any amendments, supplements or
modifications to this Agreement, the other Transaction Documents and other
related agreements, instruments and documents, and any amendment of,
supplement to or waiver of rights under any provision hereof or thereof,
(b) workouts, restructurings or fees of financial advisors with respect to
the Transaction Documents or the transactions referred to therein or
contemplated thereby, (c) the perfection by the Collateral Agent by filing,
recording, possession or otherwise in any jurisdiction whose laws are
applicable to an Issuer or any of the Collateral of a valid first priority
Lien in the Collateral, both initially and with regard to any substitute or
additional Collateral including but not limited to Cash Collateral and
other Collateral granted pursuant to any provision of Section 5 and any
---------
release of any Collateral, and (d) the enforcement of the provisions of
this Agreement, the other Transaction Documents or any of the other related
agreements, instruments and documents, by or on behalf of any Purchaser or
the Collateral Agent, including the exercise of any rights and remedies
provided herein or in the Agency Agreement.
SECTION 12. NOTICES.
-------
All communications and notices provided for herein shall be in
writing and delivered by hand, by the United States certified or registered
mail or by telecopier, and any such notice shall become effective (a) upon
personal delivery thereof, including, without limitation, by overnight mail
and courier service, (b) five (5) days after the date on which it shall
have been mailed by United States mail, certified or registered, postage
prepaid, return receipt requested, or (c) in the case of notice by
telecopier, when electronically or verbally confirmed, in each case
addressed to (i) if to a Purchaser, at the address set forth under such
Purchaser's name on Schedule 3 attached hereto with a copy to such
----------
Purchaser's special counsel, Rogers & Wells, 200 Park Avenue, New York, New
York 10166, Telecopier: (212) 878-8375, Attn. Shephard W. Melzer, Esq., or
(ii) if to the Issuers, at the address set forth under such Issuer's name
on Schedule 2 attached hereto, or at such other address as such Person may
----------
from time to time designate by written notice to the other parties hereto.
Any party may change the Person or address to whom or which notices are to
be given hereunder, by notice duly given hereunder; provided, however, that
-------- -------
any such notice shall be deemed to have been given hereunder only when
actually received by the party to which it is addressed.
SECTION 13. PURCHASERS AND NOTES.
--------------------
13.1 Withholding Taxes; Information Reporting. Notwithstanding and
----------------------------------------
subject to the Issuers' obligation to ensure that the Purchasers are reim-
bursed for any withholding Taxes pursuant to Section 9.23 (b), if required
----------------
by applicable statute, regulation or other governing authority, the Issuers
shall exclude and withhold from each distribution of principal, Make Whole
Premium, if any, and interest and other amounts due hereunder or under the
Notes (including, without limitation, any additional payments required
pursuant to Section 9.23 (b)) any and all withholding taxes applicable
----------------
thereto as required by law. Any such withholding shall in no event give
rise to an Event of Default. The Issuers agree (a) to act as such with-
holding agent and, in connection therewith, whenever any present or future
taxes or similar charges are required to be withheld with respect to any
such amounts payable in respect of the Notes, to withhold such amounts and
timely pay the same to the appropriate authority in the name of and on
behalf of the Purchasers, (b) that they will file any necessary withholding
tax returns or statements when due and (c) that, as promptly as possible
after the payment of such amounts, they will deliver to each Purchaser
appropriate documentation showing the payment of such amounts, together
with such additional documentary evidence as such Purchasers may reasonably
request from time to time. Each of the Issuers
36
<PAGE>
agrees to file any other information reports as it may be required to file
under United States law. To the extent that any Issuer fails to exclude
and withhold from any distribution to any Purchaser any amount paid by such
Issuer to any taxing authority under this Section 13.1 with respect to
which such Purchaser has no right of reimbursement under Section 9.23, upon
such Issuer furnishing written evidence satisfactory to such Purchaser that
such payment was made by such Issuer and that such Purchaser had no right
of reimbursement, then, provided that no Default or Event of Default shall
have occurred and be continuing, such Purchaser shall reimburse such Issuer
for such amounts or such Issuer may exclude and withhold such amounts from
future distributions to such Purchaser.
13.2 Satisfaction and Discharge of Agreement; Termination of
-------------------------------------------------------
Obligations. Subject to Section 13.3, the Issuers shall, except as herein
- ----------- ------------
provided, be deemed to have been discharged from their respective
Obligations with respect to the Notes, when
(a) the principal of, Make Whole Premium, if any, and interest
on the Notes and all other amounts due and payable under the Notes, this
Agreement and the other Transaction Documents have been paid in full or
there shall have been deposited with the Purchasers an amount equal to the
amount required to discharge such indebtedness and other Obligations; and
(b) each Purchaser shall have received evidence that all
conditions precedent provided for relating to the satisfaction and
discharge of this Agreement contemplated by this Section 13.2 have been
------------
complied with.
13.3 Amendments, Waivers or Consents to This
Agreement With Consent of Purchasers.
---------------------------------------
(a) With the written consent of the Majority In Interest, the
Issuers may enter into such supplemental agreements or waivers to add any
provisions to or to change or eliminate any provisions of this Agreement or
of any such supplemental agreements or any of the other Transaction
Documents or to modify the rights of the Purchasers or consent to any
departure by the Issuers from any of the terms or conditions hereof or
thereof; provided, however, that, without the consent of each Purchaser
-------- -------
affected thereby, an amendment, waiver or consent under this Section 13.3
------------
may not:
(i) reduce the amount of principal, interest or Make
Whole Premium due or owing on the Notes held by
such Purchaser; or
(ii) affect the terms of payment of any Note; or
(iii) reduce the amount of Purchasers which constitutes
the Majority In Interest; or
(iv) make any change in Section 5.1, 5.6, 5.7, 9.19,
----------------------------
10, or this Section 13.3(a); or
-- ---------------
(v) affect the priority of the Obligations and Liens
on the Collateral as to any obligation or lien of
third party creditors.
(b) Promptly after the execution of any supplemental agreement,
waiver or consent pursuant to the provisions of this Section 13.3, the
------------
Issuers shall transmit by first-class mail a copy of such supplemental
agreement, waiver or consent to all Purchasers, as the names and addresses
of such
37
<PAGE>
Purchasers appear on the Register. Any failure of the Issuers to mail such
copy, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental agreement, waiver or consent.
(c) The Issuers will not, directly or indirectly, request or
negotiate for, or offer to pay any remuneration or grant any security as an
inducement for, any proposed amendment or waiver of any of the provisions
of this Agreement or any of the Operative Documents unless each holder of
the Notes (irrespective of the kind and amount of Notes then owned by it)
shall be informed thereof by the Issuers and, if such holder is entitled to
the benefit of any such provision proposed to be amended or waived, shall
be afforded the opportunity to consider the same, shall be supplied by the
Issuers with such information relating to the Issuers as may be reasonably
required to enable such holder to make an informed decision with respect
thereto and shall be offered and paid such remuneration and granted such
security on the same terms.
13.4 Notification on or Exchange of Notes. Each of the Purchasers may
------------------------------------
place an appropriate notation about an amendment or waiver on any Note
hereafter executed. Each of the Purchasers in exchange for such Notes
shall request that the relevant Issuer shall execute new Notes that reflect
the amendment or waiver.
SECTION 14. MISCELLANEOUS.
-------------
14.1 Oral Modification, Termination, etc. This Agreement cannot be
------------------------------------
changed, discharged or terminated orally.
14.2 Successors and Assigns. All the terms of this Agreement shall be
----------------------
binding upon, inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto, and, in particular, shall
inure to the benefit of and be enforceable by any registered owner or
holder of a Note; provided, however, the liabilities and Obligations of the
-------- -------
Issuers may not be assigned or otherwise transferred except by any merger
permitted under Section 9.18(b) or an assumption by Interpool or Ltd.
---------------
provided under Section 5.6.
-----------
14.3 Headings. The headings to the various sections of this Agreement
--------
have been inserted for the convenience of reference only and shall not
limit or otherwise affect any of the terms hereof.
14.4 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
14.5 Survival. All warranties, representation, indemnities and
--------
covenants made by any Person hereto, herein or in any certificate or other
instrument delivered by any such Person or on the behalf of any such Person
under this Agreement shall be considered to have been relied upon by each
other Person hereto and shall survive the consummation of the transactions
contemplated hereby on the Closing Date regardless of any investigation
made by any such Person or on the behalf of any such Person. All state-
ments in any such certificate or other instrument shall constitute warran-
ties and representations by the Person so making the same.
14.6 Governing Law; Severability. This Agreement shall be governed by
---------------------------
and construed and enforced in accordance with the internal laws (as opposed
to conflicts of law provisions) of the State of New York. Whenever
possible, each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under appli-
cable law, such provision shall be ineffective to the extent of such
38
<PAGE>
prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
14.7 WAIVER OF JURY TRIAL; SUBMISSION TO JURISDICTION. EACH OF THE
------------------------------------------------
ISSUERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT TO A JURY TRIAL IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY. In any action or proceeding arising out of or
relating to this Agreement, each of the Issuers hereby accepts, for itself
and its property, the non-exclusive jurisdiction of the courts of the State
of New York sitting in the County of New York, or in the United States
District Court for the Southern District of New York, and agrees that
effective service of process may be made on each Issuer by mailing same to
such Issuer's address set in Schedule 2 attached hereto. The Collateral
----------
Agent or any Purchaser may proceed against any Issuer in any other
applicable jurisdiction, and may serve process in any other manner
permitted by applicable law. Each of the Issuers hereby irrevocably waives
any objection to the laying of venue in the aforesaid courts, and any claim
of an inconvenient forum. To the extent that such Issuer or its property
may have or hereafter acquire immunity, on the grounds of sovereignty or
otherwise, from any judicial process in connection with this Agreement,
each Issuer hereby irrevocably waives, to the fullest extent permitted by
law, any such immunity and agrees not to claim same. Each of the Issuers
agrees that a final judgment in any such action or proceeding shall be
conclusive, and may be enforced in any other jurisdiction by suit on the
judgment or in any other permitted manner.
Interpool and Corp. each hereby irrevocably designates and
appoints Interpool Limited of 633 Third Avenue, New York, New York 10017 as
its agent to receive on its behalf and its property service of copies of
the summons and complaint and any other process which may be served upon
Interpool or Corp., as the case may be, in the State of New York in
connection with any action or proceeding in the courts of the State of New
York or of the United States of America for the Southern District of New
York.
14.8 Further Assurances. At any time and from time to time, upon the
------------------
reasonable request of the Collateral Agent, the Issuers shall, at their
expense, execute, deliver and acknowledge or cause to be executed,
delivered and acknowledged, such further agreements, documents and
instruments, and do such other acts and things as the Collateral Agent or
either Purchaser may reasonably request in order to fully effect the
purposes of this Agreement, the Notes and the other Transaction Documents.
SECTION 15. DEFINITIONS.
-----------
The following terms used herein shall have the following respective
meanings (such definitions to be equally applicable to both the singular
and plural forms of the terms defined):
"Affiliate" of any Person shall mean any other Person which directly
---------
or indirectly controls, or is controlled by, or is under a common control
with, such Person, including, without limitation, Related Parties.
"Agency Agreement" shall mean the Collateral Agency Agreement dated
----------------
the date hereof among the Collateral Agent, the Issuers and the Purchasers,
as the same may be amended, supplemented or modified from time to time,
substantially in the form of Exhibit B hereto.
---------
"Approved Investments" shall mean the investments listed in paragraphs
--------------------
(a) or (b) of Section 9.25 hereof, provided that such investments have
------------
maturities of less than one (1) year and provided that the
39
<PAGE>
Purchasers can, in their judgment, obtain a perfected lien in such
investments under the laws of the United States or any political
subdivision thereof. So long as no Default or Event of Default shall have
occurred, the Issuer pledging Cash Collateral shall have the option of
designating the specific Approved Investment in which such Cash Collateral
shall be maintained. If a Default or Event of Default shall have occurred,
such Approved Investment shall be designated by the Collateral Agent.
"Business Day" shall mean any day other than a Saturday, Sunday or
------------
other day on which commercial banking institutions in the State of New York
are authorized or obligated by law to close.
"Cash Collateral" shall mean
---------------
(i) all bank accounts in the name of the Collateral Agent
as agent for the ratable benefit of the Purchasers, all funds held therein
and all certificates and instruments representing or evidencing such bank
accounts which are maintained by the Collateral Agent;
(ii) all Approved Investments made from time to time in
accordance with the provisions of this Agreement and the applicable
Transaction Documents which are properly perfected and pledged to the
Collateral Agent;
(iii) all interest, dividends and other property from time to
time received, receivable or otherwise distributed in respect of any
amounts on deposit in any of the accounts or the Approved Investments
described in subparagraphs (i) or (ii) above; and
(iv) all proceeds of any or all of the foregoing.
The Issuers shall, at all times, cause all Cash Collateral to be
subject to a first priority perfected security interest in favor of the
Collateral Agent for the ratable benefit of the Purchasers, subject to no
other Liens.
"Cash Collateral Agreement" shall mean the Cash Collateral Agreement
-------------------------
substantially in the form of Exhibit J hereto between the Collateral Agent
and one or more of the Issuers in respect of Cash Collateral as the same
may be amended, supplemented or modified from time to time.
"Chassis" shall mean wheeled steel frames used to carry containers
-------
over the road.
"Chief Offices" shall mean, for each Issuer, those offices listed on
-------------
Schedule 7.1 attached hereto.
- ------------
"Claims" shall have the meaning set forth in Section 9.8 hereof.
------ -----------
"Closing" shall have the meaning set forth in Section 3 hereof.
------- ---------
"Closing Date" shall have the meaning set forth in Section 3 hereof.
------------ ---------
"Code" shall have the meaning set forth in Section 7.12 hereof.
---- ------------
"Collateral" shall mean all Equipment, Leases, Direct Finance Leases
----------
and other property subject to the Lien of the Collateral Documents,
including, without limitation, insurance policies as required pursuant to
Section 9.6.
- -----------
40
<PAGE>
"Collateral Administration Agreement" shall mean the Collateral
-----------------------------------
Administration Agreement dated as of July 25, 1995 among the Collateral
Administration Agent, the Issuers, and each of the other financial
institutions from time to time party thereto, as the same may be amended,
supplemented or modified from time to time.
"Collateral Administration Agent" shall mean First Security Bank of
Utah, National Association, not in its individual
-------------------------------
capacity but solely as agent under the Collateral Administration Agreement,
and its successor thereof.
"Collateral Agent" shall mean First Security Bank of Utah, National
Association, not in its individual capacity but solely
----------------
as agent under the Agency Agreement, and its successors thereof.
"Collateral Certificate" shall mean the Collateral Value certificate,
----------------------
substantially in the form of Exhibit C.
---------
"Collateral Documents" shall mean the Security Agreements, together
--------------------
with any Security Agreement Supplements, the Railcars Security Agreements,
together with any Railcar Security Agreement Supplement, the Cash
Collateral Agreement and the Guaranties.
"Collateral Value" shall mean with respect to Collateral of each
----------------
Issuer (including an Issuer for whose benefit Collateral is added or
designated pursuant to Section 5.6): (a) in respect of Containers and
Trailers pledged to the Collateral Agent, the cost basis of the individual
Containers and Trailers less depreciation of $56.67 per $1,000 of the cost
of the Containers and Trailers per year of age calculated on a straight
line basis over a fifteen (15) year life until their estimated salvage
value of 15% of cost basis is reached as reflected on the books and records
of an Issuer, in accordance with GAAP, (b) with respect to Chassis pledged
to the Collateral Agent, the depreciated calculated value using a
depreciable basis of $6,800 per Chassis, less annual depreciation of $240
per Chassis per year of age, and calculated on a straight line basis over a
twenty (20) year life until a floor value of no less than $2,000 per
Chassis is reached, (c) with respect to Railcars pledged to the Collateral
Agent, the cost basis of the individual Railcar less depreciation on a
straight line basis over their estimated useful life until their estimated
salvage value is reached, as reflected on the books and records of an
Issuer in accordance with GAAP, (d) with respect to Direct Finance Leases
pledged to the Collateral Agent, such Direct Finance Leases at their
Unamortized Portion and (e) with respect to Cash Collateral pledged to the
Collateral Agent, the Cash Collateral shall have the value ascribed to it
in the Cash Collateral Agreement or as is otherwise agreed between the
Purchasers and the Issuers.
"Commitment" shall mean the amount set forth opposite the name of each
----------
Purchaser on Schedule 1 attached hereto.
----------
"Containers" shall mean general purpose standard, inter-modal dry
----------
cargo containers, each in 20, 40 or 48 foot lengths and having a configu-
ration suitable for shipping small packages or bulk material that confines
the contents and can be handled in transit as a unit, for road transport on
chassis, or for rail transport deck-mounted to appropriate rail cars.
"Control" shall mean the possession, directly or indirectly, of the
-------
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Controlled Group" shall have the meaning as defined in the Code.
----------------
41
<PAGE>
"Default" shall mean an event or condition which, with the passage of
-------
time or with the giving of notice, or both, would constitute an Event of
Default.
"Depreciation" shall be determined in accordance with GAAP.
------------
"Direct Finance Leases" shall mean for purposes of determining
---------------------
Collateral Value under this Agreement and the other Transaction Documents,
leases which have been classified as direct finance leases in the financial
statements of Interpool and its consolidated Subsidiaries in accordance
with GAAP. For all other purposes of this Agreement and the other
Transaction Documents, Direct Finance Leases shall mean leases which have
been classified as direct finance leases in the financial statements of
Interpool and its consolidated Subsidiaries in accordance with GAAP and
leases which are construed as leases intended as security in accordance
with New York UCC Section 1-201(37), as such section may be revised,
amended or supplemented from time to time and which are leases or similar
agreements or arrangements with respect to equipment, but only to the
extent that they relate to equipment which is included in the Collateral,
and all extensions, substitutions and modifications thereto, and only to
the extent that they either (a) are in the form of one of the forms of
lease contained in Schedule 15(b) hereto or (b) vary from any of such forms
only in respects that, individually or collectively, do not (i) cause such
leases to provide other than that the lessees thereunder are generally
required to pay and perform all obligations in respect of the equipment
covered thereby, (ii) prohibit the assignment thereof by the lessor, (iii)
provide for or permit setoffs or defenses by the lessee or (iv) provide for
any obligations of lessor other than to provide for quiet enjoyment to the
lessee absent a default thereunder.
"Duff & Phelps" shall mean Duff & Phelps Credit Rating Co.
-------------
"Earnings Available for Fixed Charges" shall mean the sum of Fixed
------------------------------------
Charges plus Net Earnings before income taxes.
"Equipment" shall mean Containers, Trailers, Chassis and Railcars,
---------
excluding those subject to Direct Finance Leases.
"ERISA" shall have the meaning set forth in Section 7.12 hereof.
----- ------------
"Event of Default" shall mean any of the events specified in Section
---------------- -------
10.1, provided there has been satisfied any requirement in connection with
- ----
such event for the giving of notice, or the lapse of time, or the happening
of any further condition, event or act.
"Financed Equipment" shall mean all Equipment now owned or hereafter
------------------
acquired by any of the Issuers, including New Equipment and Used Equipment
which is included in the Collateral pursuant to this Agreement.
"Fixed Charges" shall mean the sum of interest expense (including
-------------
capitalized interest, if any) plus lease rentals on Long-Term Leases and
the interest component of capitalized leases.
"Funded Debt" shall mean all indebtedness for money borrowed with
-----------
recourse to Interpool and its Restricted Subsidiaries, including purchase
money mortgages, leases capitalized in accordance with Statement 13 of the
Financial Accounting Standards Board and conditional sales contracts and
similar title retention debt in instruments (excluding any current
maturities of such indebtedness) which by its terms matures more than one
year from the date of any calculation thereof and/or which is renewable or
extendible under any revolving or similar agreement. The calculation of
Funded Debt shall include all Funded Debt of Interpool and its Restricted
Subsidiaries, plus any Funded Debt of another Person, other
42
<PAGE>
than a Restricted Subsidiary, which has been guaranteed by Interpool or its
Restricted Subsidiaries. Funded Debt shall exclude all Indebtedness of
Interpool or any of its Restricted Subsidiaries which is non-recourse to
Interpool or any of its Restricted Subsidiaries, as the case may be.
"GAAP" shall mean generally accepted accounting principles, in effect
----
from time to time, consistently applied in the United States.
"Guarantor" shall mean Interpool or Ltd.
---------
"Guaranties" shall mean the Guaranties by each of the Guarantors in
----------
favor of each Purchaser, substantially in the form of Exhibit D.
---------
"Initial Advance Amount" shall mean for each Direct Finance Lease, the
----------------------
amount equal to 100% of the net present value of all remaining Lease
payments at the time such Direct Finance Lease or a portion thereof becomes
a part of the Collateral Value where such Lease payments are present valued
at the interest rate of the Notes.
"Investment Company Act of 1940" shall mean the Investment Company Act
------------------------------
of 1940, as amended.
"Investors" shall have the meaning set forth in Section 5.8 hereof.
--------- -----------
"Issuer(s)" shall have the meaning set forth in the introductory
---------
paragraph hereof.
"Joinder Agreement" shall mean a joinder agreement entered into by the
-----------------
Collateral Administration Agent, the Issuers and each of the other
financial institutions from time to time party thereto, substantially in
the form of Exhibit K hereto.
---------
"Leases" shall mean all leases or similar agreements or arrangements
------
with respect to the Financed Equipment, but only to the extent that they
relate to the Financed Equipment, and all extensions, substitutions and
modifications thereto, and only to the extent that they either (a) are in
the form of one of the forms of lease contained in Schedule 15(a) hereto or
(b) vary from any of such forms only in respects that, individually or
collectively, do not (i) cause such leases to provide other than that the
lessees thereunder are generally required to pay and perform all
obligations in respect of the Financed Equipment covered thereby, (ii)
prohibit the assignment thereof by the lessor, (iii) provide for or permit
setoffs or defenses by the lessee or (iv) provide for any obligations of
lessor other than to provide for quiet enjoyment to the lessee absent a
default thereunder.
"Liens" shall mean all mortgages, liens, judicial liens, encumbrances,
-----
security interests, charges, pledges, hypothecations, assignments,
conditional sale or other title retention agreements and the like, relating
to any real or personal property interest of any Issuer, whether legal or
equitable.
"Long-Term Leases" shall mean minimum lease rentals of non-capitalized
----------------
leases whereunder Interpool or any Restricted Subsidiary is the lessee with
an initial term in excess of three years, excluding leases of office
---------
equipment and motor vehicles used in the ordinary course of business.
"Majority In Interest", as of a particular date of determination,
--------------------
shall mean the holders of more than 66 2/3% of the aggregate outstanding
principal amount of the Notes excluding any Notes held by an Issuer or an
Affiliate.
43
<PAGE>
"Make Whole Premium" and related definitions. For all purposes of
------------------
this Agreement, the following terms shall have the following meanings (such
definitions to be equally applicable to both the singular and plural forms
of the terms defined):
"Discounted Value" shall mean, as of any Settlement Date, the sum
----------------
of amounts obtained by discounting all Remaining Scheduled Payments as
of such Settlement Date from their respective scheduled due dates to
the Settlement Date in accordance with accepted financial practice and
using a discount factor based on the Reinvestment Yield restated on an
equivalent quarterly compounded basis. The Reinvestment Yield
restated on an equivalent quarterly compounded basis ("Yq") shall be
equal to the product of (a) four, and (b) one subtracted from the
square root of the sum of one plus a fraction, the numerator of which
is the Reinvestment Yield and the denominator of which is two, it
being understood that the foregoing calculation is expressed as the
formula below where RY equals the Reinvestment Yield:
________
Yq = 4 x ( 1 + RY - 1)
--
2
Such discount factor for each Remaining Scheduled Payment shall be applied
by dividing such Remaining Scheduled Payment ("RSP") by an amount equal to
(A) the sum of one plus a fraction, the numerator of which is the
Reinvestment Yield restated on an equivalent quarterly compounded basis
(Yq) and the denominator of which is four, (B) which sum shall be raised to
an exponent equal to the number of quarterly payments or portions thereof
from the Settlement Date to the scheduled due date of such Remaining
Scheduled Payment ("n"), it being understood that the foregoing calculation
is expressed as the formula below:
Discounted RSP
----------
Value of RSP = (1 + Yq)n
--
4
"Make Whole Premium" shall mean, as of any Settlement Date, an
------------------
amount equal to the excess, if any, of the Discounted Value over the
unpaid principal amount of the Note (or the portion thereof being
prepaid or accelerated) then outstanding (determined immediately prior
to any prepayment made on such Settlement Date). The Make Whole
Premium shall in no event be less than zero.
"Reinvestment Yield" shall mean, as of any Settlement Date,
------------------
0.50% over the yield to maturity (computed to the fifth decimal place
(one thousandth of a percentage point) and then rounded to the fourth
decimal place (one hundredth of a percentage point)) implied by the
yields reported, as of 10:00 a.m. (New York City time) two Business
Days next preceding such Settlement Date on the display designated as
"Page 500" on the Telerate Service for actively traded U.S. Treasury
securities having a maturity equal to the Remaining Average Life of
the Notes as of such Settlement Date (or if such data services are no
longer available or if such yields shall not be reported as of such
time or the yields reported as of such time shall not be
ascertainable, then any publicly available source of similar market
data acceptable to at least 51% of the Purchasers of the outstanding
Notes being prepaid or accelerated, as the case may be). It is
understood that the yield to maturity for actively traded U.S.
Treasury securities and the Reinvestment Yield are stated on a semi-
annual bond equivalent basis in accordance with accepted financial
practice. Such implied yield shall be determined, if necessary, by
(a) converting U.S. Treasury bill/note quotations to bond-equivalent
yields in accordance with accepted financial
44
<PAGE>
practice and (b) interpolating linearly (calculated to the nearest
one-twelfth of a year) between yields reported for (i) the actively
traded U.S. Treasury security with a maturity closest to and less than
the Remaining Average Life and (ii) the actively traded U.S. Treasury
security with a maturity closest to and greater than the Remaining
Average Life, except that if the Remaining Average Life is less than
one year, the yield on actively traded U.S. Treasury securities
adjusted to a constant maturity of one year shall be used.
"Remaining Average Life" shall mean, as of any Settlement Date,
----------------------
the number of years (calculated to the nearest one-twelfth year)
obtained by dividing (i) the principal amount of the Notes then
outstanding (or if less than all Notes are to be prepaid, the
principal amount to be prepaid) (determined prior to any prepayment or
acceleration required or made on such Settlement Date) into (ii) the
sum of the products obtained by multiplying (a) each Remaining
Scheduled Payment (but not of interest thereon) by (b) the number of
years (calculated to the nearest one-twelfth year) which will elapse
between such Settlement Date and the scheduled due date of such
Remaining Scheduled Payment.
"Remaining Scheduled Payments" shall mean, as of any Settlement
----------------------------
Date, all payments of principal to be prepaid or accelerated on such
Settlement Date and interest on such payments that would be due on or
after such Settlement Date if such Note (or such payments of
principal) were not prepaid or accelerated prior to its (or their)
scheduled due date (excluding accrued interest from the last date that
interest was payable to and including the date prior to the Settlement
Date).
"Settlement Date" shall mean each Prepayment Date and the date of
---------------
any other prepayment or acceleration of the Notes with respect to
which prepayment or acceleration the Make Whole Premium is payable.
"Margin Stock" shall have the meaning as defined in Regulation U.
------------
"Moody's" shall mean Moody's Investors Services, Inc.
-------
"NAIC" shall have the meaning set forth in Section 4.13(a) hereof.
---- ---------------
"Net Book Value" shall have the meaning as determined in accordance
--------------
with GAAP.
"Net Earnings" shall mean the consolidated net income before
------------
extraordinary items of Interpool and its Restricted Subsidiaries for any
period, determined in conformity with GAAP applied on a basis consistent
with those applied in preparing Interpool's audited annual reports.
"New Equipment" shall mean newly manufactured Equipment owned at any
-------------
time by any of the Issuers that have not yet been put into use and free of
all Liens.
"Nominee(s)" shall have the meaning set forth in Section 3 hereof.
---------- ---------
"Notes" shall have the meaning set forth in Section 1.2 hereof.
----- -----------
"Obligations" shall mean (i) any and all indebtedness, obligations,
-----------
liabilities and agreements of any kind and nature of the Issuers pursuant
to this Agreement, the Notes or any other Transaction Document to or with
any of the Purchasers, or to or with any Nominees of any of the Purchasers,
or of
45
<PAGE>
any guarantor of any of such Issuers' indebtedness, obligations,
liabilities and agreements, now existing or hereafter arising, and now or
hereafter incurred, whether in the form of loans, guarantees, interest,
charges, expenses, fees (including, without limitation, attorneys' fees) or
otherwise, direct or indirect, (including, without limitation, any
participation or interest of any of the Purchasers (or of a Nominee of any
of the Purchasers) in any such Issuers' indebtedness) acquired outright,
conditionally or as collateral security from another, absolute or
contingent, joint and/or several, liquidated or unliquidated, due or not
due, contractual or tortious, secured or unsecured, arising by operation of
law or otherwise, whether incurred by the Issuers as principal, surety,
endorser, guarantor, accommodation party or otherwise; (ii) all other sums
and charges to be paid to the Purchasers pursuant to this Agreement; and
(iii) all interest and late charges on any of the foregoing.
"Officer's Certificate" shall mean a certificate signed by the
---------------------
President, any Vice President, the Treasurer or an Assistant Treasurer and,
in the case of a commercial bank or trust company, by any other officer
customarily performing the functions similar to those performed by the
Persons who at the time shall be such officers, or to whom any corporate
trust matter is referred because of his knowledge of and familiarity with
the particular subject; provided, however, that in the case of the
-------- -------
Collateral Agent, "Officer's Certificate" shall mean a certificate signed
by any Vice President, any Trust Officer or any Assistant Trust Officer who
is, in each case, responsible for corporate trust administration.
"Other Investments" shall mean investments in excess of an aggregate
-----------------
of $10,000,000.00 (other investments up to an aggregate of $10,000,000.00
being provided for in Section 9.25(k) hereof) in anything other than those
---------------
investments listed in paragraphs (a) through (g) and (i) and (j) of Section
-------
9.25 hereof, which shall be deemed to be Unrestricted Subsidiaries for
- ----
purposes of calculating the financial covenants in connection with Section
-------
9.19 hereof.
- ----
"Overdue Rate" shall have the meaning set forth in the Notes.
------------
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
----
Person succeeding to the functions thereof.
"Permitted Investments" shall have the meaning set forth in Section
--------------------- -------
9.25 hereof.
- ----
"Permitted Liens" shall mean
---------------
(i) Liens for Taxes not yet delinquent or which are being
contested in good faith by appropriate proceedings and the enforcement of
which has been stayed (and for the payment of which adequate reserves are
provided);
(ii) carriers', seamen's, stevedores', wharfinger's,
warehousemen's, mechanics', suppliers', materialmen's, repairmen's or other
like Liens arising in the ordinary course of business and relating to
amounts not yet due or which shall not have been overdue for a period of
more than sixty (60) days or which are being contested in good faith by
appropriate proceedings or for the payment of which adequate reserves have
been provided;
(iii) leases, lease agreements, and other contracts entered into
in the ordinary course of business providing for the leasing, sale or
exchange of Equipment owned by the Company;
(iv) deposits and other forms of security given to any
governmental agency or body created or approved by law or governmental
regulation as a condition to the transaction of business or the exercise of
any privilege, franchise or license;
46
<PAGE>
(v) deposits and other forms of security in connection with
worker's compensation, unemployment insurance and other social security
legislation; and
(vi) deposits and other forms of security to secure the
performance of bids, trade contracts (other than for borrowed money),
leases, surety and appeal bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business.
"Person" shall mean and include an individual, a partnership, a joint
------
venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
"Placement Agent" shall have the meaning set forth in Section 4.14
--------------- ------------
hereof.
"Plan" shall mean any plan subject to the minimum funding requirements
----
of Section 412 of the Code.
"Prepayment Date" shall mean the date of an optional prepayment of any
---------------
of the Notes by any Issuer pursuant to Section 5.5 hereof.
-----------
"Prior Private Placement" shall mean the placement of 7.21% senior
-----------------------
secured notes issued by the Issuers on July 25, 1995.
"Private Placement Memorandum" shall mean the Annual Report on Form
----------------------------
10K for the fiscal year ended 1994, the Quarterly Report on Form 10Q for
the fiscal quarter ended September 30, 1995, the Summary of Proposed Terms
and Conditions dated November 3, 1995 and other documents provided by any
of the Issuers to the Purchasers.
"Pro-Forma Fixed Charges" for any period shall mean the aggregate
-----------------------
amount of Fixed Charges as adjusted to reflect an increase or decrease in
Funded Debt for such period.
"PTE" shall have the meaning set forth in Section 8.3 hereof.
--- -----------
"Purchasers" shall have the meaning set forth in the introductory
----------
paragraph hereof and shall include the successors and assigns of each
Purchaser.
"Qualified Institutional Buyer" shall mean
-----------------------------
(i) A duly authorized domestic bank, savings and loan
association, insurance company, registered investment company, registered
investment adviser or registered dealer, acting for its own account, which
in the aggregate owns and invests on a discretionary basis at least $100
million in securities and, in each case, which has a net worth of at least
$100 million; or
(ii) A foreign bank, savings and loan association or
insurance company or equivalent institution, acting for its own account,
which in the aggregate owns and invests on a discretionary basis at least
$100 million in securities and, in each case, has a net worth of at least
$100 million; or
(iii) Any other entity which also constitutes a "qualified
institutional buyer" as defined in Rule 144A under the Securities Act of
1933 (or any successor statute) and the rules and regulations thereunder,
all as from time to time in effect.
47
<PAGE>
"QPAM Exemption" shall have the meaning set forth in Section 8.3(c)
-------------- --------------
hereof.
"Railcars" shall mean steel wheeled vehicles for use on railroad
--------
tracks.
"Railcars Security Agreement" shall mean the Railcars Security
---------------------------
Agreement between the Collateral Agent and Interpool in respect of the
Railcars (as the same may be amended, supplemented or modified from time to
time), substantially in the form of Exhibit H.
---------
"Railcars Security Agreement Supplement" shall mean any Supplement to
--------------------------------------
the Railcars Security Agreement between the Collateral Agent and Interpool
substantially in the form of Annex A to Exhibit H.
---------
"Record Date" shall have the meaning specified in the relevant Note.
-----------
"Register" shall have the meaning specified in Section 5.4(a) hereof.
-------- --------------
"Regulation U" shall mean Regulation U of the Board of Governors of
------------
the Federal Reserve System, as the same may be amended or supplemented from
time to time.
"Related Party" shall mean the following: The Ivy Group, Radcliff
-------------
Group, Princeton Intermodal Equipment Trust I, Eurochassis L.P., three New
Jersey limited partnerships called Microtech Three, Microtech Four and
Microtech Five, Princeton International Properties, Inc., Martom
Associates, and 211 College Road Associates, a New Jersey general
partnership and any other Affiliates of Interpool or its Restricted
Subsidiaries.
"Reportable Event" shall have the meaning as such term is defined in
----------------
Title IV of ERISA.
"Responsible Officer" shall mean, with respect to the subject matter
-------------------
of any covenant, agreement or obligation of any Person contained in any
Transaction Document, the President, or any Vice President, Treasurer,
Assistant Treasurer or other officer thereof, who in the normal performance
of his or her operational responsibility would have knowledge of such
matters and the requirements with respect thereto.
"Restricted Payments" shall mean cash dividends, redemption of capital
-------------------
stock, Other Investments, and investments in Unrestricted Subsidiaries.
"Restricted Subsidiary" shall mean any Subsidiary which has not been
---------------------
designated as an Unrestricted Subsidiary, provided that (i) Ltd. shall be a
Restricted Subsidiary unless and until (a) it shall be fully released from
all its Obligations (other that its representations, warranties and
indemnities) upon Interpool's assumption of all such Obligations pursuant
to Section 5.6(a) hereof, or (b) its Notes and all its other Obligations
--------------
shall have been paid in full, provided further that Ltd. may not be
----------------
designated as an Unrestricted Subsidiary if a Default or an Event of
Default shall have occurred and be continuing or would result from Ltd.
being designated as an Unrestricted Subsidiary and (ii) Corp. shall be a
Restricted Subsidiary unless and until (a) it shall be fully released from
all its Obligations (other that its representations, warranties and
indemnities) upon Interpool's and/or Ltd.'s assumption of all such
Obligations pursuant to Sections 5.6(a) and 5.6(b) hereof, or (b) its Notes
--------------------------
and all its other Obligations shall have been paid in full, provided
--------
further that Corp. may not be designated as an Unrestricted Subsidiary if a
- -------
Default or an Event of Default shall have occurred and be continuing or
would result from Corp. being designated as an Unrestricted Subsidiary.
48
<PAGE>
"Securities Act" shall mean the Securities Act of 1933, as amended.
--------------
"Security Agreement(s)" shall mean each of the Security Agreements
---------------------
between the Collateral Agent and an Issuer in respect of the Collateral,
excluding the Railcars, as the same may be amended, supplemented or
modified from time to time substantially in the form of Exhibit E.
---------
"Security Agreement Supplement(s)" shall have the meaning set forth in
--------------------------------
the Security Agreement.
"Source" shall have the meaning set forth in Section 8.3 hereof.
------ -----------
"Standard & Poor's" shall mean Standard & Poor's Corporation.
-----------------
"Subsidiary" shall mean any Person (other than an individual) with
----------
respect to which Interpool or any one or more of its subsidiaries has
Control.
"Tangible Net Worth" shall mean stockholders' equity as set forth on a
------------------
consolidated financial statement for Interpool and its Restricted
Subsidiaries, reduced by all items of goodwill and other intangible assets
(other than deferred charges).
"Taxes" shall have the meaning set forth in Section 9.23(a) hereof.
----- ---------------
"Trailers" shall mean general purpose, 45 foot length standard
--------
piggyback trailers.
"Transaction Documents" shall mean this Agreement, the Notes, the
---------------------
Agency Agreement, the Collateral Administration Agreement and the
Collateral Documents.
"UCC" shall mean the Uniform Commercial Code as enacted in any state
---
of the United States or in the District of Columbia or the United States
Virgin Islands insofar as any such statute, as in effect from time to time,
may be relevant to the creation, perfection, continuation and enforcement
of Liens on Collateral.
"Unamortized Portion" shall mean for each Direct Finance Lease, the
-------------------
amount equal to 100% of the net present value of all remaining Lease
payments as of the date such calculation is made, where such Lease payments
are present valued at the interest rate of the Notes.
"Unrestricted Subsidiary" shall mean any Subsidiary which is
-----------------------
designated by Interpool as an Unrestricted Subsidiary and/or any Other
Investment. Unrestricted Subsidiaries and Other Investments shall not be
restricted by the provisions of this Agreement applicable to Restricted
Subsidiaries, and the debt, other liabilities, earnings and assets of the
Unrestricted Subsidiaries and Other Investments will not be consolidated
with those of Interpool and its Restricted Subsidiaries in calculating
consolidated Net Earnings, Tangible Net Worth and Funded Debt.
"Used Equipment" shall mean all Equipment owned at any time by any of
--------------
the Issuers that is not New Equipment.
49
<PAGE>
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterparts of this Agreement and return the
same to the Issuers, whereupon this Agreement shall become a binding
agreement among the Issuers and the Purchasers.
Very truly yours,
INTERPOOL, INC.
By:
------------------------------
Name:
Title:
INTERPOOL LIMITED
By:
------------------------------
Name:
Title:
INTERPOOL FINANCE CORP.
By:
------------------------------
Name:
Title:
<PAGE>
The foregoing Agreement is
hereby accepted as of the
date first above written.
NOTE PURCHASERS:
*
By *
By:
------------------------------
Name:
Title:
*
By:
------------------------------
Name:
Title:
* Confidential Treatment Requested
<PAGE>
Schedule 1 to the Note Purchase Agreement
-----------------------------------------
Purchasers Schedule
-------------------
<TABLE><CAPTION>
Investor Interpool, Inc. Interpool Interpool Finance
Total ($MM) Limited Corp.
<S> <C> <C> <C> <C>
ALL INVESTORS ($mm) $30 $10,700,000.00 $11,000,000.00 $8,300,000.00
* $20 $7,133,333.00 $7,333,333.00 $5,533,334.00
* $10 $3,566,667.00 $3,666,667.00 $2,766,666.00
</TABLE>
* Confidential Treatment Requested
1-1
Exhibit 10.30
FORM OF SECURITY AGREEMENT
SECURITY AGREEMENT (the "Agreement"), dated ____, December, 1995 between
---------
[INTERPOOL, INC., a Delaware corporation,] [INTERPOOL LIMITED, a Barbados
corporation,] [INTERPOOL FINANCE CORP., a Cayman Islands corporation] (the
"Company"), and First Security Bank of Utah, National Association, as
------
collateral agent for the Purchasers and each other holder of a Note from
time to time (in such capacity, together with its successors in such
capacity, the "Collateral Agent").
----------------
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Interpool, Inc., Interpool Limited and Interpool Finance
Corp. (the "Obligors") have entered into that certain Note Purchase
Agreement, of even date herewith, with the Purchasers, as purchasers of the
Notes (as it may be amended and supplemented from time to time, (the "Note
----
Purchase Agreement"); and
- ------------------
WHEREAS, it is a condition precedent to the obligation of the
Purchasers to purchase the Notes provided for in the Note Purchase
Agreement that the Company shall execute and deliver this Agreement;
NOW, THEREFORE, in consideration of the premises and in order to
induce the Purchasers to purchase the Notes pursuant to the Note Purchase
Agreement, the parties hereto agree as follows:
SECTION 1. DEFINITIONS.
-----------
Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Note Purchase Agreement. The terms
"equipment," "inventory," "accounts," "chattel paper," "instruments,"
--------- --------- -------- ------------- -----------
"documents," "general intangibles," "products" and "proceeds" shall have
--------- ------------------- -------- --------
the respective meanings ascribed thereto in the UCC.
SECTION 2. SECURITY INTEREST.
-----------------
(a) To secure the due payment and performance of all of the
Obligations of the Company (the "Secured Obligations"), including, without
-------------------
limitation, the strict performance and observance by the Company of all
representations, warranties, agreements, covenants and conditions contained
in this Agreement,
<PAGE>
the Note Purchase Agreement, the Notes and the other Transaction Documents,
and any and all amendments thereto and replacements therefor, the Company
hereby assigns, mortgages, pledges, hypothecates, transfers and sets over
to the Collateral Agent, for the benefit of the Purchasers and the
Collateral Agent, and grants to the Collateral Agent, for the benefit of
the Purchasers and the Collateral Agent, a duly perfected first priority
Lien upon the Company's right, title and interest in and to (i) all
equipment and inventory now owned by the Company listed on Annex A attached
-------
hereto and all equipment and inventory hereafter listed on each of the
Security Agreement Supplements (the "Security Agreement Supplements")
------------------------------
executed from time to time in the form attached hereto as Annex B,
-------
including all accessions, additions, improvements and upgrades to, and
parts of, such equipment and inventory and all substitutions and
replacements therefor, all guarantees, warranties and rights against
manufacturers under purchase agreements or otherwise and other parties in
connection therewith, all insurance thereon and all insurance proceeds
payable in connection therewith; (ii) all lease rental schedules, master
leases as they relate to such lease rental schedules, Leases, Direct
Finance Leases, agreements for use and chattel paper to the extent that
they relate to the leasing by the Company of such equipment and inventory
now or hereafter in effect or executed from time to time, and any and all
renewals, extensions, modifications and substitutions thereof and therefor
(all such lease rental schedules, master leases, Leases, Direct Finance
Leases, agreements for use and chattel paper, to the extent that they cover
such equipment and inventory now or hereafter in effect or executed from
time-to time, and any and all renewals, extensions, modifications and
substitutions thereof and therefor, are hereinafter referred to
collectively as the "Lease Collateral"), all of its rights to all rentals
----------------
and additional rentals and all other amounts, monies or payments due or to
become due under the Lease Collateral, to the extent applicable to such
equipment and inventory, including, without limitation, amounts, monies or
payments representing rent, principal, interest, Taxes, insurance premiums,
condemnation awards, delinquency charges, together with rights evidenced by
an account, note, contract, security agreement, chattel paper or other
evidence of indebtedness or security, all guaranties, warranties and
indemnities in respect thereof, and all of its accounts, contract rights
and general intangibles arising thereunder; (iii) all security pledged,
assigned, hypothecated or granted to or held by the Company to secure the
obligations of any lessees or other obligors under any Lease Collateral;
(iv) all powers of attorney for the execution of any evidence of
indebtedness or security or other writing in connection with the Lease
Collateral or such equipment and inventory; (v) all books, records, ledger
cards, invoices and certificates of title relating to the Lease Collateral
or such equipment and inventory; (vi) all evidences of the filing of
financing statements and other statements, if any, and the registration and
notation of Liens on certificates of title or of other instruments in
connection with any of the foregoing and all amendments thereto, notices to
other creditors or secured parties, and certificates from filing or other
registration offices; (vii)
2
<PAGE>
all credit information, reports and memoranda relating to such Lease
Collateral; (viii) all maintenance contracts relating to such equipment and
inventory; and (ix) all proceeds, including without limitation insurance
proceeds, and products of any and all of the foregoing (all of the items
described in preceding parts (i) through (ix) being hereinafter referred to
as the "Collateral").
----------
(b) (i) This Agreement shall create a present and continuing
collateral assignment of and security interest in the Collateral and shall
remain in full force and effect until payment in full of the Obligations to
the Purchasers. Upon receipt by the Collateral Agent of written advice
from the Purchasers that the Notes and all the Secured Obligations have
been paid or satisfied in full, the Collateral Agent shall, upon the
Company's written request, promptly execute and deliver to the Company, at
the Company's expense, termination statements for all financing statements
filed by the Collateral Agent against the Company and such assignments and
reassignments as the Company shall reasonably require in order to terminate
the security interests created hereunder and any collateral assignments of
Collateral to the Collateral Agent, in each case with the Collateral
Agent's sole representation and warranty that the Collateral is being
reconveyed free and clear of any Lien created by or as a result of any act
of the Collateral Agent.
(ii) Notwithstanding the foregoing to the contrary, the
Collateral Agent agrees that the Company shall be permitted to add
Collateral to, and obtain the partial or full release of Collateral from,
the Lien created under this Agreement from time to time on the terms and
subject to the conditions set forth in the Note Purchase Agreement.
SECTION 3. COMPANY'S TITLE; LIENS AND ENCUMBRANCES; SECURITY
INTEREST.
-------------------------------------------------
(a) The Company represents and warrants that the Company is or,
to the extent that Collateral is acquired after the date hereof, agrees
that it will be, on the date on which such Collateral is included in the
Lien created under this Agreement, the owner of the Collateral, having good
and marketable title thereto free from any and all Liens except for the
Lien created and granted pursuant to this Agreement and Permitted Liens.
(b) The Company will not create or assume or permit to exist any
Lien or claim on or against the Collateral, except for the Lien hereof and
Permitted Liens, and the Company will promptly notify the Collateral Agent
of any such Lien, except for the Lien hereof and Permitted Liens, made or
asserted against the Collateral, and will defend the Collateral against,
and take all such action as may be necessary to remove, any such Lien,
other than the Lien hereof and Permitted Liens.
(c) The Company represents and warrants that the Liens which
have been created in favor of the Collateral Agent on behalf
3
<PAGE>
of the Purchasers under this Agreement and granted to the Collateral Agent
on behalf of the Purchasers upon the execution of this Agreement,
constitute, or which will be created and granted upon the execution and
delivery of a Security Agreement Supplement, will constitute, first
priority Liens, and with respect to Trailers, Containers and non-titled
Chassis, upon the filing of appropriate UCC financing statements, duly
perfected Liens in favor of the Collateral Agent on behalf of the
Purchasers on the Collateral subject to no other Lien other than the Lien
hereof and Permitted Liens on such Collateral, and with respect to titled
Chassis and Trailers, upon the notation of Liens on certificates of title,
duly perfected Liens in favor of the Collateral Agent on behalf of the
Purchasers on the Collateral subject to no other Lien other than the Lien
hereof and Permitted Liens on such Collateral.
SECTION 4. LOCATION OF COLLATERAL AND RECORDS; NAMES OF COMPANY.
-----------------------------------------------------
(a) The Company represents and warrants that it has, and during
at least the past four months, has had, no place of business or office
where the Company's books of account and records are kept other than its
Chief Office set forth on Schedule 7.1 of the Note Purchase Agreement.
------------
(b) The Company shall maintain all its properties in good
working order and condition and, in the ordinary course of business, make
all repairs, replacements, additions and improvements in accordance with
the provisions of Section 9.5 of the Note Purchase Agreement.
(c) The Company shall notify the Collateral Agent in writing at
least thirty (30) days in advance of (a) any change of location of its
Chief Office, (b) the change, elimination or opening of any chief executive
office of the Company, or (c) any change in the place where the Company
maintains its records as to the Collateral such that such records are not
located at the Company's Chief Office. The Company shall notify the
Collateral Agent in writing promptly following a change in the character,
use or location of any of the Financed Equipment such that any of such
Financed Equipment ceases to be either "mobile goods" or "goods covered by
a certificate of title", in each case within the meaning of the UCC. The
Company shall notify the Collateral Agent in writing within five (5) days
if there is a change in the character of any of the Collateral such that it
constitutes an "instrument" (other than an "instrument" which constitutes
part of "chattel paper") within the meaning of the UCC.
SECTION 5. PERFECTION OF SECURITY INTEREST.
-------------------------------
The Company will join with the Collateral Agent in executing one
or more UCC financing statements, applications for the notation of the
Liens created hereunder on certificates of title covering any of the
Collateral or other notices, agreements, documents or instruments
appropriate under applicable law in form
4
<PAGE>
satisfactory to the Collateral Agent and shall pay all filing or recording
costs with respect thereto, and all costs of filing or recording this
Agreement or any other instrument, agreement or document executed and
delivered pursuant hereto (including the cost of all Federal, state or
local mortgage, documentary, stamp or other Taxes), in each case, in all
public offices where filing or recording is deemed by the Purchasers to be
necessary or desirable. The Company hereby authorizes the Collateral Agent
to take all action at the expense of the Company (including, without
limitation, the filing of any UCC financing statements or amendments
thereto, applications for the notation of the Liens created hereunder on
certificates of title covering any of the Collateral and any other
documents or instruments without the signature of the Company) which the
Purchasers may deem reasonably necessary or desirable to perfect or
otherwise protect the Liens created hereunder and to obtain the benefits of
this Agreement. The Collateral Agent shall endeavor to give the Company
notice prior to taking such action if such notice is practicable; provided,
however, the Collateral Agent shall take such action whether or not such
notice is received by the Company. Without limiting the generality of the
foregoing, the Company shall, at the Company's expense, take and cause to
be taken all such actions as the Collateral Agent by instructions from the
Purchasers may reasonably request in order to perfect and continue the
perfection of the Liens granted to the Collateral Agent in the Collateral.
The Collateral Agent shall have the right at any time at the Company's
expense to cause the perfection of the Liens granted to the Collateral
Agent in the Collateral by whatever means reasonably deemed by the
Purchasers to be necessary, and the Company shall cooperate fully with the
Collateral Agent in connection therewith.
SECTION 6. GENERAL COVENANTS.
-----------------
The Company covenants and agrees that it shall:
(a) furnish the Collateral Agent, and the Collateral Agent shall
deliver to each Purchaser upon request by such Purchaser, from time to time
at the Collateral Agent's request, with written statements and schedules
further identifying and describing the Collateral in such detail as the
Collateral Agent may reasonably require;
(b) comply or, with respect to the Collateral, require the
lessees thereof to comply, with all acts, rules, regulations and orders of
any legislative, administrative or judicial body or official applicable to
the Collateral or any part thereof or to the operation of the Company's
business;
(c) at all times use, or require the lessees to use, the
Collateral for lawful purposes only, with all reasonable care and caution;
5
<PAGE>
(d) cause the Lien granted pursuant to this Agreement to be at
all times a first priority duly perfected Lien upon the Collateral, subject
to no Liens other than Permitted Liens; and
(e) promptly execute and deliver to the Collateral Agent, and
the Collateral Agent shall deliver to each Purchaser upon request by such
Purchaser, such further deeds, mortgages, assignments, security agreements
or other instruments, documents, certificates and assurances and take such
further action as the Collateral Agent may from time to time in its
reasonable discretion deem necessary to perfect, protect or enforce its
Lien on the Collateral or otherwise to effectuate the intent of this
Agreement, including, without limitation, the right of the Collateral Agent
upon the occurrence of an Event of Default and pursuant to instructions by
the Majority In Interest to enforce such rights to (i) take possession of
the Collateral and without liability for trespass to enter any premises
where the Collateral may be located for the purpose of taking possession of
or removing the Collateral, as to any or all of the Collateral, by any
available judicial procedure, or without judicial process, and, in
connection therewith, the Company shall, upon request of the Collateral
Agent and at the Company's expense, assemble the Collateral and make it
available to the Collateral Agent at the Company's standard depot locations
worldwide, and (ii) to require the Company to, and upon such demand the
Company shall (A) instruct each lessee under the Lease Collateral to make
payment of rentals and other sums (to the extent that such rentals and
other sums relate to the Financed Equipment) due and becoming due under a
Lease included in the Lease Collateral directly to, in the Collateral
Agent's sole discretion, either the Collateral Agent or to a post office
box designated by the Collateral Agent to which only the Collateral Agent
shall have access, (B) if the Company shall receive any rental or other
payment in respect of any Financed Equipment covered by any such Lease, or
any Financed Equipment (including, without limitation, any proceeds of
insurance with respect to Financed Equipment), hold such payment in trust
by the Company for the benefit of the Purchasers and the Collateral Agent
and shall not commingle such payment with any other moneys or assets of the
Company, and (C) promptly turn over and remit to the Collateral Agent all
sums thus received, in the identical form as received, with all such
endorsements thereof as may be required, as contemplated by Section 8
---------
hereof; in the event that the Company shall fail within three (3) Business
Days of demand by the Collateral Agent to notify the Lessees to make
payments to the Collateral Agent or to a post office designated by it, the
Collateral Agent shall be entitled to do so, either in the name of the
Company pursuant to its power of attorney in Section 11 hereof or in its
----------
own name.
SECTION 7. ASSIGNMENT OF INSURANCE.
-----------------------
(a) The Company shall keep all its properties insured as
provided in Section 9.6 of the Note Purchase Agreement.
6
<PAGE>
(b) As further security for the due payment and performance of
the Secured Obligations, the Company hereby assigns to the Collateral Agent
all sums relating to the Collateral, which may become payable under or in
respect of any policy of insurance owned by the Company or payable to the
Company covering the Collateral, and the Company hereby directs each
insurance company issuing any such policy owned by the Company to make
payment of such sums directly to the Collateral Agent upon notice from the
Collateral Agent to such insurance company of the occurrence of an Event of
Default as defined in the Note Purchase Agreement. The Company hereby
appoints the Collateral Agent as the Company's attorney-in-fact and in the
Company's or in the Collateral Agent's name to do one or more of the
following upon the occurrence of an Event of Default and pursuant to
instructions by the Majority In Interest: (i) endorse any check or draft
representing any such payment or execute any proof of claim, subrogation
receipt or any other document required by such insurance company as a
condition to or otherwise in connection with such payment or (ii) assign
the proceeds under any such policies. All such sums received by the
Collateral Agent shall be paid by the Collateral Agent to the Purchasers
pursuant to the Agency Agreement or, to the extent that such sums represent
unearned premiums in respect of any policy of insurance on the Collateral
refunded by reason of cancellation, toward payment for similar insurance
protecting the respective interests of the Company and the Collateral
Agent, or as otherwise required by applicable law. The Company shall
provide to the Collateral Agent evidence that the Collateral Agent for the
benefit of the Purchasers and the Purchasers have been named as additional
insureds and loss payees. On the date on which a policy of insurance
relating to the Collateral is issued or renewed, the Company shall promptly
provide to the Collateral Agent evidence that the Collateral Agent for the
benefit of the Purchasers together with the Purchasers have been named as
additional insureds and loss payees.
SECTION 8. COLLECTIONS.
-----------
At any time if the Collateral Agent exercises the rights granted
to it under this Agreement, the Company shall, at the request of the
Collateral Agent, immediately upon receipt of any checks, drafts, cash or
other remittances in payment of any of its accounts, contract rights, or
general intangibles constituting part of the Collateral or in payment for
any Collateral sold, transferred, or otherwise disposed of, or in payment
of or on account of its accounts, contracts, contract rights, notes,
drafts, acceptances, general intangibles choses in action and all other
forms of obligations relating to any of the Collateral so sold, transferred
or otherwise disposed of, deliver any such items to the Collateral Agent
accompanied by a remittance report in form supplied or approved by the
Collateral Agent, such items to be delivered to the Collateral Agent in the
same form received, endorsed or otherwise assigned by the Company where
necessary to permit collection of items and, regardless of the form of such
endorsement the Company hereby waives presentment, demand, notice
7
<PAGE>
of dishonor, protest, notice of protest and all other notices with respect
thereto. All such remittances shall be applied and paid over by the
Collateral Agent to the Purchasers pursuant to the Agency Agreement or as
otherwise required by applicable law.
SECTION 9. RIGHTS AND REMEDIES ON DEFAULT.
------------------------------
(a) In the event of the occurrence of any Event of Default and
pursuant to instructions by the Majority In Interest to enforce the Lien
granted hereunder:
(i) the Collateral Agent shall at any time thereafter
have the right, itself or through any of its agents, as to any or all of
the Collateral (to the extent it is permissible to do so in view of the
rights of lessees who may have the right to possession of certain
Collateral), by any available judicial procedure, or without judicial
process, to take possession of the Collateral and without liability for
trespass to enter any premises where the Collateral may be located for the
purpose of taking possession of or removing the Collateral, and, generally,
to exercise any and all rights afforded to a secured party under the UCC or
other applicable law;
(ii) without limiting the generality of the foregoing,
the Company agrees that the Collateral Agent shall have the right (subject
to any rights of lessees) to sell, lease, or otherwise dispose of all or
any part of the Collateral, whether in its then condition or after further
preparation or processing, either at public or private sale or at any
broker's board, in lots or in bulk, for cash or for credit, with or without
warranties or representations, and upon such terms and conditions, all as
the Collateral Agent in its sole discretion may deem advisable, and it
shall have the right to purchase at any such sale; and, if any Collateral
shall require rebuilding, repairing, maintenance, preparation, or is in
process or other unfinished state, the Collateral Agent shall have, the
right, at its option, to do such rebuilding, repairing, maintenance,
preparation, processing or completion of manufacturing, for the purpose of
putting the Collateral in such salable or disposable form as it shall deem
appropriate;
(iii) the Collateral Agent shall at any time have the
right to require the Company to, and upon such demand the Company shall (A)
instruct each lessee under the Lease Collateral to make payment of all
rentals and other sums relating to the Collateral, due and becoming due
under a Lease included in the Lease Collateral directly to, in the
Collateral Agent's sole discretion, either the Collateral Agent or to a
post office box designated by the Collateral Agent to which only the
Collateral Agent shall have access, (B) if the Company shall receive any
rental or other payment relating to the
8
<PAGE>
Collateral in respect of any such Lease, or any Financed Equipment
(including, without limitation, any proceeds of insurance with respect to
Financed Equipment), hold the amount of such payment relating to the
Collateral in trust by the Company for the benefit of the Purchasers and
the Collateral Agent and shall not commingle such payment with any other
moneys or assets of the Company, and (C) promptly turn over and remit to
the Collateral Agent all sums thus received, in the identical form as
received, with all such endorsements thereof as may be required, as
contemplated by Section 8 hereof; in the event that the Company shall fail
---------
within three (3) Business Days of demand by the Collateral Agent to notify
the lessees to make payments to the Collateral Agent or to a post office
designated by it, the Collateral Agent shall be entitled to do so, either
in the name of the Company pursuant to its power of attorney in Section 11
----------
hereof, or in its own name; and
(iv) at the Collateral Agent's request, the Company
shall assemble the Collateral and make the Collateral available to the
Collateral Agent at the Company's standard depots worldwide and make
available to the Collateral Agent, without rent or any other charge, all of
the Company's premises and facilities for the purpose of the Collateral
Agent's taking possession of, removing or putting the Collateral in salable
or disposable form.
(b) The Company hereby agrees that a notice sent at least ten
(10) days before the time of any intended public sale or of the time after
which any private sale or other disposition of the Collateral is to be
made, shall be reasonable notice of such sale or other disposition.
(c) The proceeds of any collection, sale, lease or other
disposition of all or any part of the Collateral, and of all proceeds of
the enforcement of any Lien created under this Agreement or any other
Transaction Document, together with any sums then held by any Purchaser or
the Collateral Agent as part of the Collateral, shall be applied and paid
over to the Purchasers pursuant to the Agency Agreement.
(d) To the extent permitted by applicable law, the Company
waives all claims, damages and demands against the Collateral Agent arising
out of the repossession, removal, retention, sale or lease of the
Collateral, provided that the Company does not waive any claim, damages or
demand it may have arising out of the Collateral Agent's willful misconduct
or gross negligence in connection with any action taken in respect of the
Note Purchase Agreement or this Agreement.
SECTION 10. COSTS AND EXPENSES.
------------------
Any and all fees, costs and expenses, of whatever kind or nature,
including the reasonable attorneys, fees and legal expenses incurred by the
Collateral Agent in connection with the preparation of this Agreement and
all other documents relating hereto and the consummation of the
transactions contemplated by the Note Purchase Agreement, the filing or
recording of UCC financing statements, applications for notation of the
Liens created hereunder on certificates of title covering any of the
Collateral and other
9
<PAGE>
documents (including all Taxes in connection therewith) in public offices,
the payment or discharge of any Taxes, insurance premiums, encumbrances or
otherwise protecting, maintaining or preserving the Collateral, or the
enforcing, foreclosing, retaking, holding, storing, processing, selling,
leasing or otherwise realizing upon the Collateral and the Collateral
Agent's Lien thereon, whether through judicial proceedings or otherwise, or
in defending or prosecuting any actions or proceedings arising out of or
relating to the transaction to which this Agreement relates, shall be borne
and paid by the Company on demand by the Collateral Agent and if not paid
within ten (10) days of such demand, the Collateral Agent shall provide the
notice to the Purchasers pursuant to the third sentence of Section 4 of the
Agency Agreement.
SECTION 11. POWER OF ATTORNEY.
-----------------
(a) The Company authorizes the Collateral Agent and does hereby
make, constitute and appoint the Collateral Agent, and any officer,
employee or agent of the Collateral Agent, with full power of substitution,
as the Company's true and lawful attorney-in-fact, exercisable upon the
occurrence of an Event of Default or if the Collateral Agent exercises any
of its rights under this Agreement pursuant to instructions by the Majority
In Interest, with power in its own name or in the name of the Company:
(i) to endorse any notes, checks, drafts, money
orders, or other instruments of payment (including payments payable under
or in respect of any policy of insurance) in respect of the Collateral that
may come into possession of the Collateral Agent;
(ii) to sign and endorse any invoice, freight or
express bill, bill of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications and notices in connection with
accounts, and other documents relating to the Collateral;
(iii) to pay or discharge Taxes, Liens, security
interests or other encumbrances at any time levied or placed on or
threatened against the Collateral;
(iv) to demand, collect, receive, compromise, settle
and sue for monies due in respect of the Collateral;
(v) to cause each lessee under the Lease Collateral to
make payment of rentals and other sums (to the extent that such rentals and
other sums relate to the Financed Equipment) due and becoming due under a
Lease included in the Lease Collateral to the Collateral Agent;
(vi) to notify lessees and other persons obligated with
respect to the Collateral to make payments directly to the Collateral
Agent; and
10
<PAGE>
(vii) generally, to do, at the Collateral Agent's option
and at the Company's expense, at any time, or from time to time, all acts
and things which the Collateral Agent reasonably deems necessary to
protect, preserve and realize upon the Collateral and the Collateral
Agent's security interest therein (including signing and filing any UCC
Financing Statements, applications for the notation of the Lien created
hereunder upon certificates of title covering the Collateral or other
agreements, documents, instruments or notices in the name of the Company or
otherwise) in order to effect the intent of this Agreement and of the other
Transaction Documents, all as fully and effectively as the Company might or
could do.
(b) The Company hereby ratifies all that said attorney shall
lawfully do or cause to be done by virtue hereof.
(c) This power of attorney, being coupled with an interest,
shall be irrevocable for the term of this Agreement and thereafter as long
as any of the Obligations shall be outstanding.
SECTION 12. DISPOSITION OF COLLATERAL.
--------------------------
The Company shall not be entitled to sell or otherwise dispose of
any of the Collateral except such as shall have been released from the Lien
granted hereby in accordance with the terms hereof or as permitted by the
Note Purchase Agreement.
SECTION 13. NOTICES.
--------
Except as otherwise provided for herein, all communications and
notices provided for herein shall be in writing and delivered by hand, the
United States certified or registered mail or by telecopier, and any such
notice shall become effective (a) upon personal delivery thereof,
including, without limitation, by overnight mail courier service, (b) five
(5) days after the date on which it shall have been mailed by United States
mail, certified or registered, postage prepaid, return receipt requested,
or (c) in the case of notice by telecopier, when electronically or
verbally confirmed, in each case addressed as follows:
If to the Company:
211 College Road East
Princeton, New Jersey 08540
Telephone: (609) 452-8900
Fax: (609) 452-8211
Attention: Richard W. Gross
11
<PAGE>
with a copy to:
633 Third Avenue, 17th Floor
New York, New York 10017
Fax: (212) 687-8403
Attention: President and Chief Financial Officer
If to the Collateral Agent:
First Security Bank of Utah, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Corporate Trust Department
Facsimile: (801) 246-5053
Any party may change the person or address to whom or which notices are to
be given hereunder, by notice duly given hereunder; provided, however, that
any such notice shall be deemed to have been given hereunder only when
actually received by the party to which it is addressed.
SECTION 14. OTHER SECURITY.
---------------
To the extent that the Secured Obligations are now or hereafter
secured by property other than the Collateral or by the guarantee,
endorsement or property of any other person, firm, corporation or other
entity, then the Collateral Agent shall have the right in its sole
discretion to pursue, relinquish, subordinate, modify or take any other
action with respect thereto, without in any way modifying or affecting any
of the Collateral Agent's rights and remedies hereunder.
SECTION 15. CUSTODY OF THE COLLATERAL.
-------------------------
Except as expressly provided herein or in the Agency Agreement,
the Collateral Agent shall have no duty as to the collection of any
Collateral in its possession or control or in the possession or control of
any agent or nominee of the Collateral Agent, or any income thereon or as
to the preservation of rights against prior parties or any other rights
pertaining thereto.
SECTION 16. WAIVERS; OBLIGATIONS ABSOLUTE.
-----------------------------
(a) No course of dealing between the Company and the Collateral
Agent, nor any failure to exercise, nor any delay in exercising, on the
part of the Collateral Agent, of any right, power or privilege hereunder or
under the Note Purchase Agreement shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege
hereunder or thereunder preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.
(b) The Company acknowledges that this Agreement is a
continuing obligation and that the obligations hereunder shall
12
<PAGE>
extend to each and every extension or renewal of any Obligation of the
Issuers, regardless of whether the Obligations of the Company may, in
successive transactions, be paid, repaid, advanced or renewed from time to
time and the Obligations shall be absolute, independent and unconditional
under any and all circumstances.
(c) The liability of the Company under this Agreement shall be
absolute and unconditional irrespective of the validity, legality or
enforceability of the Transaction Documents or other agreements evidencing
or securing the Obligations or any part thereof, or Collateral for any or
all of the Obligations or any part thereof or any other circumstance or
circumstances which might otherwise constitute a legal or equitable
discharge of, or a defense available to, a surety or guarantor and
regardless of any law, rule, regulation, order, writ, judgment, decree,
award or other administrative or judicial pronouncement now or hereafter in
effect in any jurisdiction purporting to affect in any manner any of the
terms of the Transaction Documents. The Purchasers or the Collateral
Agent, as applicable, may at any time or times, in their absolute
discretion, in the manner permitted under the Transaction Documents (a)
extend or change the time, manner, place or other term of payment of any -
Obligation or any part thereof, (b) waive compliance by any of the Obligors
with any term, covenant, agreement or condition on the part of such obligor
to be complied with under any of the Transaction Documents, (c) obtain or
release Collateral for, any guarantor or any obligor obligated with respect
to, any Obligation or any part thereof, (d) file, record, refile, rerecord
or otherwise perfect, fail to do any of the foregoing, or allow to lapse
any Transaction Document, financing statement, mortgage, deed of trust,
pledge or other security document or interest, covering or relating to
Collateral for, or securing, any Obligation or any part thereof, (e) settle
or compromise with the Obligors under any Transaction Document, or any
other person or entity obligated with respect to any Obligation or any part
thereof, and subordinate upon any terms the Purchasers' right or rights to
receive payment or performance of any Obligation or any part thereof, and
(f) amend or otherwise modify any Obligation or any part thereof or the
Transaction Documents, or the liability of the Obligors or any entity
obligated with respect thereto, in any manner, all without notice to or the
assent of the Company and without affecting this Agreement or the liability
of the Company hereunder, which shall continue with respect to the
Obligations as extended, changed, modified, settled or compromised, until
indefeasibly paid in full.
SECTION 17. CUMULATIVE REMEDIES.
--------------------
All of the Collateral Agent's rights and remedies with respect to
the Collateral, whether established hereby or by any other agreements,
instruments or documents or by law shall be cumulative and may be exercised
singly or concurrently.
13
<PAGE>
SECTION 18. SEVERABILITY.
-------------
The provisions of this Agreement are severable, and if any clause
or provision shall be held invalid or unenforceable in whole or in part in
any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction and
shall not in any manner affect such clause or provision in any other
jurisdiction, or any other clause or provision of this Agreement in any
jurisdiction.
SECTION 19. MODIFICATION.
-------------
This Agreement may not be amended or modified, nor may any
provisions be waived, except by a writing signed by each of the parties
hereto or, in the case of a waiver, by the party so waiving its rights.
SECTION 20. COUNTERPARTS.
-------------
This Agreement may be executed in as many counterparts as may be
deemed necessary or convenient, each of which, when so executed, shall be
deemed an original, but all such counterparts shall constitute one and the
same instrument.
SECTION 21. BINDING EFFECT, BENEFIT OF AGREEMENT
AND ASSIGNMENT.
------------------------------------
The benefits and burdens of this Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns; provided, however, that the rights and obligations
of the Company under this Agreement shall not be assigned or delegated
without the prior written consent of the Collateral Agent, and any
purported assignment or delegation without such consent shall be void. The
terms of this Agreement shall also inure to the benefit of each of the
Purchasers and their respective successors and assigns.
SECTION 22. GOVERNING LAW.
-------------
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York, applicable to contracts
entered into and to be performed entirely within such State.
SECTION 23. INDEMNITY.
---------
(a) The Company covenants and agrees to indemnify and hold
harmless the Collateral Agent, the Purchasers and their respective
officers, directors, employees, agents, attorneys-in-fact and affiliates,
from and against any and all claims, suits, losses, penalties, demands,
causes of action and judgments of any nature whatsoever and all liabilities
and indebtedness of any and every kind and nature now or hereafter owing,
arising, due or payable, including all costs and expenses (including
reasonable
14
<PAGE>
attorneys fees and expenses) (all of the foregoing being herein
collectively called "Liabilities"), which may be imposed on, incurred by or
-----------
asserted against any of them in connection with (i) the ownership or use of
any of the Collateral or the security interest of the Collateral Agent in
the Collateral, (ii) the failure on the part of the Company to comply and
to cause the lessees and users under all Leases to comply in all respects
with the laws of the United States of America and other jurisdictions in
which the Collateral or any part thereof may be operated and with all
lawful acts, rules, regulations and orders of any commissions, boards or
other legislative, executive, administrative or judicial bodies or officers
having power to regulate or supervise any of the Collateral, and (iii) the
execution, delivery, consummation, waiver, consent, amendment, enforcement,
performance and administration of this Agreement, the Note Purchase
Agreement, the Security Agreement Supplements and the other Transaction
Documents, or the use by the Company of the proceeds of the Notes or the
Note Purchase Agreement; provided, however, that the Company shall not have
any obligation to the Collateral Agent or a Purchaser with respect to
liabilities arising from such Person's own, gross negligence or willful
misconduct.
(b) The Company agrees to defend and pay all costs, expenses
and judgments incurred by it, the Collateral Agent or the Purchasers in any
action brought against the Company under the Leases or in any actions
brought by the Collateral Agent pursuant to this Agreement whether under or
pursuant to the provision of any Lease or to enforce any provisions of the
Leases.
(c) The obligations of the Company under this Section 23 shall
----------
survive the termination of this Agreement.
15
<PAGE>
IN WITNESS WHEREOF the parties hereto have caused this Agreement
to be duly executed on the day and year first above written.
[INTERPOOL, INC.,]
[INTERPOOL LIMITED,]
[INTERPOOL FINANCE CORP.,]
as an Obligor
By:
---------------------------
Title:
------------------------
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION, as
Collateral Agent
By:
---------------------------
Title:
------------------------
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On December __, 1995, before me personally came
, to me known, who, being by me duly sworn, did
- -------------------------
depose and say that he is of [Interpool, Inc.][Interpool
----------------
Limited][Interpool Finance Corp.] (the "Company"), the corporation
described in and which executed the foregoing instrument; that he knows the
seal of said corporation that the seal affixed to such instrument is such
corporate seal and that he signed his name and affixed such seal by order
of the Board of Directors of said corporation.
-------------------------
Notary Public
<PAGE>
STATE OF UTAH )
) ss.:
COUNTY OF SALT LAKE)
On December __, 1995, before me personally appeared
---
, to me personally known, who being by me duly sworn, did depose
- ----------
and say that he is of FIRST SECURITY
------------------------------------
BANK OF UTAH, NATIONAL ASSOCIATION, that the seal affixed to the foregoing
instrument is the corporate seal of said national banking association, that
said instrument was signed and sealed on behalf of said corporation by
authority of its Board of Directors, and he acknowledged that the execution
of the foregoing instrument was the free act and deed of said national banking
association.
------------------------------
Notary Public
My Commission expires
--------
<PAGE>
ANNEX A TO
SECURITY AGREEMENT
TYPE OF FINANCED UNIT NUMBER MANUFACTURER'S
EQUIPMENT SERIAL NUMBER
(FOR CHASSIS
AND/0R
TRAILERS)
19
<PAGE>
ANNEX B TO
SECURITY AGREEMENT
FORM OF SECURITY AGREEMENT SUPPLEMENT
-------------------------------------
SUPPLEMENT NO.
--------
TO
SECURITY AGREEMENT
DATED DECEMBER __, 1995
BETWEEN
[INTERPOOL, INC.][INTERPOOL LIMITED][INTERPOOL FINANCE CORP.]
(the "COMPANY")
AND
FIRST SECURITY BANK OF UTAH, NATIONAL ASSOCIATION
as COLLATERAL AGENT
(the "COLLATERAL AGENT")
- -------------------------------------------------
WHEREAS:
A.Interpool, Inc., Interpool Limited and Interpool Finance Corp.
(the "Issuers"), the Collateral Agent and the Purchasers listed therein
-------
(the "Purchasers") entered into a certain Note Purchase Agreement dated
December __, 1995 (which agreement, as the same may have been or hereafter
may be amended, supplemented, restated or otherwise, the "Note Purchase
-------------
Agreement");
- ---------
B. Pursuant to the Note Purchase Agreement, each of the Issuers
and the Collateral Agent entered into certain Security Agreements dated
December __, 1995 (each a "Security Agreement" and collectively, the
------------------
"Security Agreements");
-------------------
C. Pursuant to the Note Purchase Agreement, the Company is
obligated with the addition by the Company of any Equipment to the
Collateral to deliver to the Collateral Agent supplements to its Security
Agreement (each, a "Security Agreement Supplement" and collectively, the
-----------------------------
"Security Agreement Supplements") describing the properties and assets
------------------------------
which shall constitute the Collateral, and it is therefore in consideration
of the premises that the Company shall execute and deliver to the
Collateral Agent on behalf of the Purchasers this Security Agreement
Supplement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
The Security Agreement is hereby amended and supplemented by the
addition thereto (in addition to the Collateral covered by the Security
Agreement and in addition to any other Collateral added by previous
Security Agreement Supplements) of the following
20
<PAGE>
Collateral: the Financed Equipment listed or identified on Schedule I
----------
hereto.
The Company hereby represents and warrants that upon the
consummation of this Security Agreement Supplement, no Default or Event of
Default shall exist under any of the Transaction Documents, and the Issuers
will be in compliance with the requirements of the Transactions Documents.
Capitalized terms used herein are used as defined herein or by
reference in the Security Agreement.
Except as supplemented by this Security Agreement Supplement, the
Security Agreement (as heretofore supplemented) shall continue unchanged
and remain in full force and effect.
21
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement Supplement to be duly executed this day of 19 .
---- --------- --
[INTERPOOL, INC.,]
[INTERPOOL LIMITED,]
[INTERPOOL FINANCE CORP.,]
as an Obligor
By:
--------------------------
Title
FIRST SECURITY BANK OF UTAH,
NATIONAL ASSOCIATION
as Collateral Agent on behalf
of the Purchasers
By:
--------------------------
Title
<PAGE>
SCHEDULE I TO
SECURITY AGREEMENT
SUPPLEMENT
TYPE OF FINANCED EQUIPMENT UNIT NUMBER MANUFACTURER'S SERIAL
NUMBER
(FOR CHASSIS
AND/OR
TRAILERS)
23
Exhibit 10.31
$50,000,000 TERM LOAN FACILITY
TERM LOAN AGREEMENT
by and among
INTERPOOL, INC.
INTERPOOL LIMITED,
INTERPOOL FINANCE CORP.
and
THE BANKS PARTY HERETO
and
* , as Agent
Dated March 28, 1996
(subsequently amended)
* Confidential Treatment Requested
<PAGE>
TABLE OF CONTENTS
1. CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Certain Definitions . . . . . . . . . . . . . . . . . . . . 1
1.2 Construction . . . . . . . . . . . . . . . . . . . . . . . 13
1.3 Accounting Principles . . . . . . . . . . . . . . . . . . . 14
2. TERM LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.1 Term Loans . . . . . . . . . . . . . . . . . . . . . . . . 15
2.2 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . 15
2.3 Notes and Guaranties . . . . . . . . . . . . . . . . . . . 15
3. INTEREST RATES . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.1 Interest Rate Options . . . . . . . . . . . . . . . . . . . 16
3.2 Euro-Rate Interest Periods . . . . . . . . . . . . . . . . 16
3.3 Interest After Default; Interest on Overdue Amount . . . . 17
3.4 Euro-Rate Unascertainable . . . . . . . . . . . . . . . . . 18
3.5 Failure to Select Euro-Rate Option . . . . . . . . . . . . 19
4. PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.1 Principal Payment Schedule . . . . . . . . . . . . . . . . 20
4.2 Interest Payment Dates . . . . . . . . . . . . . . . . . . 20
4.3 Payments . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.4 Pro Rata Treatment of Banks . . . . . . . . . . . . . . . . 20
4.5 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . 20
4.6 Additional Compensation in Certain Circumstances . . . . . 22
4.7 Loan Accounts . . . . . . . . . . . . . . . . . . . . . . . 24
4.8 Interpool's and Ltd.'s Assumption of Term Loans; Pledge
of Equipment . . . . . . . . . . . . . . . . . . . . . . . 24
4.9 Termination of Collateral . . . . . . . . . . . . . . . . . 29
4.10 Collateral . . . . . . . . . . . . . . . . . . . . . . . . 31
4.11 Sale/Leaseback Arrangements . . . . . . . . . . . . . . . . 31
5. REPRESENTATIONS AND WARRANTIES OF BORROWERS . . . . . . . . . . . . 32
5.1 Organization and Power . . . . . . . . . . . . . . . . . . 32
5.2 Trademarks, Licenses, etc. . . . . . . . . . . . . . . . . 32
5.3 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . 32
5.4 Business . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.5 Financial Statements . . . . . . . . . . . . . . . . . . . 32
5.6 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.7 Litigation . . . . . . . . . . . . . . . . . . . . . . . . 33
i
<PAGE>
5.8 Title, Liens . . . . . . . . . . . . . . . . . . . . . . . 33
5.9 Consent, Approval . . . . . . . . . . . . . . . . . . . . . 33
5.10 Compliance with Other Instruments . . . . . . . . . . . . . 33
5.11 Corporate Existence; Place of Business; Books and
Records . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.12 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.13 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . 34
5.14 Governmental Licenses . . . . . . . . . . . . . . . . . . . 34
5.15 Event of Default . . . . . . . . . . . . . . . . . . . . . 35
5.16 Margin Securities . . . . . . . . . . . . . . . . . . . . . 35
5.17 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . 35
5.18 Liabilities; Business . . . . . . . . . . . . . . . . . . . 35
5.19 Regulated Company . . . . . . . . . . . . . . . . . . . . . 35
5.20 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . 35
5.21 Foreign Assets Control Regulations . . . . . . . . . . . . 36
5.22 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.23 Financed Equipment . . . . . . . . . . . . . . . . . . . . 36
5.24 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.25 No brokers', agent's or finders fees . . . . . . . . . . . 36
6. CONDITIONS OF CLOSING . . . . . . . . . . . . . . . . . . . . . . . 37
6.1 Loan Documents . . . . . . . . . . . . . . . . . . . . . . 37
6.2 Legal Opinions . . . . . . . . . . . . . . . . . . . . . . 37
6.3 Representations and Warranties, No Default . . . . . . . . 37
6.4 Evidence of Title to Collateral, Absence of Liens on
Collateral, Collateral Certificate . . . . . . . . . . . . 37
6.5 Corporate Proceedings and Documents . . . . . . . . . . . . 38
6.6 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.7 UCC Financing Statements; Applications to Note Liens on
Certificates of Title. . . . . . . . . . . . . . . . . . . 39
6.8 Loan Permitted By Applicable Laws . . . . . . . . . . . . . 39
6.9 Participation in Term Loans by Other Banks . . . . . . . . 39
6.10 Other Documents . . . . . . . . . . . . . . . . . . . . . . 40
6.11 Legal Matters . . . . . . . . . . . . . . . . . . . . . . . 40
6.12 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.13 Compliance with This Agreement . . . . . . . . . . . . . . 40
6.14 Collateral Administration Agreement. . . . . . . . . . . . 40
7. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.1 Maintenance of Corporate Existence . . . . . . . . . . . . 40
7.2 Amendments . . . . . . . . . . . . . . . . . . . . . . . . 41
7.3 Compliance . . . . . . . . . . . . . . . . . . . . . . . . 41
7.4 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.5 Preservation of Assets . . . . . . . . . . . . . . . . . . 41
ii
<PAGE>
7.6 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.7 Liens and pledges of shares in Restricted Subsidiaries . . 42
7.8 Litigation . . . . . . . . . . . . . . . . . . . . . . . . 43
7.9 Line of Business . . . . . . . . . . . . . . . . . . . . . 43
7.10 Chief Offices; Places of Business; Character of
Collateral . . . . . . . . . . . . . . . . . . . . . . . . 43
7.11 Financial Statements . . . . . . . . . . . . . . . . . . . 43
7.12 Books and Records . . . . . . . . . . . . . . . . . . . . . 45
7.13 Inspection . . . . . . . . . . . . . . . . . . . . . . . . 45
7.14 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.15 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . 46
7.16 Further Assurances . . . . . . . . . . . . . . . . . . . . 46
7.17 Government Contracts . . . . . . . . . . . . . . . . . . . 46
7.18 Sell, Merge, Consolidate, etc. . . . . . . . . . . . . . . 46
7.19 Financial Covenants . . . . . . . . . . . . . . . . . . . . 47
7.20 Payment of Obligations . . . . . . . . . . . . . . . . . . 48
7.21 Notice of Default . . . . . . . . . . . . . . . . . . . . . 49
7.22 Lock Box . . . . . . . . . . . . . . . . . . . . . . . . . 49
7.23 Additional Costs . . . . . . . . . . . . . . . . . . . . . 49
7.24 Transactions with Related Parties . . . . . . . . . . . . . 50
7.25 Permitted Investments . . . . . . . . . . . . . . . . . . . 50
7.26 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . 50
7.27 Maintenance of Collateral Value . . . . . . . . . . . . . . 50
7.28 Lien on Cash Collateral . . . . . . . . . . . . . . . . . . 50
7.29 Security Interest in Leases . . . . . . . . . . . . . . . . 50
7.30 Collateral Administration Agreement . . . . . . . . . . . . 51
8. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.1 Occurrence of Event of Default . . . . . . . . . . . . . . 52
8.2 Action Upon Event of Default . . . . . . . . . . . . . . . 53
8.3 Authorized to Execute Bills of Sale . . . . . . . . . . . . 54
8.4 Remedies Cumulative . . . . . . . . . . . . . . . . . . . . 55
8.5 Discontinuance of Proceedings . . . . . . . . . . . . . . . 55
8.6 Agreements with respect to Remedies and Defaults . . . . . 55
8.7 Waiver of Existing Defaults . . . . . . . . . . . . . . . . 55
8.8 Rights of Banks to Receive Payment . . . . . . . . . . . . 56
9. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . 56
9.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . 56
9.3 Nature of Duties; Independent Credit Investigation . . . . 56
9.4 Actions in Discretion of Agent; Instructions from the
Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
9.5 Reimbursement and Indemnification of Agent by the
Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . 57
9.6 Exculpatory Provisions . . . . . . . . . . . . . . . . . . 58
iii
<PAGE>
9.7 Reimbursement and Indemnification of Agent by Banks . . . . 58
9.8 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . 58
9.9 Notice of Default . . . . . . . . . . . . . . . . . . . . . 59
9.10 Banks in Their Individual Capacities . . . . . . . . . . . 59
9.11 Holders of Notes . . . . . . . . . . . . . . . . . . . . . 59
9.12 Equalization of Banks . . . . . . . . . . . . . . . . . . . 59
9.13 Successor Agent . . . . . . . . . . . . . . . . . . . . . . 60
9.14 Agent's Fee . . . . . . . . . . . . . . . . . . . . . . . . 60
9.15 Availability of Funds . . . . . . . . . . . . . . . . . . . 60
9.16 Calculations . . . . . . . . . . . . . . . . . . . . . . . 60
9.17 Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . 61
10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . 61
10.1 Modifications, Amendments or Waivers . . . . . . . . . . . 61
10.2 No Implied Waivers; Cumulative Remedies; Writing
Required . . . . . . . . . . . . . . . . . . . . . . . . . 61
10.3 Reimbursement and Indemnification of Banks by the
Borrowers; Taxes . . . . . . . . . . . . . . . . . . . . . 62
10.4 Holidays . . . . . . . . . . . . . . . . . . . . . . . . . 62
10.5 Funding by Branch or Affiliate . . . . . . . . . . . . . . 63
10.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 63
10.7 Severability . . . . . . . . . . . . . . . . . . . . . . . 64
10.8 Governing Law . . . . . . . . . . . . . . . . . . . . . . . 64
10.9 Prior Understanding . . . . . . . . . . . . . . . . . . . . 64
10.10 Duration; Survival . . . . . . . . . . . . . . . . . . . . 64
10.11 Successors and Assigns . . . . . . . . . . . . . . . . . . 64
10.12 Confidentiality . . . . . . . . . . . . . . . . . . . . . . 65
10.13 Counterparts . . . . . . . . . . . . . . . . . . . . . . . 65
10.14 Agent's or Bank's Consent . . . . . . . . . . . . . . . . . 66
10.15 Exceptions . . . . . . . . . . . . . . . . . . . . . . . . 66
10.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL . . . . . . . . . . 66
10.17 Tax Withholding Clause . . . . . . . . . . . . . . . . . . 66
iv
<PAGE>
LIST OF SCHEDULES AND EXHIBITS
SCHEDULES
SCHEDULE 1 - Banks Schedule
SCHEDULE 3 - Names and Addresses of any Wiring Instructions for Agent
SCHEDULE 4.1 - Principal Amortization Schedule
SCHEDULE 5.1 - Borrowers' Jurisdictions of Incorporation; Other
Jurisdictions Where the Borrowers are Qualified to do
Business; Chief Executive Offices of the Borrowers;
Locations of Borrowers' Books and Records; Subsidiaries
of the Borrowers; and Capital Stock of the Borrowers
SCHEDULE 5.5 - Indebtedness of the Borrowers
SCHEDULE 7.29 - Stamp Language
(x)(i)
SCHEDULE 7.29 - Form of Notice regarding delivery of Leases
(x)(ii)
SCHEDULE 7.29 - Form of Notice regarding delivery of Leases
(x)(iii)
SCHEDULE 15(a) - Forms of Lease
SCHEDULE 15(b) - Forms of Direct Finance Lease
EXHIBITS
EXHIBIT A - Form of Term Note
EXHIBIT B - Form of Collateral Certificate
EXHIBIT C - Form of Guaranty
EXHIBIT D - Form of Security Agreement
EXHIBIT E - Form of Assignment and Assumption Agreement
EXHIBIT F - Form of Bank Assignment and Assumption Agreement
EXHIBIT G - Form of Railcars Security Agreement
EXHIBIT H - Form of Officer's Certificate
EXHIBIT I - Form of Cash Collateral Agreement
EXHIBIT J - Collateral Administration Agreement
EXHIBIT K - Form of Joinder to Collateral Administration Agreement
v
<PAGE>
TERM LOAN AGREEMENT
THIS TERM LOAN AGREEMENT is dated March 28, 1996 and is made by and
among INTERPOOL, INC., a Delaware corporation ("Interpool"), INTERPOOL LIMITED,
a Barbados corporation ("Ltd.") and INTERPOOL FINANCE CORP., a Cayman Islands
corporation ("Corp." and together with Interpool and Ltd., each a "Borrower" and
collectively, the "Borrowers"), the BANKS (as hereinafter defined) and * ,
in its capacity as agent for the Banks under this Agreement (hereinafter
referred to in such capacity as the "Agent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrowers have requested the Banks to provide a term loan
facility to the Borrowers in an aggregate principal amount of $50,000,000; and
WHEREAS, the term loan facility shall be used to retire outstanding
indebtedness of the Borrowers, to acquire Equipment and Direct Finance Leases
(each as defined herein) and for the Borrowers' general corporate purposes; and
WHEREAS, the Banks are willing to provide such term loan facility upon
the terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, covenant and agree as follows:
1. CERTAIN DEFINITIONS
1.1 Certain Definitions.
-------------------
In addition to words and terms defined elsewhere in this Agreement,
the following words and terms shall have the following meanings, respectively,
unless the context hereof clearly requires otherwise:
Affiliate of any Person shall mean any other Person which directly or
---------
indirectly controls, or is controlled by, or is under a common control with,
such Person, including, without limitation, Related Parties.
Agent shall mean * , as agent under this Agreement and the Loan
-----
Documents, exclusive of the Collateral Administration Agreement, and shall
include * in its capacity as Collateral Agent and its successors and assigns
in such capacity.
Agent's Fee shall have the meaning assigned to that term in Section
-----------
9.14.
* Confidential Treatment Requested
<PAGE>
Agreement shall mean this Term Loan Agreement, as the same may be
---------
supplemented or amended from time to time, including all schedules and exhibits.
Approved Investments shall apply only to Cash Collateral and shall
--------------------
mean (i) purchases of obligations of the United States Government and its
agencies, U.S. dollar denominated obligations of the Canadian Government, and
those "obligations of supranationals," which includes government issued
securities and World Bank securities, that are rated at least "AAA" by Standard
& Poor's or Moody's, all such purchases having maturities of 397 days or less,
(ii) purchases of prime commercial paper rated A1/P1 or higher by Standard &
Poor's or Moody's maturing in 397 days or less and (iii) money market or mutual
funds which adhere to Regulation 2a-7 under the Securities Act and invest in the
obligations or commercial paper referred to in clauses (i) or (ii) of this
paragraph, provided that the Banks can, in their judgment, obtain a perfected
lien in such investments under the laws of the United States or any political
subdivision thereof.
Assignment and Assumption Agreement shall mean an Assignment and
-----------------------------------
Assumption Agreement by and among a Purchasing Bank, the Transferor Bank and the
Agent, substantially in the form of Exhibit E.
---------
Banks shall mean the financial institutions named on Schedule 1 and
----- ----------
their respective successors and assigns as permitted hereunder, each of which is
referred to herein as a Bank.
----
Base Rate shall mean the greater of (i) the interest rate per annum
---------
announced from time to time by the Agent at its Principal Office as its then
prime rate, which rate may not be the lowest rate then being charged commercial
borrowers by the Agent, or (ii) the Federal Funds Effective Rate plus 1/2 % per
annum.
Base Rate Option shall mean the option of the Borrowers to have Term
----------------
Loans bear interest at the rate and under the terms and conditions set forth in
Section 3.1(b)(i).
Borrower(s) shall have the meaning set forth in the introductory
-----------
paragraph hereof.
Borrowing Tranche shall mean specified portions of Term Loans
-----------------
outstanding as follows: (i) any Term Loans to which a Euro-Rate Option applies
which become subject to the same Interest Rate Option under the request to
select, convert to or renew a Euro-Rate Option in accordance with Section 3.2
-----------
hereof by a Borrower and which have the same Interest Period shall constitute
one Borrowing Tranche, and (ii) all Term Loans to which a Base Rate Option
applies shall constitute one Borrowing Tranche.
Business Day shall mean any day other than a Saturday or Sunday or a
------------
legal holiday on which commercial banks are authorized or required to be closed
for business in Philadelphia, Pennsylvania .
Cash Collateral shall mean:
---------------
2
<PAGE>
(i) all bank accounts in the name of the Collateral Agent as
agent for the ratable benefit of the Banks, all funds held therein and all
certificates and instruments representing or evidencing such bank accounts which
are maintained by the Collateral Agent;
(ii) all Approved Investments made from time to time in
accordance with the provisions of this Agreement and the applicable Loan
Documents which are properly perfected and pledged to the Collateral Agent;
(iii) all interest, dividends and other property from time to time
received, receivable or otherwise distributed in respect of any amounts on
deposit in any of the accounts or the Approved Investments described in
subparagraphs (i) or (ii) above; and
(iv) all proceeds of any or all of the foregoing.
Cash Collateral Agreement shall mean the Cash Collateral Agreement
-------------------------
substantially in the form of Exhibit I hereto between the Collateral Agent and
---------
one or more of the Borrowers in respect of Cash Collateral, as the same may be
amended, supplemented or modified from time to time.
Chassis shall mean wheeled steel frames used to carry containers over
-------
the road.
Chief Offices shall mean, for each Borrower, those offices listed on
-------------
Schedule 5.1 attached hereto.
- ------------
Claims shall have the meaning set forth in Section 7.8 hereof.
------
Closing shall mean the execution and delivery of the Loan Documents,
-------
which shall take place at the offices of Rogers & Wells, 200 Park Avenue, New
York, New York, commencing at 10:00 a.m., New York time, on the Closing Date.
Closing Date shall mean the date of this Agreement.
------------
Code shall have the meaning set forth in Section 5.12 hereof.
----
Collateral shall mean all Equipment, Leases, Direct Finance Leases and
----------
other property subject to the Lien of the Collateral Documents, including,
without limitation, insurance policies as required pursuant to Section 7.6.
Collateral Administration Agent shall mean First Security Bank of
-------------------------------
Utah, National Association, not in its individual capacity but solely as agent
under the Collateral Administration Agreement, and its successor thereunder.
Collateral Administration Agreement shall mean the Collateral
-----------------------------------
Administration Agreement dated as of July 25, 1995 among the collateral
administration agent named therein, the Borrowers, and each of the other secured
financial institutions from time to time party
3
<PAGE>
thereto, including the Collateral Agent, as the same may be amended,
supplemented or modified from time to time, substantially in the form of Exhibit
-------
J hereto.
- -
Collateral Agent shall mean * , not in its individual capacity but
----------------
solely as collateral agent under the Collateral Documents and its successor in
such capacity.
Collateral Certificate shall mean the Collateral Value certificate,
----------------------
substantially in the form of Exhibit B hereto.
---------
Collateral Documents shall mean the Security Agreements, together with
--------------------
any Security Agreement Supplements, the Railcars Security Agreements, together
with any Railcars Security Agreement Supplements, the Cash Collateral Agreement
and the Guaranties.
Collateral Value shall mean with respect to Collateral (excluding any
----------------
Collateral which has suffered an Equipment Collateral Loss) of each Borrower
(including a Borrower for whose benefit Collateral is added or designated
pursuant to Section 4.8): (a) in respect of Containers and Trailers pledged to
the Collateral Agent, the cost basis of the individual Containers and Trailers
less depreciation of $56.67 per $1,000 of the cost of the Containers and
Trailers per year of age calculated on a straight line basis over a fifteen (15)
year life until their estimated salvage value of 15% of cost basis is reached as
reflected on the books and records of a Borrower, in accordance with GAAP,
(b) with respect to Chassis pledged to the Collateral Agent, the depreciated
calculated value using a depreciable basis of $6,800 per Chassis, less annual
depreciation of $240 per Chassis per year of age, and calculated on a straight
line basis over a twenty (20) year life until a floor value of no less than
$2,000 per Chassis is reached, (c) with respect to Railcars pledged to the
Collateral Agent, the cost basis of the individual Railcar less depreciation on
a straight line basis over their estimated useful life until their estimated
salvage value is reached, as reflected on the books and records of a Borrower in
accordance with GAAP, (d) with respect to Direct Finance Leases pledged to the
Collateral Agent, such Direct Finance Leases at their Unamortized Portion and
(e) with respect to Cash Collateral pledged to the Collateral Agent, the Cash
Collateral shall have the value ascribed to it in the Cash Collateral Agreement
or as is otherwise agreed between the Banks and the Borrowers.
Commitment shall mean as to any Bank at any time, the amount set forth
----------
opposite its name on Schedule 1 in the column labeled "Amount of Commitment For
----------
Term Loans" and thereafter on Schedule I to the most recent Assignment and
Assumption Agreement, and Commitments shall mean the aggregate of the
-----------
Commitments of all of the Banks.
Containers shall mean any of various types of inter-modal dry cargo
----------
containers, each in 20, 40 or 48 foot lengths and having a configuration
suitable for shipping cargo or bulk material whereby the contents can be handled
in transit as a unit, aboard ship, for road transport on chassis, or for
railroad transport.
* Confidential Treatment Requested
4
<PAGE>
Control shall mean the possession, directly or indirectly, of the
-------
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
Controlled Group shall have the meaning as defined in the Code.
----------------
* Lien shall have the meaning set forth in Section 6.4(c) hereof.
------
Corp. shall mean Interpool Finance Corp., a Cayman Islands
-----
corporation.
Default shall mean an event or condition which, with the passage of
-------
time or with the giving of notice, or both, would constitute an Event of
Default.
Depreciation shall be determined in accordance with GAAP.
------------
Direct Finance Leases shall mean for purposes of determining
---------------------
Collateral Value under this Agreement and the other Loan Documents, leases which
have been classified as direct finance leases in the financial statements of
Interpool and its consolidated Subsidiaries in accordance with GAAP, but only to
the extent they relate to equipment which is included in the Collateral. For
all other purposes of this Agreement and the other Loan Documents, Direct
Finance Leases shall mean leases which have been classified as direct finance
leases in the financial statements of Interpool and its consolidated
Subsidiaries in accordance with GAAP and leases which are construed as leases
intended as security in accordance with New York UCC Section 1-201(37), as such
section may be revised, amended or supplemented from time to time, and which are
leases or similar agreements or arrangements with respect to equipment which is
of the same type as Equipment, but only to the extent that they relate to
equipment which is included in the Collateral, and all extensions, substitutions
and modifications thereto, and only to the extent that they either (a) are in
the form of one of the forms of lease contained in Schedule 15(b) hereto or
(b) vary from any of such forms only in respects that, individually or
collectively, do not (i) cause such leases to provide other than that the
lessees thereunder are generally required to pay and perform all obligations in
respect of the equipment covered thereby, (ii) prohibit the assignment thereof
by the lessor, (iii) provide for or permit setoffs or defenses by the lessee or
(iv) provide for any obligations of lessor other than to provide for quiet
enjoyment to the lessee absent a default thereunder.
Dollar, Dollars, U.S. Dollars and the symbol $ shall mean lawful money
----------------------------- -
of the United States of America.
Earnings Available for Fixed Charges shall mean the sum of Fixed
------------------------------------
Charges plus Net Earnings before income taxes.
Equipment shall mean Containers, Trailers, Chassis and Railcars,
---------
excluding those subject to Direct Finance Leases.
* Confidential Treatment Requested
5
<PAGE>
Equipment Collateral Loss shall mean the occurrence, to the knowledge
-------------------------
of any of the Borrowers, of actual total or constructive total loss of any item
or items of equipment which are a part of the Collateral.
ERISA shall have the meaning set forth in Section 5.12 hereof.
-----
Euro-Rate shall mean with respect to the Term Loans comprising any
---------
Borrowing Tranche to which the Euro-Rate Option applies for any Interest Period,
the interest rate per annum determined by the Agent by dividing (the resulting
quotient rounded upward to the nearest 1/1000 of 1% per annum) (i) the rate of
interest determined by the Agent in accordance with its usual procedures (which
determination shall be conclusive absent manifest error) to be the average of
the London interbank offered rates set forth on page three thousand seven
hundred fifty (3750) of the Telerate Rate Reporting System (or a comparable
replacement determined by the Agent) at approximately 11:00 a.m. London time two
(2) Business Days prior to the first day of such Interest Period for an amount
comparable to such Borrowing Tranche and having a borrowing date and a maturity
comparable to such Interest Period by (ii) a number equal to 1.00 minus the
Euro-Rate Reserve Percentage. The Euro-Rate may also be expressed by the
following formula:
Average of London interbank offered rates on page 3750
Euro-Rate = of the Telerate Rate Reporting System or appropriate
-----------------------------------------------------
successor
- ----------
1.00 Euro-Rate Reserve Percentage
The Euro-Rate shall be adjusted with respect to any Euro-Rate Option outstanding
on the effective date of any change in the Euro-Rate Reserve Percentage as of
such effective date. The Agent shall give prompt notice to the Borrowers of the
Euro-Rate as determined or adjusted in accordance herewith, which determination
shall be conclusive, absent manifest error.
Euro-Rate Interest Period shall have the meaning assigned thereto in
-------------------------
Section 3.2 hereof.
Euro-Rate Option shall mean the option of the Borrowers to have Term
----------------
Loans bear interest at the rate and under the terms and conditions set forth in
Section 3.1(b)(ii).
Euro-Rate Reserve Percentage shall mean the maximum percentage
----------------------------
(expressed as a decimal rounded upward to the nearest 1/1000 of 1%) as
determined by the Agent which is in effect during any relevant period, 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") of a member bank
in such System.
Event of Default shall mean any of the events specified in Section
----------------
8.1, provided there has been satisfied any requirement in connection with such
event for the giving of notice, or the lapse of time, or the happening of any
further condition, event or act.
6
<PAGE>
Federal Funds Effective Rate for any day shall mean the rate per annum
----------------------------
(based on a year of 360 days and actual days elapsed and rounded upward to the
nearest 1/1000 of 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 of which such rate was announced.
Financed Equipment shall mean all Equipment now owned or hereafter
------------------
acquired by any of the Borrowers which is included in the Collateral pursuant to
this Agreement.
Fixed Charges shall mean the sum of interest expense (including
-------------
capitalized interest, if any), lease rentals on Long-Term Leases and the
interest component of capitalized leases.
Funded Debt shall mean all indebtedness for money borrowed with
-----------
recourse to Interpool and its Restricted Subsidiaries, including purchase money
mortgages, leases capitalized in accordance with Statement 13 of the Financial
Accounting Standards Board and conditional sales contracts and similar title
retention debt instruments (excluding any current maturities of such
indebtedness) which by its terms matures more than one year from the date of any
calculation thereof and/or which is renewable or extendible under any revolving
or similar agreement. The calculation of Funded Debt shall include all Funded
Debt of Interpool and its Restricted Subsidiaries, plus any Funded Debt of
another Person, other than a Restricted Subsidiary, which has been guaranteed by
Interpool or its Restricted Subsidiaries. Funded Debt shall exclude all Indebt-
edness of Interpool or any of its Restricted Subsidiaries which is non-recourse
to Interpool or any of its Restricted Subsidiaries, as the case may be.
Funding Date shall mean April 11, 1996.
------------
GAAP shall mean generally accepted accounting principles as are in
----
effect from time to time, subject to the provisions of Section 1.3, and applied
on a consistent basis both as to classification of items and amounts .
Guaranties shall mean the Guaranties by each of the Guarantors in
----------
favor of each Bank, substantially in the form of Exhibit C.
---------
Guarantor shall mean Interpool, Ltd. or Corp.
---------
Interest Period shall mean Euro-Rate Interest Period, as defined in
---------------
Section 3.2 hereof.
Interest Rate Election shall have the meaning set forth in Section
----------------------
3.1(c) hereof.
7
<PAGE>
Interest Rate Option shall mean any Euro-Rate Option or Base Rate
--------------------
Option.
Interpool shall mean Interpool, Inc., a Delaware corporation.
---------
Investment Company Act of 1940 shall mean the Investment Company Act
------------------------------
of 1940, as amended.
Investors shall have the meaning assigned to such term in Section 4.10
---------
hereof.
Joinder Agreement shall mean a joinder agreement entered into by the
-----------------
Collateral Administration Agent, the Borrowers and each of the other financial
institutions from time to time party thereto, substantially in the form of
Exhibit K hereto.
- ---------
Law shall mean any law (including common law), constitution, statute,
---
treaty, regulation, rule, ordinance, opinion, release, ruling, order,
injunction, writ, decree or award of any Official Body.
Leases shall mean all leases or similar agreements or arrangements
------
with respect to the Financed Equipment, but only to the extent that they relate
to the Financed Equipment, and all extensions, substitutions and modifications
thereto, and only to the extent that they either (a) are in the form of one of
the forms of lease contained in Schedule 15(a) hereto or (b) vary from any of
such forms only in respects that, individually or collectively, do not (i) cause
such leases to provide other than that the lessees thereunder are generally
required to pay and perform all obligations in respect of the Financed Equipment
covered thereby, (ii) prohibit the assignment thereof by the lessor, (iii)
provide for or permit setoffs or defenses by the lessee or (iv) provide for any
obligations of lessor other than to provide for quiet enjoyment to the lessee
absent a default thereunder.
Liens shall mean all mortgages, liens, judicial liens, encumbrances,
-----
security interests, charges, pledges, hypothecations, assignments, conditional
sale or other title retention agreements and the like, relating to any real or
personal property interest of any Borrower, whether legal or equitable.
Loan Documents shall mean this Agreement, the Notes, the Collateral
--------------
Administration Agreement and the Collateral Documents and any other instruments,
certificates or documents delivered or contemplated to be delivered hereunder or
thereunder or in connection herewith or therewith, as the same may be
supplemented or amended from time to time in accordance herewith or therewith,
and Loan Document shall mean any of the Loan Documents.
-------------
Long-Term Leases shall mean minimum lease rentals of non-capitalized
----------------
leases whereunder Interpool or any Restricted Subsidiary is the lessee with an
initial term in excess of three years, excluding leases of office equipment and
---------
motor vehicles used in the ordinary course of business.
Ltd. shall mean Interpool Limited., a Barbados Corporation.
----
8
<PAGE>
Margin Stock shall have the meaning as defined in Regulation U.
------------
month, with respect to an Interest Period under the Euro-Rate Option,
-----
shall mean the interval between the days in consecutive calendar months
numerically corresponding to the first day of such Interest Period. If any
Euro-Rate Interest Period begins on a day of a calendar month for which there is
no numerically corresponding day in the month in which such Interest Period is
to end, the final month of such Interest Period shall be deemed to end on the
last Business Day of such final month.
Moody's shall mean Moody's Investors Services, Inc.
-------
Net Earnings shall mean the consolidated net income before
------------
extraordinary items of Interpool and its Restricted Subsidiaries for any period,
determined in conformity with GAAP applied on a basis consistent with those
applied in preparing Interpool's audited annual reports.
Notes shall mean collectively and Note shall mean separately all the
----- ----
Notes of the Borrowers in the form of Exhibit A evidencing the Term Loans
---------
together with all amendments, extensions, renewals, replacements, refinancings
or refundings thereof in whole or in part.
notices shall have the meaning assigned to that term in Section 10.6.
-------
Obligations shall mean (i) any and all indebtedness, obligations,
-----------
liabilities and agreements of any kind and nature of the Borrowers pursuant to
this Agreement, the Notes or any other Loan Document to or with any of the
Banks, or of any guarantor of any of such Borrowers' indebtedness, obligations,
liabilities and agreements, now existing or hereafter arising, and now or
hereafter incurred, whether in the form of loans, guarantees, interest, charges,
expenses, fees (including, without limitation, attorneys' fees) or otherwise,
direct or indirect, (including, without limitation, any participation or
interest of any of the Banks in any such Borrowers' indebtedness) acquired
outright, conditionally or as collateral security from another, absolute or
contingent, joint and/or several, liquidated or unliquidated, due or not due,
contractual or tortious, secured or unsecured, arising by operation of law or
otherwise, whether incurred by the Borrowers as principal, surety, endorser,
guarantor, accommodation party or otherwise; (ii) all other sums and charges to
be paid to the Banks pursuant to this Agreement; and (iii) all interest and late
charges on any of the foregoing.
Officer's Certificate shall mean a certificate signed by the
---------------------
President, any Vice President, the Treasurer or an Assistant Treasurer and, in
the case of a commercial bank or trust company, by any other officer customarily
performing the functions similar to those performed by the Persons who at the
time shall be such officers, or to whom any corporate trust matter is referred
because of his knowledge of and familiarity with the particular subject.
Official Body shall mean any national, federal, state, local or other
-------------
government or political subdivision or any agency, authority, bureau, central
bank, commission, department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
9
<PAGE>
PBGC shall mean the Pension Benefit Guaranty Corporation or any Person
----
succeeding to the functions thereof.
Permitted Liens shall mean:
---------------
(i) Liens for Taxes not yet delinquent or which are being
contested in good faith by appropriate proceedings and the enforcement of which
has been stayed (and for the payment of which adequate reserves are provided);
(ii) carriers', seamen's, stevedores', wharfinger's,
warehousemen's, mechanics', suppliers', materialmen's, repairmen's or other like
Liens arising in the ordinary course of business and relating to amounts not yet
due or which shall not have been overdue for a period of more than sixty (60)
days or which are being contested in good faith by appropriate proceedings or
for the payment of which adequate reserves have been provided;
(iii) leases, lease agreements, and other contracts entered into
in the ordinary course of business providing for the leasing, sale or exchange
of Equipment owned by a Borrower;
(iv) deposits and other forms of security given to any
governmental agency or body created or approved by law or governmental
regulation as a condition to the transaction of business or the exercise of any
privilege, franchise or license;
(v) deposits and other forms of security in connection with
worker's compensation, unemployment insurance and other social security
legislation; and
(vi) deposits and other forms of security to secure the
performance of bids, trade contracts (other than for borrowed money), leases,
surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business.
Person shall mean any individual, corporation, partnership,
------
association, joint-stock company, limited liability company or partnership,
trust, unincorporated organization, joint venture, government or political
subdivision or agency thereof, or any other entity.
Plan shall mean any plan subject to the minimum funding requirements
----
of Section 412 of the Code.
* Bank shall mean * , its successors and assigns.
------
Principal Office shall mean the main banking office of the Agent in
----------------
Philadelphia, Pennsylvania.
Principal Payment Date shall mean the date specified in Section 4.1
----------------------
hereof.
* Confidential Treatment Requested
10
<PAGE>
Pro-Forma Fixed Charges for any period shall mean the aggregate amount
-----------------------
of Fixed Charges as adjusted to reflect an increase or decrease in Funded Debt
for such period.
Purchasing Bank shall mean a Bank which becomes a party to this
---------------
Agreement by executing an Assignment and Assumption Agreement.
Railcars shall mean steel wheeled vehicles for use on railroad tracks.
--------
Railcars Security Agreement shall mean the Railcars Security Agreement
---------------------------
between the Collateral Agent and Interpool in respect of the Railcars (as the
same may be amended, supplemented or modified from time to time), substantially
in the form of Exhibit G.
---------
Railcars Security Agreement Supplement shall mean any Supplement to
--------------------------------------
the Railcars Security Agreement between the Collateral Agent and Interpool
substantially in the form of Annex A to Exhibit G.
---------
Ratable Share shall mean the proportion that a Bank's Commitment bears
-------------
to the Commitments of all of the Banks.
Regulation U shall mean Regulation U, T, G or X as promulgated by the
------------
Board of Governors of the Federal Reserve System, as amended from time to time.
Related Party shall mean the following: The Ivy Group, Radcliff
-------------
Group, Princeton Intermodal Equipment Trust I, Eurochassis L.P., three New
Jersey limited partnerships called Microtech Three, Microtech Four and Microtech
Five, Princeton International Properties, Inc., Martom Associates, and 211
College Road Associates, a New Jersey general partnership and any other
Affiliates of Interpool or its Restricted Subsidiaries.
Reportable Event means a reportable event described in Section 4043 of
----------------
ERISA and regulations thereunder with respect to a Plan or Multiemployer Plan.
Required Banks, as of a particular date of determination, shall mean
--------------
(i) prior to the Funding Date, Banks having Commitments equal to at least 60% of
the aggregate principal amount of the Commitments and (ii) on and after the
Funding Date, Banks holding at least 60% of the aggregate outstanding principal
amount of the Term Loans.
Required Collateral Ratio of a Borrower, as of the date of
-------------------------
determination, shall mean the ratio determined by dividing (i) the Collateral
Value of the specific Collateral of such Borrower listed in the Collateral
Certificate delivered prior to the Closing pursuant to Section 6.4(e) of this
Agreement as of such date of determination (regardless of whether or not, as of
such date, such items of Collateral are still subject to the Lien of the
Collateral Documents) by (ii) the scheduled outstanding principal balance, as of
such date of determination, of the Term Loans of such Borrower determined solely
by reference to Schedule 4.1 (regardless of whether or not, as of such date,
such amount is the actual outstanding principal amount of such Term Loans).
11
<PAGE>
Responsible Officer shall mean, with respect to the subject matter of
-------------------
any covenant, agreement or obligation of any Person contained in any Loan
Document, the President, or any Vice President, Treasurer, Assistant Treasurer
or other officer thereof, who in the normal performance of his or her
operational responsibility would have knowledge of such matters and the
requirements with respect thereto.
Restricted Payments shall mean cash dividends, redemption of capital
-------------------
stock and investments in Unrestricted Subsidiaries.
Restricted Subsidiary shall mean any Subsidiary which has not been
---------------------
designated as an Unrestricted Subsidiary, provided that (i) Ltd. shall be a
Restricted Subsidiary unless and until (a) it shall be fully released from all
its Obligations (other that its representations, warranties and indemnities)
upon Interpool's and or Corp.'s assumption of all such Obligations pursuant to
Section 4.8(a) and 4.8(c) hereof, or (b) its Term Loans and all its other
Obligations shall have been paid in full, provided further that Ltd. may not be
----------------
designated as an Unrestricted Subsidiary if a Default or an Event of Default
shall have occurred and be continuing or would result from Ltd. being designated
as an Unrestricted Subsidiary and (ii) Corp. shall be a Restricted Subsidiary
unless and until (a) it shall be fully released from all its Obligations (other
than its representations, warranties and indemnities) upon Interpool's and/or
Ltd.'s assumption of all such Obligations pursuant to Sections 4.8(a) and 4.8(b)
hereof, or (b) its Term Loans and all its other Obligations shall have been paid
in full, provided further that Corp. may not be designated as an Unrestricted
----------------
Subsidiary if a Default or an Event of Default shall have occurred and be
continuing or would result from Corp. being designated as an Unrestricted
Subsidiary.
Securities Act shall mean the Securities Act of 1933, as amended.
--------------
Security Agreement(s) shall mean each of the Security Agreements
---------------------
between the Collateral Agent and a Borrower in respect of the Collateral,
excluding the Railcars, as the same may be amended, supplemented or modified
from time to time, substantially in the form of Exhibit D.
---------
Security Agreement Supplement(s) shall have the meaning set forth in
--------------------------------
the Security Agreement.
Standard & Poor's shall mean Standard & Poor's Ratings Group, a
-----------------
division of McGraw Hill, Inc.
Subsidiary shall mean any Person (other than an individual) with
----------
respect to which Interpool or any one or more of its Subsidiaries has Control.
Tangible Net Worth shall mean stockholders' equity as set forth on a
------------------
consolidated balance sheet for Interpool and its Restricted Subsidiaries,
reduced by all items of goodwill and other intangible assets (other than
deferred charges).
Taxes shall have the meaning set forth in Section 7.23(a) hereof.
-----
12
<PAGE>
Telerate Rate Reporting System shall mean the computerized rate
------------------------------
reporting system of the same name.
Term Loans shall mean collectively and Term Loan shall mean separately
---------- ---------
all loans or any loan made by the Banks to the Borrowers pursuant to Section
2.1.
Trac shall mean Trac Lease, Inc., a Delaware corporation.
----
Trailers shall mean general purpose, 45 foot length standard piggyback
--------
trailers.
Transferor Bank shall mean the selling Bank pursuant to an Assignment
---------------
and Assumption Agreement.
UCC shall mean the Uniform Commercial Code as enacted in any state of
---
the United States or in the District of Columbia or the United States Virgin
Islands insofar as any such statute, as in effect from time to time, may be
relevant to the creation, perfection continuation and enforcement of Liens on
Collateral.
Unamortized Portion shall mean for each Direct Finance Lease, the
-------------------
amount equal to the lesser of 100% of the equipment cost of the equipment
subject to such Direct Finance Lease or 95% of the net present value of all
remaining lease payments as of the date such calculation is made, where such
lease payments are present valued at an interest rate of 6.23% per annum.
Unrestricted Subsidiary shall mean any Subsidiary which is designated
-----------------------
by Interpool as an Unrestricted Subsidiary. Unrestricted Subsidiaries shall not
be restricted by the provisions of this Agreement applicable to Restricted
Subsidiaries, and the debt, other liabilities, earnings and assets of the
Unrestricted Subsidiaries will not be consolidated with those of Interpool and
its Restricted Subsidiaries in calculating consolidated Net Earnings, Tangible
Net Worth and Funded Debt.
1.2 Construction.
------------
Unless the context of this Agreement otherwise clearly requires, the
following rules of construction shall apply to this Agreement and each of the
other Loan Documents:
(a) references to the plural include the singular, the plural, the
part and the whole; "or" has the inclusive meaning represented by the phrase
"and/or," and "including" has the meaning represented by the phrase "including
without limitation";
(b) references to "determination" of or by the Agent or the Banks
shall be deemed to include good faith estimates by the Agent or the Banks (in
the case of quantitative determinations) and good faith beliefs by the Agent or
the Banks (in the case of qualitative determinations) and such determination
shall be conclusive, absent manifest error;
13
<PAGE>
(c) the words "hereof," "herein," "hereunder," "hereto" and similar
terms in this Agreement or any other Loan Document refer to this Agreement or
such other Loan Document as a whole and not to any particular provision of this
Agreement or such other Loan Document;
(d) the section and other headings contained in this Agreement or
such other Loan Document and the Table of Contents (if any), preceding this
Agreement or such other Loan Document are for reference purposes only and shall
not control or affect the construction of this Agreement or such other Loan
Document or the interpretation thereof in any respect;
(e) article, section, subsection, clause, schedule and exhibit
references are to this Agreement or other Loan Document, as the case may be,
unless otherwise specified;
(f) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are permitted by
this Agreement or other Loan Document, as the case may be, and reference to a
Person in a particular capacity excludes such Person in any other capacity;
(g) reference to any agreement (including this Agreement and any
other Loan Document together with the schedules and exhibits hereto or thereto),
document or instrument means such agreement, document or instrument as amended,
modified, replaced, substituted for, superseded or restated;
(h) relative to the determination of any period of time, "from" means
"from and including," "to" means "to but excluding" and "through" means "through
and including"; and
(i) references to "shall" and "will" are intended to have the same
meaning.
1.3 Accounting Principles.
---------------------
Except as otherwise provided in this Agreement, all computations and
determinations as to accounting or financial matters and all financial
statements to be delivered pursuant to this Agreement shall be made and prepared
in accordance with GAAP (including principles of consolidation where
appropriate), and all accounting or financial terms shall have the meanings
ascribed to such terms by GAAP and, except as otherwise provided herein to the
contrary, financial statements and reports shall be presented on a consolidated
basis.
14
<PAGE>
2. TERM LOANS
2.1 Term Loans. Subject to the terms and conditions hereof and relying
----------
upon the representations and warranties herein set forth, each of the Banks
severally agrees to make a term loan on the Funding Date (the "Term Loan" of
such Bank) to the Borrowers in the principal amount set forth opposite its name
on Schedule 1. The obligations of each Bank hereunder are several. The failure
----------
of any Bank to perform its obligations hereunder shall not affect the
obligations of any or all of the Borrowers, or any other Bank, to any other
party nor shall any or all of the Borrowers, or any other Bank, be liable for
the failure of such Bank to perform its obligations hereunder.
2.2 Use of Proceeds. The Borrowers shall use the entire proceeds of the
---------------
Term Loans (i) to retire outstanding indebtedness, (ii) to acquire Equipment and
Direct Finance Leases and/or (iii) for the Borrowers' general corporate
purposes.
2.3 Notes and Guaranties. The obligation of each of the Borrowers to
--------------------
repay the Term Loan made to it by each Bank, together with interest thereon,
shall be evidenced by a promissory note of such Borrower dated the Funding Date
in substantially the form attached hereto as Exhibit A, payable to the order of
---------
each Bank in a principal amount equal to the Term Loan of such Bank. Interpool
will execute and deliver an irrevocable guarantee (in the form of Exhibit C and
---------
as described below) to each Bank and the Agent guaranteeing full and timely
repayment of the Term Loans made to Ltd. and Corp. and all other obligations of
Ltd. and Corp. under this Agreement and the other Loan Documents. Ltd. will
execute and deliver an irrevocable guarantee (in the form of Exhibit C and as
---------
described below) to each Bank and the Agent guaranteeing full and timely payment
and performance of the Term Loans made to Corp. and all other obligations of
Corp. under this Agreement and the other Loan Documents. Corp. will execute and
deliver an irrevocable guarantee (in the form of Exhibit D and as described
---------
below) to each Bank and the Agent guaranteeing full and timely payment and
performance of the Term Loans made to Ltd. and all other obligations of Ltd.
under this Agreement and the other Loan Documents.
15
<PAGE>
3. INTEREST RATES
3.1 Interest Rate Options.
---------------------
(a) Selection of Interest Rate Options. The Borrowers shall pay
----------------------------------
interest in respect of the outstanding unpaid principal amount of the Term Loans
as selected by them from the Base Rate Option or Euro-Rate Option set forth in
Section 3.1(b) below applicable to the Term Loans; it being understood that,
subject to the provisions of this Agreement, any Borrower may select different
Interest Rate Options and different Euro-Rate Interest Periods to apply
simultaneously to the Term Loans comprising different Borrowing Tranches and may
convert to or renew one or more Interest Rate Options with respect to all or any
of the Term Loans comprising any Borrowing Tranche; provided that there shall
not be at any one time more than five (5) Borrowing Tranches outstanding in the
aggregate for all Term Loans outstanding. If at any time the designated rate
applicable to any Term Loan made by any Bank exceeds such Bank's highest lawful
rate, the rate of interest on such Bank's Term Loan shall be limited to such
Bank's highest lawful rate.
(b) Term Loan Interest Rate Options. Each Borrower shall have the
-------------------------------
right to select from the following Interest Rate Options applicable to the Term
Loans:
(i) Base Rate Option: A fluctuating rate per annum (computed on
----------------
the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed) equal to the Base Rate, such interest rate
to change automatically from time to time effective as of the
effective date of each change in the Base Rate; or
(ii) Euro-Rate Option: A rate per annum (computed on the basis of
----------------
a year of 360 days and actual days elapsed) equal to the sum of
the Euro-Rate for such Euro-Rate Interest Period, plus seventy-
five (75) basis points (3/4 of l%).
(c) Rate Quotations. Any Borrower may call the Agent on or before
---------------
the date on which such Borrower's election of a Euro-Rate Option (the "Interest
Rate Election") is to be delivered to the Agent in order to receive an
indication of the rates then in effect, but it is acknowledged that such
indication shall not be binding on the Agent or the Banks nor affect the rate of
interest which thereafter is actually in effect when the Interest Rate Election
is made.
3.2 Euro-Rate Interest Periods. At any time when any Borrower shall
--------------------------
select or renew a Euro-Rate Option, such Borrower shall notify the Agent thereof
at least three (3) Business Days prior to the effective date of such Euro-Rate
Option, by delivering an Interest Rate Election to the Agent. The Interest Rate
Election shall specify an interest period during which such Euro-Rate Option
shall apply for each Term Loan subject to a Euro-Rate Option comprising any
Borrowing Tranche (the "Euro-Rate Interest Period"), such period to be three (3)
months, provided that:
16
<PAGE>
(a) any Euro-Rate Interest Period which would otherwise end on a date
which is not a Business Day shall be extended to the next succeeding Business
Day unless such Business Day falls in the next calendar month, in which case
such Euro-Rate Interest Period shall end on the next preceding Business Day;
(b) any Euro-Rate Interest Period which begins on the last day of a
calendar month for which there is no numerically corresponding day in the
subsequent calendar month during which such Euro-Rate Interest Period is to end
shall end on the last Business Day of such subsequent month;
(c) each Borrowing Tranche of Euro-Rate Loans shall be not less than
$2,500,000 or in the full principal amount of the Term Loan of such Borrower.
(d) such Borrower shall not select, convert to or renew a Euro-Rate
Interest Period for any part of the Term Loans that would end after the maturity
date of the Term Loans;
(e) in the case of the renewal of a Euro-Rate Option at the end of a
Euro-Rate Interest Period, the first day of the new Euro-Rate Interest Period
shall be the last day of the preceding Euro-Rate Interest Period, without
duplication in the payment of interest for such day.
(f) no Interest Period may end later than a Principal Payment Date if
any portion of the principal amount of the Term Loans comprising any Borrowing
Tranche to which the Euro-Rate option applies and to which such Interest Period
would be applicable is due and payable on such Principal Payment Date.
3.3 Interest After Default; Interest on Overdue Amount.
--------------------------------------------------
(a) To the extent permitted by Law, upon the occurrence of an Event
of Default and during any period in which an Event of Default exists (i) the
principal amount of all of the Term Loans to which the Base Rate Option is
applicable, whether or not the same have become due and payable by maturity,
acceleration, declaration or otherwise, shall bear interest at a rate per annum
which shall be two percent (2%) per annum above the rate otherwise in effect
under the Base Rate Option, such interest rate to change automatically from time
to time, effective as of the effective date of each change in the Base Rate and
(ii) the principal amount of the Term Loans to which the Euro-Rate Option is
applicable, whether or not the same have become due and payable by maturity,
acceleration, declaration or otherwise, shall bear interest, until the end of
the then current Euro-Rate Interest Period, at a rate per annum which shall be
two percent (2%) per annum above the rate otherwise in effect under the Euro-
Rate Option. At the end of the then current Euro-Rate Interest Period, such
part of the Term Loans bearing interest at the Euro-Rate Option shall
automatically be converted to the Base Rate Option, and thereafter the interest
rate shall be calculated in accordance with clause (i) of this Section 3.3(a).
(b) If any Borrower fails to make any payment of interest on the
Term Loans when due, such Borrower shall, to the extent permitted by applicable
law, pay interest on the amount of such overdue payment at a rate of interest
equal to the Base Rate for the first five (5) days following the due date and
thereafter at a rate of interest equal to the Base Rate plus two
17
<PAGE>
hundred (200) basis points (2%); such interest shall be calculated from and
including the due date of such payment to but excluding the date of payment of
such amount in full, payable on demand.
(c) If any Borrower fails to make any payment of fees, costs,
expenses or indemnities when due under this Agreement, such Borrower shall, to
the extent permitted by applicable law, pay interest on the amount of such
overdue payment at a rate of interest equal to the Base Rate plus two hundred
(200) basis points (2%); such interest shall be calculated from and including
the fifth (5th) day following the due date of such payment to but excluding the
date of payment of such amount in full, payable on demand.
The Borrowers acknowledge that such increased rates reflect, among
other things, the fact that such Loans or other amounts have become a
substantially greater risk given their default status and that the Banks are
entitled to additional compensation for such risk; and, all such interest shall
be payable by the relevant Borrower upon demand by Agent.
3.4 Euro-Rate Unascertainable.
-------------------------
(a) If on any date on which a Euro-Rate would otherwise be
determined, the Agent shall have determined (which determination shall be
conclusive, absent manifest error) that:
(i) adequate and reasonable means do not exist for
ascertaining such Euro-Rate, or
(ii) an event has occurred which materially and adversely
affects the London interbank market relating to the
Euro-Rate, or
(b) if at any time any Bank shall have determined (which
determination shall be conclusive, absent manifest error) that:
(i) the maintenance of any Term Loan to which a Euro-Rate
Option applies has been made impracticable or unlawful
by compliance by such Bank in good faith with any Law
or any interpretation or application thereof by any
Official Body or with any request or directive of any
such Official Body (whether or not having the force of
Law), or
(ii) such Euro-Rate Option will not adequately and fairly
reflect the cost to such Bank of the establishment or
maintenance of any such Term Loan, or
(iii) after making all reasonable efforts that deposits of
the relevant amount in Dollars for the relevant Euro-
Rate Interest Period for a Term Loan to which a Euro-
Rate
18
<PAGE>
Option applies are not available to such Bank at the
effective cost of funding a proposed Euro-Rate loan, in
the London interbank market,
then, in the case of any event specified in subsection (a) above, the Agent
shall promptly so notify the Banks and the Borrowers thereof and in the case of
an event specified in subsection (b) above, such Bank shall promptly so notify
the Agent and endorse a certificate to such notice as to the specific
circumstances of such notice and the Agent shall promptly send copies of such
notice and certificate to the other Banks and the Borrowers. Upon such date as
shall be specified in such notice (which shall not be earlier than the date such
notice is given) the obligation of (A) the Banks in the case of such notice
given by the Agent or (B) such Bank in the case of such notice given by such
Bank to allow the Borrower or Borrowers, as the case may be, to continue the
Euro-Rate Option shall be suspended until the Agent shall have later notified
the Borrowers or such Bank shall have later notified the Agent, of the Agent's
or such Bank's, as the case may be, determination (which determination shall be
conclusive, absent manifest error) that the circumstances giving rise to such
previous determination no longer exist. If at any time the Agent makes a
determination under subsection (a) or (b) of this Section 3.4 and any Borrower
has previously notified the Agent of its selection of a Euro-Rate Option and
such Euro-Rate Option has not yet gone into effect, such notification shall be
deemed to provide for selection of, conversion to or renewal of the Base Rate
Option otherwise available with respect to such Term Loans. If any Bank
notifies the Agent of a determination under subsection (b) of this Section 3.4,
each Borrower shall, subject to such Borrower's indemnification obligations
under Section 4.6(b), as to any Term Loan of the Bank to which a Euro-Rate
Option applies, on the date specified in such notice either convert such Term
Loan or prepay such Term Loan in accordance with Section 4.5 hereof. Absent due
notice from such Borrower of conversion or prepayment such Term Loan shall
automatically be converted to the Base Rate Option otherwise available with
respect to such Term Loan upon such specified date.
3.5 Failure to Select Euro-Rate Option. If a Borrower fails to select a
----------------------------------
new Interest Period to apply to any Borrowing Tranche of Euro-Rate Term Loans at
the expiration of an existing Interest Period applicable to such Borrowing
Tranche in accordance with the provisions of Section 3.4 such Borrower shall be
deemed to have renewed and elected the Euro-Rate Option for a three month period
for such Borrowing Tranche, commencing upon the last day of the existing
Interest Period.
19
<PAGE>
4. PAYMENTS
4.1 Principal Payment Schedule. Each Borrower shall pay to the Agent for
--------------------------
the account of the Banks the principal of its Term Loans in the amounts and on
the eleventh day of each of the months set forth on Schedule 4.1 annexed hereto
(each a "Principal Payment Date"). The outstanding unpaid principal amount of
the Term Loans shall be due and payable in full on April 11, 2001.
4.2 Interest Payment Dates. Interest on Term Loans to which the Base Rate
----------------------
Option applies shall be due and payable in arrears on the eleventh day of each
January, April, July and October after the date hereof and on maturity or upon
the earlier acceleration of the Term Loans. Interest on Term Loans to which a
Euro-Rate Option applies shall be due and payable on the last day of each Euro-
Rate Interest Period and if the payment of the Term Loans is accelerated, the
date of the acceleration of the Term Loans. After the maturity of the Term
Loans, whether by acceleration or otherwise, interest on the Term Loans shall be
payable on demand.
4.3 Payments. All payments and prepayments to be made in respect of
--------
principal, interest, Agent's Fee or other fees or amounts due from the Borrowers
hereunder shall be payable prior to 11:00 A.M. (Eastern Daylight Time) on the
date when due without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived by the Borrowers, and without setoff,
counterclaim or other deduction of any nature, and an action therefor shall
immediately accrue. Such payments shall be made to the Agent at the Principal
Office for the ratable accounts of the Banks with respect to the Term Loans in
Dollars and in immediately available funds, and the Agent shall promptly
distribute such amounts to the Banks in immediately available funds. The
Agent's and each Bank's statement of account, ledger or other relevant record
shall, in the absence of manifest error, be conclusive as the statement of the
amount of principal of and interest on the Term Loans and other amounts owing
under this Agreement and shall be deemed an "account stated."
4.4 Pro Rata Treatment of Banks. Each selection of, conversion to or
---------------------------
renewal of any Interest Rate Option and each payment or prepayment by any
Borrower with respect to principal, interest or other fees or amounts due from
such Borrower hereunder to the Banks with respect to the Term Loans, shall
(except as provided in Section 3.4(b) or 4.6(a) hereof) be made in proportion to
the amount which the outstanding principal amount Term Loans from each Bank
bears to the aggregate unpaid outstanding principal amount of Term Loan.
4.5 Prepayments.
-----------
(a) Voluntary Prepayments.
---------------------
Each Borrower shall have the right at its option from time to time to
prepay the principal of the Term Loans due from such Borrower in whole or in
part, together with any accrued and unpaid interest on such principal amount so
prepaid without premiums or penalties (except as provided in Section 4.6
hereof):
20
<PAGE>
(i) at any time with respect to any Term Loan, or
(ii) on the date specified in a notice by any Bank pursuant
to Section 3.4(b) hereof with respect to any Term Loan
to which a Euro-Rate Option applies.
Whenever any Borrower desires to prepay any part of the Term Loans, it shall
provide a prepayment notice to the Agent at least one (1) Business Day prior to
the date of prepayment of Term Loans setting forth the following information:
(y) the date, which shall be a Business Day, on which the
proposed prepayment is to be made; and
(z) the total principal amount of such prepayment.
All prepayment notices shall be irrevocable. The principal amount of the Term
Loans for which a prepayment notice is given, together with any accrued and
unpaid interest on such principal amount shall be due and payable on the date
specified in such prepayment notice, and the proceeds of any such prepayment
shall be applied ratably over all Term Loans of such Borrower and then applied
to the prepayment of such Term Loans in inverse order of the scheduled principal
payments thereof without priority of any one such Term Loan over any other in
accordance with the terms of this Agreement. Any prepayment hereunder shall be
subject to the Borrowers' obligation to indemnify the Banks under Section
4.6(b).
(b) Mandatory Prepayments. In the event there shall occur any
---------------------
deficiency in the amount of Collateral Value required to be maintained by a
Borrower under Section 7.27, the Borrowers shall give prompt notice thereof to
the Agent and the Banks and may elect to eliminate such deficiency by taking an
action pursuant to Section 4.8 hereof (a) within five (5) days following the
occurrence of a sale resulting in a deficiency or a deficiency resulting from
any other cause if the proceeds of such sale or the amount of such deficiency,
as the case may be, is greater than or equal to $100,000 or (b) within thirty
(30) days following the end of the calendar quarter during which such sale or
deficiency occurs if proceeds of such sale or the amount of such deficiency, as
the case may be, is less than $100,000, provided, however, that such Borrower
-------- -------
will not be required to eliminate such deficiency if such deficiency results
from the occurrence of any Equipment Collateral Losses and (i) occurs during the
first twenty-four (24) months following the Closing Date and together with all
other Equipment Collateral Losses (which have not been substituted or prepaid)
does not exceed $500,000, or (ii) occurs at any time thereafter and together
with all other Equipment Collateral Losses (which have not been substituted or
prepaid) does not exceed $1,000,000. If the Borrowers fail to take such action
to eliminate such deficiency within such time periods, the Borrower suffering
such deficiency shall immediately make a mandatory prepayment of the principal
of its Term Loans in an amount sufficient to cause such Borrower to comply with
Section 7.27, in each case, together with a payment of accrued and unpaid
interest on the principal amount so prepaid. The Borrowers shall notify the
Agent in writing at least one (1) Business Day prior to the date (which shall be
a Business Day) on which any prepayment to eliminate such deficiency is made.
All prepayments of principal pursuant to this Section 4.5(b) shall be applied to
payment of the principal amount
21
<PAGE>
of the Term Loans by application to the unpaid installments of principal in the
inverse order of scheduled maturities.
(c) Application Among Interest Rate Options.
All prepayments required pursuant to this Section 4.5 shall first be
applied between the Interest Rate Options to the principal amount of the Term
Loans subject to a Base Rate Option, then to Term Loans subject to the Euro-Rate
Option. In accordance with Section 4.6(b), the Borrowers shall indemnify the
Banks for any loss or expense including loss of margin incurred with respect to
any such prepayments applied against Term Loans subject to a Euro-Rate Option on
any day other than the last day of the applicable Interest Period; provided,
--------
however, that each Bank will give notice to the Borrowers and consider in good
- -------
faith whether it will waive such indemnification in every case in which the
Euro-Rate on the date of payment equals or exceeds the Euro-Rate applicable to
the Borrowing Tranche being prepaid.
4.6 Additional Compensation in Certain Circumstances.
------------------------------------------------
(a) Increased Costs or Reduced Return Resulting From Taxes, Reserves,
------------------------------------------------ ----------------
Capital Adequacy Requirements, Expenses, Etc. If, after the date hereof, any
- --------------------------------------------
Law, guideline or interpretation or any change in any Law, guideline or
interpretation or application thereof by any Official Body charged with the
interpretation or administration thereof or compliance with any request or
directive (whether or not having the force of law) of any central bank or other
Official Body:
(i) subjects any Bank to any tax or changes the basis of
taxation with respect to this Agreement, the Term
Loans, the Term Loans or payments by any Borrower of
principal, interest, fees, or other amounts due from
such Borrower hereunder or under the Term Loans (except
for franchise taxes and taxes on the overall net income
of such Bank),
(ii) imposes, modifies or deems applicable any reserve,
special deposit or similar requirement (excluding any
reserve requirement included in any applicable Euro-
Rate Reserve Percentage) against credits or commitments
to extend credit extended by, or assets (funded or
contingent) of, deposits with or for the account of, or
other acquisitions of funds by, any Bank, or
(iii) imposes, modifies or deems applicable any capital
adequacy or similar requirement (A) against assets
(funded or contingent) of, credits or commitments to
extend credit extended by, any Bank, or (B) otherwise
applicable to the obligations of any Bank under this
Agreement,
22
<PAGE>
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon any
Bank with respect to this Agreement, the Term Loans or the making, maintenance
or funding of any part of the Term Loans (or, in the case of any capital
adequacy or similar requirement, to have the effect of reducing the rate of
return on any Bank's capital, taking into consideration such Bank's customary
policies with respect to capital adequacy) by an amount which such Bank deems to
be material, such Bank shall from time to time notify the Borrowers and the
Agent of the amount determined in good faith (using any averaging and
attribution methods employed in good faith) by such Bank (which determination
shall be conclusive, absent manifest error) to be necessary to compensate such
Bank for such increase in cost, reduction of income or additional expense. Such
Bank shall use its best efforts to give such notice promptly, and such notice
shall set forth in reasonable detail the basis for such determination. Within
five (5) days following such notice, the Borrowers shall have the right to
prepay the Term Loans pursuant to Section 4.5(a) of this Agreement, failing
which prepayment, the amount notified pursuant to this paragraph shall be due
and payable by the Borrowers to such Bank ten (10) Business Days after such
notice is given. As of the Closing Date, to the actual knowledge of the
relevant Responsible Officers of the Agent, no such increases in cost,
reductions of income or additional expenses exist.
(b) Indemnity. In addition to the compensation required by
---------
subsection (a) of this Section 4.6, the Borrowers shall indemnify each Bank
against all liabilities, losses or expenses (including loss of margin, any loss
or expense incurred in liquidating or employing deposits from third parties and
any loss or expense incurred in connection with funds acquired by a Bank to fund
or maintain Term Loans subject to the Euro-Rate Option) which such Bank sustains
or incurs as a consequence of any
(i) payment, prepayment or conversion of any Term Loan to
which the Euro-Rate Option applies on a day other than
the last day of the corresponding Euro-Rate Interest
Period (whether or not such payment or prepayment is
mandatory, voluntary or automatic and whether or not
such payment or prepayment is then due); provided,
--------
however, that each Bank will give notice to the
-------
Borrowers and consider in good faith whether it will
waive such indemnification in every case in which the
Euro-Rate on the date of payment equals or exceeds the
Euro-Rate applicable to the Borrowing Tranche being
prepaid;
(ii) attempt by any Borrower to revoke (expressly, by later
inconsistent notices or otherwise) in whole or part any
notice relating to prepayments under Section 4.5, or
(iii) default by any Borrower in the payment of any principal
of, or interest on, any Euro-Rate Loan when due
(whether by acceleration or otherwise).
23
<PAGE>
If any Bank sustains or incurs any such loss or expense it shall from
time to time notify the Borrowers of the amount determined in good faith by such
Bank (which determination shall be conclusive, absent manifest error, and may
include such assumptions, allocations of costs and expenses and averaging or
attribution methods as such Bank shall deem reasonable) to be necessary to
indemnify such Bank for such loss or expense. Such notice shall set forth in
reasonable detail the basis for such determination. Such amount shall be due
and payable by the Borrowers to such Bank within ten (10) Business Days after
such notice is given.
4.7 Loan Accounts. Each Bank shall open and maintain on its books loan
-------------
accounts in each of the Borrowers' names with respect to Term Loans made,
repayments, prepayments, the computation and payment of interest, fees and other
amounts due and sums paid to such Bank hereunder. Such loan accounts shall be
conclusive and binding on the Borrowers as to the amount at any time due to such
Bank from each Borrower, except in the case of manifest error. Each Bank shall
make available at the request of any of the Borrowers on no more frequently than
a calendar quarterly basis a copy of each such loan account. The failure of any
Bank to maintain such loan accounts shall not impair any of the obligations of
the Borrowers under the Loan Documents.
4.8 Interpool's and Ltd.'s Assumption of Term Loans; Pledge of Equipment.
--------------------------------------------------------------------
(a) At any time and from time to time (but in the case of a partial
assumption not more often than once during any calendar quarter) Interpool may
assume the Obligations of Ltd. or Corp., in whole or in part, including, but not
limited to, the Term Loans of Ltd. and/or Corp., as the case may be, pursuant to
an assumption agreement in the form of Exhibit E attached hereto, provided that
---------
(i) Interpool's Collateral Value shall not be less than an amount equal to the
amount required pursuant to Section 7.27 hereof after giving effect to such
assumption, (ii) no Default or Event of Default exists (unless such Default
shall be cured by the assumption by Interpool), and the Banks shall have
received an Officer's Certificate of Interpool to such effect, and (iii) the
Banks shall have received a legal opinion of Arthur L. Burns Esq. or his
successor, as general counsel to the Borrowers, in form and substance
satisfactory to the Banks and their special counsel as to the enforceability of
the assumption agreement and the transactions contemplated thereby. If
Interpool assumes any Obligations of Ltd. and/or Corp., Ltd. and/or Corp., as
the case may be, will be released from its and/or their Obligations hereunder
and under the other Loan Documents to the extent such Obligations shall have
been assumed by Interpool except that the representations, warranties and
indemnities of each of Ltd. and Corp. shall survive the release of their other
respective Obligations.
(b) At any time and from time to time (but in the case of a partial
assumption not more often than once during any calendar quarter) Ltd. may assume
the Obligations of Corp., in whole or in part, including, but not limited to,
its Term Loans, pursuant to an assumption agreement in the form of Exhibit E
---------
attached hereto, provided that (i) Ltd.'s Collateral Value shall not be less
than an amount equal to the amount required pursuant to Section 7.27 hereof
after giving effect to such assumption, (ii) no Default or Event of Default
exists (unless such Default shall be cured by the assumption by Ltd.), and the
Banks shall have received an Officer's Certificate of Ltd. to such effect, and
(iii) the Banks shall have received a legal opinion of Arthur L. Burns Esq. or
his successor, as general counsel to the Borrowers,
24
<PAGE>
in form and substance satisfactory to the Banks and their special counsel as to
the enforceability of the assumption agreement and the transactions contemplated
thereto. If Ltd. assumes any Obligations of Corp., Corp. will be released from
its Obligations hereunder and under the other Loan Documents to the extent such
Obligations shall have been assumed by Ltd., except that the representations,
warranties and indemnities of Corp. shall survive the release of its other
Obligations.
(c) At any time and from time to time (but in the case of a partial
assumption not more often than once during any calendar quarter) Corp. may
assume the Obligations of Ltd., in whole or in part, including, but not limited
to, its Term Loans, pursuant to an assumption agreement in the form of Exhibit E
---------
attached hereto, provided that (i) Corp.'s Collateral Value shall not be less
than an amount equal to the amount required pursuant to Section 7.27 hereof
after giving effect to such assumption, (ii) no Default or Event of Default
exists (unless such Default shall be cured by the assumption by Corp.), and the
Banks shall have received an Officer's Certificate of Corp. to such effect, and
(iii) the Banks shall have received a legal opinion of Arthur L. Burns Esq. or
his successor, as general counsel to the Borrowers, in form and substance
satisfactory to the Banks and their special counsel as to the enforceability of
the assumption agreement and the transactions contemplated thereto. If Corp.
assumes any Obligations of Ltd., Ltd. will be released from its Obligations
hereunder and under the other Loan Documents to the extent such Obligations
shall have been assumed by Corp., except that the representations, warranties
and indemnities of Ltd. shall survive the release of its other Obligations.
(d) Any Borrower shall have the right to add Collateral to, or
substitute Collateral under, the Lien created under the relevant Security
Agreement, at any time or from time to time, provided that any such substitution
will not decrease the aggregate Collateral Value of such Borrower's Collateral,
by the execution and delivery to the Collateral Agent with copies to the Banks
and special counsel to the Banks, at least five (5) Business Days prior to the
proposed effective date of any addition or substitution of Collateral of an
appropriate Security Agreement Supplement indicating specifically the Collateral
to be added or substituted provided, that no Default or Event of Default exists
(other than a Default which would be cured by such addition or substitution), or
would arise as a result of or after giving effect to, such addition or
substitution of Collateral and the Banks shall have received an Officer's
Certificate of such Borrower to such effect. The Collateral Agent shall
countersign such Security Agreement Supplement pursuant to instructions by the
Banks to do so which the Banks shall issue upon their being satisfied that the
conditions set forth herein have been fulfilled whereupon such Security
Agreement Supplement shall become effective. Interpool shall have the right to
add Railcars to, or substitute Railcars at any time or from time to time by the
execution and delivery to the Collateral Agent with copies to the Banks and
special counsel to the Banks, at least ten (10) Business Days prior to the
proposed effective date of any addition or substitution of such Collateral of an
appropriate Railcars Security Agreement Supplement (in the form attached as
Annex A to Exhibit G hereto) indicating specifically the Collateral to be added
---------
or substituted; provided that no Default or Event of Default exists (other than
--------
a Default which would be cured by such addition or substitution), or would arise
as a result of or after giving affect to, such addition or substitution of
Collateral and the Banks shall have received an Officer's Certificate of
Interpool to such effect. The Collateral Agent shall countersign such Railcars
Security
25
<PAGE>
Agreement Supplement, pursuant to instructions by the Banks to do so which the
Banks shall issue upon their being satisfied that the conditions set forth
herein have been fulfilled whereupon such Security Agreement Supplement shall
become effective and shall be filed with the Surface Transportation Board.
(e) At any time or from time to time Interpool shall have the right,
for the benefit of Ltd. and/or Corp., in order to enable Ltd. and/or Corp., as
the case may be, to avoid the occurrence of an Event of Default as a result of
non-compliance with the provisions of Section 7.27 hereof, to add Collateral to
the Lien created by the relevant Security Agreement executed by Interpool in
favor of the Collateral Agent by the execution and delivery to the Collateral
Agent with copies to the Banks and special counsel to the Banks, at least five
(5) Business Days prior to the proposed effective date of any addition of
Collateral, of an appropriate Security Agreement Supplement provided that
(i) such Security Agreement Supplement indicates specifically the Collateral
being added to such Lien; (ii) such Security Agreement Supplement or an
Officer's Certificate delivered in connection therewith specifically provides
that such Collateral is being added for the benefit of Ltd. and/or Corp., as the
case may be, to avoid the occurrence an Event of Default as a result of non-
compliance with the provisions of Section 7.27 hereof and that such Collateral
shall secure all the Obligations of Interpool (including Obligations of
Interpool under the Guaranty made by Interpool) and the Obligations of Ltd.
(including the Obligations of Ltd. under the Guaranty made by Ltd.) and/or
Corp., as the case may be; and (iii) no Default or Event of Default exists
(unless such Default shall be cured by the addition of such Collateral) and the
Banks shall have received an Officer's Certificate of Interpool to such effect.
The Collateral Agent shall countersign such Security Agreement Supplement
pursuant to instructions by the Banks to do so which the Banks shall issue upon
their being satisfied that the conditions set forth in this Section 4.8(e) shall
have been fulfilled whereupon such Security Agreement Supplement shall become
effective.
(f) At any time or from time to time Ltd. shall have the right, for
the benefit of Corp., in order to enable Corp. to avoid the occurrence of an
Event of Default as a result of non-compliance with the provisions of Section
7.27 hereof, to add Collateral to the Lien created by the relevant Security
Agreement executed by Ltd. in favor of the Collateral Agent by the execution and
delivery to the Collateral Agent with copies to the Banks and special counsel to
the Banks, at least five (5) Business Days prior to the proposed effective date
of any addition of Collateral, of an appropriate Security Agreement Supplement
provided that (i) such Security Agreement Supplement indicates specifically the
Collateral being added to such Lien; (ii) such Security Agreement Supplement or
an Officer's Certificate delivered in connection therewith specifically provides
that such Collateral is being added for the benefit of Corp. to avoid the
occurrence of an Event of Default as a result of non-compliance with the
provisions of Section 7.27 hereof and that such Collateral shall secure all the
Obligations of Ltd. (including Obligations of Ltd. under the Guaranty made by
Ltd.) and the Obligations of Corp.; and (iii) no Default or Event of Default
exists (unless such Default shall be cured by the addition of such Collateral)
and the Banks shall have received an Officer's Certificate of Ltd. to such
effect. The Collateral Agent shall countersign such Security Agreement
Supplement pursuant to instructions by the Banks to do so which the Banks shall
issue upon their being satisfied that the conditions set forth in this Section
4.8(f) shall have been fulfilled whereupon such Security Agreement Supplement
shall become effective.
26
<PAGE>
(g) At any time or from time to time Corp. shall have the right, for
the benefit of Ltd., in order to enable Ltd. to avoid the occurrence of an Event
of Default as a result of non-compliance with the provisions of Section 7.27
hereof, to add Collateral to the Lien created by the relevant Security Agreement
executed by Corp. in favor of the Collateral Agent by the execution and delivery
to the Collateral Agent with copies to the Banks and special counsel to the
Banks, at least five (5) Business Days prior to the proposed effective date of
any addition of Collateral, of an appropriate Security Agreement Supplement
provided that (i) such Security Agreement Supplement indicates specifically the
Collateral being added to such Lien; (ii) such Security Agreement Supplement or
an Officer's Certificate delivered in connection therewith specifically provides
that such Collateral is being added for the benefit of Ltd. to avoid the
occurrence of an Event of Default as a result of non-compliance with the
provisions of Section 7.27 hereof and that such Collateral shall secure all the
Obligations of Corp. (including Obligations of Corp. under the Guaranty made by
Corp.) and the Obligations of Ltd.; and (iii) no Default or Event of Default
exists (unless such Default shall be cured by the addition of such Collateral)
and the Banks shall have received an Officer's Certificate of Corp. to such
effect. The Collateral Agent shall countersign such Security Agreement
Supplement pursuant to instructions by the Banks to do so which the Banks shall
issue upon their being satisfied that the conditions set forth in this Section
4.8(g) shall have been fulfilled whereupon such Security Agreement Supplement
shall become effective.
(h) In lieu of adding Collateral to the Lien created by the relevant
Security Agreement executed by a Borrower in favor of the Collateral Agent, such
Borrower shall have the right to grant to the Collateral Agent for the ratable
benefit of the Banks a first Lien on Cash Collateral by the execution and
delivery to the Collateral Agent with copies to the Banks and special counsel to
the Banks, at least five (5) Business Days prior to the proposed effective date
of any such grant, of a Cash Collateral Agreement covering such Cash Collateral,
provided, that (i) such agreement specifically designates the Borrower for whose
- -------- ----
benefit such Cash Collateral is being granted and (ii) no Default or Event of
Default exists (unless such Default shall be cured by the grant of such Cash
Collateral) and the Banks shall have received an Officer's Certificate of such
Borrower to such effect. Such Borrower may thereafter add Collateral to its
Security Agreement pursuant to and in compliance with the provisions of
subsection (d), (e), (f) or (g) above and upon such addition of Collateral
becoming effective, such Borrower may request the release of Cash Collateral
from the Cash Collateral Agreement corresponding to the Cash Collateral so added
and upon the Banks having been satisfied that (x) such Cash Collateral has been
added to the relevant Security Agreement pursuant to and in compliance with the
provisions of subsection (d), (e), (f) or (g) above and (y) no Event of Default
-------------------------------
or Default exists and the Banks have received an Officer's Certificate of such
Borrower that no Event of Default or Default exists, the Banks shall instruct
the Collateral Agent to execute and deliver to such Borrower a release of such
Cash Collateral from the Cash Collateral Agreement and the Collateral Agent
shall execute and deliver such release to such Borrower. So long as no Default
or Event of Default shall have occurred, the Borrower pledging Cash Collateral
shall have the option of designating the specific Approved Investment in which
such Cash Collateral shall be maintained. If a Default or Event of Default
shall have occurred, such Approved Investment shall be designated by the
Collateral Agent.
27
<PAGE>
(i) In the event that Interpool determines that the Collateral Value
of the Collateral granted by it pursuant to its Security Agreement (and not
theretofore released) exceeds the amount required pursuant to Section 7.27
hereof, then Interpool shall have the right, for the benefit of Ltd. and/or
Corp., as the case may be, in order to enable Ltd. and/or Corp., as the case may
be, to avoid the occurrence of an Event of Default as a result of non-compliance
with the provisions of Section 7.27 hereof to notify the Banks, the Collateral
Agent and their special counsel at least five (5) business days prior to the
effective date thereof of its designation that the Collateral representing such
excess Collateral Value shall inure to the benefit of Ltd. and/or Corp., as the
case may be, to avoid the occurrence of such an Event of Default, which notice
shall be accompanied by (i) a Collateral Certificate specifically calculating
such excess and indicating specifically the Collateral representing such excess
Collateral Value and (ii) an Officer's Certificate of Interpool that no Event of
Default or Default exists (unless such Default shall be cured by such
designation by Interpool of excess Collateral Value). Upon their satisfaction
that the conditions referred to above shall have been fulfilled, the Banks shall
instruct the Collateral Agent to countersign such notice and designation and the
Collateral Agent shall so countersign such notice and designation, whereupon
such designation by Interpool shall become effective.
(j) In the event that Ltd. determines that the Collateral Value of
the Collateral granted by it pursuant to its Security Agreement and any
Collateral which Interpool and Ltd. pursuant to Sections 4.8(e), (g), (i) and
(k) have designated as inuring to the benefit of Ltd. (and not theretofore
released) exceeds the amount required pursuant to Section 7.27 hereof, then Ltd.
shall have the right, for the benefit of Corp. in order to enable Corp. to avoid
the occurrence of an Event of Default as a result of non-compliance with the
provisions of Section 7.27 hereof, to notify the Banks, the Collateral Agent and
their special counsel at least five (5) business days prior to the effective
date thereof of its designation that the Collateral representing such excess
Collateral Value shall inure to the benefit of Corp. to avoid the occurrence of
such an Event of Default, which notice shall be accompanied by (i) a Collateral
Certificate specifically calculating such excess and indicating specifically the
Collateral representing such excess Collateral Value and (ii) an Officer's
Certificate of Ltd. that no Event of Default or Default exists (unless such
Default shall be cured by such designation by Ltd. of excess Collateral Value).
Upon their satisfaction that the conditions referred to above shall have been
fulfilled, the Banks shall instruct the Collateral Agent to countersign such
notice and designation and the Collateral Agent shall so countersign such notice
and designation, whereupon such designation by Ltd. shall become effective.
(k) In the event that Corp. determines that the Collateral Value of
the Collateral granted by it pursuant to its Security Agreement and any
Collateral which Interpool and Ltd. pursuant to Sections 4.8(e), (f), (i) and
(j) have designated as inuring to the benefit of Corp. (and not theretofore
released) exceeds the amount required pursuant to Section 7.27 hereof, then
Corp. shall have the right, for the benefit of Ltd. in order to enable Ltd to
avoid the occurrence of an Event of Default as a result of non-compliance with
the provisions of Section 7.27 hereof, to notify the Banks, the Collateral Agent
and their special counsel at least five (5) business days prior to the effective
date thereof of its designation that the Collateral representing such excess
Collateral Value shall inure to the benefit of Ltd. to avoid the occurrence of
such an Event of Default, which notice shall be accompanied by (i) a Collateral
28
<PAGE>
Certificate specifically calculating such excess and indicating specifically the
Collateral representing such excess Collateral Value and (ii) an Officer's
Certificate of Corp. that no Event of Default or Default exists (unless such
Default shall be cured by such designation by Corp. of excess Collateral Value).
Upon their satisfaction that the conditions referred to above shall have been
fulfilled, the Banks shall instruct the Collateral Agent to countersign such
notice and designation and the Collateral Agent shall so countersign such notice
and designation, whereupon such designation by Corp. shall become effective.
(l) All assumptions, additions, or substitutions of Collateral and
Cash Collateral pursuant to the provisions of this Section 4.8 shall be
accompanied by all such agreements, instruments, documents, certificates, UCC
financing statements, notations of Liens on certificates of title or
applications therefor and other lien instruments and the taking of all such
action (including the filing and recording of any of the foregoing, searches of
public records and confirmation of the stamping of Leases and Direct Finance
Leases required under Section 7.29(b)) as the Banks, the Collateral Agent and
their special counsel shall reasonably require and all fees and expenses with
respect thereto (including the fees and expenses of special counsel to the Banks
and the Collateral Agent) shall be paid promptly by the Borrowers upon
presentation of invoices therefor.
4.9 Termination of Collateral.
-------------------------
(a) If (i) based upon the financial statements and the related
certificates delivered to the Banks pursuant to Section 7.11 each of the
financial conditions set forth in paragraph (b) below have been met by the
Borrowers for the most recent six consecutive quarters as applied at the end of
each quarter and (ii) Interpool receives a long-term unsecured debt rating of
BBB-/Baa3 or greater from Standard & Poor's or Moody's and (iii) subsequent to
receipt of such rating, the holders of at least 80% of Interpool's outstanding
recourse Funded Debt other than the Obligations (excluding capitalized leases)
consent in writing to the release of the collateral securing such Funded Debt,
Interpool may request that the Banks waive the requirement that the Obligations
be secured by the Collateral and cause the Collateral Agent to release the Liens
of the Collateral Agent created by the Loan Documents. Upon (A) receipt of such
consent from Banks to which at least 60% of the aggregate outstanding principal
amount of the Term Loans are due, which consent the Banks agree shall not be
unreasonably withheld (it being understood that such consent may be reasonably
withheld even if the financial conditions set forth in paragraph (b) have been
met) and (B) the satisfaction of the conditions set forth in clauses (i), (ii)
and (iii) of this paragraph (a), the Banks shall instruct the Collateral Agent
and the Collateral Agent shall take any and all steps necessary to terminate the
Liens created under the Loan Documents.
(b) The financial conditions referred to in paragraph (a) above shall
be as follows:
(i) Funded Debt did not exceed 300% of Tangible Net Worth;
(ii) the sum of Fixed Charges for Interpool and its Restricted
Subsidiaries would have been covered at least 1.75 times by
the
29
<PAGE>
sum of Earnings Available for Fixed Charges for Interpool
and its Restricted Subsidiaries for the four (4) fiscal
quarters preceding the date of determination; and
(iii) Tangible Net Worth exceeded $125,000,000;
(c) In the event that the Liens of the Collateral Agent shall have
been terminated in accordance with the provisions of Section 4.9(a), then at all
times thereafter unless and until the Obligations become secured pursuant to the
provisions of Section 4.9(d), neither Interpool nor any Restricted Subsidiary
will cause, incur or suffer to be incurred or to exist any Lien on any of its or
their property or assets other than:
(i) Permitted Liens;
(ii) judgment Liens contested with execution stayed on appeal for
which adequate reserves are set aside;
(iii) Liens securing indebtedness between Interpool and the
Restricted Subsidiaries;
(iv) Liens existing on property as at the date of such
termination of Collateral after the release of collateral
referred to in Section 4.9(a)(iii) which Liens were not
prohibited under this Agreement at such date;
(v) Subject to the provisions of Section 7.19(b), Liens incurred
subsequent to the date of such release of Collateral on
property acquired after such date securing up to 100% of the
lower of cost or fair market value; Liens existing on
property at the time of acquisition; and Liens on the
property of a corporation at the time such corporation
becomes a Restricted Subsidiary;
(vi) Subject to the provisions of Section 7.19(b), other Liens if
the amount of indebtedness secured by such Liens when added
to Funded Debt incurred subsequent to the date of such
release of Collateral which is secured by Liens does not
exceed 20% of Tangible Net Worth; and
(vii) extensions, renewals and refundings of the Liens and
indebtedness referred to in clauses (i), (ii), (iii), (iv),
(v) and (vi) above.
(d) In the event that following the release of Collateral pursuant to
Section 4.9(a) the Borrowers determine that they may be unable to continue to
meet the financial conditions referred to in Section 7.19(e), they may notify
the Banks that they will no longer be able to comply with the financial
conditions of Section 7.19(e) but that they will continue to comply with the
financial conditions as set forth in Section 7.19(a), (b) and (c) then from and
30
<PAGE>
after the fifth (5th) Business Day following such notice such financial
conditions as set forth in Section 7.19(a), (b) and (c) shall become applicable
to the Borrowers, provided that on or prior to the fifth (5th) Business Day
-------- ----
following such notice (i) the Borrowers shall each grant to the Collateral Agent
a first priority perfected security interest in Collateral in accordance with
the provisions of this Agreement and the other Loan Documents having a
Collateral Value in at least an amount necessary to satisfy the requirements of
Section 7.27 hereof pursuant to Security Agreements and a Security Agreement
executed and delivered by the Borrowers to the Banks, the Collateral Agent and
their special counsel; (ii) the Borrowers shall have executed and delivered to
the Banks, the Collateral Agent and their special counsel all such legal
opinions, agreements, documents, instruments, certificates, UCC financing
statements and other lien instruments and take all such actions (including
notations on certificates of title) as the Banks, the Collateral Agent and their
special counsel shall reasonably require in connection therewith; (iii) no
Default or Event of Default shall exist (other than a Default which would be
cured by such reinstatement of the original provisions of Section 7.19(a), (b)
and (c)) and the Banks shall have received an Officer's Certificate of the
Borrowers to the foregoing effect; and (iv) the Borrowers shall be able to
effect such reversion of the financial conditions from Section 7.19(e) to the
original provisions of Section 7.19(a), (b) and (c) only once during the term of
this Agreement. All reasonable fees and expenses relating to the foregoing
(including the fees and expenses of special counsel to the Banks and the
Collateral Agent) shall be paid by the Borrowers promptly upon presentation of
invoices therefor.
4.10 Collateral. The payment and performance of the Obligations shall
----------
be secured by the Collateral. Notwithstanding any other provision hereof or any
provision of any other Loan Document to the contrary, neither Ltd. nor Corp.
shall be liable for, nor shall the Collateral of Ltd. or Corp. secure, the
Obligations of Interpool.
4.11 Sale/Leaseback Arrangements. The Borrowers may from time to time
---------------------------
desire to enter into sale/leaseback arrangements with private offshore investors
(the "Investors") relating to various items of Equipment. If the Banks are
requested in writing by a Borrower to give their consent to such Borrower's use
of certain Equipment in such sale/leaseback arrangements, then, so long as no
Event of Default or Default shall have occurred and be continuing or shall
occur, the Banks shall consider, in good faith, but shall not be obligated to
consent to such arrangement; provided, that such transaction will not adversely
--------
affect, diminish or impair their rights, security interest or priority in the
Equipment, the Collateral or under the Documents. Each such Borrower and
Investor shall, at its sole cost and expense, execute and deliver any document,
agreement or instrument and take all such action reasonably requested by the
Banks in connection with any such transaction. All costs and expenses of the
Banks (including the legal fees and disbursements of Banks' counsel) in
connection with such proposed transactions shall be paid by the Borrowers.
31
<PAGE>
5. REPRESENTATIONS AND WARRANTIES OF BORROWERS
Each of the Borrowers hereby represents and warrants to the Banks as
follows:
5.1 Organization and Power. Each of the Borrowers (a) (i) is a
----------------------
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation and qualified to do business as a foreign
corporation in the jurisdictions set forth in Schedule 5.1 attached hereto for
------------
each Borrower, (ii) is not required to be qualified as a foreign corporation in
any jurisdiction where the failure to so qualify would have a material adverse
effect on such Borrower, its business operations or its property and (iii) has
its chief executive office and chief place of business at the respective Chief
Office set forth on Schedule 5.1 attached hereto; and (b) has all requisite
------------
corporate power and authority and all necessary licenses and permits to enter
into and perform this Agreement and the other Loan Documents to which such
Borrower is a party and to issue and deliver its Term Loans. This Agreement,
the Term Loans and the other Loan Documents to which such Borrower is a party
have been duly authorized, executed and delivered by such Borrower and, assuming
the due authorization, execution and delivery thereof by the other parties
thereto, such documents constitute the legal, valid and binding obligations of
such Borrower, enforceable against such Borrower in accordance with their
respective terms.
5.2 Trademarks, Licenses, etc. Each of the Borrowers possesses, in full
--------------------------
force and effect, all necessary franchises, patents, licenses, trademarks,
trademark rights, trade names, trade name rights, fictitious name authorizations
or certificates and copyrights material to the conduct of its business as now
being conducted, without any conflict, to its knowledge, with the franchises,
patents, licenses, trademarks, trademark rights, trade name, trade name rights,
fictitious name authorizations or certificates and copyrights of others.
5.3 Subsidiaries. Each of the Borrowers has no Subsidiaries, other than
------------
those set forth in Schedule 5.1 attached hereto.
------------
5.4 Business. Each of the Borrowers is engaged principally in the
--------
businesses of leasing, financing or managing containers, chassis, railcars,
trailers or other transportation equipment and business related to the
foregoing. In addition, a Subsidiary of one of the Borrowers is engaged in the
business of leasing micro computers and related accessories and businesses
related to the foregoing.
5.5 Financial Statements. Interpool has furnished to the Banks balance
--------------------
sheets of Interpool and its consolidated subsidiaries as of December 31, 1993
and December 31, 1994, and the related statements of income, statements of cash
flows and statements of the stockholders' equity, for the years ended December
31, 1992, December 31, 1993 and December 31, 1994, respectively, all of which
were audited by Arthur Andersen LLP, and has furnished to the Banks unaudited
balance sheets of Interpool and its consolidated subsidiaries and the related
statements of income, statements of cash flows and statements of the
stockholders' equity for the year ended December 31, 1995. All such financial
statements present fairly, in all material respects, the financial position,
stockholders' equity, results of operations and cash flows of the entities
covered thereby for the periods involved. Since the date of the most recent
32
<PAGE>
financial statements, there has been no material and adverse change in the
financial position of any Borrower not reflected in the most recent financial
statements as of that date, and, since such date, the business of each Borrower
has not been materially and adversely affected by any occurrence, whether or not
insured against. Except as otherwise disclosed on Schedule 5.5 attached hereto,
------------
the Borrowers have issued no other indebtedness for borrowed money which is
still outstanding on the date hereof, except indebtedness which is reflected in
the most recent financial statements referred to above or restructuring or
refinancing thereof.
5.6 Taxes. All tax returns of the Borrowers which are due have been duly
-----
filed and are correct in all material respects, and all Taxes and other
governmental charges upon the Borrowers which are shown to be due and payable
thereon have been paid.
5.7 Litigation. There are no outstanding judgments against any Borrower
----------
or any actions, proceedings, claims or investigations pending or, to any
Borrower's knowledge, threatened before any court or governmental body which, if
adversely determined, would materially and adversely affect the business,
properties, prospects, operations or affairs of any Borrower or impair any
Borrower's ability to perform its Obligations under this Agreement and the other
Loan Documents.
5.8 Title, Liens. Each of the Borrowers owns and has good and marketable
------------
title to all of the Collateral included in the Collateral Value relating to such
Borrower, and there are no Liens on the Collateral of any Borrower other than
the * Lien, a release of which lien shall be delivered by the Borrowers
pursuant to section 6.4(c) hereof and those Liens created pursuant to this
Agreement and the other Loan Documents and except for Permitted Liens. The
Liens granted in the Security Agreements and the Security Agreements constitute
valid first priority perfected Liens on the Collateral subject to no other
mortgage, Lien or security interest. The laws of Barbados and the Cayman
Islands do not, as to Ltd. and Corp., respectively, necessitate, require or,
other than the Cayman Islands' provision for registration of details of the
Collateral in Corp.'s internal register of charges, provide for the recording,
registration or filing of any mortgage or Lien in any of the Equipment, Leases
or any other types or items of property or proceeds thereof which are included
in the Collateral covered by or provided for in the Loan Documents executed and
delivered by each of Ltd. and Corp.
5.9 Consent, Approval. No consent or approval of any Person, shareholder,
-----------------
landlord or mortgagee, no waiver of any Lien or right of distraint or other
similar right, and no consent, license, approval or authorization of or
registration, qualification, designation, declaration or filing (except any
recordations required in connection with the perfection of the Liens granted in
the Security Agreements) with or payment of any withholding or other tax to any
governmental authority by or on the part of the Borrowers is required in
connection with the execution, delivery and performance of this Agreement or any
other Loan Document, the issuance and sale or payment of the Term Loans or the
consummation of any other transactions contemplated hereby or thereby.
5.10 Compliance with Other Instruments. None of the Borrowers is a party
---------------------------------
to any contract, commitment or agreement or subject to any restriction or to any
order, rule, regulation, writ, injunction or decree of any court or governmental
authority or to any statute which
* Confidential Treatment Requested
33
<PAGE>
materially and adversely affects its business, property, prospects, operations,
assets or financial condition as now conducted or as proposed to be conducted.
Neither the execution, delivery or performance by any Borrower of this
Agreement, the Term Loans or the other Loan Documents to be delivered by such
Borrower nor compliance herewith or therewith (a) conflicts with or results in a
breach of (i) any law, statute, rule or regulation in effect as of the date of
delivery of this Agreement, (ii) any order, writ, injunction or decree of any
court or other governmental authority, or (b) results or will result in the
creation or imposition of any Lien, charge or encumbrance upon its property
pursuant to such agreement or instrument, except for Liens created hereunder and
Permitted Liens. Neither the execution, delivery or performance by any Borrower
of this Agreement, the Term Loans or the other Loan Documents nor compliance by
any Borrower herewith or therewith conflicts or will conflict with the
certificate of incorporation, by-laws or other organizational document of any
Borrower or results or will result in a breach of or constitutes or will
constitute a default under any agreement or instrument to which any Borrower is
a party or by which it is bound.
5.11 Corporate Existence; Place of Business; Books and Records. Except as
---------------------------------------------------------
disclosed in Schedule 5.1 attached hereto, none of the Borrowers has at any time
------------
within the last five (5) years, (i) changed its name; (ii) used any fictitious
name, (iii) been the surviving corporation of a merger or consolidation, or
(iv) acquired all or substantially all of the assets of any Person. The Chief
Offices, all other offices of the Borrowers and the only places of business of
each of the Borrowers where commercial affairs are conducted and books and
records are maintained are set forth on Schedule 5.1 attached hereto. None of
------------
the Borrowers is in violation of any charter instrument or by-law, and none of
the Borrowers is in violation in any material respect of any term in any
agreement or other instrument to which it is a party or by which it or any of
its property may be bound which violation could have a material adverse effect
on any Borrower or its business, assets, operations, leaseholds and equipment.
5.12 ERISA.
-----
(a) No Reportable Event has occurred with respect to any Plan
maintained for employees of (i) any Borrower or (ii) any member of a Controlled
Group of which any Borrower is a part.
(b) None of the Borrowers is entering into the Loan Documents or any
other transaction contemplated hereby, directly or indirectly, in connection
with any arrangement in any way involving any employee benefit plan or fund or
trust which holds assets of any employee benefit plan with respect to which it
in its individual capacity is a party-in-interest, all within the meaning of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") and the
-----
Internal Revenue Code of 1986, as amended (the "Code").
----
5.13 Capital Stock. All of the issued and outstanding capital stock of
-------------
Ltd. and Corp. is owned and registered as set forth in Schedule 5.1 attached
------------
hereto.
5.14 Governmental Licenses. Each of the Borrowers has been issued all
---------------------
required federal, state, local and foreign licenses, certificates or permits
relating to, and each of the Borrowers and its facilities, business, assets,
property, prospects, operations, leaseholds and
34
<PAGE>
equipment are in compliance in all respects with, all applicable federal, state,
local and foreign laws, rules and regulations relating to air emissions, water
discharge, noise emissions, solid or liquid disposal, hazardous waste or
materials, or other environmental health or safety matters, where the failure to
so comply could have a material adverse effect on any Borrower or its business,
assets, operations, leaseholds and equipment.
5.15 Event of Default. No Event of Default or Default has occurred and is
----------------
continuing.
5.16 Margin Securities.
-----------------
(a) None of the Borrowers will, directly or indirectly, apply any
part of the proceeds of the Term Loans for the purpose (whether immediate,
incidental or ultimate) of purchasing or carrying any "margin stock" as defined
in Regulation G of the Federal Reserve Board (12 C.F.R. 207) or any security
issued by any investment company registered pursuant to Section 8 of the
Investment Company Act of 1940 or for the purpose of repaying any indebtedness
originally incurred for such purpose.
(b) None of the Borrowers is, in any way, engaged in the business of
extending credit for the purpose of purchasing or carrying Margin Stock; nor has
any Borrower secured the payment of the Term Loans by an assignment of any stock
(as such term is defined in Regulation U) or by any arrangement under which any
Borrower's right or ability to sell, pledge or otherwise dispose of stock owned
by it is in any way restricted or under which the exercise of such right,
whether by written agreement or otherwise, is or may be cause for acceleration
of the Term Loans.
5.17 Use of Proceeds. None of the Borrowers is, directly or indirectly,
---------------
applying any part of the proceeds of the Term Loans for any purpose other than
for the purposes described in Section 2.2.
5.18 Liabilities; Business. None of the Borrowers has any liabilities or
---------------------
obligations which are material to its business, property, prospects, operations,
assets or financial condition as now conducted or as proposed to be conducted
which are prohibited by this Agreement and by the other Loan Documents to which
it is a party. None of the Borrowers' assets are less than its liabilities,
both determined in accordance with GAAP, and each of the Borrowers is solvent.
5.19 Regulated Company. Neither any Borrower nor any of its Subsidiaries
-----------------
is (i) an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
(ii) a "holding company" or a "Subsidiary company" of a "holding company,"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended, or (iii) subject to any other law which purports to regulate or
restrict its ability to borrow money or to consummate the transactions
contemplated by this Agreement or the other Loan Documents or to perform its
obligations hereunder or thereunder other than usuary laws or other statutes
generally applicable to borrowers.
5.20 Disclosure. Neither this Agreement nor any other Loan Document nor
----------
any other document, certificate or instrument delivered to the Banks by or on
behalf of any Borrower in
35
<PAGE>
connection with the transactions contemplated by this Agreement contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained in this Agreement, any other Loan
Document and in such other documents, certificates or instruments not
misleading. There is no fact known to any Borrower which materially and
adversely affects or in the future may (so far as any Borrower can now
reasonably foresee) materially and adversely affect the business, prospects,
operations, affairs, condition (financial or otherwise), properties or assets of
any Borrower which has not been set forth in the financial statements or in this
Agreement, any other Loan Document or the other documents, certificates and
instruments delivered to the Banks by or on behalf of any Borrower specifically
for use in connection with the transactions contemplated by this Agreement.
5.21 Foreign Assets Control Regulations. Neither the issuance by the
----------------------------------
Borrower of the notes under this Agreement nor its use of the proceeds of the
Term Loans will violate any U.S. law or regulation including, but not limited
to, the Trading With the Enemy Act, the International Emergency Economic Powers
Act, the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act and the Foreign
Assets Control Regulations, the Transaction Control Regulations, the Cuban
Assets Control Regulations, the Iranian Assets Control Regulations, the Iranian
Transactions Regulations, the Iraqi Sanctions Regulations, the Libyan Sanctions
Regulations, the Unita (Angola) Sanctions Regulations, the sanctions regulations
regarding the former Yugoslavia and the Terrorism Sanctions Regulations, of the
Office of Foreign Assets Control, United States Department of the Treasury (31
C.F.R., Chapter V, Subtitle B as amended) or any other order, regulation or
ruling thereunder or pursuant thereto.
5.22 Leases. The Leases which are in effect on the date of this Agreement
------
each constitute legal, valid and binding obligations of such relevant Borrower
and, to the best of the Borrowers' knowledge, each of the respective lessees
thereunder, enforceable in accordance with their respective terms.
5.23 Financed Equipment. As of the date hereof, other than the *
------------------
Lien, a release of which lien shall be delivered by the Borrowers pursuant to
section 6.4(c) hereof, and Permitted Liens, no Person has a Lien on any Financed
Equipment.
5.24 Insurance. Each of the Borrowers is, as of the date of this
---------
Agreement, in compliance with the provisions of Section 7.6.
5.25 No broker's, agent's or finder's fees. No broker's fees or finder's
-------------------------------------
fees or costs of the Agent, other than pursuant to Section 9.14 hereof, or of
any other Person who acted as agent for or on behalf of a Borrower or who was
retained by a Borrower to so act relating to the transactions contemplated
hereunder are due in connection with the this Agreement, the Loan Documents or
the transactions contemplated hereunder or thereunder.
* Confidential Treatment Requested
36
<PAGE>
6. CONDITIONS OF CLOSING
The obligation of each of the Banks to make Term Loans to the
Borrowers hereunder is subject to the satisfaction, on or before the Closing
Date, of the following conditions:
6.1 Loan Documents. The Banks and the Agent shall have received a fully
--------------
executed counterpart of each of the Loan Documents, each of which shall be in
full force and effect and no term or condition thereof shall have been amended,
modified or waived, and the transactions contemplated therein to be consummated
hereunder and thereunder (including the payment of all fees and other charges)
on or prior to the Closing shall have been consummated.
6.2 Legal Opinions. The Banks and the Agent shall have received a legal
--------------
opinion from each of (a) DeCampo, Diamond & Ash, special counsel to the
Borrowers and the Guarantors; (b) Arthur L. Burns, Esq., general counsel to the
Borrowers and the Guarantors; (c) David King, Esq., special Barbados counsel to
Ltd.; and (d) Bruce Campbell & Co., special Cayman Islands counsel to Corp., all
of which legal opinions shall be in form and substance satisfactory to the
Banks.
6.3 Representations and Warranties, No Default. The representations and
------------------------------------------
warranties contained in Section 5 shall be true and correct and the conditions
set forth in this Section 6 shall have been satisfied on and as of the Closing
Date as if restated at and as of the Closing Date, there shall exist on the
Closing Date no Default or Event of Default, and each of the Borrowers shall
have delivered to the Banks an Officer's Certificate, dated the Closing Date, to
each such effect.
6.4 Evidence of Title to Collateral, Absence of Liens on Collateral,
----------------------------------------------------------------
Collateral Certificate and Stamping of Original Leases.
- ------------------------------------------------------
(a) Prior to the Closing, the Banks shall have received true, correct
and complete copies of the certificates of title or similar document for the
Chassis and Trailers covered by certificates of title included in the
Collateral.
(b) Prior to the Closing Date, the Banks shall have received the
following: (i) to the extent reasonably available, evidence of title to the
Containers included in the Collateral showing that the relevant Borrower has
good and marketable title to such Containers; (ii) search reports of the records
of the applicable offices where UCC financing statements, Federal tax liens and
judgments are filed showing that such Containers, Trailers and Chassis not
covered by certificates of title included in the Collateral are (except for the
CoreStates Lien, a release of which shall be delivered by the Borrowers pursuant
to Section 6.4(c) hereof) free and clear of Liens of record; (iii) an affidavit
executed by an officer of the relevant Borrower of such Borrower's ownership of,
and good and marketable title to such Containers, Trailers and Chassis free and
clear of Liens other than Permitted Liens, which affidavit shall be in form and
substance satisfactory to the Banks and their special counsel; (iv) a legal
opinion of Arthur L. Burns, Esq., general counsel to the Borrowers, in form and
substance satisfactory to the Banks
37
<PAGE>
and their special counsel, as to the relevant Borrower's having good and
marketable title to such Containers, Trailers and Chassis free and clear of
Liens of record.
(c) Prior to the Closing, the special counsel to the Banks, Agent and
Collateral Agent shall have received from * , a letter releasing its lien on
the Collateral (the "CoreStates Lien"), executed by * as secured party, which
letter such counsel shall hold in escrow pending receipt of written
instructions from * to such counsel to release such letter from escrow.
(d) Prior to the Closing, the Banks shall have received the
following: (i) search reports of the records of the applicable offices where
UCC financing statements, Federal tax liens and judgments are filed showing that
the Leases and Direct Finance Leases are (except for the CoreStates Lien, a
release of which shall be delivered by the Borrowers on or prior to the Funding
Date pursuant to Section 6.4(c) hereof) free and clear of Liens of record; (ii)
an affidavit executed by an officer of the relevant Borrower of such Borrower's
ownership of, and good and marketable title to the Leases and Direct Finance
Leases free and clear of Liens other than Permitted Liens, which affidavit shall
be in form and substance satisfactory to the Banks and their special counsel;
and (iii) a legal opinion of Arthur L. Burns, Esq., general counsel to the
Borrowers, in form and substance satisfactory to the Banks and their special
counsel, as to the relevant Borrower's having good and marketable title to such
Leases and Direct Finance Leases free and clear of Liens of record.
(e) Prior to the Closing, the Banks shall have received a Collateral
Certificate, dated as of the date of the Closing, executed by an officer of each
Borrower with respect to all the Collateral referred to in paragraphs (a), (b)
and (d) above.
(f) The Leases. Prior to Closing, the Borrowers shall have stamped
----------
the language set forth in Schedule 7.29(x)(i) on the front cover or other
conspicuous space of Leases and Direct Finance Leases relating to at least 90%
of the aggregate Collateral Value of Financed Equipment covered by Leases and of
Direct Finance Leases.
6.5 Corporate Proceedings and Documents. Each Borrower shall have taken
-----------------------------------
all necessary corporate action to authorize the transactions contemplated by the
Loan Documents to the reasonable satisfaction of the Banks and their special
counsel, and the Banks and their special counsel shall have received evidence of
such proceedings, together with such other corporate documents and certificates
reasonably requested by the Banks and their special counsel including, without
limitation, charter documents, certificates of good standing and certificates of
incumbency of officers, in form and substance satisfactory to the Banks and
their special counsel.
6.6 Taxes. All Taxes, fees and other charges payable in connection with
-----
the execution, delivery, recording, publishing and filing of the Loan Documents,
and the issue, sale and delivery of the Notes to be delivered on the Closing
Date shall have been paid in full by the Borrowers and the Banks and their
special counsel shall have received evidence of any such payment or arrangements
for any such payment satisfactory to the Banks and their special counsel.
* Confidential Treatment Requested
38
<PAGE>
6.7 UCC Financing Statements; Applications to Note Liens on Certificates
--------------------------------------------------------------------
of Title.
- ---------
(a) At the Closing, all UCC financing statements (covering the
Collateral other than Chassis and Trailers which are covered by certificates of
title), naming the relevant Borrower, as debtor, and the Collateral Agent, as
secured party, all certificates of title for Chassis and Trailers included in
the Collateral, applications to note the Lien of the Collateral Agent in any
Collateral covered by such certificates of title, the Security Agreement and
all other documents and instruments required under other applicable laws, shall
have been duly executed and delivered to special counsel to the Banks and the
Collateral Agent, in appropriate form for filing together with the applicable
filing fees with respect thereto, in all jurisdictions that the Banks deem
necessary or desirable in order to perfect the Liens of the Collateral Agent on
behalf of the Banks in the Collateral.
(b) By the Closing, the Borrowers shall have filed one or more
precautionary UCC financing statements against any lessee and any sublessee (if
located in the United States, and if not located in the United States then in
the jurisdiction where such lessee or sublessee is located in compliance with
the filing requirements of such jurisdiction, and if located in a jurisdiction
which is not part of the United States and which does not provide for perfection
of such security interest by filing of recording in such jurisdiction, then in
accordance with the laws of that jurisdiction in the United States in which
such lessee or sublessee has its major executive office, if any) under all
Direct Finance Leases of Equipment not subject to a certificate of title and
assignments of such UCC financing statements in favor of the Collateral Agent.
(c) Not later than one hundred fifty (150) days subsequent to the
Closing Date, the Borrowers shall have given to the Collateral Agent search
reports of the records of the applicable offices where UCC financing statements,
Federal tax liens and judgments are filed covering the period from the latest
date covered by both of the search reports delivered pursuant to Sections
6.4(b)(ii) and 6.4(d)(i) through a date subsequent to the Closing Date,
evidencing the Lien of the Collateral Agent in the Collateral other than the
Chassis and Trailers which are covered by certificates of title, showing that
such Collateral is free and clear of any blanket Liens of record other than
Permitted Liens and showing the filing information with respect to the UCC
Financing Statements referred to in Subsection 6.7(a) above.
6.8 Loan Permitted By Applicable Laws. The making of each of the Term
---------------------------------
Loans by the relevant Banks on the Closing Date on the terms and conditions
herein provided (including the use of the proceeds of such Term Loans by the
Borrowers pursuant to Section 2.2) shall not violate any law or governmental
regulation in any jurisdiction to which any Bank is subject and shall not
subject any Bank or the Collateral Agent to any Tax, penalty, liability or to
jurisdiction as a domiciliary or resident of or other onerous condition under or
pursuant to any applicable law or governmental regulation in any jurisdiction,
and such Bank shall have received such certificates, legal opinions or other
evidence as it or its special counsel may request to establish compliance with
this condition.
6.9 Participation in Term Loans by Other Banks. Simultaneously with the
------------------------------------------
making of Term Loans by each Bank, all of the other Term Loans to be made by the
other Banks, as set forth on Schedule 1 attached hereto, shall be made by such
----------
other Banks.
39
<PAGE>
6.10 Other Documents. The Banks and the Agent shall have received all such
---------------
other agreements, documents, instruments and certificates and evidence that all
action shall have been taken as is reasonably requested by the Banks or their
special counsel in order to effect the transactions contemplated hereby and by
the other Loan Documents.
6.11 Legal Matters. All legal matters incident to the purchase of the
-------------
Notes, the Collateral and the transactions relating thereto shall be
satisfactory to special counsel for the Banks and the Agent.
6.12 Expenses. At the Closing, upon presentation of invoices therefor, the
--------
Borrowers shall pay all fees and expenses relating to this Agreement, all other
Loan Documents or the transactions contemplated hereunder and thereunder
including but not limited to:
(a) the reasonable fees and disbursements of all the Banks' and the
Agent's special counsel;
(b) all costs and expenses relating to this Agreement, all other Loan
Documents, the transactions contemplated hereunder and thereunder.
6.13 Compliance with This Agreement. The Borrowers shall have performed
------------------------------
and complied with all agreements and conditions contained herein or in the other
Loan Documents which are required to be performed or complied with by the
Borrowers before or at the Closing Date to the satisfaction of the Banks and
their special counsel.
6.14 Collateral Administration Agreement. The Borrowers shall have
-----------------------------------
delivered a certified copy of the Collateral Administration Agreement to the
Banks.
7. COVENANTS
COVENANTS OF BORROWERS. Each of the Borrowers hereby covenants and
----------------------
agrees that from the date of this Agreement and so long as any Obligations or
other amounts under the Notes and hereunder are outstanding, such Borrowers will
comply with the following covenants:
7.1 Maintenance of Corporate Existence. Each of the Borrowers shall
----------------------------------
preserve and keep in full force and effect its corporate existence and all
franchises, rights and privileges necessary to the proper conduct of its
business, including, without limitation, all necessary franchises, patents,
licenses, trademarks, trademark rights, trade names, trade name rights,
fictitious name authorizations or certificates and copyrights, without any
unlawful conflict with franchises, patents, licenses, trademarks, trademark
rights, trade names, trade name rights, fictitious name authorizations or
certificates and copyrights of others which conflict may materially and
adversely affect such Borrower or interfere with the conduct of such Borrower's
business or may result in an action brought against such Borrower for such
violation which action may materially and adversely affect such Borrower or
interfere with the conduct of such Borrower's business.
40
<PAGE>
7.2 Amendments. Each of the Borrowers shall (a) promptly deliver to the
----------
Banks and the Agent copies of any amendments or modifications to its certificate
of incorporation, bylaws and organizational documents and/or other documents of
formation, as the case may be, certified, with respect to the certificate of
incorporation, by the Secretary of State of the jurisdiction of incorporation,
or by the appropriate official of its jurisdiction of formation, as the case may
be, and, with respect to the bylaws, by the secretary of such Borrower and
(b) promptly deliver to the Banks and the Agent a certificate of the incumbency
of its officers whenever a change in such incumbency has occurred.
7.3 Compliance. Each of the Borrowers shall comply with all laws,
----------
ordinances, rules and regulations of any foreign, federal, state or local
government, or any instrumentality or agency thereof, applicable to it,
including, without limitation, the Fair Labor Standards Act, now or hereafter in
effect, and all international laws, ordinances, rules and regulations, the
failure to comply with which may have a materially adverse effect on any
Borrower or on its ability to perform its Obligations under any of the Loan
Documents, any material agreement, document or instrument to which it is a
party, or on the Collateral or on the Banks or the Collateral Agent in enforcing
their rights hereunder against any Borrower or the Collateral.
7.4 Taxes. Each of the Borrowers shall pay and discharge, as they become
-----
due, all Taxes, assessments, debts, claims and other governmental or non-
governmental charges lawfully imposed upon it or incurred by it or its
properties and assets, except Taxes, assessments, debts, claims and charges
contested in good faith in appropriate proceedings and for which any Borrower
shall have set aside adequate reserves for the payment of such Tax, assessment,
debts, claims or charges. Such Borrower shall provide the Agent, upon the
Agent's request, evidence of payment of such Taxes, assessments, debts, claims
and charges. If such Borrower fails to pay such Taxes, assessments, debts,
claims or charges when due, and is not contesting the same in good faith or has
not set aside adequate reserves for the payment thereof, the Agent may discharge
the same, and any amounts so advanced by the Agent for such purposes shall be
added to the Obligations of such Borrower secured by the Collateral and shall
bear interest at the overdue rate set forth in such Notes relating to such
Taxes, assessments, debts, claims or charges.
7.5 Preservation of Assets. Each of the Borrowers shall maintain,
----------------------
preserve and keep or cause to be maintained, preserved and kept, all its
properties, Equipment and assets, including the Collateral, in accordance with
industry standards, and make, or cause to be made, all necessary or appropriate
repairs, renewals, replacements, substitutions, additions, betterments and
improvements thereto so that efficiency of all such property and assets shall at
all times be properly preserved and maintained in accordance with industry
standards.
7.6 Insurance. Each of the Borrowers shall maintain, with financially
---------
sound and reputable insurance companies, such insurance on its properties,
businesses and assets, including, without limitation, the Collateral, against
casualty, general liability, worker's compensation and such other insurable
interests and in such amounts as is consistent with practices generally followed
in the container industry for companies of comparable size and shall pay all
premiums thereon when due. The all risk insurance policies with respect to the
Collateral shall initially cover $3,500,000 in physical damage in respect of any
one occurrence, shall name the Collateral
41
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Agent for the benefit of the Banks and the Banks as additional insureds and loss
payees, and the liability insurance policies with respect to the Collateral
shall initially cover $50,000,000 in any one occurrence and in the aggregate and
shall name the Collateral Agent and the Banks, as additional insureds. All such
policies of insurance shall provide for at least thirty (30) days' advance
notice in writing to the Collateral Agent of any cancellation or modification
thereof and, with respect to all risk casualty insurance only, contain a "breach
of warranty clause" whereby the insurer agrees that a breach of the insuring
conditions or any negligence by any Borrower, or any other Person, shall not
invalidate the insurance as to the Collateral Agent, the Banks and their
respective successors and assigns. If any Borrower fails to pay the premiums on
any such insurance or maintain such insurance in effect, the Collateral Agent
shall have the right (but shall be under no duty) to pay such premiums for such
Borrower's account and take all such action (at such Borrower's expense) as the
Collateral Agent deems necessary to keep such insurance in effect. Such
Borrower shall repay to the Collateral Agent any sums which the Collateral Agent
shall have so paid, together with interest thereon at the Euro-Rate then in
effect, if the Euro-Rate Option is then applicable to any Borrowing Tranche, and
otherwise at the Base Rate then payable by such Borrower on the Term Loans.
Such Borrower, upon the Collateral Agent's request, shall (a) deliver to the
Collateral Agent a detailed list of insurance then in effect, stating the names
of the insurance companies, the amounts and rates of the insurance, dates of
expiration thereof and the properties and risks covered thereby; (b) obtain,
within thirty (30) days after notice from the Collateral Agent, such additional
insurance as described in this Section 7.6 which is reasonably required by the
Collateral Agent and which is consistent with practices generally followed in
the container industry for companies of comparable size; (c) provide to the
Collateral Agent and Banks copies of all insurance policies relating to its
properties, business and assets; and (d) assign to the Collateral Agent all
rights to receive proceeds of any such insurance with respect to the Collateral
and direct all insurers to pay all proceeds directly to the Collateral Agent.
Each of the Borrowers hereby authorizes the Collateral Agent to endorse any
draft for such proceeds. Notwithstanding anything contained herein, each of the
Borrowers shall have the option to (i) use all said proceeds received by the
Collateral Agent with respect to the Collateral to pay down the outstanding
amount of the Term Loans on a pro rata basis in inverse order of the scheduled
--- ----
principal payments thereof without priority of any one such Term Loan over any
other such Term Loan together with any amounts due under Section 4.6 hereof, or
(ii) receive said proceeds from the Collateral Agent, provided, that (a) no
-------- ----
Default or Event of Default shall have occurred and be continuing and (b) such
Borrower shall provide the Banks with substitute Collateral having a Collateral
Value sufficient to maintain the aggregate Collateral Value of such Borrower at
an amount equal to or exceeding the amount required pursuant to Section 7.27
hereof, which Collateral may be purchased with the proceeds of such insurance,
provided said substitute Collateral shall be the subject of a valid first
perfected Lien in favor of the Collateral Agent for the benefit of the Banks
subject to no other Liens.
7.7 Liens and pledges of shares in Restricted Subsidiaries. None of the
------------------------------------------------------
Borrowers shall, directly or indirectly, (a) permit to exist any Liens with
respect to the Collateral other than Liens in favor of the Banks or the
Collateral Agent or Permitted Liens; nor (b) pledge any shares owned by it in
Restricted Subsidiaries. The relevant Borrower shall ensure that appropriate
notations of the Liens of the Collateral Agent are made on the relevant
certificates of title for Chassis and Trailers which are included in the
Collateral and which are covered by certificates of title and that UCC financing
statements, naming the relevant Borrower, as debtor
42
<PAGE>
and the Collateral Agent, as secured party, are filed for Chassis and Trailers
which are included in the Collateral and which are not covered by certificates
of title, for Containers, for Leases and for Direct Finance Leases, and that
Leases and Direct Finance Leases have been stamped pursuant to Section 7.29(b),
in each case with respect to Chassis, Containers, Trailers, Leases and Direct
Finance Leases which are included in the Collateral after the Closing Date.
7.8 Litigation. The Borrowers shall promptly notify all of the Banks and,
----------
with respect to the Collateral, the Collateral Agent (a) of any litigation,
actions, proceedings, claims or investigations (collectively, "Claims") pending
------
or threatened, in which a recovery of in excess of $2,000,000 is sought against
any Borrower or of the entry of any judgment in excess of $2,000,000 against any
Borrower, which Claims or judgments are not fully covered by insurance (subject
to deductibles) in respect of which the carrier has not disclaimed liability or
(b) of any of the Collateral becoming subject to any Liens securing or relating
to Claims or judgments in excess of $500,000, other than Liens in favor of the
Banks or the Collateral Agent.
7.9 Line of Business. None of the Borrowers shall materially change its
----------------
present lines of business as described in Section 5.4 and including businesses
-----------
related thereto, nor will Interpool permit any Restricted Subsidiary to engage
in any business other than such present lines of business or any other business
related thereto.
7.10 Chief Offices; Places of Business; Character of Collateral. The
----------------------------------------------------------
Borrowers shall notify the Collateral Agent in writing at least thirty (30) days
in advance of (a) any change of location of its Chief Office and (b) the change,
elimination or opening of any chief executive office of any Borrower or (c) any
change in the place where such Borrower maintains its records as to the
Collateral such that such records are not located at such Borrower's Chief
Office. Each Borrower shall notify the Collateral Agent in writing promptly
following a change in any of the Financed Equipment such that any of such
Financed Equipment ceases to be either "mobile goods" or "goods covered by a
certificate of title", in each case within the meaning of the UCC. Each
Borrower shall notify the Collateral Agent in writing within five (5) days if
there is a change in the character of any of the Collateral such that it
constitutes an "instrument" (other than an "instrument" which constitutes part
of "chattel paper") within the meaning of the UCC.
7.11 Financial Statements. The Borrowers shall deliver to the Banks the
--------------------
following:
(a) Within forty-five (45) days after the end of each quarterly
fiscal period of Interpool (commencing with the quarter ending March 31, 1996
and continuing until all of the Obligations under this Agreement and the other
Loan Documents are satisfied), company prepared unaudited consolidated financial
statements for Interpool and its consolidated subsidiaries in comparative form
showing the corresponding figures for the preceding year prepared in accordance
with GAAP, along with a certificate by an authorized officer of Interpool which
shall include an attestation by such officer briefly stating he has reviewed
such unaudited consolidated financial statements and that he has reviewed the
relevant provisions of this Agreement including Section 7 together with
supporting computations and stating whether his examination has disclosed the
existence of any Default or Event of Default and, if so, specifying
43
<PAGE>
the nature and period of existence thereof and actions management proposes to
undertake to cure the same.
(b) Within ninety (90) days after the end of each fiscal year of
Interpool, a consolidated balance sheet of Interpool and its consolidated
subsidiaries as of the end of such year and the related consolidated statements
of income, statements of cash flows and statements of shareholders' equity for
such year audited, without qualification, by Arthur Andersen LLP. or another
independent "Big Six" certified public accounting firm, showing in comparative
form the corresponding figures as at the end of and for the preceding financial
year. In addition, such accountants shall issue a statement in connection with
their audit as to whether anything has come to their attention that would cause
them to believe that the Borrowers were not in compliance with any of the terms,
covenants or conditions of Section 7.19 of this Agreement, it being understood
------------
that their audit was not directed primarily to obtaining knowledge of such non-
compliance and if any such non-compliance is indicated, specifying the nature
and period of existence thereof, together with a certificate of an authorized
officer with respect to such financial statements covering the same matters
referred to in the first three quarters' attestations delivered pursuant to
Section 7.11(a) and actions management proposes to undertake to cure the same.
(c) (i) Within sixty (60) days after the end of each calendar quarter
until all of the Obligations outstanding are satisfied, a Collateral Certificate
showing Collateral Value and the amount of the unpaid principal amounts
outstanding of the Term Loans, an equipment status report sent to the Collateral
Agent for Collateral (indicating the Collateral located at depots or under
lease) and an aging of all accounts receivable (including lease receivables
covering the Equipment and other equipment) of Interpool and its consolidated
subsidiaries, as at the end of such calendar quarter, in form and substance
reasonably satisfactory to the Banks.
(ii) Within sixty (60) days after the end of each quarterly
fiscal period of Interpool (commencing with the quarter ending March 31, 1996
and continuing until all of the Obligations under this Agreement and the other
Loan Documents are satisfied), an Equipment utilization report (showing the
percentage of Equipment under lease) with respect to Equipment owned and managed
by Interpool and its consolidated subsidiaries.
(d) Copies of all formal, written notices or reports, if any, fur-
nished to a Borrower by its independent certified public accountants in
connection with each fiscal year audit of the financial statements of such
Borrower made by such accountants.
(e) Such additional financial information with respect to the
Borrowers and information with respect to the Collateral as the Banks may from
time to time reasonably require.
(f) Promptly after the filing thereof, copies of all financial
statements and reports (including all exhibits or schedules annexed thereto or
filed therewith) which are material to any Borrower and which such Borrower may
file with the Securities and Exchange Commission of the United States or any
public body succeeding to the functions of that Commission and which are
generally available to the public.
44
<PAGE>
(g) Upon any addition to the Collateral pursuant to Section 4.8 or
any other provision of this Agreement or the other Loan Documents, the related
Borrower shall furnish to the Banks and the Agent a certificate of such Borrower
(in the form of Exhibit H attached hereto).
---------
7.12 Books and Records. Each of the Borrowers shall, at all times and in
-----------------
accordance with GAAP keep complete and accurate books and records concerning its
business, affairs and operations and concerning its properties and assets,
including, without limitation, the Collateral, and shall deliver, or cause to be
delivered to the Collateral Agent promptly upon the Collateral Agent's request,
from time to time, with respect to the Collateral (i) after an Event of Default
occurs, to the extent in its possession, all instruments and chattel paper
(including all executed copies thereof) representing or evidencing the
Collateral or proceeds of the Collateral subject to the Collateral Agent's
compliance with the last sentence of Section 7.29(a); (ii) after an Event of
Default occurs, to the extent in its possession or control, all original
invoices, original bills of lading, documents of title, all Leases covering
Financed Equipment and Direct Finance Leases included in the Collateral,
original contracts, chattel paper, instruments, and any other writings relating
to the Collateral; and (iii) such other information to the extent in its
possession or control with respect to any of the Collateral as the Collateral
Agent may, in its sole discretion, deem to be necessary or effectual to evidence
the transactions contemplated hereby or to evidence, enforce or perfect the
Collateral Agent's Lien in the Collateral, or to carry into effect the
provisions and intent of this Agreement or other Loan Documents delivered
pursuant hereto, all at the sole expense of the Borrowers.
7.13 Inspection. The Borrowers shall, from time to time and during normal
----------
business hours, on reasonable notice, permit the Banks or the Agent to inspect
or examine the properties and assets of the Borrowers, including, without
limitation, the Collateral, to the extent the Collateral is in the possession or
control of the Borrowers or could be so inspected or examined under the terms of
applicable Leases with respect thereto, and further to examine, check, make
copies of, or extracts from, any of the Borrowers' books, records, journals,
receipts, orders, correspondence, other data, or orders and accounts receivable
of the Borrowers and to permit the Banks and the Agent to hold discussions with
the Borrowers' officers and auditors and the Borrowers shall instruct such
officers and request such auditors to hold such discussions. If a Default or
Event of Default has occurred and is continuing (a) all of the foregoing shall
be at the Borrowers' expense, (b) the Banks or the Agent may independently
verify the orders and accounts receivable of the Borrowers at the Borrowers'
expense, and (c) the Banks shall have the right to audit (or cause to be audited
by certified public accountants) all of the foregoing items of the Borrowers at
the Borrowers' expense.
7.14 ERISA and the Securities and Exchange Commission. Each of the
------------------------------------------------
Borrowers shall furnish to the Banks and, with respect to the Collateral, the
Agent (a) as soon as possible and in any event within thirty (30) days after
such Borrower or a duly appointed administrator of a Plan knows or has reason to
believe that any Reportable Event has occurred with respect to any Plan, a
statement of an authorized officer of such Borrower setting forth details as to
such Reportable Event and the action which such Borrower proposes to take with
respect thereto, together with a copy of the notice of such Reportable Event
given to the PBGC or a statement that said notice will be filed with the annual
report to the United States Department of Labor
45
<PAGE>
with respect to such Plan if required under applicable regulations; (b) promptly
after receipt thereof, a copy of any notice a Borrower or any other member of a
Controlled Group may receive from the United States Department of Labor, the
Internal Revenue Service or the PBGC with respect to any deficiency with respect
to any Plan; (c) in the event any stock of any Borrower is ever offered pursuant
to a registration statement filed with the Securities and Exchange Commission,
promptly after the sending of, making available or filing of the same, copies of
any proxy statements and financial statements which such Borrower shall send or
make available to all of its stockholders, and any registration statements and
any reports which such Borrower shall file with the Securities and Exchange
Commission; and (d) promptly after receipt thereof, a copy of any notice a
Borrower may receive indicating an actual or potential violation of any
environmental law or regulation.
7.15 Use of Proceeds. The Borrowers shall use the proceeds of the Term
---------------
Loans solely in accordance with the provisions of Section 2.2.
7.16 Further Assurances. The Borrowers shall procure, execute and deliver
------------------
to the Collateral Agent any security agreement, financing statement, or other
writing and take all such other actions as the Collateral Agent may reasonably
require to evidence, preserve, protect or enforce the Collateral Agent's rights
and interests to or in the Collateral.
If any lessee under a Direct Finance Lease has or establishes an
executive office in the United States or with respect to any Direct Finance
Leases which are added to the Collateral the facts and circumstances are such
that a precautionary financing statement against the lessee thereunder may be
filed in any jurisdiction in the United States, one of the Borrowers shall duly
file against the lessee under such Direct Finance Lease precautionary Uniform
Commercial Code Financing Statements which adequately identify the Equipment
subject to such Lease and which are accurate in all other respects in favor of
such Borrower, identifying the Collateral Agent, as agent for the Banks, as
assignee of the secured party thereunder, in accordance with the laws of that
jurisdiction in the United States in which such lessee has or has established
its major executive office or in which the facts and circumstances permit the
filing of a precautionary Financing Statement.
7.17 Government Contracts. No Financed Equipment covered by contracts with
--------------------
the United States or any other governmental entity or any of their respective
departments, agencies or instrumentalities shall be deemed to constitute
Collateral unless and until (a) the Borrowers shall have notified the Collateral
Agent and executed any writings and taken all such other actions as the
Collateral Agent may require in order that all money due or to become due under
such contracts shall be assigned to the Collateral Agent and (b) proper notice
of the assignment has been given under and all other actions have been taken
which are required under the Federal Assignment of Claims Act or other
applicable law to the reasonable satisfaction of the Banks.
7.18 Sell, Merge, Consolidate, etc. None of the Borrowers shall:
------------------------------
(a) Sell, abandon, or otherwise dispose of all or any substantial
part (which shall be deemed to constitute an amount in excess of 20% of the
consolidated assets of Interpool and its Restricted Subsidiaries), of its
properties or assets in any 12 month period unless (i) it
46
<PAGE>
either (A) reinvests the proceeds from such transactions in excess of 20% of
such consolidated assets in its principal businesses as described in Section 5.4
-----------
or other investments permitted hereunder provided that such investments are
fully liquidated and the proceeds thereof are invested in such principal
businesses within twelve (12) months from the date of such transaction, and/or
(B) prepays the Term Loans on a pro rata basis in inverse order of the scheduled
--------
principal payments thereof without priority of any one such Term Loan over any
other such Term Loan in the amount of such excess of 20% of such consolidated
assets, subject to payment of any amounts due under Section 4.6 hereof, or (ii)
such transaction occurs entirely among the Borrowers and the Restricted
Subsidiaries.
(b) Consolidate with or merge into any Person or permit any merger of
any other Person into any Borrower or acquire all or substantially all the
assets of any Person, unless such Borrower is the surviving corporation (and if
one of the Borrowers involved in such transaction is Interpool, Interpool is the
surviving corporation) or the survivor expressly assumes the Obligations of such
Borrower and following and giving effect to such merger, consolidation or
acquisition, no Default or Event of Default exists or shall result under any
Loan Document, the Collateral Agent continues to have a first perfected security
interest in the Collateral under the UCC, reflected on the certificates of title
or through a filing with the Surface Transportation Board, as applicable to the
relevant Collateral subject to no other Liens, other than Permitted Liens and
the Borrowers, including the surviving corporation, may issue at least $1.00 of
additional Funded Debt without any Default or Event of Default resulting
hereunder.
(c) Alter the existing capital stock structure of any Borrower or
take any other action such that (i) Interpool owns less than 75% of the common
stock of Ltd. or 75% of the common stock of Trac Lease, Inc., (ii) Interpool
holds less than 75% of the voting rights in Ltd. or 75% of the voting rights in
Trac Lease, Inc. or (iii) Ltd. owns directly or indirectly less than 75% of
Corp. or (iv) Ltd. holds directly or indirectly less than 75% of the voting
rights in Corp.
(d) Sell, assign, transfer, discount, securitize or otherwise dispose
of any Lease, or any interest therein, with or without recourse, except in the
ordinary course of its business as presently conducted.
7.19 Financial Covenants. So long as the Obligations remain outstanding
-------------------
under any of the Loan Documents (subject to the provisions of Section 7.19(e)):
(a) Interpool shall cause Tangible Net Worth to be greater than
$125,000,000 at all times.
(b) Neither Interpool nor any of its Restricted Subsidiaries shall
incur any Funded Debt unless after giving effect to such incurrence of Funded
Debt (i) the ratio of Funded Debt to Tangible Net Worth is not greater than 4 to
1; and (ii) the sum of Pro-Forma Fixed Charges for Interpool and its Restricted
Subsidiaries would have been covered at least 1.5 times by the sum of Earnings
Available for Fixed Charges for Interpool and its Restricted Subsidiaries for
the most recent four (4) fiscal quarters preceding the date of determination.
47
<PAGE>
(c) Interpool shall not permit the ratio, which shall be calculated
on a quarterly basis, of (i) the sum of Earnings Available for Fixed Charges
plus Depreciation for Interpool and its Restricted Subsidiaries for the four (4)
fiscal quarters immediately preceding the date of determination to (ii) the sum
of Fixed Charges for Interpool and its Restricted Subsidiaries for the four (4)
fiscal quarters immediately preceding the date of determination to be less than
1.5 to 1.
(d) Neither Interpool nor its Restricted Subsidiaries shall make any
Restricted Payments if the aggregate amount of all Restricted Payments made
subsequent to June 30, 1993 would exceed the sum of $5,000,000 plus 75% of the
sum of (i) Net Earnings of Interpool and its Restricted Subsidiaries (minus 100%
of any net loss) subsequent to June 30, 1993; (ii) the net cash proceeds
received after June 30, 1993 from the sales (other than to Interpool or its
Subsidiaries) of shares of common stock and preferred stock of Interpool or any
Restricted Subsidiary which does not provide for mandatory redemption thereof or
sinking fund payments with respect thereto; and (iii) the face value of any debt
exchanged or converted into common or preferred stock, which preferred stock
does not provide for mandatory redemption thereof or sinking fund payments with
respect thereto.
(e) If the Collateral is terminated pursuant to Section 4.9(a) then,
from and after the date of such termination up to and until such time, if any,
as the Borrowers again secure the Obligations with Collateral in accordance with
Section 4.9(d), the Borrowers shall not be required to comply with the financial
covenants set forth in Sections 7.19(a), (b) and (c) and shall, instead be
----------------
required to comply with the following financial covenants:
(i) Interpool shall cause Tangible Net Worth to be greater than
$125,000,000;
(ii) Neither Interpool nor any of its Restricted Subsidiaries
shall incur any Funded Debt unless after giving effect to such incurrence of
Funded Debt (A) the ratio of Funded Debt to Tangible Net Worth is not greater
than 3 to 1; and (B) the sum of Pro-Forma Fixed Charges for Interpool and its
Restricted Subsidiaries would have been covered at least 1.75 times by the sum
of Earnings Available for Fixed Charges for Interpool and its Restricted
Subsidiaries for the most recent four (4) fiscal quarters preceding the date of
determination;
(iii) Interpool shall not permit the ratio, which shall be
calculated on a quarterly basis, of (i) the sum of Earnings Available for Fixed
Charges plus Depreciation for Interpool and its Restricted Subsidiaries for the
four (4) fiscal quarters immediately preceding the date of determination to (ii)
the sum of the Fixed Charges for Interpool and its Restricted Subsidiaries for
the four (4) fiscal quarters immediately preceding the date of determination to
be less than 1.75 to 1.
7.20 Payment of Obligations. Each Borrower shall pay all obligations
----------------------
material to its business when due (taking into account any grace periods granted
in respect thereof) other than those disputed by it in good faith, if failure to
pay might have a material adverse affect on the business, conditions (financial
or otherwise), prospects or creditworthiness of a Borrower.
48
<PAGE>
7.21 Notice of Default. Each Borrower shall promptly but in any event
-----------------
within three (3) Business Days after obtaining knowledge thereof furnish the
Agent and the Banks with a statement of the occurrence of any Event of Default
or Default, specifying the nature and period of existence thereof and what
action management of such Borrower proposes to take with respect thereto. If a
Borrower receives a notice of Default from any creditor or Person other than the
Agent and the Banks, such Borrower shall deliver to the Agent and the Banks a
copy of such notice of Default, immediately upon receipt thereof. In the event
that the Borrowers have cured such Default within any applicable cure period
provided therefor, such cure shall have the effect of remedying any failure of
the Borrowers to give notice relating to such Default.
7.22 Lock Box. Upon the occurrence of an Event of Default and at the
--------
request of the Required Banks or the Agent acting on the instructions of the
Required Banks, the Borrowers will establish a lock box in respect of the
Collateral and all proceeds thereof at a location satisfactory to the Banks and
the Agent, and take all such action and execute all agreements, documents,
letters and instruments which the Agent deems appropriate in its sole discretion
to establish and maintain said lock box.
7.23 Additional Costs. (a) In the event that any change in or adoption of
----------------
any applicable law, regulation or guideline, or any interpretation thereof by
any governmental authority charged with the administration thereof, not
published on or prior to the date hereof, subjects a Bank to any Tax of any kind
whatsoever with respect to the Term Loans made by such Bank, or changes the
basis of taxation of payments to such Bank of any fees, principal or interest
payable on such Term Loans (except for changes in the rate of tax based solely
on the overall net income of such Bank) or imposes, modifies or deems applicable
any reserve requirement against assets held by, or other liabilities in or for
the account of, or loans by, such Bank, or imposes on such Bank, directly or
indirectly, any of the conditions affecting the relevant Term Loans, and the
result of any of the foregoing is to increase the cost to such Bank of
purchasing or holding the relevant Term Loans by an amount which such Bank deems
to be material, then upon demand by such Bank made promptly upon such event, the
Borrowers will pay to such Bank, upon its demand, the additional amount or
amounts necessary to compensate such Bank for such additional cost. Absent
manifest error, such Bank's statement shall be conclusive as to any additional
amount to be paid. Such Bank shall supply the Borrowers with such information
related to any such Taxes, taxation or reserve requirement as is available to
such Bank and is not confidential. In the event that any such additional cost
arises and is demanded by a Bank from a Borrower, such Borrower shall have the
right to prepay the Notes of such Bank, together with payment of accrued
interest thereon and any amounts payable under Section 4.6 hereof.
The Borrowers shall pay to the Banks all principal of, and interest on, the
amount outstanding on the Notes and all their other Obligations under the Loan
Documents free and clear of and without deduction or withholding for any present
or future license, registration or other fees, taxes or other amounts for or on
account of levies, imposts, duties, deductions, withholdings or other charges
assessed by any governmental or taxing authority, excluding income and franchise
taxes imposed on a Bank by a jurisdiction under which such Bank is organized or
operating in connection with this Agreement or any political subdivision thereof
(the "Taxes"). In the event any Borrower is or may become required to pay any
-----
such costs,
49
<PAGE>
such Borrower may elect to prepay the Term Loans, together with accrued interest
thereon, and any additional costs associated with such prepayment.
(b) Subject to Section 10.17 of this Agreement, if a Borrower shall
-------------
be required to withhold or deduct Taxes from any sum payable hereunder, (i) the
sum payable shall be increased as may be necessary so that the amount received
is equal to the sum which would have been received had no withholdings or
deductions been made, (ii) such Borrower shall make such necessary withholdings
and deductions, and (iii) such Borrower shall pay the full amount withheld or
deducted to the relevant authority according to applicable law so that any Bank
shall not be required to make any deduction or payment of Taxes.
7.24 Transactions with Related Parties. The Borrowers will not and will
---------------------------------
not permit any Restricted Subsidiary to enter into any transaction or
arrangement with any Related Party, including the purchase from, sale to or
exchange of property with or lease of Financed Equipment to or from (as Lessor
or lessee, respectively) or rendering of any service by or for, any Related
Party, except in the ordinary course of business and pursuant to the reasonable
requirements of the Borrowers and such Restricted Subsidiary and upon fair and
reasonable terms no less favorable than would be obtained in a comparable arm's
length transaction with a Person other than a Related Party.
7.25 Permitted Investments. Neither Interpool nor any of its Restricted
---------------------
Subsidiaries shall make cash or cash equivalent investments in, loans or
advances to or guarantee the obligations of, any Person except investments not
prohibited under the terms of any loan or note purchase agreement to which any
of the Borrowers is a party.
The foregoing provision of this Section 7.25 shall not be deemed to limit
the transactions in which the Borrowers are permitted to engage in accordance
with the provisions of Section 7.18.
7.26 Leases. At all times following the occurrence and during the
------
continuance of an Event of Default and upon the lock box provided for in Section
7.22 being established, the Borrowers shall immediately notify the Collateral
Agent of the cancellation of any Lease with a term of one (1) year or more.
7.27 Maintenance of Collateral Value. At all times (other than such time
-------------------------------
that the Term Loans are permitted to be unsecured pursuant to Section 4.9
hereof) each of the Borrowers shall maintain the aggregate Collateral Value of
its Collateral at an amount not less than the amount determined by multiplying
(i) the outstanding principal balance of the Term Loans of such Borrower by (ii)
the Required Collateral Ratio of such Borrower.
7.28 Lien on Cash Collateral. The Borrowers shall, at all times, cause all
-----------------------
Cash Collateral to be subject to a first priority perfected security interest in
favor of the Collateral Agent for the benefit of the Banks and subject to no
other liens.
7.29 Security Interest in Leases.
---------------------------
50
<PAGE>
(a) Notwithstanding anything to the contrary contained herein, the
Borrowers agree that they shall not deliver any Lease relating to any Collateral
to any Person, (other than a signed counterpart of a Lease to the lessee under
such Lease and other than delivery of Leases pursuant to the Collateral
Administration Agreement), unless a Borrower is in default with respect to its
obligations to a secured party having a security interest in such Lease and is
required under its agreement with such secured party to deliver possession of
such Lease to such secured party, and either (x) (i) prior to delivering
possession of any such Leases, such Borrower shall stamp on the front cover or
other conspicuous space in any such Leases the language set forth in Schedule
--------
7.29(x)(i) and furnish written evidence satisfactory to the Collateral Agent
- ----------
that such stamping has been effected, provided that such stamping shall not be
in derogation or limitation of the requirements of Section 7.29(b), and (ii)
such other secured party shall, as a condition of obtaining possession of such
Lease, furnish to the Borrowers and the Collateral Agent its agreement
substantially in the form of Schedule 7.29(x)(ii) that it is receiving
--------------------
possession of and holding possession of such Leases both for its own benefit and
as agent of and for the benefit of the Collateral Agent to the extent of their
respective security interests in such Leases or (y) such Leases and any related
Equipment is released from the Lien of the applicable Security Agreement,
provided that the aggregate Collateral Value of such Borrower after such release
is equal to or greater than the amount required pursuant to Section 7.27 hereof.
If a Default or Event of Default has occurred and is continuing, each Borrower
shall immediately deliver possession of all its Leases to the Collateral Agent
(unless such Borrower shall have previously delivered possession of such Leases
to another secured party under a prior obligation), similarly stamped with
respect to the security interest of any other secured party in such Lease and
provided the Collateral Agent shall have furnished each of the Borrowers with
its agreement in the form of Schedule 7.29(x)(ii) that it is receiving
--------------------
possession of and holding possession of such Leases both for its own benefit as
Agent and as agent of and for the benefit of such other secured party to the
extent of their respective security interests in such Lease.
(b) Each Borrower shall stamp and maintain the language set forth in
Schedule 7.29(x)(i) on the front cover or other conspicuous space of Leases and
Direct Finance Leases relating to at least 90% of the aggregate Collateral Value
of Financed Equipment covered by Leases and of Direct Finance Leases.
7.30 Collateral Administration Agreement. Each Borrower shall use its best
-----------------------------------
efforts to have a Joinder Agreement executed and delivered to the Collateral
Administration Agent and the Agent by all existing and future holders of its
Funded Debt secured by leases or similar agreements or arrangements covering
Financed Equipment and Direct Finance Leases.
51
<PAGE>
8. DEFAULT; REMEDIES OF THE BANKS
8.1 Occurrence of Event of Default. Any one of the following events or
------------------------------
conditions shall constitute an Event of Default:
(a) any Borrower shall fail to pay, when due, at maturity (whether as
stated or by acceleration) or otherwise, any payment of principal, interest,
fees, any amounts due under Section 4.6 hereof or other charges or amounts due
and owing to the Banks with respect to the Obligations, and such failure shall
continue for five (5) Business Days or more; or
(b) any Borrower shall fail to observe or perform the covenants set
forth in Sections 7.6, 7.18, 7.19 or 7.21; or
(c) any Borrower shall fail to observe or perform any other covenant
or agreement of such Borrower in this Agreement or any other Loan Document which
shall remain unremedied for thirty (30) days; or
(d) any representation or warranty made by any Borrower hereunder,
under any Loan Document or in any other document to any Bank or the Collateral
Agent shall be incorrect as at the date made in any material respect; or
(e) if any Borrower or Trac shall (i) file, or consent by answer or
otherwise to the filing against it of, a petition for relief or reorganization
or arrangement or any other petition in bankruptcy, for liquidation or to take
advantage of any bankruptcy or insolvency law of any jurisdiction or if there
shall be commenced against any Borrower any such proceeding and such action or
proceeding remains undismissed for a period of sixty (60) days, (ii) make an
assignment for the benefit of its creditors, (iii) consent to the appointment of
a custodian, receiver, trustee or other officer with similar powers for itself
or any substantial part of its property, (iv) be adjudicated a bankrupt or
insolvent, or (v) take any action for the purpose of any of the foregoing; or
(f) if a court or governmental authority of competent jurisdiction
shall enter an order appointing, without consent by any Borrower or Trac, a
custodian, receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its property, or constituting
an order for relief or approving a petition for relief or reorganization or any
other petition in bankruptcy or for liquidation or to take advantage of any
bankruptcy or insolvency law of any jurisdiction, or ordering its dissolution,
winding-up or liquidation and such order shall not have been stayed or dismissed
within sixty (60) days; or
(g) if any Lien (other than a Lien in favor of the Banks or the
Collateral Agent or a Permitted Lien) or attachment, levy or garnishment exists
or is issued against the Collateral or any property of any Borrower securing any
of the Obligations in respect of indebtedness or obligations of $2,000,000 or
more is not released, discharged, dismissed, stayed or fully bonded within a
period of thirty (30) days after its creation, attachment, issue or levy or if
any such Lien, attachment, levy or garnishment against the Collateral or any
property of any Borrower securing Obligations shall have priority over the
security interest of the Collateral Agent in the
52
<PAGE>
Collateral, and such Lien, attachment, levy or garnishment is not released,
discharged, dismissed, stayed or fully bonded within a period of fifteen (15)
days after its creation, attachment, issue or levy; or
(h) if any judgment or tax lien is entered against any Borrower and
remains unsatisfied after thirty (30) days, unless said judgment or tax lien is
being contested in good faith by appropriate proceedings and is stayed in the
interim; or
(i) a Person or outside group of related Persons which is not listed
on Schedule 5.1 attached hereto obtains voting control of fifty one percent
------------
(51%) or more of the voting securities of Interpool; or
(j) any Borrower or Trac (as principal, guarantor or other surety)
defaults in the payment of any principal or interest of any indebtedness for
borrowed money in excess of $4,000,000 with respect to Interpool and in excess
of $2,000,000 with respect to each of Ltd., Trac and Corp. (including any
indebtedness of Interpool, Trac, Ltd. or Corp. to the Banks other than the
Obligations) or defaults in any other manner in respect of such indebtedness, in
either case, beyond the period of grace, if any, specified therefor so as to
give the holder of any such indebtedness the right to cause the acceleration of
such indebtedness including any grace period provided to such holder.
8.2 Action Upon Event of Default.
----------------------------
(a) Declaration of Acceleration. If an Event of Default occurs and
---------------------------
is continuing, the Required Banks may, by notice to the Borrowers, declare the
principal of any or all Term Loans to be immediately due and payable together
with accrued interest thereon and any amounts due under Section 4.6 hereof with
respect thereto; provided that the Term Loans will automatically become due and
--------
payable together with accrued interest thereon and any amounts due under Section
4.6 hereof with respect thereto without any action of the Banks in the case of
an Event of Default under Section 8.1(e) or Section 8.1(f). At any time after
such acceleration, and prior to the sale or disposition of any of the
Collateral, the Required Banks may rescind such a declaration or automatic
acceleration, as the case may be, and thereby annul its consequences if (i) the
Borrowers pay an amount sufficient to pay all principal of, any amounts due
under Section 4.6 hereof, and interest on the Term Loans, to the extent each
such amount is due or past due without regard to the acceleration hereof, if
any, in respect of the outstanding Term Loans otherwise than by reason of such
acceleration and all sums due and payable to the Banks or the Agent, (ii) the
rescission would not conflict with any judgment or decree and (iii) all existing
Events of Default have been cured or waived except nonpayment of principal of,
any amounts due under Section 4.6 hereof or interest on the Term Loans that has
become due solely because of such acceleration.
(b) Payments after Acceleration of Term Loans. All payments received
-----------------------------------------
and all amounts held or realized by the Banks after the outstanding principal of
any of the Term Loans shall have been declared to be due and payable pursuant to
Section 8.2(a), and all payments or amounts then held or thereafter received by
the Banks hereunder, shall be applied by each such Bank in the following order
of priority:
53
<PAGE>
First, to reimburse the Agent for any costs, disbursements and expenses,
-----
including reasonable attorneys' and paralegals' fees and legal expenses not
reimbursed by the Borrowers;
Second, to reimburse the Banks for any costs and expenses not reimbursed by
------
the Borrowers;
Third, so much of such payments or amounts remaining as shall be required
-----
to pay in full any interest at the applicable rate specified in Section 3.3 of
this Agreement, the accrued but unpaid interest on the Term Loans to the date of
distribution and any amounts due under Section 4.6 hereof;
Fourth, so much of such amounts remaining as shall be required to pay in
------
full the aggregate unpaid principal amount of the Term Loans on a pro rata basis
--- ----
for all the Term Loans for each Borrower and then applied to such Term Loans in
inverse order of the scheduled principal payments thereof and all other amounts
payable hereunder;
Fifth, so much of such amounts remaining as shall be required to pay in
-----
full all other outstanding Obligations; and
Sixth, the balance, if any, of such payments or amounts remaining
-----
thereafter shall be distributed to each of the relevant Borrowers, upon its
written direction or to any other Person entitled thereto as a matter of law.
All payments and proceeds received by the Agent or the Banks shall be applied to
the Obligations secured thereby pursuant to the applicable Security Agreement,
Security Agreement or security and pledge agreement in respect of the Cash
Collateral.
(c) Other Remedies. The Borrowers agree, to the full extent that
--------------
they lawfully may, that if one or more Events of Default shall have occurred and
be continuing, then, and in every such case the Banks or upon the instructions
of the Required Banks the Collateral Agent on behalf of the Banks pursuant to
the Agency Agreement, as secured party, mortgagee or collateral assignee
hereunder or under the Collateral Documents, or otherwise, may exercise any or
all of the rights and powers and pursue any and all of the remedies available to
the Banks hereunder or under any of the Loan Documents or with respect to the
Collateral Agent, under the Collateral Documents.
8.3 Authorized to Execute Bills of Sale. Each of the Borrowers hereby
-----------------------------------
irrevocably appoints the Collateral Agent the true and lawful attorney-in-fact
of such Borrower in its respective name and stead and on its respective behalf,
for the purpose of effectuating any sale, assignment, transfer or delivery for
the enforcement of the Lien in connection with this Agreement and any other Loan
Documents, following the occurrence of an Event of Default to execute and
deliver all such bills of sale, assignments, UCC financing statements and other
instruments as the Collateral Agent may consider necessary or appropriate, with
full power of substitution, each of the Borrowers hereby ratifying and
confirming all that such attorney or any substitute shall lawfully do by virtue
hereof. After the Collateral Agent has exercised its rights hereunder, if so
requested by the Collateral Agent or any Bank, each of the Borrowers shall
ratify and confirm
54
<PAGE>
any such sale, assignment, transfer or delivery, by executing and delivering to
the Collateral Agent or such purchaser all bills of sale, assignments, releases,
UCC financing statements and other proper instruments to effect such ratifica-
tion and confirmation as may be designated in any such request.
8.4 Remedies Cumulative. Each and every right, power and remedy herein
-------------------
specifically given to the Banks or the Agent or otherwise in this Agreement or
any other Loan Documents shall be cumulative and shall be in addition to every
other right, power and remedy herein specifically given or now or hereafter
existing at law, in equity or by statute, and each and every right, power and
remedy whether specifically herein given or otherwise existing may be exercised
from time to time and as often and in such order as may be deemed expedient by
the Banks or the Agent, and the exercise or the beginning of the exercise of any
power or remedy shall not be construed to be a waiver of the right to exercise
at the same time or thereafter any other right, power or remedy. No delay or
omission by the Banks or the Agent in the exercise of any right, remedy or power
or in the pursuance of any remedy shall impair any such right, power or remedy
or be construed to be a waiver of any Default or Event of Default on the part of
any Borrower or to be an acquiescence therein.
8.5 Discontinuance of Proceedings. In case any of the Banks or the
-----------------------------
Collateral Agent shall have proceeded to enforce any right, power or remedy
under this Agreement or any other Loan Documents and such proceedings shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to such Bank or the Collateral Agent, then and in every such case the
Borrowers and the Collateral Agent shall be restored to their former positions
and rights hereunder with respect to the Collateral, and all rights, remedies
and powers of such Bank or the Collateral Agent shall continue as if no such
proceedings had been taken.
8.6 Agreements with respect to Remedies and Defaults.
------------------------------------------------
Notwithstanding any provisions of this Agreement or the Collateral
Documents to the contrary,
(a) If an Event of Default shall have occurred and is continuing
under this Agreement or any other Loan Documents (whether declared or not), the
Collateral Agent shall in accordance with instructions from the Required Banks,
to the extent remedies are available to do so and the Collateral Agent is not
stayed from exercising such remedies, pursue such remedies as are available
under the Leases and the Collateral Documents and at law in respect of the
Collateral in accordance with the Collateral Documents and with respect to the
Borrowers.
(b) If an Event of Default shall have occurred and is continuing, the
Collateral Agent shall act in a commercially reasonable manner in respect of the
Collateral and with respect to the exercise of the remedies provided under the
Collateral Documents and at law related to the Collateral.
8.7 Waiver of Existing Defaults. The Borrowers, upon written confirmation
---------------------------
that the Required Banks waive an existing Event of Default, shall notify all the
Banks that the Required Banks have provided such waiver; provided, however, no
-------- -------
such waiver shall be effective in the
55
<PAGE>
case of (i) an Event of Default in the payment of the principal of, any amounts
due under Section 4.6 hereof, or interest on, any Term Loan or (ii) in respect
of a covenant or provision of Section 7.18 and Section 7.19 unless such waiver
is made by all the Banks.
8.8 Rights of Banks to Receive Payment. Each Bank, or with respect to all
----------------------------------
the Term Loans, the Required Banks, shall have the right to bring suit for the
enforcement of such Bank's, or with respect to all Term Loans, all of the Banks'
rights to receive payment of principal of, any amounts due under Section 4.6
hereof, and interest on such Term Loan or Term Loans on or after the due date
expressed in such Term Loan or Term Loans. Notwithstanding any other provision
of this Agreement or the Agency Agreement, the right of any Bank to receive
payment of principal of, any amounts due under Section 4.6 hereof, and interest
on a Term Loan on or after the respective due dates expressed in such Term Loan,
or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Bank.
9. THE AGENT
9.1 Appointment.
-----------
Each Bank hereby irrevocably designates, appoints and authorizes PNC
Bank to act as Agent, including Collateral Agent, for such Bank under this
Agreement to execute and deliver or accept on behalf of each of the Banks the
other Loan Documents. Each Bank hereby irrevocably authorizes, and each holder
of any Note by the acceptance of a Note shall be deemed irrevocably to
authorize, the Agent to take such action on its behalf under the provisions of
this Agreement and the other Loan Documents and any other instruments and
agreements referred to herein, and to exercise such powers and to perform such
duties hereunder as are specifically delegated to or required of the Agent by
the terms hereof, together with such powers as are reasonably incidental
thereto. * agrees to act as the Agent on behalf of the Banks to the
extent provided in this Agreement and the other Loan Documents.
9.2 Delegation of Duties.
--------------------
The Agent may perform any of its duties hereunder by or through agents
or employees (provided such delegation does not constitute a relinquishment of
--------
its duties as Agent) and, subject to Sections 9.5 and 9.6, shall be entitled to
engage and pay for the advice or services of any attorneys, accountants or other
experts concerning all matters pertaining to its duties hereunder and to rely
upon any advice so obtained.
9.3 Nature of Duties; Independent Credit Investigation.
--------------------------------------------------
The Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and no implied covenants, functions,
responsibilities, duties, obligations, or liabilities shall be read into this
Agreement or otherwise exist. The duties of the Agent shall be mechanical and
administrative in nature; the Agent shall not have by reason of this Agreement a
fiduciary or trust relationship in respect of any Bank; and nothing in this
Agreement, expressed
* Confidential Treatment Requested
56
<PAGE>
or implied, is intended to or shall be so construed as to impose upon the Agent
any obligations in respect of this Agreement except as expressly set forth
herein. Each Bank expressly acknowledges (i) that the Agent has not made any
representations or warranties to it and that no act by the Agent hereafter
taken, including any review of the affairs of any Borrower, shall be deemed to
constitute any representation or warranty by the Agent to any Bank; (ii) that it
has made and will continue to make, without reliance upon the Agent, its own
independent investigation of the financial condition and affairs and its own
appraisal of the creditworthiness of any Borrower in connection with this
Agreement and the making and continuance of the Term Loans hereunder; and
(iii) except as expressly provided herein, that the Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Bank
with any credit or other information with respect thereto, whether coming into
its possession before the making of any Term Loan or at any time or times
thereafter.
9.4 Actions in Discretion of Agent; Instructions from the Banks.
-----------------------------------------------------------
The Agent agrees, upon the written request of the Required Banks, to
take or refrain from taking any action of the type specified as being within the
Agent's rights, powers or discretion herein, provided that the Agent shall not
--------
be required to take any action which exposes the Agent to personal liability or
which is contrary to this Agreement or any other Loan Document or applicable
Law. In the absence of a request by the Required Banks, the Agent shall have
authority, in its sole discretion, to take or not to take any such action,
unless this Agreement specifically requires the consent of the Required Banks or
all of the Banks. Any action taken or failure to act pursuant to such
instructions or discretion shall be binding on the Banks, subject to Section
9.6. Subject to the provisions of Section 9.6, no Bank shall have any right of
action whatsoever against the Agent as a result of the Agent acting or
refraining from acting hereunder in accordance with the instructions of the
Required Banks, or in the absence of such instructions, in the absolute
discretion of the Agent.
9.5 Reimbursement and Indemnification of Agent by the Borrowers.
-----------------------------------------------------------
The Borrowers unconditionally agree to pay or reimburse the Agent and
save the Agent harmless against (a) liability for the payment of all reasonable
out-of-pocket costs, expenses and disbursements, including fees and expenses of
counsel, appraisers and environmental consultants, incurred by the Agent (i) in
connection with the negotiation, preparation, printing, execution,
administration, interpretation and performance of this Agreement and the other
Loan Documents, (ii) relating to any requested amendments, waivers or consents
pursuant to the provisions hereof, (iii) in connection with the enforcement of
this Agreement or any other Loan Document or collection of amounts due hereunder
or thereunder or the proof and allowability of any claim arising under this
Agreement or any other Loan Document, whether in bankruptcy or receivership
proceedings or otherwise, and (iv) in any workout, restructuring or in
connection with the protection, preservation, exercise or enforcement of any of
the terms hereof or of any rights hereunder or under any other Loan Document or
in connection with any foreclosure, collection or bankruptcy proceedings, and
(b) all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against the Agent,
in its capacity as such, in any way relating to or arising out
57
<PAGE>
of this Agreement or any other Loan Documents or any action taken or omitted by
the Agent hereunder or thereunder, provided that the Borrowers shall not be
--------
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements if the
same results solely from the Agent's gross negligence or willful misconduct.
9.6 Exculpatory Provisions.
----------------------
Neither the Agent nor any of its directors, officers, employees,
agents, attorneys or Affiliates shall (a) be liable to any Bank for any action
taken or omitted to be taken by it or them hereunder, or in connection herewith
including pursuant to any Loan Document, unless caused solely by its or their
own gross negligence or willful misconduct, (b) be responsible in any manner to
any of the Banks for the effectiveness, enforceability, genuineness, validity or
the due execution of this Agreement or any other Loan Documents or for any
recital, representation, warranty, document, certificate, report or statement
herein or made or furnished under or in connection with this Agreement or any
other Loan Documents, or (c) be under any obligation to any of the Banks to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions hereof or thereof on the part of the Borrowers, or the
financial condition of the Borrowers, or the existence or possible existence of
any Default or Event of Default. Neither the Agent nor any Bank nor any of
their respective directors, officers, employees, agents, attorneys or Affiliates
shall be liable to any Borrower for consequential damages resulting from any
breach of contract, tort or other wrong in connection with the negotiation,
documentation, administration or collection of the Term Loans or any of the Loan
Documents.
9.7 Reimbursement and Indemnification of Agent by Banks.
---------------------------------------------------
Each Bank agrees to reimburse and indemnify the Agent (to the extent
not reimbursed by the Borrowers and without limiting the Obligation of the
Borrowers to do so) in proportion to its Ratable Share from and against all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against the Agent, in its capacity as such,
in any way relating to or arising out of this Agreement or any other Loan
Documents or any action taken or omitted by the Agent hereunder or thereunder,
provided that no Bank shall be liable for any portion of such liabilities,
- --------
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements if the same results from the Agent's gross negligence
or willful misconduct.
9.8 Reliance by Agent.
-----------------
The Agent shall be entitled to rely upon any writing, telegram, telex
or teletype message, resolution, notice, consent, certificate, letter,
cablegram, statement, order or other document or conversation by telephone or
otherwise believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person or Persons, and upon the advice and opinions of
counsel and other professional advisers selected by the Agent. The Agent shall
be fully justified in failing or refusing to take any action hereunder unless it
shall first be
58
<PAGE>
indemnified to its satisfaction by the Banks against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action.
9.9 Notice of Default.
-----------------
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default unless the Agent has received
written notice from a Bank or a Borrower referring to this Agreement, describing
such Default or Event of Default and stating that such notice is a "notice of
default."
9.10 Banks in Their Individual Capacities.
------------------------------------
With respect to its Commitments and the Term Loans made by it, the
Agent shall have the same rights and powers hereunder as any other Bank and may
exercise the same as though it were not the Agent, and the term "Banks" shall,
unless the context otherwise indicates, include the Agent in its individual
capacity. * and its Affiliates and each of the Banks and their
respective Affiliates may, without liability to account, except as prohibited
herein, make Term Loans to, accept deposits from, discount drafts for, act as
trustee under indentures of, and generally engage in any kind of banking or
trust business with, the Borrowers and their Affiliates, in the case of the
Agent, as though it were not acting as Agent hereunder and in the case of each
Bank, as though such Bank were not a Bank hereunder.
9.11 Holders of Notes.
----------------
The Agent may deem and treat any payee of any Note as the owner
thereof for all purposes hereof unless and until written notice of the
assignment or transfer thereof shall have been filed with the Agent. Any
request, authority or consent of any Person who at the time of making such
request or giving such authority or consent is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or Notes issued in exchange therefor.
9.12 Equalization of Banks.
---------------------
The Banks and the holders of any participations in any Notes agree
among themselves that, with respect to all amounts received by any Bank or any
such holder for application on any Obligation hereunder or under any Note or
under any such participation, whether received by voluntary payment, by
realization upon security, by the exercise of the right of set-off or banker's
lien, by counterclaim or by any other non-pro rata source, equitable adjustment
will be made in the manner stated in the following sentence so that, in effect,
all such excess amounts will be shared ratably among the Banks and such holders
in proportion to their interests in payments under the Notes, except as
otherwise provided in Sections 3.4(b) or 4.6(a). The Banks or any such holder
receiving any such amount shall purchase for cash from each of the other Banks
an interest in such Bank's Term Loans in such amount as shall result in a
ratable participation by the Banks and each such holder in the aggregate unpaid
amount under the Notes, provided that if all or any portion of such excess
--------
amount is thereafter recovered from the Bank or the holder making such purchase,
such purchase shall be rescinded and the purchase price
* Confidential Treatment Requested
59
<PAGE>
restored to the extent of such recovery, together with interest or other
amounts, if any, required by law (including court order) to be paid by the Bank
or the holder making such purchase.
9.13 Successor Agent.
---------------
The Agent (i) may resign as Agent or (ii) shall resign if such
resignation is required hereunder by giving not less than thirty (30) days'
prior written notice to the Borrowers. If the Agent shall resign under this
Agreement, then either (a) the Required Banks shall appoint from among the Banks
a successor agent for the Banks, subject to the consent of the Borrowers or ,
such consent not to be unreasonably withheld or delayed, or (b) if a successor
agent shall not be so appointed and approved within the thirty (30) day period
following the Agent's notice to the Banks of its resignation, then the Agent
shall appoint, with the consent of the Borrowers, such consent not to be
unreasonably withheld, a successor agent who shall serve as Agent until such
time as the Required Banks appoint and the Borrowers consent to the appointment
of a successor agent. Upon its appointment pursuant to either clause (a) or (b)
above, such successor agent shall succeed to the rights, powers and duties of
the Agent and the term "Agent" shall mean such successor agent, effective upon
its appointment, and the former Agent's rights, powers and duties as Agent shall
be terminated without any other or further act or deed on the part of such
former Agent or any of the parties to this Agreement. After the resignation of
any Agent hereunder, the provisions of this Section 9 shall inure to the benefit
---------
of such former Agent and such former Agent shall not by reason of such
resignation be deemed to be released from liability for any actions taken or not
taken by it while it was an Agent under this Agreement.
9.14 Agent's Fee.
-----------
The Borrowers shall pay to the Agent fees and other amounts pursuant
to a separate agreement between the Borrowers and the Agent (the "Agent's Fee").
9.15 Availability of Funds.
---------------------
Unless the Agent shall have been notified by a Bank prior to the date
upon which a Term Loan is to be made that such Bank does not intend to make
available to the Agent such Bank's portion of such Term Loan, the Agent may
assume that such Bank has made or will make such proceeds available to the Agent
on such date and the Agent may, in reliance upon such assumption (but shall not
be required to), make available to the Borrowers a corresponding amount. If
such corresponding amount is not in fact made available to the Agent by such
Bank, the Agent shall be entitled to recover such amount on demand from such
Bank (or, if such Bank fails to pay such amount forthwith upon such demand from
the Borrowers) together with interest thereon, in respect of each day during the
period commencing on the date such amount was made available to the Borrowers
and ending on the date the Agent recovers such amount, at a rate per annum equal
to the applicable interest rate in respect of the Term Loan.
9.16 Calculations.
------------
60
<PAGE>
In the absence of gross negligence or willful misconduct, the Agent
shall not be liable for any error in computing the amount payable to any Bank
whether in respect of the Term Loans, fees or any other amounts due to the Banks
under this Agreement. In the event an error in computing any amount payable to
any Bank is made, the Agent, the Borrowers and each affected Bank shall,
forthwith upon discovery of such error, make such adjustments as shall be
required to correct such error, and any compensation therefor will be calculated
at the Federal Funds Effective Rate.
9.17 Beneficiaries.
-------------
Except as expressly provided herein, the provisions of this Article X
are solely for the benefit of the Agent and the Banks, and the Borrowers shall
not have any rights to rely on or enforce any of the provisions hereof. In
performing its functions and duties under this Agreement, the Agent does not
assume and shall not be deemed to have assumed any fiduciary obligation toward
or relationship of agency or trust with or for any party.
10. MISCELLANEOUS
10.1 Modifications, Amendments or Waivers.
------------------------------------
With the written consent of the Required Banks, the Agent, acting on
behalf of all the Banks, and the Borrowers may from time to time enter into
written agreements amending or changing any provision of this Agreement or any
other Loan Document or the rights of the Banks or the Borrowers hereunder or
thereunder, or may grant written waivers or consents to a departure from the due
performance of the Obligations of the Borrowers hereunder or thereunder. Any
such agreement, waiver or consent made with such written consent shall be
effective to bind all the Banks and the Borrowers; provided, that, without the
--------
written consent of all the Banks, no such agreement, waiver or consent may be
made which will:
(a) reduce the amount or extend the date of payment of any principal,
interest, or any amounts due under Section 4.6 hereof due or owing on any Term
Loans; or
(b) reduce the amount of Banks which constitutes the Required Banks;
or
(c) make any change in Sections 7.27, 7.28, or this Section 10.1.
No agreement, waiver or consent which would modify the interests, rights or
obligations of the Agent in its capacity as Agent shall be effective without the
written consent of the Agent.
10.2 No Implied Waivers; Cumulative Remedies; Writing Required.
---------------------------------------------------------
No course of dealing and no delay or failure of the Agent or any Bank
in exercising any right, power, remedy or privilege under this Agreement or any
other Loan Document shall affect any other or future exercise thereof or operate
as a waiver thereof; nor shall any single or partial exercise thereof or any
abandonment or discontinuance of steps to
61
<PAGE>
enforce such a right, power, remedy or privilege preclude any further exercise
thereof or of any other right, power, remedy or privilege. The rights and
remedies of the Agent and the Banks under this Agreement and any other Loan
Documents are cumulative and not exclusive of any rights or remedies which they
would otherwise have. Any waiver, permit, consent or approval of any kind or
character on the part of any Bank of any breach or default under this Agreement
or any such waiver of any provision or condition of this Agreement must be in
writing and shall be effective only to the extent specifically set forth in such
writing.
10.3 Reimbursement and Indemnification of Banks by the Borrowers; Taxes.
------------------------------------------------------------------
The Borrowers agree unconditionally upon demand to pay or reimburse to
each Bank (other than the Agent, as to which the Borrowers' Obligations are set
forth in Section 9.5) and to save such Bank harmless against (i) liability for
the payment of all reasonable out-of-pocket costs, expenses and disbursements
(including fees and expenses of counsel for each Bank except with respect to (a)
and (b) below), incurred by such Bank (a) in connection with the administration
and interpretation of this Agreement, and other instruments and documents to be
delivered hereunder, (b) relating to any amendments, waivers or consents
pursuant to the provisions hereof, (c) in connection with the enforcement of
this Agreement or any other Loan Document, or collection of amounts due
hereunder or thereunder or the proof and allowability of any claim arising under
this Agreement or any other Loan Document, whether in bankruptcy or receivership
proceedings or otherwise, and (d) in any workout, restructuring or in connection
with the protection, preservation, exercise or enforcement of any of the terms
hereof or of any rights hereunder or under any other Loan Document or in
connection with any foreclosure, collection or bankruptcy proceedings, or
(ii) all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against such Bank,
in its capacity as such, in any way relating to or arising out of this Agreement
or any other Loan Documents or any action taken or omitted by such Bank
hereunder or thereunder, provided that the Borrowers shall not be liable for any
--------
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (A) if the same results
solely from such Bank's gross negligence or willful misconduct. The Borrowers
agree unconditionally to pay all stamp, document, transfer, recording or other
Taxes now or hereafter determined by the Agent or any Bank to be payable in
connection with this Agreement or any other Loan Document, and the Borrowers
agree unconditionally to save the Agent and the Banks harmless from and against
any and all present or future claims, liabilities or losses with respect to or
resulting from any omission to pay or delay in paying any such Taxes, fees or
impositions.
10.4 Holidays.
--------
Whenever any payment or action to be made or taken hereunder shall be
stated to be due on a day which is not a Business Day, such payment or action
shall be made or taken on the next following Business Day (except as provided in
Section 3.2(a) with respect to Interest Periods under the Euro-Rate Option), and
such extension of time shall be included in computing interest or fees, if any,
in connection with such payment or action.
62
<PAGE>
10.5 Funding by Branch or Affiliate.
------------------------------
(a) Notional Funding.
Each Bank shall have the right from time to time, without notice
to the Borrowers, to deem any branch or Affiliate (which for the purposes of
this Section 10.5 shall mean any corporation or association which is directly or
indirectly controlled by or is under direct or indirect common control with any
corporation or association which directly or indirectly controls such Bank) of
such Bank to have made, maintained or funded any Term Loan to which the Euro-
Rate Option applies at any time, provided that immediately following (on the
--------
assumption that a payment were then due from the Borrowers to such other office)
and as a result of such change no Borrower would be under any greater financial
obligation pursuant to Section 4.6 than it would have been in the absence of
such change. Notional funding offices may be selected by each Bank without
regard to the Bank's actual methods of making, maintaining or funding the Term
Loans or any sources of funding actually used by or available to such Bank.
(b) Actual Funding.
Each Bank shall have the right from time to time to make or
maintain any Term Loan by arranging for a branch or Affiliate of such Bank to
make or maintain such Term Loan subject to the last sentence of this Section
10.5(b). If any Bank causes a branch or Affiliate to make or maintain any part
of the Term Loans hereunder, all terms and conditions of this Agreement shall,
except where the context clearly requires otherwise, be applicable to such part
of the Term Loans to the same extent as if such Term Loans were made or
maintained by such Bank but in no event shall any Bank's use of such a branch or
Affiliate to make or maintain any part of the Term Loans hereunder cause such
Bank or such branch or Affiliate to incur any cost or expenses payable by the
Borrowers hereunder or require the Borrowers to pay any other compensation to
any Bank (including any expenses incurred or payable pursuant to Section 4.6)
which would otherwise not be incurred.
n
10.6 Notices.
-------
All notices, requests, demands, directions and other communications
(as used in this Section 10.6 collectively referred to as "notices") given to or
made upon any party hereto under the provisions of this Agreement shall be by
telephone or in writing (including facsimile communication) unless otherwise
expressly permitted hereunder and shall be delivered or sent by facsimile to the
respective parties at the addresses and numbers set forth under their respective
names on the signature pages hereof or in accordance with any subsequent
unrevoked written direction from any party to the others. All notices shall,
except as otherwise expressly herein provided, be effective (a) in the case of
facsimile, when received, (b) in the case of hand-delivered notice, when hand
delivered, (c) in the case of telephone, when telephoned, provided, however,
-------- -------
that in order to be effective, telephonic notices must be confirmed in writing
no later than the next day by letter, facsimile and (d) if given by any other
means (including by air courier), when delivered; provided, that notices to the
--------
Agent shall not be effective until received. Any Bank giving any notice to any
Borrower shall simultaneously send a copy thereof to the
63
<PAGE>
Agent, and the Agent shall promptly notify the other Banks of the receipt by it
of any such notice.
10.7 Severability.
------------
The provisions of this Agreement are intended to be severable. If any
provision of this Agreement shall be held invalid or unenforceable in whole or
in part in any jurisdiction such provision shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without in any
manner affecting the validity or enforceability thereof in any other
jurisdiction or the remaining provisions hereof in any jurisdiction.
10.8 Governing Law.
-------------
This Agreement shall be deemed to be a contract under the Laws of the
State of New York and for all purposes shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York without
regard to its conflict of laws principles.
10.9 Prior Understanding.
-------------------
This Agreement supersedes all prior understandings and agreements,
whether written or oral, between the parties hereto and thereto relating to the
transactions provided for herein and therein, including any prior
confidentiality agreements and commitments.
10.10 Duration; Survival.
------------------
All warranties, representation, indemnities and covenants made by any
Person hereto, herein or in any certificate or other instrument delivered by any
such Person or on the behalf of any such Person under this Agreement shall be
considered to have been relied upon by each other Person hereto and shall
survive the consummation of the transactions contemplated hereby on the Closing
Date regardless of any investigation made by any such Person or on the behalf of
any such Person. All statements in any such certificate or other instrument
shall constitute warranties and representations by the Person so making the
same.
10.11 Successors and Assigns.
----------------------
This Agreement shall be binding upon and shall inure to the benefit of
the Banks, the Agent, the Borrowers and their respective successors and assigns,
except that none of the Borrowers may assign or transfer any of its rights and
Obligations hereunder or any interest herein. Each Bank may, at its own cost,
make assignments of or sell participations in all or any part of its Term Loans
made by it to one or more banks or other entities, subject to the consent of the
Borrowers (absent the existence of a Default or Event of Default) and the Agent
with respect to any assignee, such consent not to be unreasonably withheld, and
provided that, unless there exists an Event of Default, assignments may not be
- -------------
made in amounts less than $5,000,000 and only after ten (10) Business Days prior
notice to the Agent. In the case of an assignment, upon receipt by the Agent of
the Assignment and Assumption Agreement, the assignee shall have, to the extent
of such assignment (unless otherwise provided therein), the same rights,
64
<PAGE>
benefits and obligations as it would have if it had been a signatory Bank
hereunder, the Commitments in Section 2.1 shall be adjusted accordingly, and
upon surrender of any Note subject to such assignment, the Borrower surrendering
such Note shall execute and deliver a new Note to the assignee in an amount
equal to the amount of the Commitment assumed by it and a new Note to the
assigning Bank in an amount equal to the Commitment retained by it hereunder.
The assigning Bank shall pay to the Agent a service fee in the amount of $2,000
for each assignment. In the case of a participation, the participant shall only
have the rights specified in Section 10.3(i)(c) (the participant's rights
against such Bank in respect of such participation to be those set forth in the
agreement executed by such Bank in favor of the participant relating thereto and
not to include any voting rights except with respect to changes of the type
referenced in clauses (a), (b), or (c) under Section 10.1), all of such Bank's
obligations under this Agreement or any other Loan Document shall remain
unchanged and all amounts payable by any Borrower hereunder or thereunder shall
be determined as if such Bank had not sold such participation. Any assignee or
participant which is not incorporated under the Laws of the United States of
America or a state thereof shall deliver to the Borrowers and the Agent the form
of certificate described in Section 10.17 relating to federal income tax
withholding. Each Bank may furnish any publicly available information
concerning any Borrower and any other information concerning any Borrower in the
possession of such Bank from time to time to assignees and participants
(including prospective assignees or participants) provided that such assignees
-------------
and participants agree to be bound by the provisions of Section 10.12.
10.12 Confidentiality.
---------------
The Agent and the Banks each agree to keep confidential all
information obtained from any Borrower which is nonpublic and confidential or
proprietary in nature (including any information the Borrowers specifically
designate as confidential), except as provided below, and to use such
information only in connection with their respective capacities under this
Agreement and for the purposes contemplated hereby. The Agent and the Banks
shall be permitted to disclose such information (i) to outside legal counsel,
accountants and other professional advisors who need to know such information in
connection with the administration and enforcement of this Agreement, subject to
agreement of such Persons to maintain the confidentiality, (ii) to assignees and
participants as contemplated by Section 10.11, (iii) to the extent requested by
any bank regulatory authority or, with notice to the Borrowers, as otherwise
required by applicable Law or by any subpoena or similar legal process, or in
connection with any investigation or proceeding arising out of the transactions
contemplated by this Agreement, (iv) if it becomes publicly available other than
as a result of a breach of this Agreement or becomes available from a source not
subject to confidentiality restrictions, or (v) if the Borrowers shall have
consented to such disclosure.
10.13 Counterparts.
------------
This Agreement may be executed by different parties hereto on any
number of separate counterparts, each of which, when so executed and delivered,
shall be an original, and all such counterparts shall together constitute one
and the same instrument.
65
<PAGE>
10.14 Agent's or Bank's Consent.
-------------------------
Whenever the Agent's or any Bank's consent is required to be obtained
under this Agreement or any of the other Loan Documents as a condition to any
action, inaction, condition or event, the Agent and each Bank shall be
authorized to give or withhold such consent in its sole and absolute discretion
and to condition its consent upon the giving of additional collateral, the
payment of money or any other matter.
10.15 Exceptions.
----------
The representations, warranties and covenants contained herein shall
be independent of each other and no exception to any representation, warranty or
covenant shall be deemed to be an exception to any other representation,
warranty or covenant contained herein unless expressly provided, nor shall any
such exceptions be deemed to permit any action or omission that would be in
contravention of applicable Law.
10.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL.
--------------------------------------
EACH BORROWER HEREBY IRREVOCABLY CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK SITTING IN THE COUNTY OF NEW YORK AND THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH
SERVICE OF PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED TO SUCH
BORROWER AT THE ADDRESSES PROVIDED FOR IN SECTION 10.06 AND SERVICE SO MADE
SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF. EACH BORROWER
WAIVES ANY OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED AGAINST
IT AS PROVIDED HEREIN AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF
JURISDICTION OR VENUE. EACH BORROWER, THE AGENT AND THE BANKS HEREBY WAIVE TRIAL
BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT
OF OR RELATED TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT TO THE FULL EXTENT
PERMITTED BY LAW.
10.17 Tax Withholding Clause.
----------------------
Each Bank or assignee or participant of a bank that is not
incorporated under the Laws of the United States of America or a state thereof
agrees that it will deliver to each of the Borrowers and the Agent two (2) duly
completed copies of the following: (i) Internal Revenue Service Form W-9, 4224
or 1001, or other applicable form prescribed by the Internal Revenue Service,
certifying that such Bank, assignee or participant is entitled to receive
payments under this Agreement and the other Loan Documents without deduction or
withholding of any United States federal income taxes, or is subject to such tax
at a reduced rate under an applicable tax treaty, or (ii) Internal Revenue
Service Form W-8 or other applicable form or a certificate of the Bank, assignee
or participant indicating that no such exemption or reduced rate is allowable
66
<PAGE>
with respect to such payments. Each Bank, assignee or participant required to
deliver to the Borrowers and the Agent a form or certificate pursuant to the
preceding sentence shall deliver such form or certificate as follows: (A) each
Bank which is a party hereto on the Closing Date shall deliver such form or
certificate at least five (5) Business Days prior to the first date on which any
interest or fees are payable by the Borrowers hereunder for the account of each
Bank; (B) each assignee or participant shall deliver such form or certificate at
least five (5) Business Days before the effective date of such assignment or
participation (unless the Agent in its sole discretion shall permit such
assignee or participant to deliver such form or certificate less than five (5)
Business Days before such date in which case it shall be due on the date
specified by the Agent). Each Bank, assignee or participant which so delivers a
Form W-8, W-9, 4224 or 1001 further undertakes to deliver to the Borrowers and
the Agent two (2) additional copies of such form (or a successor form) on or
before the date that such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form so delivered
by it, and such amendments thereto or extensions or renewals thereof as may be
reasonably requested by the Borrowers or the Agent, either certifying that such
Bank, assignee or participant is entitled to receive payments under this
Agreement and the other Loan Documents without deduction or withholding of any
United States federal income taxes or is subject to such tax at a reduced rate
under an applicable tax treaty or stating that no such exemption or reduced rate
is allowable. The Agent shall be entitled to withhold United States federal
income taxes at the full withholding rate unless the Bank, assignee or
participant establishes an exemption or that it is subject to a reduced rate as
established pursuant to the above provisions.
67
<PAGE>
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto
duly authorized, have executed this Agreement as of the day and year first above
written.
INTERPOOL, INC.
By: /s/ MARTIN TUCHMAN
------------------
Title: Chairman/Chief Executive Officer
--------------------------------
Address for Notices:
Interpool, Inc.
211 College Road East
Princeton, New Jersey 08540
Telephone: (609) 452-8900
Fax: (609) 452-8211
Attention: Richard W. Gross
with a copy to:
Interpool, Inc.
633 Third Avenue, 17th Floor
New York, New York 10017
Fax: (212) 687-8403
Attention: President and Chief Financial Officer
INTERPOOL LIMITED
By:/s/ RICHARD W. GROSS
--------------------
Title: Senior Vice President
---------------------
Address for Notices:
Interpool Limited
211 College Road East
Princeton, New Jersey 08540
Telephone: (609) 452-8900
Fax: (609) 452-8211
Attention: Richard W. Gross, Senior Vice President
68
<PAGE>
with a copy to:
Interpool Limited
633 Third Avenue, 17th Floor
New York, New York 10017
Fax: (212) 687-8403
Attention: President and Chief Financial Officer
INTERPOOL FINANCE CORP.
By: /s/ FRANK SELLIER
-----------------
Title: President
Address for Notices:
Interpool Finance Corp.
Stevemar House, Suite 101
Rockley
Christchurch, Barbados
West Indies
Telephone: (809) 435-8955
Fax: (809) 435-9056
Attention: Frank Sellier, President
with a copy to:
Interpool Finance Corp.
Campbell Corporate Services Limited
The Bank of Nova Scotia Building
P.O. Box 268
Georgetown, Grand Cayman
Cayman Islands, B.W.I.
Fax: (809) 949-8613
Attention: Simon Stephens, Esq.
and with a copy to:
Interpool, Inc.
633 Third Avenue, 17th Floor
New York, New York 10017
Fax: (212) 687-8403
Attention: President and Chief Financial Officer
69
<PAGE>
and with a copy to:
Interpool Limited
211 College Road East
Princeton, New Jersey 08540
Fax: (609) 452-8211
Attention: Richard W. Gross, Senior Vice President
*
individually and as Agent and Collateral Agent
By: *
-------------------------
Title: Vice President
Address for Notices:
*
* Confidential Treatment Requested
70
<PAGE>
Schedule 1 to the Term Loan Agreement
-------------------------------------
Banks Schedule
--------------
<TABLE>
<CAPTION>
Bank Interpool, Inc. Interpool Interpool Finance
Total Limited Corp.
<S> <C> <C> <C> <C>
ALL BANKS $50,000,000 $12,050,000.00 $12,950,000.00 $25,000,000.00
* $50,000,000 $12,050,000.00 $12,950,000.00 $25,000,000.00
</TABLE>
* Confidential Treatment Requested
<PAGE>
Schedule 4.1 to the Term Loan Agreement
---------------------------------------
*
Term Loan Facility
March 28, 1996
Principal Amortization Schedule
-------------------------------
<TABLE><CAPTION>
Interpool Inc. Interpool Limited Interpool Finance Corp.
--------------------------- ----------------------------- ----------------------------------
Loan Amt: 12,050,000.00 Loan Amt: 12,950,000.00 Loan Amt: 25,000,000.00
---------------------------- ---------------------------- ----------------------------------
OPERATING OPERATING
LEASE LEASE DIRECT FIN.LSE.
PRINCIPAL PRINCIPAL PRINCIPAL COMBINED
PMT AMORTIZATION - PRINCIPAL AMORTIZATION- PRINCIPAL AMORTIZATION- PRINCIPAL PRINCIPAL
PMT DATE QUARTERLY % PAYMENTS QUARTERLY % PAYMENTS QUARTERLY % PAYMENTS PAYMENT
- ----- -------- --------------- ----------- -------------- ------------- ---------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
0 11-Apr-96
1 11-Jul-96 3.375% 406,687.50 3.375% 437,062.50 4.500% 1,125,000.00 1,968,750.00
2 11-Oct-96 3.375% 406,687.50 3.375% 437,062.50 4.500% 1,125,000.00 1,968,750.00
3 11-Jan-97 3.375% 406,687.50 3.375% 437,062.50 4.500% 1,125,000.00 1,968,750.00
4 11-Apr-97 3.375% 406,687.50 3.375% 437,062.50 4.500% 1,125,000.00 1,968,750.00
5 11-Jul-97 3.500% 421,750.00 3.500% 453,250.00 4.875% 1,218,750.00 2,093,750.00
6 11-Oct-97 3.500% 421,750.00 3.500% 453,250.00 4.875% 1,218,750.00 2,093,750.00
7 11-Jan-98 3.500% 421,750.00 3.500% 453,250.00 4.875% 1,218,750.00 2,093,750.00
8 11-Apr-98 3.500% 421,750.00 3.500% 453,250.00 4.875% 1,218,750.00 2,093,750.00
9 11-Jul-98 3.625% 436,812.50 3.625% 469,437.50 5.125% 1,281,250.00 2,187,500.00
10 11-Oct-98 3.625% 436,812.50 3.625% 469,437.50 5.125% 1,281,250.00 2,187,500.00
11 11-Jan-99 3.625% 436,812.50 3.625% 469,437.50 5.125% 1,281,250.00 2,187,500.00
12 11-Apr-99 3.625% 436,812.50 3.625% 469,437.50 5.125% 1,281,250.00 2,187,500.00
13 11-Jul-99 3.750% 451,875.00 3.750% 485,625.00 5.375% 1,343,750.00 2,281,250.00
14 11-Oct-99 3.750% 451,875.00 3.750% 485,625.00 5.375% 1,343,750.00 2,281,250.00
15 11-Jan-00 3.750% 451,875.00 3.750% 485,625.00 5.375% 1,343,750.00 2,281,250.00
16 11-Apr-00 3.750% 451,875.00 3.750% 485,625.00 5.375% 1,343,750.00 2,281,250.00
17 11-Jul-00 3.875% 466,937.50 3.875% 501,812.50 5.125% 1,281,250.00 2,250,000.00
18 11-Oct-00 3.875% 466,937.50 3.875% 501,812.50 5.125% 1,281,250.00 2,250,000.00
19 11-Jan-01 3.875% 466,937.50 3.875% 501,812.50 5.125% 1,281,250.00 2,250,000.00
20 11-Apr-01 31.375% 3,780,687.50 31.375% 4,063,062.50 5.125% 1,281,250.00 9,125,000.00
--------------------- -------- ------------- -------- ------------- -------------
100.000%12,050,000.00 100.000% 12,950,000.00 100.000% 25,000,000.00 50,000,000.00
===================== ======== ============= ======== ============= =============
</TABLE>
* Confidential Treatment Requested
SCHED. 4.1, Page 1
<PAGE>
AMENDMENT NUMBER ONE TO TERM LOAN AGREEMENT
-------------------------------------------
AMENDMENT AGREEMENT made as of the 11th day of April, 1996, by and among:
(1) INTERPOOL, INC., a Delaware corporation ("Interpool");
(2) INTERPOOL LIMITED, a Barbados corporation ("Ltd.");
(3) INTERPOOL FINANCE CORP., a Cayman Islands corporation ("Corp."
and together with Interpool and Ltd., each a "Borrower" and collectively, the
"Borrowers");
(4) * (and each a "Bank" and collectively the "Banks"); and
(5) * in its capacity as agent for the Banks under the Term Loan
Agreement (as defined below) (hereinafter referred to in such capacity as
the "Agent").
WHEREAS:
A. The Borrowers, the Banks (other than *) and the Agent are
parties to a Term Loan Agreement dated as of March 28, 1996 pursuant to which,
inter alia, the Banks agreed to loan to the Borrowers an aggregate principal
- ----------
amount of $50,000,000 (the "Term Loan Agreement" and the "Facility");
B. * wish to join the Facility with commitments of $15,000,000,
$15,000,000, $15,000,000 and $15,000,000, respectively;
C. * wishes to decrease its commitment to $20,000,000;
D. The parties hereto wish to admit * into the Facility and to
increase the aggregate principal amount of the Facility to $80,000,000;
E. The parties hereto wish to amend certain definitions and
restrictions on amendment contained in the Term Loan Agreement;
F. All capitalized terms which are not otherwise defined herein
shall have the respective meanings ascribed thereto in the Term Loan Agreement;
* Confidential Treatment Requested
<PAGE>
G. Section 10.1 of the Term Loan Agreement requires, inter alia,
----------
that certain amendments to the Term Loan Agreement, as specified in said
section, be signed by the Required Banks; and
H. The Banks signatory hereto constitute the Required Banks;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
I. AMENDMENT OF THE TERM LOAN AGREEMENT
The Term Loan Agreement is hereby amended as follows:
A. TO ADMIT A NEW PARTY TO THE LOAN AGREEMENT
------------------------------------------
1.1 (a) Upon its execution of this Amendment Agreement, * shall
each be a party to the Term Loan Agreement and assume all of the rights and
obligations of a Bank under the Term Loan * will be effective as of
April 11, 1996. It is a condition precedent to such effectiveness that
Interpool, Limited and Corp. each deliver to each of * its Term Note in the
principal face amount representing the commitment of such Bank as set forth
in Schedule 1 annexed hereto.
(b) * each hereby (i) warrants and represents that it is authorized
to become a party to the Term Loan Agreement; (ii) appoints and authorizes the
Agent to take such action, exercise such powers, and perform such duties under
the Term Loan Agreement as are specifically delegated to or required of the
Agent by the terms of the Term Loan Agreement, together with such other powers
as are reasonably incidental thereto; (iii) agrees that it will abide and be
bound by all of the terms, covenants and agreements, and perform all of the
obligations, which by the terms of the Term Loan Agreement are required to by
abided and performed by it as a Bank and shall be entitled to all of the
rights, benefits and privileges available or accruing to the Banks under the
Loan Documents; and (iv) represent and warrant that as of the date hereof, the
representations and warranties made by the Banks in the Term Loan Agreement and
the other Loan Documents are true and correct as to such Bank as if made on the
date hereof.
1.2 The signature pages of the Term Loan Agreement are amended by adding
the following names and addresses:
*
* Confidential Treatment Requested
2
<PAGE>
*
*
*
B. TO INCREASE THE FACILITY AMOUNT
-------------------------------
1.3 The number "$50,000,000" set forth in the first recital paragraph of
the Term Loan Agreement is deleted and the number "$80,000,000" is substituted
therefor.
1.4. Effective April 11, 1996 Schedule 1 to the Term Loan Agreement is
----------
deleted in its entirety and new Schedule 1, annexed to this Amendment Agreement,
----------
is substituted therefor.
1.5 Effective April 11, 1996 Schedule 4.1 to the Term Loan Agreement is
------------
deleted in its entirety and new Schedule 4.1, annexed to this Amendment
------------
Agreement, is substituted therefor.
C. TO AMEND CERTAIN DEFINITIONS AND RESTRICTIONS ON AMENDMENT
1.6 The definition of Business Day is deleted in its entirety and the
following definition of Business Day is substituted therefor:
Business Day shall mean any day other than a Saturday or Sunday or a legal
holiday on which commercial banks are authorized or required to be closed for
business in Philadelphia, Pennsylvania or New York, New York.
1.7 Clause (b) of the definition of Collateral Value is deleted and the
----------
following Clause (b) is substituted therefor:
----------
* Confidential Treatment Requested
3
<PAGE>
(b) with respect to Chassis pledged to the Collateral Agent, the
depreciated book value using the cost basis of the individual
Chassis, less depreciation in accordance with GAAP.
1.8 Clause (a) of Section 10.1 of the Term Loan Agreement is deleted in
its entirety and the following Clause (a) is substituted therefor:
(a) reduce the amount or extend the date of payment of any
principal, interest, or any amounts due under Section 4.6 hereof
-----------
due or owing on any Term Loans or reduce the rate of interest
under Section 3.1(b) hereof; or
II. PROVISIONS OF GENERAL APPLICATION
2.1 Headings have been inserted herein for convenience of reference only
and shall not be deemed to be a part of this Amendment Agreement.
2.2 On and after the date hereof, each reference in the Term Loan
Agreement to "the Term Loan Agreement", "this Agreement", "hereunder", "hereof",
"herein" or words of like import, and each such reference to the Term Loan
Agreement in the other Loan Documents, shall mean and be a reference to the Term
Loan Agreement as amended hereby.
2.3 Except as specifically amended and as otherwise agreed herein, the
Term Loan Agreement shall remain in full force and effect in accordance with its
Terms.
2.4. The Borrowers hereby represent and warrant that as of the date hereof,
both before and after giving effect to the Amendment Agreement: (A) the
representations and warranties in the Term Loan Agreement are true and correct
as if made on and as of the date hereof; and (B) no Default or Event of Default
under the Term Loan Agreement has occurred and is existing.
4
<PAGE>
2.5 This Amendment Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York.
2.6 This Amendment Agreement shall be effective when signed by the
Borrowers and the Required Banks. This Amendment Agreement may be executed in
any number of counterparts and by different parties on different counterparts,
but all such counterparts shall together constitute but one agreement. In
making proof of this Amendment Agreement, it shall not be necessary to produce
or account for more than one such counterpart signed by all the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
Agreement as of the date first set forth above.
BORROWERS:
----------
INTERPOOL, INC.
By: /s/ Martin Tuchman
-------------------
Title: Chairman/Chief Executive Officer
INTERPOOL LIMITED
By: /s/ Richard Gross
-----------------
Title: Senior Vice President
INTERPOOL FINANCE CORP.
By: /s/ Frank Sellier
-----------------
Title: President
<PAGE>
AGENT:
------
*
as Agent for the Banks
By: /s/ *
----------------------
Title: Vice President
BANKS:
------
*
By: /s/ *
----------------------
Title: Vice President
*
By: /s/ *
-----------------------
Title: Vice President
*
By: /s/ *
-------------------
Title: Vice President
*
By: /s/ *
---------------------
Title: Vice President
* Confidential Treatment Requested
<PAGE>
*
By: /s/ *
-------------------
Title: Vice President
* Confidential Treatment Requested
<PAGE>
Schedule 1 to the Term Loan Agreement
-------------------------------------
Banks Schedule
--------------
<TABLE>
<CAPTION>
Bank Interpool, Interpool Interpool
Total Inc. Limited Finance
Corp.
<S> <C> <C> <C> <C>
ALL BANKS $80,000,000 $12,050,000 $28,250,000 $39,700,000
* $20,000,000 $3,012,500 $7,062,500 $9,925,000
* $15,000,000 $2,259,375 $5,296,875 $7,443,750
*
$15,000,000 $2,259,375 $5,296,875 $7,443,750
* $15,000,000 $2,259,375 $5,296,875 $7,443,750
* $15,000,000 $2,259,375 $5,296,865 $7,443,750
</TABLE>
* Confidential Treatment Requested
1-1
EXHIBIT 10.34
AMENDMENT NUMBER TWO TO NOTE PURCHASE AGREEMENT
AMENDMENT AGREEMENT, made as of June 28, 1996, by and among Interpool,
Inc., a Delaware corporation ("Interpool"), Interpool Limited, a Barbados
corporation ("Ltd."), Trac Lease Inc., a Delaware corporation ("Trac") and the
Note Purchasers whose signatures appear on the signature pages hereto (the
"Signatory Purchasers").
WHEREAS:
A. Interpool, Limited, Trac and Signatory Purchasers are parties to that
certain Note Purchase Agreement, dated as of November 30, 1993, relating to the
sale by Interpool, Limited and Trac of $58,000,000 of Guaranteed Secured Notes,
as amended (the "Note Purchase Agreement"). Unless otherwise indicated, each
capitalized term used herein shall have the meaning ascribed thereto in the Note
Purchase Agreement;
B. The parties hereto desire to amend Section 9.18(c)of the Note Purchase
Agreement as set forth herein;
C. Section 13.3 of the Note Purchase Agreement requires that this Amendment
Agreement be signed by the Majority In Interest of the Purchasers;
D. The Signatory Purchasers constitute a Majority In Interest of the
Purchasers;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:
I. AMENDMENT OF NOTE PURCHASE AGREEMENT
1.1 Section 9.18 (c) of the Note Purchase Agreement is hereby amended in
its entirety to read as follows:
"(c) Alter the existing capital structure of any Issuer such that Interpool
owns less than 70% of the common stock of Ltd. or Trac or Interpool holds
less than 70% of the voting rights in Ltd. Or 70% of the voting rights in
Trac."
1.2 Except as specifically set forth herein, The Note Purchase Agreement
shall remain in full force and effect in accordance with its terms.
<PAGE>
II. PROVISIONS OF GENERAL APPLICATION
2.1 Headings have been inserted herein for convenience of reference only
and shall not be deemed to be a part of this Amendment Agreement.
2.2 On and after the effective date hereof, each reference in the Note
Purchase Agreement to "the Agreement", "this Agreement", "hereunder", "hereof",
"herein" or words of like import, and each such reference to the Note Purchase
Agreement in the other Transaction Documents, shall mean and be a reference to
the Note Purchase Agreement as amended hereby.
2.3 The Issuers hereby represent and warrant that as of the date hereof and
after giving effect to this Amendment Agreement no Default or Event of Default
under the Note Purchase Agreement has occurred and is existing.
2.4 This Amendment Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York.
2.5 This Amendment Agreement shall be effective when signed by the Issuers
and a Majority In Interest of the Purchasers.
2.6 This Amendment Agreement may be executed in any number of counterparts
and by different parties on different counterparts, but all such counterparts
shall together constitute but one agreement. In making proof of this Amendment
Agreement, it shall not be necessary to produce or account for more than one
such counterpart signed by each of the parties hereto.
IN WITNESS WHEREOF, the undersigned have caused this Amendment Agreement to
be executed, as of the day and year first above written.
ISSUERS:
INTERPOOL, INC.
By:/s/Richard W. Gross
-------------------
Name: Richard W. Gross
Title: Senior Vice President
2
<PAGE>
INTERPOOL LIMITED
By:/s/Richard W. Gross
-------------------
Name: Richard W. Gross
Title: Senior Vice President
TRAC LEASE, INC.
By: /s/Martin Tuchman
------------------
Name: Martin Tuchman
Title: Chairman
NOTE PURCHASERS:
*
By:__________________________
Name:
Title:
*
By:___________________________
Name:
Title:
*
By:___________________________
Name:
Title:
*
By:___________________________
Name:
Title:
* Confidential Treatment Requested
3
<PAGE>
*
By:_____________________________
Name:
Title:
*
By: *
By:_____________________________
Name:
Title:
*
By: *
By:______________________________
Name:
Title:
*
By: *
By:_______________________________
Name:
Title:
*
By: *
By:________________________________
Name:
Title:
* Confidential Treatment Requested
4
<PAGE>
*
By: *
By:_________________________________
Name:
Title:
*
By: *
By:________________________________
Name:
Title:
*
By: *
By:_________________________________
Name:
Title:
*
By: *
By:_________________________________
Name:
Title:
*
By: *
By:_________________________________
Name:
Title:
* Confidential Treatment Requested
5
EXHIBIT 10.35
AMENDMENT NUMBER TWO TO NOTE PURCHASE AGREEMENT
AMENDMENT AGREEMENT, made as of June 28, 1996, by and among Interpool,
Inc., a Delaware corporation ("Interpool"), Interpool Limited, a Barbados
corporation ("Ltd.") and the Note Purchasers whose signatures appear on the
signature pages hereto (the "Signatory Purchasers").
WHEREAS:
A. Interpool, Limited and the Signatory Purchasers are parties to that
certain Note Purchase Agreement, dated as of October 27, 1994, relating to the
sale by Interpool and Limited of $32,500,000 of Guaranteed Senior Secured Notes,
as amended (the "Note Purchase Agreement"). Unless otherwise indicated, each
capitalized term used herein shall have the meaning ascribed thereto in the Note
Purchase Agreement;
B. The parties hereto desire to amend Section 9.18(c)of the Note Purchase
Agreement as set forth herein;
C. Section 13.3 of the Note Purchase Agreement requires that this Amendment
Agreement be signed by the Majority In Interest of the Purchasers;
D. The Signatory Purchasers constitute a Majority In Interest of the
Purchasers;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:
I. AMENDMENT OF NOTE PURCHASE AGREEMENT
1.1 Section 9.18(c)of the Note Purchase Agreement is hereby amended in its
entirety to read as follows:
"(C) Alter the existing capital structure of any Issuer such that Interpool
owns less than 70% of the common stock of Ltd. or Trac Lease, Inc. or
Interpool holds less than 70% of the voting rights in Ltd. or 70% of the
voting rights in Trac Lease, Inc."
1.2 Except as specifically set forth herein, The Note Purchase Agreement
shall remain in full force and effect in accordance with its terms.
<PAGE>
II. PROVISIONS OF GENERAL APPLICATION
2.1 Headings have been inserted herein for convenience of reference only
and shall not be deemed to be a part of this Amendment Agreement.
2.2 On and after the effective date hereof, each reference in the Note
Purchase Agreement to "the Agreement", "this Agreement", "hereunder", "hereof",
"herein" or words of like import, and each such reference to the Note Purchase
Agreement in the other Transaction Documents, shall mean and be a reference to
the Note Purchase Agreement as amended hereby.
2.3 The Issuers hereby represent and warrant that as of the date hereof and
after giving effect to this Amendment Agreement no Default or Event of Default
under the Note Purchase Agreement has occurred and is existing.
2.4 This Amendment Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York.
2.5 This Amendment Agreement shall be effective when signed by the Issuers
and a Majority In Interest of the Purchasers.
2.6 This Amendment Agreement may be executed in any number of counterparts
and by different parties on different counterparts, but all such counterparts
shall together constitute but one agreement. In making proof of this Amendment
Agreement, it shall not be necessary to produce or account for more than one
such counterpart signed by each of the parties hereto.
IN WITNESS WHEREOF, the undersigned have caused this Amendment Agreement to
be executed, as of the day and year first above written.
ISSUERS:
INTERPOOL, INC.
By:/s/Richard W. Gross
-------------------
Name: Richard W. Gross
Title: Senior Vice President
2
<PAGE>
INTERPOOL LIMITED
By:/s/Richard W. Gross
-------------------
Name: Richard W. Gross
Title: Senior Vice President
NOTE PURCHASERS:
*
By:__________________________
Name:
Title:
*
By:__________________________
Name:
Title:
*
By:__________________________
Name:
Title:
*
By: *
By: *
By:________________
Name:
Title:
* Confidential Treatment Requested
3
<PAGE>
*
By:________________________
Name:
Title:
*
By:_________________________
Name:
Title:
* Confidential Treatment Requested
4
EXHIBIT 10.36
AMENDMENT NUMBER THREE TO NOTE PURCHASE AGREEMENT
AMENDMENT AGREEMENT made as of June 28, 1996, by and among Interpool, Inc.,
a Delaware corporation ("Interpool"), Interpool Limited, a Barbados corporation
("Ltd.") and the Note Purchasers whose signatures appear on the signature pages
hereto (the "Signatory Purchasers").
WHEREAS:
A. Interpool, Limited and the Signatory Purchasers are parties to that
certain Note Purchase Agreement, dated as of April 28, 1995, as amended,
relating to the sale by Interpool andd Limited of $30,000,000 of Guaranteed
Senior Secured Notes (the "Note Purchase Agreement"). Unless otherwise
indicated, each capitalized term used herein shall have the meaning ascribed
thereto in the Note Purchase Agreement;
B. The parties hereto desire to amend Section 9.18(c)of the Note Purchase
Agreement as set forth herein;
C. Section 13.3 of the Note Purchase Agreement requires that this Amendment
Agreement be signed by the Majority In Interest of the Purchasers;
D. The Signatory Purchasers constitute a Majority In Interest of the
Purchasers;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:
I. AMENDMENT OF NOTE PURCHASE AGREEMENT
1.1 Section 9.18 (c) of the Note Purchase Agreement is hereby amended in
its entirety to read as follows:
"(c) Alter the existing capital structure of any Issuer such that Interpool
owns less than 70% of the common stock of Ltd. or Trac Lease, Inc. or
Interpool holds less than 70% of the voting rights in Ltd. or voting rights
in Trac Lease, Inc."
1.2 Except as specifically set forth herein, The Note Purchase Agreement
shall remain in full force and effect in accordance with its terms.
<PAGE>
II. PROVISIONS OF GENERAL APPLICATION
2.1 Headings have been inserted herein for convenience of reference only
and shall not be deemed to be a part of this Amendment Agreement.
2.2 On and after the effective date hereof, each reference in the Note
Purchase Agreement to "the Agreement", "this Agreement", "hereunder", "hereof",
"herein" or words of like import, and each such reference to the Note Purchase
Agreement in the other Transaction Documents, shall mean and be a reference to
the Note Purchase Agreement as amended hereby.
2.3 The Issuers hereby represent and warrant that as of the date hereof and
after giving effect to this Amendment Agreement no Default or Event of Default
under the Note Purchase Agreement has occurred and is existing.
2.4 This Amendment Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York.
2.5 This Amendment Agreement shall be effective when signed by the Issuers
and a Majority In Interest of the Purchasers.
2.6 This Amendment Agreement may be executed in any number of counterparts
and by different parties on different counterparts, but all such counterparts
shall together constitute but one agreement. In making proof of this Amendment
Agreement , it shall not be necessary to produce or account for more than one
such counterpart signed by each of the parties hereto.
IN WITNESS WHEREOF, the undersigned have caused this Amendment Agreement to
be executed, as of the day and year first above written.
ISSUERS:
INTERPOOL, INC.
By:/s/Richard W. Gross
-------------------
Name: Richard W. Gross
Title: Senior Vice President
2
<PAGE>
INTERPOOL LIMITED
By:/s/Richard W. Gross
-------------------
Name: Richard W. Gross
Title: Senior Vice President
NOTE PURCHASERS:
*
By:____________________________
Name:
Title:
By:____________________________
Name:
Title:
* Confidential Treatment Requested
3
EXHIBIT 10.37
AMENDMENT NUMBER ONE TO NOTE PURCHASE AGREEMENT
AMENDMENT AGREEMENT, made as of June 28, 1996, by and among Interpool,
Inc., a Delaware corporation ("Interpool"), Interpool Limited, a Barbados
corporation ("Ltd."), Interpool Finance Corp., a Cayman Islands corporation
("Corp") and the Note Purchasers whose signatures appear on the signature pages
hereto (the "Signatory Purchasers").
WHEREAS:
A. Interpool, Limited, Corp and the Signatory Purchasers are parties to
that certain Note Purchase Agreement, dated as of July 25, 1995, relating to the
sale by Interpool, Limited and Corp of $103,000,000 of Guaranteed Secured Notes
(the "Note Purchase Agreement"). Unless otherwise indicated, each capitalized
term used herein shall have the meaning ascribed thereto in the Note Purchase
Agreement;
B. The parties hereto desire to amend Section 9.18(c) of the Note Purchase
Agreement as set forth herein;
C. Section 13.3 of the Note Purchase Agreement requires that this Amendment
Agreement be signed by the Majority In Interest of the Purchasers;
D. The Signatory Purchasers constitute a Majority In Interest of the
Purchase;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:
I. AMENDMENT OF NOTE PURCHASE AGREEMENT
1.1 Section 9.18(c) of the Note Purchase Agreement is hereby amended in its
entirety to read as follows:
"(c) Alter the existing capital structure of any Issuer such that (i)
Interpool owns less than 70% of the common stock of Ltd. or 70% of the
common stock of Trac Lease, Inc. or (ii) Interpool holds less than 70% of
the voting rights in Ltd. or 70% of the voting rights in Trac Lease, Inc.
or (iii) Ltd. holds less than 70% of the voting rights in Corp."
1.2 Except as specifically set forth herein, The Note Purchase Agreement
shall remain in full force and effect in accordance with its terms.
<PAGE>
II. PROVISIONS OF GENERAL APPLICATION
2.1 Headings have been inserted herein for convenience of reference only
and shall not be deemed to be a part of this Amendment Agreement.
2.2 On and after the effective date hereof, each reference in the Note
Purchase Agreement to "the Agreement", "this Agreement", "hereunder", "hereof",
"herein" or words of like import, and each such reference to the Note Purchase
Agreement in the other Transaction Documents, shall mean and be a reference to
the Note Purchase Agreement as amended hereby.
2.3 The Issuers hereby represent and warrant that as of the date hereof and
after giving effect to this Amendment Agreement no Default or Event of Default
under the Note Purchase Agreement has occurred and is existing.
2.4 This Amendment Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York.
2.5 This Amendment agreement shall be effective when signed by the Issuers
and a Majority In Interest of the Purchasers
2.6 This Amendment Agreement may be executed in any number of counterparts
and by different parties on different counterparts, but all such counterparts
shall together constitute but one agreement. In making proof of this Amendment
Agreement, it shall not be necessary to produce or account for more than one
such counterpart signed by each of the parties hereto.
IN WITNESS WHEREOF, the undersinged have caused this Amendment Agreement to
be executed, as of the day and year first above written.
ISSUERS:
INTERPOOL, INC.
BY:/S/Richard W. Gross
-------------------
Name: Richard W. Gross
Title: Senior Vice President
2
<PAGE>
INTERPOOL LIMITED
By:/s/Richard W. Gross
-------------------
Name: Richard W. Gross
Title: Senior Vice President
INTERPOOL FINANCE CORP.
By:___________________________
Name:
Title:
NOTE PURCHASERS:
*
By:___________________________
Name:
Title:
*
By:___________________________
Name:
Title:
*
By:___________________________
Name:
Title:
*
By:___________________________
Name:
Title:
* Confidential Treatment Requested
3
<PAGE>
*
By:_________________________
Name:
Title:
*
By:_________________________
Name:
Title:
*
By:__________________________
Name:
Title:
*
By:__________________________
Name:
Title:
*
By:__________________________
Name:
Title:
*
By:___________________________
Name:
Title:
* Confidential Treatment Requested
4
<PAGE>
*
By:_________________________
Name:
Title:
*
By:__________________________
Name:
Title:
*
By:__________________________
Name:
Title:
*
By:_________________________
Name:
Title:
*
By:__________________________
Name:
Title:
*
By:___________________________
Name:
Title:
* Confidential Treatment Requested
5
<PAGE>
*
By:________________________
Name:
Title:
By:_________________________
Name:
Title:
* Confidential Treatment Requested
6
Exhibit 10.38
*
*
August 2, 1996
Rick Gross
Interpool Limited
211 College Road East
Princeton, NJ 08540-6623
Re: Senior Loan and Security Agreement
Dear Rick:
Pursuant to Section 7.3 of the subject Agreement, *, as Agent, and for itself,
hereby waives the restriction of Interpool, Inc. owning 100% of the stock of
Interpool, Ltd.
Please call with any questions in reference to the above.
Sincerely,
/s/ *
*
Vice President
* CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT 10.39
AMENDMENT NUMBER ONE TO NOTE PURCHASE AGREEMENT
AMENDMENT AGREEMENT, made as of June 28, 1996, by and among Interpool,
Inc., a Delaware corporation ("Interpool"), Interpool Limited, a Barbados
corporation ("Ltd."), Interpool Finance Corp., a Cayman Islands corporation
("Corp") and the Note Purchasers whose signatures appear on the signature pages
hereto (the "Signatory Purchasers").
WHEREAS:
A. Interpool, Limited, Corp and the Signatory Purchasers are parties to
that certain Note Purchase Agreement, dated as of Dec. 12, 1995, relating to the
sale by Interpool, Limited and Corp of $30,000,000 of Guaranteed Secured Notes
(the "Note Purchase Agreement"). Unless otherwise indicated, each capitalized
term used herein shall have the meaning ascribed thereto in the Note Purchase
Agreement;
B. The parties hereto desire to amend Section 9.18(c)of the Note Purchase
Agreement as set forth herein;
C. Section 13.3 of the Note Purchase Agreement requires that this Amendment
Agreement be signed by the Majority In Interest of the Purchasers;
D. The Signatory Purchasers constitute a Majority In Interest of the
Purchaserss;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:
I. AMENDMENT OF NOTE PURCHASE AGREEMENT
1.1 Section 9.18(c)of the Note Purchase Agreement is hereby amended in its
entirety to read as follows:
"(c) Alter the existing capital structure of any Issuer or take any other
action such that (i) Interpool owns less than 70% of the common stock of
Ltd. or 70% of the common stock of Trac Lease, Inc. or (ii) Interpool holds
less than 70% of the voting rights in Ltd. Or 70% of the voting rights in
Trac Lease, Inc. or (iii) Interpool owns directly or indirectly less than
70% of the common stock in Corp. or (iv) Interpool holds directly or
indirectly, less than 70% of the voting rights in Corp."
1.2 Except as specifically set forth herein, The Note Purchase Agreement
shall remain in full force and effect in
<PAGE>
accordance with its terms.
II. PROVISIONS OF GENERAL APPLICATION
2.1 Headings have been inserted herein for convenience of reference only
and shall not be deemed to be a part of this Amendment Agreement.
2.2 On and after the effective date hereof, each reference in the Note
Purchase Agreement to "the Agreement", "this Agreement", "hereunder", "hereof",
"herein" or words of like import, and each such reference to the Note Purchase
Agreement in the other Transaction Documents, shall mean and be a reference to
the Note Purchase Agreement as amended hereby.
2.3 The Issuers hereby represent and warrant that as of the date hereof and
after giving effect to this Amendment Agreement no Default or Event of Default
under the Note Purchase Agreement has occurred and is existing.
2.4 This Amendment Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York.
2.5 This Amendment Agreement shall be effective when signed by the Issuers
and a Majority In Interest of the Purchasers.
2.6 This Amendment Agreement may be executed in any number of counterparts
and by different parties on different counterparts, but all such counterparts
shall together constitute but one agreement. In making proof of this Amendment
Agreement, it shall not be necessary to produce or account for more than one
such counterpart signed by each of the parties hereto.
IN WITNESS WHEREOF, the undersigned have caused this Amendment Agreement to
be executed, as of the day and year first above written.
ISSUERS;
INTERPOOL, INC.
By:/s/Richard W. Gross
-------------------
Name: Richard W. Gross
Title: Senior Vice President
2
<PAGE>
INTERPOOL LIMITED
By:/s/Richard W. Gross
-------------------
Name: Richard W. Gross
Title: Senior Vice President
INTERPOOL FINANCE CORP.
By:_________________________
Name:
Title:
NOTE PURCHASERS:
*
By: *
By:_________________________
Name:
Title:
*
By:_________________________
Name:
Title:
* Confidential Treatment Requested
3
EXHIBIT 10.40
AMENDMENT NUMBER TWO TO TERM LOAN AGREEMENT
AMENDMENT AGREEMENT made as of the 27th day of June, 1996, by and among:
(1) INTERPOOL, INC. a Delaware corporation ("Interpool");
(2) INTERPOOL LIMITED, a Barbados corporation ("Ltd.");
(3) INTERPOOL FINANCE CORP., a Cayman Islands corporation ("Corp." and
together with Interpool and Ltd., each a "Borrower" and collectively, the
"Borrowers");
(4) * (and each a "Bank" and collectively the "Banks"); and
(5) * , in its capacity as agent for the Banks under the Term Loan
Agreement (as defined below) (hereinafter referred to in such capacity as the
"Agent").
WHEREAS:
A. The Borrowers, the Banks and the Agent are parties to a Term Loan
Agreement dated as of March 28, 1996 as amended by Amendment Number One dated
April 11, 1996 pursuant to which, inter alia, the Banks agreed to loan to the
Borrowers an aggregate principal amount of $80,000,000 (the "Term Loan
Agreement" and the "Facility");
B. The parties hereto wish to amend certain provisions contained in the
Term Loan Agreement;
C. All capitalized terms which are not otherwise defined herein shall have
the respective meanings ascribed thereto in the Term Loan Agreement;
D. Section 10.1 of the Term Loan Agreement requires, inter alia, that
certain amendments to the Term Loan Agreement, as specified in said section, be
signed by the Required Banks; and
E. The Banks signatory hereto constitute the Required Banks;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:
* Confidential Treatment Requested
<PAGE>
I. AMENDMENT OF THE TERM LOAN AGREEMENT
The Term Loan Agreement is hereby amended as follows:
1.1 The references to 75% in Section 7.18(c) shall each be amended to read
70%.
II. PROVISIONS OF GENERAL APPLICATION
2.1 Headings have been inserted herein for convenience of reference only
and shall not be deemed to be a part of this Amendment Agreement.
2.2 On and after the date hereof, each reference in the Term Loan Agreement
to "the Term Loan Agreement", "this Agreement", "hereof", "herein" or words of
like import, and each such reference to the Term Loan Agreement in the other
Loan Documents, shall mean and be a reference to the Term Loan Agreement as
amended hereby.
2.3 Except as specifically amended and as otherwise agreed herein, the Term
Loan Agreement shall remain in full force and effect in accordance with its
Terms.
2.4 The Borrowers hereby represent and warrant that as of the date hereof,
both before and after giving effect to the Amendment Agreement: (A) the
representations and warranties in the Term Loan Agreement are true and correct
as if made on and as of the date hereof; and (B) no Default or Event of Default
under the Term Loan Agreement has occurred and is existing.
2.5 This Amendment Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York.
2.6 This Amendment Agreement shall be effective when signed by the
Borrowers and the Required Banks. This Amendment Agreement may be executed in
any number of counterparts and by different parties on different counterparts,
but all such counterparts shall together constitute but one agreement. In making
proof of this Amendment Agreement, it shall not be necessary to produce or
account for more than one such counterpart signed by all the parties hereto.
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
Agreement as of the date first set forth above.
BORROWERS:
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INTERPOOL, INC.
By/s/Richard W. Gross
-------------------
Name: Richard W. Gross
Title: Senior Vice President
INTERPOOL LIMITED
By/s/Richard W. Gross
-------------------
Name: Richard W. Gross
Title: Senior Vice President
INTERPOOL FINANCE CORP.
By/s/Frank Sellier
-------------------
Name: Frank Sellier
Title: President
AGENT:
------
*
By_______________________
Name: *
Title: Vice President
* Confidential Treatment Requested
<PAGE>
BANKS:
------
*
By_________________________________
Name: *
Title: *
*
By_________________________________
Name:
Title:
*
By_________________________________
Name:
Title:
*
By_________________________________
Name:
Title:
*
By_________________________________
Name:
Title:
* Confidential Treatment Requested
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS YEAR 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1995 DEC-31-1995 DEC-31-1994 DEC-31-1993
<PERIOD-END> MAR-31-1996 MAR-31-1995 DEC-31-1995 DEC-31-1994 DEC-31-1993
<CASH> 13,139 0 7,935 5,655 0
<SECURITIES> 12,965 0 15,287 17,648 0
<RECEIVABLES> 11,085 0 10,429 8,035 0
<ALLOWANCES> 650 0 885 1,000 0
<INVENTORY> 0 0 0 0 0
<CURRENT-ASSETS> 0 0 0 0 0
<PP&E> 340,822<F1> 0<F1> 332,384<F1> 257,958<F1> 0<F1>
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0 0 0 0 0
0 0 0 0 0
<COMMON> 27 0 27 27 0
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<SALES> 18,886 13,763 64,170 44,540 36,887
<TOTAL-REVENUES> 18,886 13,763 64,170 44,540 36,887
<CGS> 0 0 0 0 0
<TOTAL-COSTS> 0 0 18,859 0 0
<OTHER-EXPENSES> 5,847 3,906 0 14,412 13,295
<LOSS-PROVISION> 0 0 0 0 0
<INTEREST-EXPENSE> 6,138 4,560 21,596 11,137 7,636
<INCOME-PRETAX> 6,901 5,297 23,715 18,991 15,956
<INCOME-TAX> 321 275 1,159 959 871
<INCOME-CONTINUING> 6,580 5,022 22,556 18,032 15,085
<DISCONTINUED> 0 0 0 0 0
<EXTRAORDINARY> 0 0 0 0 0
<CHANGES> 0 0 0 0 0
<NET-INCOME> 6,580 5,022 22,556 18,032 15,085
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<EPS-DILUTED> 0 0 0 0 0
<FN>
<F1> PP&E equals leasing equipment
</FN>
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