EXHIBIT 4.1
________________________________________________________________________________
CREDIT AGREEMENT
among
PACER INTERNATIONAL, INC.
(f/k/a Land Transport Services, Inc.)
VARIOUS LENDING INSTITUTIONS,
CREDIT SUISSE FIRST BOSTON,
AS DOCUMENTATION AGENT,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.,
AS SYNDICATION AGENT,
and
BANKERS TRUST COMPANY,
AS ADMINISTRATIVE AGENT
________________________________________________________________________________
Dated as of May 28, 1999
________________________________________________________________________________
TABLE OF CONTENTS
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SECTION 1. Amount and Terms of Credit................................................................ 1
1.01 Commitments............................................................................... 1
1.02 Minimum Borrowing Amounts, etc............................................................ 4
1.03 Notice of Borrowing....................................................................... 4
1.04 Disbursement of Funds..................................................................... 5
1.05 Notes..................................................................................... 6
1.06 Conversions............................................................................... 8
1.07 Pro Rata Borrowings....................................................................... 8
1.08 Interest.................................................................................. 9
1.09 Interest Periods.......................................................................... 10
1.10 Increased Costs; Illegality; etc.......................................................... 11
1.11 Compensation.............................................................................. 13
1.12 Change of Lending Office.................................................................. 13
1.13 Replacement of Banks...................................................................... 14
SECTION 2. Letters of Credit......................................................................... 16
2.01 Letters of Credit......................................................................... 16
2.02 Letter of Credit Requests................................................................. 18
2.03 Letter of Credit Participations........................................................... 18
2.04 Agreement to Repay Letter of Credit Drawings.............................................. 20
2.05 Increased Costs........................................................................... 21
SECTION 3. Fees; Commitments......................................................................... 22
3.01 Fees...................................................................................... 22
3.02 Voluntary Termination or Reduction of Total Unutilized Revolving Loan Commitment.......... 23
3.03 Mandatory Reduction of Commitments........................................................ 24
SECTION 4. Payments.................................................................................. 25
4.01 Voluntary Prepayments..................................................................... 25
4.02 Mandatory Repayments and Commitment Reductions............................................ 26
4.03 Method and Place of Payment............................................................... 32
4.04 Net Payments.............................................................................. 33
SECTION 5. Conditions Precedent to Initial Credit Events............................................. 35
5.01 Execution of Agreement; Notes............................................................. 36
5.02 Officer's Certificate..................................................................... 36
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5.03 Opinions of Counsel................................................................................ 36
5.04 Company Documents; Proceedings..................................................................... 36
5.05 Adverse Change, etc................................................................................ 37
5.06 Litigation......................................................................................... 37
5.07 Approvals.......................................................................................... 37
5.08 Consummation of the Recapitalization; Equity Financing, etc........................................ 38
5.09 Refinancing........................................................................................ 39
5.10 Security Documents; etc............................................................................ 40
5.11 Subsidiaries Guaranty.............................................................................. 41
5.12 Employee Benefit Plans; Shareholders' Agreements; Management
Agreements; Employment Agreements; Collective Bargaining
Agreements; Existing Indebtedness Agreements; Material Contracts; Tax
Allocation Agreements.......................................................................... 41
5.13 Consent Letter..................................................................................... 42
5.14 Solvency Certificate; Insurance Certificates....................................................... 43
5.15. Financial Statements; Projections.................................................................. 43
5.16 Payment of Fees.................................................................................... 43
SECTION 6. Conditions Precedent to All Credit Events......................................................... 43
6.01 No Default; Representations and Warranties......................................................... 44
6.02 Notice of Borrowing; Letter of Credit Request...................................................... 44
SECTION 7. Representations and Warranties.................................................................... 44
7.01 Company Status..................................................................................... 45
7.02 Company Power and Authority........................................................................ 45
7.03 No Violation....................................................................................... 45
7.04 Litigation......................................................................................... 45
7.05 Use of Proceeds; Margin Regulations................................................................ 46
7.06 Governmental Approvals............................................................................. 46
7.07 Investment Company Act............................................................................. 46
7.08 Public Utility Holding Company Act................................................................. 46
7.09 True and Complete Disclosure....................................................................... 46
7.10 Financial Condition; Financial Statements.......................................................... 47
7.11 Security Interests................................................................................. 49
7.12 Compliance with ERISA.............................................................................. 49
7.13 Capitalization..................................................................................... 50
7.14 Subsidiaries....................................................................................... 51
7.15 Intellectual Property, etc......................................................................... 51
7.16 Compliance with Statutes, etc...................................................................... 51
7.17 Environmental Matters.............................................................................. 51
7.18 Properties......................................................................................... 52
7.19 Labor Relations.................................................................................... 52
7.20 Tax Returns and Payments........................................................................... 53
7.21 Existing Indebtedness.............................................................................. 53
(ii)
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7.22 Insurance............................................................................................... 53
7.23 Representations and Warranties in Other Documents....................................................... 53
7.24 The Transaction......................................................................................... 54
7.25 Special Purpose Corporation............................................................................. 54
7.26 Subordination........................................................................................... 54
7.27 Year 2000 Representation................................................................................ 54
SECTION 8. Affirmative Covenants.................................................................................. 55
8.01 Information Covenants................................................................................... 55
8.02 Books, Records and Inspections.......................................................................... 59
8.03 Insurance............................................................................................... 59
8.04 Payment of Taxes........................................................................................ 60
8.05 Corporate Franchises.................................................................................... 60
8.06 Compliance with Statutes; etc........................................................................... 61
8.07 Compliance with Environmental Laws...................................................................... 61
8.08 ERISA................................................................................................... 62
8.09 Good Repair............................................................................................. 63
8.10 End of Fiscal Years; Fiscal Quarters.................................................................... 63
8.11 Additional Security; Further Assurances................................................................. 64
8.12 Foreign Subsidiaries Security........................................................................... 65
8.13 Use of Proceeds......................................................................................... 66
8.14 Permitted Acquisitions.................................................................................. 66
8.15 Performance of Obligations.............................................................................. 68
8.16 Maintenance of Company Separateness..................................................................... 68
8.17 Year 2000 Compliance.................................................................................... 68
SECTION 9. Negative Covenants..................................................................................... 69
9.01 Changes in Business..................................................................................... 69
9.02 Consolidation; Merger; Sale or Purchase of Assets; etc.................................................. 69
9.03 Liens................................................................................................... 72
9.04 Indebtedness............................................................................................ 74
9.05 Advances; Investments; Loans............................................................................ 77
9.06 Dividends; etc.......................................................................................... 79
9.07 Transactions with Affiliates and Unrestricted Subsidiaries.............................................. 81
9.08 Designated Senior Debt.................................................................................. 82
9.09 Consolidated Interest Coverage Ratio.................................................................... 82
9.10 Adjusted Total Leverage Ratio........................................................................... 83
9.11 Capital Expenditures.................................................................................... 84
9.12 Limitation on Voluntary Payments and Modifications of Indebtedness;
Modifications of Certificate of Incorporation, By-Laws and Certain Other Agreements;
Issuances of Capital Stock; etc..................................................................... 83
9.13 Limitation on Issuance of Capital Stock................................................................. 87
9.14 Limitation on Certain Restrictions on Subsidiaries...................................................... 88
(iii)
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9.15 Limitation on the Creation of Subsidiaries, Joint Ventures and Unrestricted Subsidiaries.................. 89
SECTION 10. Events of Default......................................................................................... 90
10.01 Payments.................................................................................................. 90
10.02 Representations, etc...................................................................................... 90
10.03 Covenants................................................................................................. 90
10.04 Default Under Other Agreements............................................................................ 90
10.05 Bankruptcy, etc........................................................................................... 91
10.06 ERISA..................................................................................................... 91
10.07 Security Documents........................................................................................ 92
10.08 Guaranties................................................................................................ 92
10.09 Judgments................................................................................................. 92
10.10 Ownership................................................................................................. 92
SECTION 11. Definitions............................................................................................... 93
SECTION 12. The Agents................................................................................................ 130
12.01 Appointment............................................................................................... 130
12.02 Delegation of Duties...................................................................................... 130
12.03 Exculpatory Provisions.................................................................................... 131
12.04 Reliance by Agents........................................................................................ 131
12.05 Notice of Default......................................................................................... 132
12.06 Nonreliance on Agents and Other Banks..................................................................... 132
12.07 Indemnification........................................................................................... 133
12.08 Agents in their Individual Capacities..................................................................... 133
12.09 Holders................................................................................................... 134
12.10 Resignation of the Agents................................................................................. 134
SECTION 13. Miscellaneous............................................................................................. 135
13.01 Payment of Expenses, etc.................................................................................. 135
13.02 Right of Setoff........................................................................................... 136
13.03 Notices................................................................................................... 136
13.04 Benefit of Agreement...................................................................................... 136
13.05 No Waiver; Remedies Cumulative............................................................................ 139
13.06 Payments Pro Rata......................................................................................... 139
13.07 Calculations; Computations................................................................................ 139
13.08 Governing Law; Submission to Jurisdiction; Venue.......................................................... 140
13.09 Counterparts.............................................................................................. 141
13.10 Effectiveness............................................................................................. 141
13.11 Headings Descriptive...................................................................................... 141
13.12 Amendment or Waiver; etc.................................................................................. 141
13.13 Survival.................................................................................................. 143
13.14 Domicile of Loans and Commitments......................................................................... 143
(iv)
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13.15 Confidentiality................................................................................................. 143
13.16 Waiver of Jury Trial............................................................................................ 140
13.17 Register........................................................................................................ 140
13.18 Limitation on Additional Amounts, etc........................................................................... 141
13.19 Post-Closing Actions............................................................................................ 141
SCHEDULE I List of Banks and Commitments
SCHEDULE II Bank Addresses
SCHEDULE III Real Properties
SCHEDULE IV Existing Indebtedness
SCHEDULE V Plans
SCHEDULE VI Existing Investments
SCHEDULE VII Subsidiaries
SCHEDULE VIII Insurance
SCHEDULE IX Existing Liens
SCHEDULE X Capitalization
SCHEDULE XI Consolidated EBITDA Adjustments
SCHEDULE XII Environmental Matters
SCHEDULE XIII Tractor Trailers
SCHEDULE XIV Existing Letters of Credit
EXHIBIT A Form of Notice of Borrowing
EXHIBIT B-2 Form of Revolving Note
EXHIBIT B-3 Form of Swingline Note
EXHIBIT C Form of Letter of Credit Request
EXHIBIT D Form of Section 4.04(b)(ii) Certificate
EXHIBIT E-1 Form of Opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, special New York counsel
to the Credit Parties
EXHIBIT E-2 Form of Opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, special
Tennessee counsel to the Credit Parties
EXHIBIT F Form of Officers' Certificate
EXHIBIT G Form of Pledge Agreement
EXHIBIT H Form of Security Agreement
EXHIBIT I Form of Subsidiaries Guaranty
EXHIBIT J Form of Consent Letter
EXHIBIT K Form of Solvency Certificate
EXHIBIT L Form of Assignment and Assumption Agreement
EXHIBIT M Form of Intercompany Note
EXHIBIT N Form of Shareholder Subordinated Note
EXHIBIT O Form of Borrower Exchange PIK Preferred Stock Certificate of
Designation
(v)
CREDIT AGREEMENT, dated as of May 28, 1999, among PACER INTERNATIONAL,
INC. (f/k/a Land Transport Services, Inc.), a Tennessee corporation (the
"Borrower"), the lenders from time to time party hereto (each, a "Bank" and,
collectively, the "Banks"), CREDIT SUISSE FIRST BOSTON, as Documentation Agent
(in such capacity, the "Documentation Agent"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING,
INC., as Syndication Agent (in such capacity, the "Syndication Agent"), and
BANKERS TRUST COMPANY, as Administrative Agent (in such capacity, the
"Administrative Agent" and, together with the Documentation Agent and the
Syndication Agent, each, an "Agent" and, collectively, the "Agents"). Unless
otherwise defined herein, all capitalized terms used herein and defined in
Section 11 are used herein as so defined.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, subject to and upon the terms and conditions herein set
forth, the Banks are willing to make available to the Borrower the credit
facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
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1.01 Commitments. (a) Subject to and upon the terms and conditions
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set forth herein, each Bank with a Term Loan Commitment severally agrees to make
a term loan (each, a "Term Loan" and, collectively, the "Term Loans") to the
Borrower, which Term Loans:
(i) shall be incurred by the Borrower pursuant to a single drawing
on the Initial Borrowing Date for the purposes described in Section
7.05(a);
(ii) shall be denominated in U.S. Dollars;
(iii) except as hereafter provided, shall, at the option of the
Borrower, be incurred and maintained as, and/or converted into, Base Rate
Loans or Eurodollar Loans, provided, that (x) except as otherwise
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specifically provided in Section 1.10(b), all Term Loans made as part of
the same Borrowing shall at all times consist of Term Loans of the same
Type and (y) unless the Administrative Agent has determined that the
Syndication Date has occurred (at which time this clause (y) shall no
longer be applicable), no more than three Borrowings of Term Loans to be
maintained as Eurodollar Loans may be incurred prior to the 90/th/ day
after the Initial Borrowing Date (or, if later, the last day of the
Interest Period applicable to the third Borrowing of Eurodollar Loans
referred to below), each of which Borrowings of Eurodollar Loans may only
have an Interest Period of one month, and the first of which Borrowings may
only be made on, or within five Business Days after, the Initial Borrowing
Date, the second of which Borrowings may only be made on the last day of
the Interest Period of the first such Borrowing and the
third of which Borrowings may only be made on the last day of the Interest
Period of the second such Borrowing; and
(iv) shall be made by each Bank in that initial aggregate principal
amount as is equal to the Term Loan Commitment of such Bank on the Initial
Borrowing Date (before giving effect to the termination thereof on such
date pursuant to Section 3.03(b)).
Once repaid, Term Loans incurred hereunder may not be reborrowed.
(b) Subject to and upon the terms and conditions herein set forth,
each RL Bank severally agrees, at any time and from time to time on and after
the Initial Borrowing Date and prior to the Revolving Loan Maturity Date, to
make a revolving loan or revolving loans (each, a "Revolving Loan" and,
collectively, the "Revolving Loans") to the Borrower, which Revolving Loans:
(i) shall be denominated in U.S. Dollars;
(ii) shall, at the option of the Borrower, be incurred and maintained
as, and/or converted into, Base Rate Loans or Eurodollar Loans, provided
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that (x) except as otherwise specifically provided in Section 1.10(b), all
Revolving Loans made as part of the same Borrowing shall at all times be of
the same Type and (y) unless the Administrative Agent has determined that
the Syndication Date has occurred (at which time this clause (y) shall no
longer be applicable), no more than three Borrowings of Revolving Loans to
be maintained as Eurodollar Loans may be incurred prior to the 90/th/ day
after the Initial Borrowing Date (or, if later, the last day of the
Interest Period applicable to the third Borrowing of Eurodollar Loans
referred to below), each of which Borrowings of Eurodollar Loans may only
have an Interest Period of one month, and the first of which Borrowings may
only be made on the same date as the initial Borrowing of Term Loans that
are maintained as Eurodollar Loans, the second of which Borrowings may only
be made on the last day of the Interest Period of the first such Borrowing
and the third of which Borrowings may only be made on the last day of the
Interest Period of the second such Borrowing;
(iii) may be repaid and reborrowed in accordance with the provisions
hereof;
(iv) shall not exceed for any Bank at any time outstanding that
aggregate principal amount which, when added to the product of (x) such
Bank's Adjusted RL Percentage and (y) the sum of (I) the aggregate amount
of all Letter of Credit Outstandings (exclusive of Unpaid Drawings which
are repaid with the proceeds of, and simultaneously with the incurrence of,
the respective incurrence of Revolving Loans) at such time and (II) the
aggregate principal amount of all Swingline Loans (exclusive of Swingline
Loans which are repaid with the proceeds of, and simultaneously with the
incurrence of, the respective incurrence of Revolving Loans) then
outstanding, equals the Revolving Loan Commitment of such Bank at such
time; and
(v) shall not exceed for all Banks at any time outstanding that
aggregate principal amount which, when added to (x) the aggregate amount of
all Letter of Credit Outstandings (exclusive of Unpaid Drawings which are
repaid with the proceeds of, and simultaneously with the incurrence of, the
respective incurrence of Revolving Loans) at such time and (y) the
aggregate principal amount of all Swingline Loans (exclusive of Swingline
Loans which are repaid with the proceeds of, and simultaneously with the
incurrence of, the respective incurrence of Revolving Loans) then
outstanding, exceeds an amount equal to the Total Revolving Loan Commitment
then in effect.
(c) Subject to and upon the terms and conditions set forth herein,
BTCo in its individual capacity agrees to make at any time and from time to time
on and after the Initial Borrowing Date and prior to the Swingline Expiry Date,
a revolving loan or revolving loans to the Borrower (each, a "Swingline Loan"
and, collectively, the "Swingline Loans"), which Swingline Loans:
(i) shall be denominated in U.S. Dollars;
(ii) shall be made and maintained as Base Rate Loans;
(iii) may be repaid and reborrowed in accordance with the provisions
hereof;
(iv) shall not exceed in aggregate principal amount at any time
outstanding, when combined with (x) the aggregate principal amount of all
Revolving Loans made by Non-Defaulting Banks then outstanding and (y) the
aggregate amount of all Letter of Credit Outstandings at such time, an
amount equal to the Adjusted Total Revolving Loan Commitment at such time
(after giving effect to any changes thereto on such date); and
(v) shall not exceed in aggregate principal amount at any time
outstanding the Maximum Swingline Amount.
Notwithstanding anything contained in this Section 1.01(c), (i) BTCo shall not
be obligated to make any Swingline Loans at a time when a Bank Default exists
unless BTCo has entered into arrangements satisfactory to it and the Borrower to
eliminate BTCo's risk with respect to the Defaulting Bank's or Banks'
participation in such Swingline Loans, including by cash collateralizing such
Defaulting Bank's or Banks' RL Percentage of the outstanding Swingline Loans and
(ii) BTCo will not make a Swingline Loan after it has received written notice
from the Borrower or the Required Banks stating that a Default or an Event of
Default exists until such time as BTCo shall have received a written notice of
(x) rescission of such notice from the party or parties originally delivering
the same or (y) a waiver of such Default or Event of Default from the Required
Banks.
(d) On any Business Day, BTCo may, in its sole discretion, give
notice to the ▇▇ ▇▇▇▇▇ that its outstanding Swingline Loans shall be funded with
a Borrowing of Revolving Loans (provided that each such notice shall be deemed
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to have been automatically given upon the occurrence of a Default or an Event of
Default under Section 10.05 or upon the exercise of any of the remedies provided
in the last paragraph of Section 10), in which case a Borrowing of
Revolving Loans constituting Base Rate Loans (each such Borrowing, a "Mandatory
Borrowing") shall be made on the immediately succeeding Business Day by all ▇▇
▇▇▇▇▇ pro rata based on each RL Bank's Adjusted RL Percentage (determined before
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giving effect to any termination of the Revolving Loan Commitments pursuant to
the last paragraph of Section 10), and the proceeds thereof shall be applied
directly to repay BTCo for such outstanding Swingline Loans. Each RL Bank
hereby irrevocably agrees to make Revolving Loans upon one Business Day's notice
pursuant to each Mandatory Borrowing in the amount and in the manner specified
in the preceding sentence and on the date specified in writing by BTCo
notwithstanding (i) that the amount of the Mandatory Borrowing may not comply
with the Minimum Borrowing Amount otherwise required hereunder, (ii) whether any
conditions specified in Section 5 or 6 are then satisfied, (iii) whether a
Default or an Event of Default has occurred and is continuing, (iv) the date of
such Mandatory Borrowing and (v) the amount of the Total Revolving Loan
Commitment or the Adjusted Total Revolving Loan Commitment at such time. In the
event that any Mandatory Borrowing cannot for any reason be made on the date
otherwise required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code with respect to the
Borrower), then each RL Bank (other than BTCo) hereby agrees that it shall
forthwith purchase from BTCo (without recourse or warranty) such assignment of
the outstanding Swingline Loans as shall be necessary to cause the ▇▇ ▇▇▇▇▇ to
share in such Swingline Loans ratably based upon their respective Adjusted RL
Percentages (determined before giving effect to any termination of the Revolving
Loan Commitments pursuant to the last paragraph of Section 10), provided that
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(x) all interest payable on the Swingline Loans shall be for the account of BTCo
until the date the respective assignment is purchased and, to the extent
attributable to the purchased assignment, shall be payable to the RL Bank
purchasing same from and after such date of purchase (or, if earlier, from the
date on which the Mandatory Borrowing would otherwise have occurred, so long as
the payments required by the following clause (y) have in fact been made) and
(y) at the time any purchase of assignments pursuant to this sentence is
actually made, the purchasing RL Bank shall be required to pay BTCo interest on
the principal amount of assignment purchased for each day from and including the
day upon which the Mandatory Borrowing would otherwise have occurred to but
excluding the date of payment for such assignment, at the rate otherwise
applicable to Revolving Loans maintained as Base Rate Loans hereunder for each
day thereafter.
1.02 Minimum Borrowing Amounts, etc. The aggregate principal amount
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of each Borrowing of Loans shall not be less than the Minimum Borrowing Amount
applicable to such Loans, provided that Mandatory Borrowings shall be made in
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the amounts required by Section 1.01(d). More than one Borrowing may be
incurred on any day, provided, that at no time shall there be outstanding more
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than eight Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to make
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a Borrowing of Loans hereunder (excluding Borrowings of Swingline Loans and
Mandatory Borrowings), an Authorized Officer of the Borrower shall give the
Administrative Agent at its Notice Office, prior to 12:00 Noon (New York time),
at least three Business Days' prior written notice (or telephonic notice
promptly confirmed in writing) of each Borrowing of Eurodollar Loans, and at
least one Business Day's prior written notice (or telephonic notice promptly
confirmed in writing) of each Borrowing of Base Rate Loans to be made hereunder.
Each such
notice (each, a "Notice of Borrowing") shall, except as otherwise expressly
provided in Section 1.10, be irrevocable, and, in the case of each written
notice and each confirmation of telephonic notice, shall be in the form of
Exhibit A, appropriately completed to specify: (i) the aggregate principal
amount of the Revolving Loans to be made pursuant to such Borrowing, (ii) the
date of such Borrowing (which shall be a Business Day), (iii) whether the
respective Borrowing shall consist of Term Loans or Revolving Loans, (iv)
whether the respective Borrowing shall consist of Base Rate Loans or, to the
extent permitted hereunder, Eurodollar Loans and, if Eurodollar Loans, the
Interest Period to be initially applicable thereto and (v) in the case of a
Borrowing of Revolving Loans the proceeds of which are to be utilized to
finance, in whole or in part, the purchase price of a Permitted Acquisition, (x)
a reference to the officer's certificate, if any, delivered in accordance with
Section 8.14, (y) the aggregate principal amount of such Revolving Loans to be
utilized in connection with such Permitted Acquisition and (z) the Total
Unutilized Revolving Loan Commitment then in effect after giving effect to the
respective Permitted Acquisition (and all payments to be made in connection
therewith). The Administrative Agent shall promptly give each Bank which is
required to make Loans of the Tranche specified in the respective Notice of
Borrowing, written notice (or telephonic notice promptly confirmed in writing)
of each proposed Borrowing, of such Bank's proportionate share thereof and of
the other matters required by the immediately preceding sentence to be specified
in the Notice of Borrowing.
(b) (i) Whenever the Borrower desires to incur Swingline Loans
hereunder, an Authorized Officer of the Borrower shall give BTCo not later than
12:00 Noon (New York time) on the day such Swingline Loan is to be made, written
notice (or telephonic notice promptly confirmed in writing) of each Swingline
Loan to be made hereunder. Each such notice shall be irrevocable and shall
specify in each case (x) the date of such Borrowing (which shall be a Business
Day) and (y) the aggregate principal amount of the Swingline Loan to be made
pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice (or deemed
notice) specified in Section 1.01(d), with the Borrower irrevocably agreeing, by
its incurrence of any Swingline Loan, to the making of Mandatory Borrowings as
set forth in such Section 1.01(d).
(c) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent or BTCo (in the case of a Borrowing of Swingline Loans) or
the respective Letter of Credit Issuer (in the case of the issuance of Letters
of Credit), as the case may be, may prior to receipt of written confirmation act
without liability upon the basis of such telephonic notice, believed by the
Administrative Agent, BTCo or such Letter of Credit Issuer, as the case may be,
in good faith to be from an Authorized Officer of the Borrower. In each such
case, the Administrative Agent's, BTCo's or the respective Letter of Credit
Issuer's, as the case may be, record of the terms of such telephonic notice
shall be conclusive evidence of the contents of such notice, absent manifest
error.
1.04 Disbursement of Funds. (a) Not later than 1:00 P.M. (New York
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time) on the date specified in each Notice of Borrowing (or (x) in the case of
Swingline Loans, not later
than 2:00 P.M. (New York time) on the date specified in Section 1.03(b)(i) or
(y) in the case of Mandatory Borrowings, not later than 12:00 Noon (New York
time) on the date specified in Section 1.01(d)), each Bank with a Commitment
under the respective Tranche will make available its pro rata share (determined
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in accordance with Section 1.07), if any, of each Borrowing requested to be made
on such date (or in the case of Swingline Loans, BTCo shall make available the
full amount thereof) in the manner provided below. All amounts shall be made
available to the Administrative Agent in U.S. Dollars and in immediately
available funds at the Payment Office and the Administrative Agent promptly will
make available to the Borrower by depositing to its account at the Payment
Office the aggregate of the amounts so made available in the type of funds
received. Unless the Administrative Agent shall have been notified by any Bank
prior to the date of Borrowing that such Bank does not intend to make available
to the Administrative Agent its portion of the Borrowing or Borrowings to be
made on such date, the Administrative Agent may assume that such Bank has made
such amount available to the Administrative Agent on such date of Borrowing, and
the Administrative Agent, in reliance upon such assumption, may (in its sole
discretion and without any obligation to do so) make available to the Borrower a
corresponding amount. If such corresponding amount is not in fact made available
to the Administrative Agent by such Bank and the Administrative Agent has made
available same to the Borrower, the Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Bank. If such Bank does
not pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall promptly notify the Borrower,
and the Borrower shall immediately pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to recover
on demand from such Bank or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the Borrower to the
date such corresponding amount is recovered by the Administrative Agent, at a
rate per annum equal to (x) if paid by such Bank, the overnight Federal Funds
Rate or (y) if paid by the Borrower, the then applicable rate of interest,
calculated in accordance with Section 1.08.
(b) Nothing in this Agreement shall be deemed to relieve any Bank from
its obligation to fulfill its commitments hereunder or to prejudice any rights
which the Borrower may have against any Bank as a result of any default by such
Bank hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal of,
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and interest on, all the Loans made to it by each Bank shall be set forth on the
Register maintained by the Administrative Agent pursuant to Section 13.17 and,
subject to the provisions of Section 1.05(f), shall be evidenced (i) if Term
Loans, by a promissory note substantially in the form of Exhibit B-1 with blanks
appropriately completed in conformity herewith (each, a "Term Note" and,
collectively, the "Term Notes"), (ii) if Revolving Loans, by a promissory note
substantially in the form of Exhibit B-2 with blanks appropriately completed in
conformity herewith (each, a "Revolving Note" and, collectively, the "Revolving
Notes") and (iii) if Swingline Loans, by a promissory note substantially in the
form of Exhibit B-3 with blanks appropriately completed in conformity herewith
(the "Swingline Note").
(b) The Term Note issued to each Bank with a Term Loan Commitment or
outstanding Term Loans shall (i) be executed by the Borrower, (ii) be payable to
such Bank or its registered assigns and be dated the Initial Borrowing Date (or,
in the case of any Term Note issued after the Initial Borrowing Date, the date
of issuance thereof), (iii) be in a stated principal amount equal to the Term
Loan Commitment of such Bank on the Initial Borrowing Date (or, in the case of
any Term Note issued after the Initial Borrowing Date, in a stated principal
amount equal to the outstanding principal amount of the Term Loan of such Bank
on the date of the issuance thereof) and be payable in the principal amount of
Term Loans evidenced thereby from time to time, (iv) mature on the Term Loan
Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case
may be, evidenced thereby, (vi) be subject to voluntary repayment as provided in
Section 4.01 and mandatory repayment as provided in Section 4.02 and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(c) The Revolving Note issued to each RL Bank shall (i) be executed by
the Borrower, (ii) be payable to such RL Bank or its registered assigns and be
dated the date of issuance thereof, (iii) be in a stated principal amount equal
to the Revolving Loan Commitment of such RL Bank and be payable in the principal
amount of the outstanding Revolving Loans evidenced thereby, (iv) mature on the
Revolving Loan Maturity Date, (v) bear interest as provided in the appropriate
clause of Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans,
as the case may be, evidenced thereby, (vi) be subject to voluntary prepayment
as provided in Section 4.01 and mandatory repayment as provided in Section 4.02
and (vii) be entitled to the benefits of this Agreement and the other Credit
Documents.
(d) The Swingline Note issued to BTCo shall (i) be executed by the
Borrower, (ii) be payable to BTCo or its registered assigns and be dated the
Initial Borrowing Date, (iii) be in a stated principal amount equal to the
Maximum Swingline Amount and be payable in the principal amount of the
outstanding Swingline Loans evidenced thereby, (iv) mature on the Swingline
Expiry Date, (v) bear interest as provided in Section 1.08 in respect of the
Base Rate Loans evidenced thereby, (vi) be subject to voluntary prepayment as
provided in Section 4.01 and mandatory repayment as provided in Section 4.02 and
(vii) be entitled to the benefits of this Agreement and the other Credit
Documents.
(e) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or any error in such notation shall not affect the Borrower's obligations in
respect of such Loans.
(f) Notwithstanding anything to the contrary contained above or
elsewhere in this Agreement, Notes shall only be delivered to Banks which at any
time specifically request the delivery of such Notes. No failure of any Bank to
request or obtain a Note evidencing its Loans to the Borrower shall affect or in
any manner impair the obligations of the Borrower to pay the Loans (and all
related Obligations) which would otherwise be evidenced thereby in accordance
with the requirements of this Agreement, and shall not in any way affect the
security or
guaranties therefor provided pursuant to the various Credit Documents. Any Bank
which does not have a Note evidencing its outstanding Loans shall in no event be
required to make the notations otherwise described in preceding clause (e). At
any time when any Bank requests the delivery of a Note to evidence any of its
Loans, the Borrower shall promptly execute and deliver to the respective Bank
the requested Note in the appropriate amount or amounts to evidence such Loans.
1.06 Conversions. The Borrower shall have the option to convert on
-----------
any Business Day occurring on or after the Initial Borrowing Date, all or a
portion at least equal to the applicable Minimum Borrowing Amount of the
outstanding principal amount of Loans (other than Swingline Loans, which shall
at all times be maintained as Base Rate Loans) made pursuant to one or more
Borrowings of one or more Types of Loans under a single Tranche into a Borrowing
or Borrowings of another Type of Loan under such Tranche; provided, that (i)
--------
except as otherwise provided in Section 1.10(b) or unless the Borrower pays all
breakage costs and other amounts owing to each Bank pursuant to Section 1.11
concurrently with any such conversion, Eurodollar Loans may be converted into
Base Rate Loans only on the last day of an Interest Period applicable to the
Loans being converted, and no partial conversion of a Borrowing of Eurodollar
Loans shall reduce the outstanding principal amount of the Eurodollar Loans made
pursuant to such Borrowing to less than the Minimum Borrowing Amount applicable
thereto, (ii) Base Rate Loans may only be converted into Eurodollar Loans if no
Default or Event of Default is in existence on the date of the conversion, (iii)
unless the Administrative Agent has determined that the Syndication Date has
occurred (at which time this clause (iii) shall no longer be applicable), prior
to the 90th day after the Initial Borrowing Date, conversions of Base Rate Loans
into Eurodollar Loans may only be made if any such conversion is effective on
the first day of the first, second or third Interest Period referred to in
clause (y) of each of Sections 1.01(a)(iii) and 1.01(b)(ii) and so long as such
conversion does not result in a greater number of Borrowings of Eurodollar Loans
prior to the 90th day after the Initial Borrowing Date as are permitted under
Sections 1.01(a)(iii) and 1.01(b)(ii) and (iv) Borrowings of Eurodollar Loans
resulting from this Section 1.06 shall be limited in number as provided in
Section 1.02. Each such conversion shall be effected by the Borrower by giving
the Administrative Agent at its Notice Office, prior to 12:00 Noon (New York
time), at least three Business Days' (or one Business Day's in the case of a
conversion into Base Rate Loans) prior written notice (or telephonic notice
promptly confirmed in writing) (each, a "Notice of Conversion") specifying the
Loans to be so converted, the Borrowing(s) pursuant to which the Loans were made
and, if to be converted into a Borrowing of Eurodollar Loans, the Interest
Period to be initially applicable thereto. The Administrative Agent shall give
each Bank prompt notice of any such proposed conversion affecting any of its
Loans. Upon any such conversion, the proceeds thereof will be deemed to be
applied directly on the day of such conversion to prepay the outstanding
principal amount of the Loans being converted.
1.07 Pro Rata Borrowings. All Borrowings of Term Loans and Revolving
-------------------
Loans under this Agreement shall be incurred by the Borrower from the Banks pro
---
rata on the basis of such Banks' Term Loan Commitments or Revolving Loan
----
Commitments, as the case may be; provided that all Borrowings of Revolving Loans
--------
made pursuant to a Mandatory Borrowing shall be incurred from the ▇▇ ▇▇▇▇▇ pro
---
rata on the basis of their respective Adjusted RL Percentages.
----
It is understood that no Bank shall be responsible for any default by any other
Bank of its obligation to make Loans hereunder and that each Bank shall be
obligated to make the Loans to be made by it hereunder, regardless of the
failure of any other Bank to fulfill its commitments hereunder.
1.08 Interest. (a) The Borrower agrees to pay interest in respect
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of the unpaid principal amount of each Base Rate Loan made to it from the date
of the Borrowing thereof until the earlier of (i) the maturity (whether by
acceleration or otherwise) of such Base Rate Loan and (ii) the conversion of
such Base Rate Loan to a Eurodollar Loan pursuant to Section 1.06, at a rate per
annum which shall at all times be the relevant Applicable Margin plus the Base
----
Rate, each as in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan made to it from the date of the
Borrowing thereof until the earlier of (i) the maturity (whether by acceleration
or otherwise) of such Eurodollar Loan and (ii) the conversion of such Eurodollar
Loan to a Base Rate Loan pursuant to Section 1.06, 1.09 or 1.10(b), as
applicable, at a rate per annum which shall at all times be the relevant
Applicable Margin plus the Eurodollar Rate for such Interest Period, each as in
----
effect from time to time.
(c) To the extent permitted by law, overdue principal and overdue
interest in respect of each Loan shall, in each case, bear interest at a rate
per annum equal to the greater of (x) the rate which is 2% in excess of the rate
borne by such Loan immediately prior to the respective payment default and (y)
the rate which is 2% in excess of the rate otherwise applicable to Base Rate
Loans from time to time. Interest which accrues under this Section 1.08(c)
shall be payable on demand.
(d) Interest shall accrue from and including the date of any Borrowing
to but excluding the date of any repayment thereof and shall be payable (i) in
respect of each Base Rate Loan, quarterly in arrears on each Quarterly Payment
Date, (ii) in respect of each Eurodollar Loan, on (x) the date of any conversion
into a Base Rate Loan pursuant to Section 1.06, 1.09 or 1.10(b), as applicable
(on the amount converted) and (y) the last day of each Interest Period
applicable thereto and, in the case of an Interest Period in excess of three
months, on each date occurring at three month intervals after the first day of
such Interest Period and (iii) in respect of each Loan, on (x) the date of any
prepayment or repayment thereof (on the amount prepaid or repaid), (y) at
maturity (whether by acceleration or otherwise) and (z) after such maturity, on
demand.
(e) All computations of interest hereunder shall be made in accordance
with Section 13.07(b).
(f) Upon each Interest Determination Date, the Administrative Agent
shall determine the Eurodollar Rate for the respective Interest Period or
Interest Periods and shall promptly notify the Borrower and the Banks thereof.
Each such determination shall, absent manifest error, be final and conclusive
and binding on all parties hereto.
1.09 Interest Periods. At the time the Borrower gives a Notice of
----------------
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto) or prior to 12:00 Noon (New York time) on the third
Business Day prior to the expiration of an Interest Period applicable to a
Borrowing of Eurodollar Loans (in the case of any subsequent Interest Period),
the Borrower shall have the right to elect by giving the Administrative Agent
written notice (or telephonic notice promptly confirmed in writing) of the
Interest Period applicable to such Borrowing, which Interest Period shall, at
the option of the Borrower (but otherwise subject to clause (y) of the proviso
to Sections 1.01(a)(iii) and 1.01(b)(ii) and to clause (iii) of the proviso to
Section 1.06), be a one, two, three, six or, to the extent available to each
Bank with outstanding Loans and/or Commitments under the respective Tranche,
nine or twelve month period. Notwithstanding anything to the contrary contained
above:
(i) all Eurodollar Loans comprising a Borrowing shall at all times
have the same Interest Period;
(ii) the initial Interest Period for any Borrowing of Eurodollar
Loans shall commence on the date of such Borrowing (including the date of
any conversion from a Borrowing of Base Rate Loans) and each Interest
Period occurring thereafter in respect of such Borrowing shall commence on
the day on which the next preceding Interest Period applicable thereto
expires;
(iii) if any Interest Period for any Borrowing of Eurodollar Loans
begins on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period, such Interest Period
shall end on the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided, that if any Interest Period for any
--------
Borrowing of Eurodollar Loans would otherwise expire on a day which is not
a Business Day but is a day of the month after which no further Business
Day occurs in such month, such Interest Period shall expire on the next
preceding Business Day;
(v) no Interest Period for a Borrowing under a Tranche shall be
selected which would extend beyond the respective Maturity Date for such
Tranche;
(vi) no Interest Period may be elected at any time when a Default or
an Event of Default is then in existence; and
(vii) no Interest Period in respect of any Borrowing of Term Loans
shall be elected which extends beyond any date upon which a Scheduled
Repayment will be required to be made under Section 4.02(b) if, after
giving effect to the election of such Interest Period, the aggregate
principal amount of such Term Loans which have Interest Periods which will
expire after such date will be in excess of the aggregate principal
amount of such Term Loans then outstanding less the aggregate amount of
such required Scheduled Repayment.
If upon the expiration of any Interest Period applicable to a
Borrowing of Eurodollar Loans, the Borrower has failed to elect, or is not
permitted to elect, a new Interest Period to be applicable to the respective
Borrowing of Eurodollar Loans as provided above, the Borrower shall be deemed to
have elected to convert such Borrowing into a Borrowing of Base Rate Loans
effective as of the expiration date of such current Interest Period.
1.10 Increased Costs; Illegality; etc. (a) In the event that (x) in
---------------------------------
the case of clause (i) below, the Administrative Agent or (y) in the case of
clauses (ii) and (iii) below, any Bank, shall have determined in good faith
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto):
(i) on any Interest Determination Date, that, by reason of any
changes arising after the Effective Date affecting the interbank Eurodollar
market, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition of
Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loans because of (x) any change since the Effective Date in
any applicable law, governmental rule, regulation, guideline, order or
request (whether or not having the force of law), or in the interpretation
or administration thereof and including the introduction of any new law or
governmental rule, regulation, guideline, order or request (other than, in
each case, any such change with respect to taxes or any similar charges),
such as, for example, but not limited to, a change in official reserve
requirements, but, in all events, excluding reserves required under
Regulation D to the extent included in the computation of the Eurodollar
Rate and/or (y) other circumstances affecting such Bank, the interbank
Eurodollar market or the position of such Bank in such market (other than
circumstances relating to taxes or any similar charges); or
(iii) at any time since the Effective Date, that the making or
continuance of any Eurodollar Loan has become unlawful by compliance by
such Bank with any law, governmental rule, regulation, guideline or order
(or would conflict with any governmental rule, regulation, guideline,
request or order not having the force of law but with which such Bank
customarily complies even though the failure to comply therewith would not
be unlawful), or has become impracticable as a result of a contingency
occurring after the Effective Date which materially and adversely affects
the interbank Eurodollar market;
then, and in any such event, such Bank (or the Administrative Agent in the case
of clause (i) above) shall promptly give notice (by telephone confirmed in
writing) to the Borrower and (except in the case of clause (i)) to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Banks). Thereafter, (x) in
the case of clause (i) above, Eurodollar Loans shall no longer be available
until such time as the
Administrative Agent notifies the Borrower and the Banks that the circumstances
giving rise to such notice by the Administrative Agent no longer exist, and any
Notice of Borrowing or Notice of Conversion given by the Borrower with respect
to Eurodollar Loans which have not yet been incurred (including by way of
conversion) shall be deemed rescinded by the Borrower, (y) in the case of clause
(ii) above, the Borrower agrees, subject to the provisions of Section 13.18 (to
the extent applicable), to pay to such Bank, upon written demand therefor, such
additional amounts (in the form of an increased rate of, or a different method
of calculating, interest or otherwise as such Bank in its sole discretion shall
determine) as shall be required to compensate such Bank for such increased costs
or reductions in amounts received or receivable hereunder (a written notice as
to the additional amounts owed to such Bank, showing in reasonable detail the
basis for the calculation thereof, prepared in good faith and submitted to the
Borrower by such Bank shall, absent manifest error, be final and conclusive and
binding upon all parties hereto, although the failure to give any such notice
shall not release or diminish any of the Borrower's obligations to pay
additional amounts pursuant to this Section 1.10(a) upon the subsequent receipt
of such notice) and (z) in the case of clause (iii) above, the Borrower shall
take one of the actions specified in Section 1.10(b) as promptly as practicable
and, in any event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii), the
Borrower shall) either (i) if the affected Eurodollar Loan is then being made
pursuant to a Borrowing, cancel said Borrowing by giving the Administrative
Agent telephonic notice (confirmed promptly in writing) thereof on the same date
that the Borrower was notified by a Bank pursuant to Section 1.10(a)(ii) or
(iii)), or (ii) if the affected Eurodollar Loan is then outstanding, upon at
least three Business Days' notice to the Administrative Agent, require the
affected Bank to convert each such Eurodollar Loan into a Base Rate Loan (which
conversion, in the case of the circumstance described in Section 1.10(a)(iii),
shall occur no later than the last day of the Interest Period then applicable to
such Eurodollar Loan or such earlier day as shall be required by applicable
law); provided, that if more than one Bank is affected at any time, then all
--------
affected Banks must be treated the same pursuant to this Section 1.10(b).
(c) If any Bank shall have determined that after the Effective Date,
the adoption or effectiveness of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by such Bank or any corporation controlling such Bank
with any request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency, has
or would have the effect of reducing the rate of return on such Bank's or such
other corporation's capital or assets as a consequence of such Bank's Commitment
or Commitments or its obligations hereunder to the Borrower to a level below
that which such Bank or such other corporation could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration such
Bank's or such other corporation's policies with respect to capital adequacy),
then from time to time, upon written demand by such Bank (with a copy to the
Administrative Agent),
accompanied by the notice referred to in the last sentence of this clause (c),
the Borrower agrees, subject to the provisions of Section 13.18 (to the extent
applicable), to pay to such Bank such additional amount or amounts as will
compensate such Bank or such other corporation for such reduction in the rate of
return to such Bank or such other corporation. Each Bank, upon determining in
good faith that any additional amounts will be payable pursuant to this Section
1.10(c), will give prompt written notice thereof to the Borrower (a copy of
which shall be sent by such Bank to the Administrative Agent), which notice
shall set forth in reasonable detail the basis of the calculation of such
additional amounts, although the failure to give any such notice shall not
release or diminish the Borrower's obligation to pay additional amounts pursuant
to this Section 1.10(c) upon the subsequent receipt of such notice. In
determining any additional amounts owing under this Section 1.10(c), each Bank
will act reasonably and in good faith and will use averaging and attribution
methods which are reasonable; provided that such Bank's reasonable good faith
--------
determination of compensation owing under this Section 1.10(c) shall, absent
manifest error, be final and conclusive and binding on all the parties hereto.
1.11 Compensation. The Borrower agrees, subject to the provisions of
------------
Section 13.18 (to the extent applicable), to compensate each Bank, promptly upon
its written request (which request shall set forth in reasonable detail the
basis for requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Bank to fund its Eurodollar Loans but excluding any loss of
anticipated profits) which such Bank may sustain: (i) if for any reason (other
than a default by such Bank or any Agent) a Borrowing of, or conversion from or
into, Eurodollar Loans does not occur on a date specified therefor in a Notice
of Borrowing or Notice of Conversion given by the Borrower (whether or not
withdrawn by the Borrower or deemed withdrawn pursuant to Section 1.10(a)); (ii)
if any repayment (including any repayment made pursuant to Section 4.01 or 4.02
or as a result of an acceleration of the Loans pursuant to Section 10 or as a
result of the replacement of a Bank pursuant to Section 1.13 or 13.12(b)) or
conversion of any Eurodollar Loans of the Borrower occurs on a date which is not
the last day of an Interest Period applicable thereto; (iii) if any prepayment
of any Eurodollar Loans is not made on any date specified in a notice of
prepayment given by the Borrower; or (iv) as a consequence of (x) any other
default by the Borrower to repay its Eurodollar Loans when required by the terms
of this Agreement or (y) an election made by the Borrower pursuant to Section
1.10(b). Each Bank's calculation of the amount of compensation owing pursuant
to this Section 1.11 shall be made in good faith. A Bank's basis for requesting
compensation pursuant to this Section 1.11 and a Bank's calculation of the
amount thereof made in accordance with the requirements of this Section 1.11,
shall, absent manifest error, be final and conclusive and binding on all parties
hereto.
1.12 Change of Lending Office. (a) Each Bank may at any time or
------------------------
from time to time designate, by written notice to the Administrative Agent to
the extent not already reflected on Schedule II, one or more lending offices
(which, for this purpose, may include Affiliates of the respective Bank) for the
various Loans made, and Letters of Credit participated in, by such Bank;
provided that, for designations made after the Effective Date, to the extent
--------
such designation shall result in increased costs under Section 1.10, 2.05 or
4.04 in excess of those which would be charged in the absence of the designation
of a different lending office (including
a different Affiliate of the respective Bank), then the Borrower shall not be
obligated to pay such excess increased costs (although the Borrower, in
accordance with and pursuant to the other provisions of this Agreement, shall be
obligated to pay the costs which would apply in the absence of such designation
and any subsequent increased costs of the type described above resulting from
changes after the date of the respective designation). Each lending office and
Affiliate of any Bank designated as provided above shall, for all purposes of
this Agreement, be treated in the same manner as the respective Bank (and shall
be entitled to all indemnities and similar provisions in respect of its acting
as such hereunder).
(b) Each Bank agrees that, upon the occurrence of any event giving
rise to the operation of Section 1.10(a)(ii) or (iii), 1.10(c), 2.05 or 4.04
with respect to such Bank, it will, if requested by the Borrower, use reasonable
efforts (subject to overall policy considerations of such Bank) to designate
another lending office for any Loans or Letters of Credit affected by such
event, with the object of avoiding the consequences of the event giving rise to
the operation of any such Section; provided, that such designation is made on
--------
such terms that such Bank and its lending office suffer no economic, legal or
regulatory disadvantage. Nothing in this Section 1.12 shall affect or postpone
any of the obligations of the Borrower or the right of any Bank provided in
Section 1.10, 2.05 or 4.04 (although each such Bank shall nevertheless have an
obligation to change its applicable lending office subject to the terms set
forth in the immediately preceding sentence).
1.13 Replacement of Banks. (x) If any Bank becomes a Defaulting
--------------------
Bank, (y) upon the occurrence of any event giving rise to the operation of
Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 2.05 or Section 4.04 with
respect to any Bank which results in such Bank charging to the Borrower
increased costs in a material amount in excess of those being generally charged
by the other Banks or (z) in the case of a refusal by a Bank to consent to a
proposed change, waiver, discharge or termination with respect to this Agreement
which has been approved by the Required Banks as provided in Section 13.12(b),
the Borrower shall have the right, in accordance with Section 13.04(b), if no
Default or Event of Default then exists or would exist after giving effect to
such replacement, to replace such Bank (the "Replaced Bank") with one or more
other Eligible Transferee or Transferees, none of whom shall constitute a
Defaulting Bank at the time of such replacement (collectively, the "Replacement
Bank") and each of which shall be reasonably acceptable to the Administrative
Agent or, at the option of the Borrower, to replace only (a) the Revolving Loan
Commitment (and outstandings pursuant thereto) of the Replaced Bank with an
identical Revolving Loan Commitment provided by the Replacement Bank or (b) in
the case of a replacement as provided in Section 13.12(b) where the consent of
the respective Bank is required with respect to less than all Tranches of its
Loans or Commitments, the Commitments and/or outstanding Loans of such Bank in
respect of each Tranche where the consent of such Bank would otherwise be
individually required, with identical Commitments and/or Loans of the respective
Tranche provided by the Replacement Bank; provided that:
--------
(i) at the time of any replacement pursuant to this Section 1.13, the
Replacement Bank shall enter into one or more Assignment and Assumption
Agreements pursuant to Section 13.04(b) (and with all fees payable pursuant
to said Section 13.04(b)
to be paid by the Replacement Bank) pursuant to which the Replacement Bank
shall acquire all of the Commitments and outstanding Loans (or, in the case
of the replacement of only (a) the Revolving Loan Commitment, the Revolving
Loan Commitment and outstanding Revolving Loans and participations in
Letter of Credit Outstandings and/or (b) the outstanding Term Loans, the
outstanding Term Loans) of, and in each case (except for the replacement of
only the outstanding Term Loans of the respective Bank) participations in
Letters of Credit by, the Replaced Bank and, in connection therewith, shall
pay to (x) the Replaced Bank in respect thereof an amount equal to the sum
of (A) an amount equal to the principal of, and all accrued interest on,
all outstanding Loans (or of the Loans of the respective Tranche being
replaced) of the Replaced Bank, (B) an amount equal to all Unpaid Drawings
(unless there are no Unpaid Drawings with respect to the Tranche being
replaced) that have been funded by (and not reimbursed to) such Replaced
Bank, together with all then unpaid interest with respect thereto at such
time and (C) an amount equal to all accrued, but theretofore unpaid, Fees
owing to the Replaced Bank (but only with respect to the relevant Tranche,
in the case of the replacement of less than all Tranches of Loans then held
by the respective Replaced Bank) pursuant to Section 3.01, (y) except in
the case of the replacement of only the outstanding Term Loans of a
Replaced Bank, each Letter of Credit Issuer an amount equal to such
Replaced Bank's RL Percentage of any Unpaid Drawing relating to Letters of
Credit issued by such Letter of Credit Issuer (which at such time remains
an Unpaid Drawing) to the extent such amount was not theretofore funded by
such Replaced Bank and (z) in the case of any replacement of Revolving Loan
Commitments, BTCo an amount equal to such Replaced Bank's Adjusted RL
Percentage of any Mandatory Borrowing to the extent such amount was not
theretofore funded by such Replaced Bank; and
(ii) all obligations of the Borrower then owing to the Replaced Bank
(other than those (a) specifically described in clause (i) above in respect
of which the assignment purchase price has been, or is concurrently being,
paid, but including all amounts, if any, owing under Section 1.11 or (b)
relating to any Tranche of Loans and/or Commitments of the respective
Replaced Bank which will remain outstanding after giving effect to the
respective replacement) shall be paid in full to such Replaced Bank
concurrently with such replacement.
Upon the execution of the respective Assignment and Assumption Agreements, the
payment of amounts referred to in clauses (i) and (ii) above, recordation of the
assignment on the Register by the Administrative Agent pursuant to Section 13.17
and, if so requested by the Replacement Bank, delivery to the Replacement Bank
of the appropriate Note or Notes executed by the Borrower, (x) the Replacement
Bank shall become a Bank hereunder and, unless the respective Replaced Bank
continues to have outstanding Term Loans and/or a Revolving Loan Commitment
hereunder, the Replaced Bank shall cease to constitute a Bank hereunder, except
with respect to indemnification provisions under this Agreement (including,
without limitation, Sections 1.10, 1.11, 2.05, 4.04, 13.01 and 13.06), which
shall survive as to such Replaced Bank and (y) except in the case of the
replacement of only outstanding Term Loans, the Adjusted RL
Percentages of the Banks shall be automatically adjusted at such time to give
effect to such replacement.
SECTION 2. Letters of Credit.
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2.01 Letters of Credit. (a) Subject to and upon the terms and
-----------------
conditions herein set forth, the Borrower may request a Letter of Credit Issuer
at any time and from time to time after the Initial Borrowing Date and prior to
the tenth Business Day (or the 30th day in the case of Trade Letters of Credit)
preceding the Revolving Loan Maturity Date to issue on a sight basis, (x) for
the account of the Borrower and for the benefit of any holder (or any trustee,
agent or other similar representative for any such holders) of L/C Supportable
Indebtedness, irrevocable sight standby letters of credit in a form customarily
used by such Letter of Credit Issuer or in such other form as has been approved
by such Letter of Credit Issuer (each such standby letter of credit, a "Standby
Letter of Credit") in support of such L/C Supportable Indebtedness and (y) for
the account of the Borrower and for the benefit of sellers of goods and
materials to the Borrower or any of its Subsidiaries in the ordinary course of
business, irrevocable sight trade letters of credit in a form customarily used
by such Letter of Credit Issuer or in such other form as has been approved by
such Letter of Credit Issuer (each such trade letter of credit, a "Trade Letter
of Credit," and each such Standby Letter of Credit and Trade Letter of Credit, a
"Letter of Credit" and, collectively, the "Letters of Credit").
(b) Subject to and upon the terms and conditions set forth herein,
each Letter of Credit Issuer hereby agrees that it will, at any time and from
time to time after the Initial Borrowing Date and prior to the tenth Business
Day (or the 30th day in the case of Trade Letters of Credit) preceding the
Revolving Loan Maturity Date, following its receipt of the respective Letter of
Credit Request, issue for the account of the Borrower one or more Letters of
Credit, (x) in the case of Trade Letters of Credit, in support of trade
obligations of the Borrower or any of its Subsidiaries that arise in the
ordinary course of business or (y) in the case of Standby Letters of Credit, in
support of such L/C Supportable Indebtedness as is permitted to remain
outstanding hereunder. Notwithstanding the foregoing, no Letter of Credit
Issuer shall be under any obligation to issue any Letter of Credit if at the
time of such issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain such Letter of
Credit Issuer from issuing such Letter of Credit or any requirement of law
applicable to such Letter of Credit Issuer or any request or directive
(whether or not having the force of law) from any governmental authority
with jurisdiction over such Letter of Credit Issuer shall prohibit, or
request that such Letter of Credit Issuer refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon such Letter of Credit Issuer with respect to such Letter of
Credit any restriction or reserve or capital requirement (for which such
Letter of Credit Issuer is not otherwise compensated) not in effect on the
Effective Date, or any unreimbursed loss, cost or expense which was not
applicable, in effect or known to such Letter of Credit Issuer as of the
Effective Date and which such Letter of Credit Issuer in good ▇▇▇▇▇ ▇▇▇▇▇
material to it; or
(ii) such Letter of Credit Issuer shall have received written notice
from the Borrower or the Required Banks prior to the issuance of such
Letter of Credit of the type described in clause (vi) of Section 2.01(c) or
the last sentence of Section 2.02(b).
(c) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such time, would
exceed either (x) $25,000,000 or (y) when added to the aggregate principal
amount of all Revolving Loans made by the Non-Defaulting Banks and then
outstanding and all Swingline Loans then outstanding, the Adjusted Total
Revolving Loan Commitment at such time; (ii) (x) each Standby Letter of Credit
shall have an expiry date occurring not later than one year after such Standby
Letter of Credit's date of issuance, provided that any such Standby Letter of
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Credit may be extendable for successive periods of up to one year, but not
beyond the tenth Business Day preceding the Revolving Loan Maturity Date, on
terms acceptable to the Letter of Credit Issuer and (y) each Trade Letter of
Credit shall have an expiry date occurring not later than 180 days after such
Trade Letter of Credit's date of issuance; (iii) (x) no Standby Letter of Credit
shall have an expiry date occurring later than the tenth Business Day preceding
the Revolving Loan Maturity Date and (y) no Trade Letter of Credit shall have an
expiry date occurring later than 30 days prior to the Revolving Loan Maturity
Date; (iv) each Letter of Credit shall be denominated in U.S. Dollars; (v) the
Stated Amount of each Letter of Credit shall not be less than $100,000 or such
lesser amount as is acceptable to the respective Letter of Credit Issuer; and
(vi) no Letter of Credit Issuer will issue any Letter of Credit after it has
received written notice from the Borrower or the Required Banks stating that a
Default or an Event of Default exists until such time as such Letter of Credit
Issuer shall have received a written notice of (x) rescission of such notice
from the party or parties originally delivering the same or (y) a waiver of such
Default or Event of Default by the Required Banks.
(d) Notwithstanding the foregoing, in the event a Bank Default
exists, no Letter of Credit Issuer shall be required to issue any Letter of
Credit unless the respective Letter of Credit Issuer has entered into
arrangements satisfactory to it and the Borrower to eliminate such Letter of
Credit Issuer's risk with respect to the participation in Letters of Credit of
the Defaulting Bank or Defaulting Banks, including by cash collateralizing such
Defaulting Bank's or Banks' Adjusted RL Percentage of the Letter of Credit
Outstandings, as the case may be.
(e) Schedule XIV hereto contains a description of all letters of
credit issued by FNBC for the account of Pacer Logistics or Pacific Motor
Transport Company and outstanding on the Initial Borrowing Date. Each such
letter of credit, as amended on the Initial Borrowing Date to change the account
party thereon to "Pacer International, Inc.", including any extension or renewal
thereof (each, as amended from time to time in accordance with the terms hereof
and thereof, an "Existing Letter of Credit") shall constitute a "Letter of
Credit" for all purposes of this Agreement, issued, for purposes of Section
2.03(a), on the Initial Borrowing Date. FNBC shall constitute the "Letter of
Credit Issuer" with respect to each such Letter of Credit for all purposes of
this Agreement.
2.02 Letter of Credit Requests. (a) Whenever the Borrower desires
-------------------------
that a Letter of Credit be issued, the Borrower shall give the Administrative
Agent and the respective Letter of Credit Issuer written notice thereof prior to
12:00 Noon (New York time) at least three Business Days (or such shorter period
as may be acceptable to the respective Letter of Credit Issuer) prior to the
proposed date of issuance (which shall be a Business Day) which written notice
shall be in the form of Exhibit C (each, a "Letter of Credit Request"). Each
Letter of Credit Request shall include any other documents as such Letter of
Credit Issuer customarily requires in connection therewith.
(b) The making of each Letter of Credit Request shall be deemed to be
a representation and warranty by the Borrower that such Letter of Credit may be
issued in accordance with, and it will not violate the requirements of, Section
2.01(c). Unless the respective Letter of Credit Issuer has received notice from
the Borrower, any Agent or the Required Banks before it issues a Letter of
Credit that one or more of the applicable conditions specified in Section 5 or
6, as the case may be, are not then satisfied, or that the issuance of such
Letter of Credit would violate Section 2.01(c), then such Letter of Credit
Issuer may issue the requested Letter of Credit for the account of the Borrower
in accordance with such Letter of Credit Issuer's usual and customary practice.
2.03 Letter of Credit Participations. (a) Immediately upon the
-------------------------------
issuance by a Letter of Credit Issuer of any Letter of Credit, such Letter of
Credit Issuer shall be deemed to have sold and transferred to each other RL
Bank, and each such RL Bank (each, a "Participant") shall be deemed irrevocably
and unconditionally to have purchased and received from such Letter of Credit
Issuer, without recourse or warranty, an undivided interest and participation,
to the extent of such Participant's Adjusted RL Percentage, in such Letter of
Credit, each substitute Letter of Credit, each drawing made thereunder and the
obligations of the Borrower under this Agreement with respect thereto (although
Letter of Credit Fees shall be payable directly to the Administrative Agent for
the account of the ▇▇ ▇▇▇▇▇ as provided in Section 3.01(b) and the Participants
shall have no right to receive any portion of any Facing Fees with respect to
such Letters of Credit) and any security therefor or guaranty pertaining
thereto. Upon any change in the Revolving Loan Commitments or the Adjusted RL
Percentages of the ▇▇ ▇▇▇▇▇ pursuant to Section 1.13 or 13.04(b) or as a result
of a Bank Default, it is hereby agreed that, with respect to all outstanding
Letters of Credit and Unpaid Drawings with respect thereto, there shall be an
automatic adjustment to the participations pursuant to this Section 2.03 to
reflect the new Adjusted RL Percentages of the assigning and assignee Bank or of
all ▇▇ ▇▇▇▇▇, as the case may be.
(b) In determining whether to pay under any Letter of Credit, no
Letter of Credit Issuer shall have any obligation relative to the Participants
other than to determine that any documents required to be delivered under such
Letter of Credit have been delivered and that they appear to substantially
comply on their face with the requirements of such Letter of Credit. Any action
taken or omitted to be taken by any Letter of Credit Issuer under or in
connection with any Letter of Credit issued by it if taken or omitted in the
absence of gross negligence or willful misconduct, shall not create for such
Letter of Credit Issuer any resulting liability.
(c) In the event that any Letter of Credit Issuer makes any payment
under any Letter of Credit issued by it and the Borrower shall not have
reimbursed such amount in full to the Letter of Credit Issuer pursuant to
Section 2.04(a), such Letter of Credit Issuer shall promptly notify the
Administrative Agent, and the Administrative Agent shall promptly notify each
Participant of such failure, and each such Participant shall promptly and
unconditionally pay to the Administrative Agent for the account of such Letter
of Credit Issuer, the amount of such Participant's Adjusted RL Percentage of
such payment in U.S. Dollars and in same day funds. If the Administrative Agent
so notifies any Participant required to fund a payment under a Letter of Credit
prior to 11:00 A.M. (New York time) on any Business Day, such Participant shall
make available to the Administrative Agent at the Payment Office for the account
of the respective Letter of Credit Issuer such Participant's Adjusted RL
Percentage of the amount of such payment on such Business Day in same day funds
(and, to the extent such notice is given after 11:00 A.M. (New York time) on any
Business Day, such Participant shall make such payment on the immediately
following Business Day). If and to the extent such Participant shall not have
so made its Adjusted RL Percentage of the amount of such payment available to
the Administrative Agent for the account of the respective Letter of Credit
Issuer, such Participant agrees to pay to the Administrative Agent for the
account of such Letter of Credit Issuer, forthwith on demand such amount,
together with interest thereon, for each day from such date until the date such
amount is paid to the Administrative Agent for the account of the Letter of
Credit Issuer at the overnight Federal Funds Rate. The failure of any
Participant to make available to the Administrative Agent for the account of the
respective Letter of Credit Issuer its Adjusted RL Percentage of any payment
under any Letter of Credit issued by it shall not relieve any other Participant
of its obligation hereunder to make available to the Administrative Agent for
the account of such Letter of Credit Issuer its applicable Adjusted RL
Percentage of any payment under any such Letter of Credit on the date required,
as specified above, but no Participant shall be responsible for the failure of
any other Participant to make available to the Administrative Agent for the
account of such Letter of Credit Issuer such other Participant's Adjusted RL
Percentage of any such payment.
(d) Whenever any Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Administrative Agent has received for
the account of such Letter of Credit Issuer any payments from the Participants
pursuant to clause (c) above, such Letter of Credit Issuer shall pay to the
Administrative Agent and the Administrative Agent shall promptly pay to each
Participant which has paid its Adjusted RL Percentage thereof, in U.S. Dollars
and in same day funds, an amount equal to such Participant's Adjusted RL
Percentage of the principal amount thereof and interest thereon accruing after
the purchase of the respective participations.
(e) Each Letter of Credit Issuer shall, promptly after each issuance
of, or amendment or modification to, a Standby Letter of Credit issued by it,
give the Administrative Agent, each Participant and the Borrower written notice
of the issuance of, or amendment or modification to, such Standby Letter of
Credit, which notice shall be accompanied by a copy of the Standby Letter of
Credit or Standby Letters of Credit issued by it and each such amendment or
modification thereto.
(f) Each Letter of Credit Issuer (other than BTCo) shall deliver to
the Administrative Agent, promptly on the first Business Day of each week, by
facsimile transmission, the aggregate daily Stated Amount available to be drawn
under the outstanding Trade Letters of Credit issued by such Letter of Credit
Issuer for the previous week. The Administrative Agent shall, within 10 days
after the last Business Day of each calendar month, deliver to each Participant
a report setting forth for such preceding calendar month the aggregate daily
Stated Amount available to be drawn under all outstanding Trade Letters of
Credit during such calendar month.
(g) The obligations of the Participants to make payments to the
Administrative Agent for the account of the respective Letter of Credit Issuer
with respect to Letters of Credit issued by it shall be irrevocable and not
subject to counterclaim, set-off or other defense or any other qualification or
exception whatsoever and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances, including, without
limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or any
of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other right
which the Borrower or any of its Subsidiaries may have at any time against
a beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), any
Agent, any Letter of Credit Issuer, any Bank, or any other Person, whether
in connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any underlying
transaction between the Borrower or any of its Subsidiaries and the
beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
2.04 Agreement to Repay Letter of Credit Drawings. (a) The Borrower
--------------------------------------------
hereby agrees to reimburse each Letter of Credit Issuer, by making payment to
the Administrative Agent in U.S. Dollars and in immediately available funds at
the Payment Office, for any payment or disbursement made by such Letter of
Credit Issuer under any Letter of Credit issued by it (each such amount so paid
or disbursed until reimbursed, an "Unpaid Drawing") immediately after, and in
any event on the date of (or, if not notified by the respective Letter of Credit
Issuer prior to 1:00 P.M. (New York time) on the date of such payment or
disbursement, on the Business Day following), such payment or disbursement, with
interest on the amount so paid or disbursed by such Letter of Credit Issuer, to
the extent not reimbursed prior to 2:00 P.M. (New York time) on
Schedule I
the date of such payment or disbursement, on the Business Day following), such
payment or disbursement, with interest on the amount so paid or disbursed by
such Letter of Credit Issuer, to the extent not reimbursed prior to 2:00 P.M.
(New York time) on the date of such payment or disbursement, from and including
the date paid or disbursed to but not including the date such Letter of Credit
Issuer is reimbursed therefor at a rate per annum which shall be the then
Applicable Margin for Revolving Loans maintained as Base Rate Loans plus the
----
Base Rate, each as in effect from time to time (plus an additional 2% per annum
if not reimbursed by the third Business Day after the date of such payment or
disbursement), such interest also to be payable on demand; provided, that it is
--------
understood and agreed, however, that the notices referred to above in this
clause (a) shall not be required to be given if a Default or an Event of Default
under such Section 10.05 shall have occurred and be continuing, in which case
the Unpaid Drawings shall be due and payable immediately without presentment,
demand, protest or notice of any kind (all of which are hereby waived by each
Credit Party) and shall bear interest at a rate per annum which shall be (x)
until the third Business Day following the respective Drawing, the Applicable
Margin for Revolving Loans maintained as Base Rate Loans plus the Base Rate,
each as in effect from time to time, and (y) at all times on and after the third
Business Day following the respective Drawing, the rate per annum specified in
preceding clause (x) plus 2%. Each Letter of Credit Issuer shall provide the
----
Borrower prompt notice of any payment or disbursement made by it under any
Letter of Credit issued by it, although the failure of, or delay in, giving any
such notice shall not release or diminish the obligations of the Borrower under
this Section 2.04(a) or under any other Section of this Agreement.
(b) The Borrower's obligation under this Section 2.04 to reimburse the
respective Letter of Credit Issuer with respect to drawings on Letters of Credit
(including, in each case, interest thereon) shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower or any of its Subsidiaries may have or
have had against such Letter of Credit Issuer, any Agent or any Bank or other
Person, including, without limitation, any defense based upon the failure of any
drawing under a Letter of Credit issued by it to conform to the terms of the
Letter of Credit or any nonapplication or misapplication by the beneficiary of
the proceeds of such drawing; provided, however, that the Borrower shall not be
-------- -------
obligated to reimburse such Letter of Credit Issuer for any wrongful payment
made by such Letter of Credit Issuer under a Letter of Credit issued by it as a
result of acts or omissions constituting willful misconduct or gross negligence
on the part of such Letter of Credit Issuer as determined by a court of
competent jurisdiction; provided, further, that any reimbursement made by the
-------- -------
Borrower shall be without prejudice to any claim it may have against such Letter
of Credit Issuer as a result of acts or omissions constituting willful
misconduct or gross negligence on the part of such Letter of Credit Issuer.
2.05 Increased Costs. If after the Effective Date, any Letter of
---------------
Credit Issuer or any Participant determines that the adoption or effectiveness
of any applicable law, rule or regulation, order, guideline or request or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Letter of Credit
Issuer or any Participant with any request or directive (whether or not having
the force of law) by any such authority, central bank or comparable agency shall
either (i) impose, modify or make applicable any reserve, deposit, capital
adequacy or similar requirement against Letters of Credit issued by such Letter
of Credit Issuer or such Participant's participation therein, or (ii) impose on
any Letter of Credit Issuer or any Participant any other conditions directly or
indirectly affecting
this Agreement, any Letter of Credit or such Participant's participation
therein; and the result of any of the foregoing is to increase the cost to such
Letter of Credit Issuer or such Participant of issuing, maintaining or
participating in any Letter of Credit, or to reduce the amount of any sum
received or receivable by such Letter of Credit Issuer or such Participant
hereunder or reduce the rate of return on its capital (other than any increased
costs or reduction in the amount received or receivable resulting from the
imposition of or a change in the rate of taxes or any similar charges) with
respect to Letters of Credit, then, upon written demand to the Borrower by such
Letter of Credit Issuer or such Participant (a copy of which notice shall be
sent by such Letter of Credit Issuer or such Participant to the Administrative
Agent), accompanied by the certificate described in the last sentence of this
Section 2.05, the Borrower agrees, subject to the provisions of Section 13.18
(to the extent applicable), to pay to such Letter of Credit Issuer or such
Participant such additional amount or amounts as will compensate such Letter of
Credit Issuer or such Participant for such increased cost or reduction. Any
Letter of Credit Issuer or any Participant, upon determining that any additional
amounts will be payable pursuant to this Section 2.05, will give prompt written
notice thereof to the Borrower, which notice shall include a certificate
submitted to the Borrower by such Letter of Credit Issuer or such Participant,
as the case may be (a copy of which certificate shall be sent by such Letter of
Credit Issuer or such Participant to the Administrative Agent), setting forth in
reasonable detail the basis for the determination of such additional amount or
amounts necessary to compensate such Letter of Credit Issuer or such Participant
as aforesaid and such certificate, if delivered in good faith, shall be final
and conclusive and binding on the Borrower absent manifest error, although the
failure to deliver any such certificate shall not release or diminish the
Borrower's obligations to pay additional amounts pursuant to this Section 2.05
upon subsequent receipt of such certificate.
SECTION 3. Fees; Commitments.
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3.01 Fees. (a) The Borrower shall pay to the Administrative Agent
----
for distribution to each Non-Defaulting Bank with a Revolving Loan Commitment, a
commitment fee (the "Commitment Fee") for the period from the Effective Date to
but not including the Revolving Loan Maturity Date (or such earlier date as the
Total Revolving Loan Commitment shall have been terminated), computed at a rate
for each day equal to the relevant Applicable Margin (as in effect from time to
time) on the daily average Unutilized Revolving Loan Commitment of such Non-
Defaulting Bank. Accrued Commitment Fees shall be due and payable quarterly in
arrears on each Quarterly Payment Date and on the Revolving Loan Maturity Date
(or such earlier date upon which the Total Revolving Loan Commitment is
terminated).
(b) The Borrower shall pay to the Administrative Agent for pro rata
--- ----
distribution to each Non-Defaulting Bank with a Revolving Loan Commitment (based
on its respective Adjusted RL Percentage), a fee in respect of each Letter of
Credit (the "Letter of Credit Fee") computed at a rate per annum equal to the
Applicable Margin for Revolving Loans maintained as Eurodollar Loans then in
effect on the daily Stated Amount of such Letter of Credit. Accrued Letter of
Credit Fees shall be due and payable quarterly in arrears on each Quarterly
Payment Date and upon the first day on or after the termination of the Total
Revolving Loan Commitment upon which no Letters of Credit remain outstanding.
(c) The Borrower shall pay to each Letter of Credit Issuer a fee in
respect of each Letter of Credit issued by such Letter of Credit Issuer (the
"Facing Fee") computed at the rate of 1/4 of 1% per annum on the daily Stated
Amount of such Letter of Credit; provided, that in no event shall the annual
--------
Facing Fee with respect to each Letter of Credit be less than $500; it being
agreed that (x) on the date of issuance of any Letter of Credit and on each
anniversary thereof prior to the termination of such Letter of Credit, if $500
will exceed the amount of Facing Fees that will accrue with respect to such
Letter of Credit for the immediately succeeding 12-month period, the full $500
shall be payable on the date of issuance of such Letter of Credit and on each
such anniversary thereof prior to the termination of such Letter of Credit and
(y) if on the date of the termination of any Letter of Credit, $500 actually
exceeds the amount of Facing Fees paid or payable with respect to such Letter of
Credit for the period beginning on the date of the issuance thereof (or if the
respective Letter of Credit has been outstanding for more than one year, the
date of the last anniversary of the issuance thereof occurring prior to the
termination of such Letter of Credit) and ending on the date of the termination
thereof, an amount equal to such excess shall be paid as additional Facing Fees
with respect to such Letter of Credit on the next date upon which Facing Fees
are payable in accordance with the immediately succeeding sentence. Except as
provided in the immediately preceding sentence, accrued Facing Fees shall be due
and payable quarterly in arrears on each Quarterly Payment Date and upon the
first day on or after the termination of the Total Revolving Loan Commitment
upon which no Letters of Credit remain outstanding.
(d) The Borrower shall pay directly to each Letter of Credit Issuer
upon each issuance of, payment under, and/or amendment of, a Letter of Credit
issued by such Letter of Credit Issuer such amount as shall at the time of such
issuance, payment or amendment be the administrative charge which such Letter of
Credit Issuer is generally charging for issuances of, payments under or
amendments of, letters of credit issued by it.
(e) The Borrower shall pay to each Agent, for its own account, such
other fees as may be agreed to in writing from time to time between the Borrower
and such Agent, when and as due.
(f) All computations of Fees shall be made in accordance with Section
13.07(b).
3.02 Voluntary Termination or Reduction of Total Unutilized Revolving
----------------------------------------------------------------
Loan Commitment. (a) Upon at least three Business Days' prior notice to the
---------------
Administrative Agent at its Notice Office (which notice the Administrative Agent
shall promptly transmit to each of the Banks), the Borrower shall have the
right, without premium or penalty, to terminate or partially reduce the Total
Unutilized Revolving Loan Commitment provided that (i) any such termination or
--------
partial reduction shall apply to proportionately and permanently reduce the
Revolving Loan Commitment of each Bank with such a Commitment, (ii) any partial
reduction pursuant to this Section 3.02(a) shall be in integral multiples of
$1,000,000 and (iii) no reduction to the Total Unutilized Revolving Loan
Commitment shall be in an amount which would cause the Revolving Loan Commitment
of any RL Bank to be reduced (as required by the preceding clause (i)) by an
amount which exceeds the remainder of (A) the Unutilized Revolving Loan
Commitment of such RL Bank as in effect immediately before giving effect to such
reduction minus (B) such RL Bank's Adjusted RL Percentage of the aggregate
principal amount of Swingline Loans then outstanding.
(b) In the event of certain refusals by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as provided in Section
13.12(b), the Borrower shall have the right, subject to obtaining the consents
required by Section 13.12(b), upon five Business Days' prior written notice to
the Administrative Agent at its Notice Office (which notice the Administrative
Agent shall promptly transmit to each of the Banks), to terminate the entire
Revolving Loan Commitment of such Bank, so long as all Loans, together with
accrued and unpaid interest, Fees and all other amounts, owing to such Bank
(including all amounts, if any, owing pursuant to Section 1.11 but excluding
amounts owing in respect of Term Loans maintained by such Bank, if such Term
Loans are not being repaid pursuant to Section 13.12(b)) are repaid concurrently
with the effectiveness of such termination (at which time Schedule I shall be
deemed modified to reflect such changed amounts) and at such time, unless the
respective Bank continues to have outstanding Term Loans hereunder, such Bank
shall no longer constitute a "Bank" for purposes of this Agreement, except with
respect to indemnifications under this Agreement (including, without limitation,
Sections 1.10, 1.11, 2.05, 4.04, 13.01 and 13.06), which shall survive as to
such repaid Bank.
3.03 Mandatory Reduction of Commitments. (a) The Total Commitment
----------------------------------
(and the Term Loan Commitment and Revolving Loan Commitment of each Bank) shall
terminate in its entirety on July 15, 1999 unless the Initial Borrowing Date has
occurred on or before such date.
(b) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Term Loan Commitment (and the Term Loan
Commitment of each Bank with such a Commitment) shall terminate in its entirety
on the Initial Borrowing Date (after giving effect to the making of the Term
Loans on such date).
(c) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Revolving Loan Commitment (and the Revolving
Loan Commitment of each RL Bank) shall terminate in its entirety on the
Revolving Loan Maturity Date.
(d) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Revolving Loan Commitment shall be permanently
reduced from time to time to the extent required by Section 4.02.
(e) Each reduction to the Total Term Loan Commitment or Total
Revolving Loan Commitment pursuant to this Section 3.03 (or pursuant to Section
4.02) shall be applied proportionately to reduce the Term Loan Commitment or the
Revolving Loan Commitment, as the case may be, of each Bank with such a
Commitment.
SECTION 4. Payments.
--------
4.01 Voluntary Prepayments. The Borrower shall have the right to
---------------------
prepay the Loans, and the right to allocate such prepayments to Term Loans,
Revolving Loans and/or Swingline Loans as the Borrower elects, in whole or in
part, without premium or penalty except as otherwise provided in this Agreement,
from time to time on the following terms and conditions:
(i) the Borrower shall give the Administrative Agent at its Notice
Office written notice (or telephonic notice promptly confirmed in writing)
of its intent to prepay the Loans, whether such Loans are Term Loans,
Revolving Loans or Swingline Loans, the amount of such prepayment, the
Types of Loans to be repaid and (in the case of Eurodollar Loans) the
specific Borrowing(s) pursuant to which made, which notice (I) shall be
given by the Borrower prior to 12:00 Noon (New York time) (x) at least one
Business Day prior to the date of such prepayment in the case of Term Loans
and Revolving Loans maintained as Base Rate Loans, (y) at least three
Business Days prior to the date of such prepayment in the case of
Eurodollar Loans and (z) on the date of such prepayment in the case of
Swingline Loans and (II) shall, except in the case of Swingline Loans,
promptly be transmitted by the Administrative Agent to each of the Banks;
(ii) each prepayment (other than prepayments in full of (I) all
outstanding Base Rate Loans or (II) any outstanding Borrowing of Eurodollar
Loans) shall be in an aggregate principal amount of at least (x)
$1,000,000, in the case of Eurodollar Loans, (y) $500,000, in the case of
Revolving Loans and Term Loans maintained as Base Rate Loans and (z)
$100,000, in the case of Swingline Loans and, in each case, if greater, in
integral multiples of $100,000, provided, that no partial prepayment of
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Eurodollar Loans made pursuant to a Borrowing shall reduce the aggregate
principal amount of the Eurodollar Loans outstanding pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto;
(iii) at the time of any prepayment of Eurodollar Loans pursuant to
this Section 4.01 on any date other than the last day of the Interest
Period applicable thereto, the Borrower shall pay the amounts required
pursuant to Section 1.11;
(iv) except as provided in clause (vi) below, each prepayment in
respect of any Loans made pursuant to a Borrowing shall be applied pro rata
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among such Loans, provided, that at the Borrower's election in connection
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with any prepayment of Revolving Loans pursuant to this Section 4.01, such
prepayment shall not be applied to any Revolving Loans of a Defaulting
Bank;
(v) each prepayment of principal of Term Loans pursuant to this
Section 4.01 shall be applied to reduce the then remaining Scheduled
Repayments on a pro rata basis; and
--- ----
(vi) in the event of certain refusals by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have
been approved by the Required Banks as provided in Section 13.12(b), the
Borrower may, upon five Business Days' prior written notice to the
Administrative Agent at its Notice Office (which notice the Administrative
Agent shall promptly transmit to each of the Banks), repay all Loans of
such Bank (including all amounts, if any, owing pursuant to Section 1.11),
together with accrued and unpaid interest, Fees and all other amounts then
owing to such Bank (or owing to such Bank with respect to each Tranche
which gave rise to the need to obtain such Bank's individual consent) in
accordance with said Section 13.12(b), so long as (A) in the case of the
repayment of Revolving Loans of any Bank pursuant to this clause (vi), the
Revolving Loan Commitment of such Bank is terminated concurrently with such
repayment (at which time Schedule I shall be deemed modified to reflect the
changed Revolving Loan Commitments) and (B) the consents required by
Section 13.12(b) in connection with the repayment pursuant to this clause
(vi) shall have been obtained.
4.02 Mandatory Repayments and Commitment Reductions. (a) (i) If on
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any date the sum of (x) the aggregate outstanding principal amount of Revolving
Loans made by Non-Defaulting Banks and Swingline Loans (after giving effect to
all other repayments thereof on such date) and (y) the Letter of Credit
Outstandings on such date, exceeds the Adjusted Total Revolving Loan Commitment
as then in effect, the Borrower shall repay on such date the principal of
Swingline Loans, and if no Swingline Loans are or remain outstanding, the
principal of Revolving Loans of Non-Defaulting Banks in an aggregate amount
equal to such excess. If, after giving effect to the prepayment of all
outstanding Swingline Loans and all outstanding Revolving Loans of Non-
Defaulting Banks, the aggregate amount of Letter of Credit Outstandings exceeds
the Adjusted Total Revolving Loan Commitment as then in effect, the Borrower
shall pay to the Administrative Agent at the Payment Office on such date an
amount in cash and/or Cash Equivalents equal to such excess (up to the aggregate
amount of Letter of Credit Outstandings at such time) and the Administrative
Agent shall hold such payment as security for the obligations of the Borrower to
Non-Defaulting Banks hereunder pursuant to a cash collateral agreement to be
entered into in form and substance reasonably satisfactory to the Administrative
Agent.
(ii) On any date on which the aggregate outstanding principal amount
of the Revolving Loans made by any Defaulting Bank exceeds the Revolving Loan
Commitment of such Defaulting Bank, the Borrower shall prepay on such date
principal of Revolving Loans of such Defaulting Bank in an amount equal to such
excess.
(b) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, the
Borrower shall be required to repay that principal amount of Term Loans, to the
extent then outstanding, as is set forth opposite such date (each such
repayment, as the same may be reduced as provided in Sections 4.01 and 4.02(h),
a "Scheduled Repayment"):
Scheduled Repayment Date Amount
------------------------ ------
September 30, 1999 $ 337,500
December 31, 1999 $ 337,500
March 31, 2000 $ 337,500
June 30, 2000 $ 337,500
September 30, 2000 $ 337,500
December 31, 2000 $ 337,500
March 31, 2001 $ 337,500
June 30, 2001 $ 337,500
September 30, 2001 $ 337,500
December 31, 2001 $ 337,500
March 31, 2002 $ 337,500
June 30, 2002 $ 337,500
September 30, 2002 $ 337,500
December 31, 2002 $ 337,500
March 31, 2003 $ 337,500
June 30, 2003 $ 337,500
September 30, 2003 $ 337,500
December 31, 2003 $ 337,500
March 31, 2004 $ 337,500
June 30, 2004 $ 337,500
September 30, 2004 $ 337,500
December 31, 2004 $ 337,500
March 31, 2005 $ 337,500
June 30, 2005 $ 337,500
September 30, 2005 $ 337,500
December 31, 2005 $ 337,500
March 31, 2006 $ 337,500
Term Loan Maturity Date $125,887,500
(c) In addition to any other mandatory repayments or commitment reductions
pursuant to this Section 4.02, on each date on or after the Effective Date upon
which the Borrower or any of its Subsidiaries receives Net Sale Proceeds from
any Asset Sale, an amount equal to the Applicable Prepayment Percentage of the
Net Sale Proceeds from such Asset Sale shall be applied as a mandatory repayment
and/or commitment reduction in accordance with the
requirements of Sections 4.02(h) and (i); provided that (I) with respect to no
more than $15,000,000 in the aggregate of such Net Sale Proceeds received by the
Borrower and its Subsidiaries after the Effective Date in connection with one or
more Permitted Sale-Leaseback Transactions, such Net Sale Proceeds shall not
give rise to a mandatory repayment (and/or commitment reduction, as the case may
be) on such date to the extent (i) no Default or Event of Default then exists
and (ii) the Borrower delivers an officer's certificate to the Administrative
Agent on or prior to such date stating that such Net Sale Proceeds constitute
Net Sale Proceeds of a Permitted Sale-Leaseback Transaction consummated in
accordance with the requirements of Section 9.02(a) and the definition thereof
and (II) with respect to no more than $10,000,000 in the aggregate of such Net
Sale Proceeds received by the Borrower or its Subsidiaries in any fiscal year of
the Borrower, such Net Sale Proceeds shall not give rise to a mandatory
repayment (and/or commitment reduction, as the case may be) on such date to the
extent that no Default or Event of Default then exists and the Borrower delivers
a certificate to the Administrative Agent on or prior to such date stating that
such Net Sale Proceeds shall be used or contractually committed to be used to
purchase assets used or to be used in the businesses permitted pursuant to
Section 9.01 (including, without limitation (but only to the extent permitted by
Section 9.02), the purchase of the capital stock of a Person engaged in such
businesses) within 270 days following the date of receipt of such Net Sale
Proceeds from such Asset Sale (which certificate shall set forth the estimates
of the proceeds to be so expended); provided further that (i) if all or any
portion of such Net Sale Proceeds are not so used (or contractually committed to
be used) within such 270 day period, such remaining portion shall be applied on
the last day of such period as a mandatory repayment and/or commitment reduction
as provided above (without giving effect to the immediately preceding proviso)
and (ii) if all or any portion of such Net Sale Proceeds are not so used within
such 270-day period referred to in clause (i) of this proviso because such
amount is contractually committed to be used and subsequent to such date such
contract is terminated or expires without such portion being so used, such
remaining portion shall be applied on the date of such termination or expiration
as a mandatory repayment and/or commitment reduction as provided above (without
giving effect to the immediately preceding proviso). Notwithstanding the
foregoing provisions of this Section 4.02(c), so long as no Default or Event of
Default shall have occurred and be continuing, no mandatory repayments or
commitment reductions shall be required pursuant to the immediately preceding
proviso appearing in this Section 4.02(c) until the date on which the aggregate
Net Sale Proceeds from all Asset Sales not reinvested within the time periods
specified by said proviso equals or exceeds $1,000,000.
(d) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date on or after the Effective
Date on which the Borrower or any of its Subsidiaries receives any cash proceeds
from any incurrence of Indebtedness (other than Indebtedness permitted to be
incurred pursuant to Section 9.04 as in effect on the Effective Date) or
issuance of Preferred Stock (other than (x) Disqualified Preferred Stock to the
extent the proceeds therefrom are used to effect Permitted Acquisitions, (y)
Qualified Preferred Stock and (z) Pacer Logistics Preferred Stock issued on the
Initial Borrowing Date in accordance with the requirements of Section 5.08) by
the Borrower or any of its Subsidiaries, an amount equal to the Applicable
Prepayment Percentage of the Net Cash Proceeds of the respective incurrence of
Indebtedness or issuance of Preferred Stock shall be applied as a mandatory
repayment and/or
commitment reduction in accordance with the requirements of Sections 4.02(h) and
(i). Notwithstanding the foregoing provisions of this Section 4.02(d), so long
as no Default or Event of Default shall have occurred and be continuing, no
mandatory repayment or commitment reduction shall be required pursuant to this
Section 4.02(d) until the date on which the sum of (x) the Net Cash Proceeds
required to be applied as mandatory repayments and/or commitment reductions in
the absence of this sentence plus (y) the Net Cash Proceeds required to be
----
applied as mandatory repayments and/or commitment reductions pursuant to Section
4.02(e) in the absence of the last sentence of said Section, equals or exceeds
$1,000,000.
(e) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date on or after the Effective
Date on which the Borrower or any of its Subsidiaries receives any cash proceeds
from any sale or issuance of Qualified Preferred Stock or common equity of (or
cash capital contributions to) the Borrower or any of its Subsidiaries (other
than (v) the Equity Financing, (w) issuances of Borrower Common Stock to
management of the Borrower and its Subsidiaries (including as a result of the
exercise of any options with respect thereto) in an aggregate amount not to
exceed $5,000,000 in any fiscal year of the Borrower, (x) equity contributions
to any Subsidiary of the Borrower made by the Borrower or any other Subsidiary
of the Borrower, (y) any issuance of Borrower Common Stock and Qualified
Preferred Stock to the extent the proceeds therefrom are used to effect
Permitted Acquisitions and (z) additional issuances of Borrower Common Stock and
Qualified Preferred Stock, to the extent that the aggregate proceeds excluded
pursuant to this clause (z) after the Effective Date do not exceed $5,000,000),
an amount equal to the Applicable Prepayment Percentage of the Net Cash Proceeds
of the respective equity issuance or capital contribution shall be applied as a
mandatory repayment and/or commitment reduction in accordance with the
requirements of Sections 4.02(h) and (i); provided that Net Cash Proceeds
--------
received by the Borrower from additional sales or issuances of Borrower Common
Stock shall not be required to be applied as a mandatory repayment and/or
commitment reduction on the date of receipt thereof, to the extent that (x) no
Default or Event of Default then exists and (y) the Borrower delivers a
certificate to the Administrative Agent on or prior to such date stating that
such Net Cash Proceeds shall be used or contractually committed to be used to
make Capital Expenditures and/or effect Permitted Acquisitions within 270 days
following the date of receipt of such Net Cash Proceeds (which certificate shall
set forth the estimates of the proceeds to be so expended), and provided
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further, that (i) if all or any portion of such Net Cash Proceeds are not so
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used (or contractually committed to be used) within such 270-day period, such
remaining portion shall be applied on the last day of such period as a mandatory
repayment and/or commitment reduction as provided above (without giving effect
to the immediately preceding proviso) and (ii) if all or any portion of such Net
Cash Proceeds are not so used within such 270-day period referred to in clause
(i) above because such amount is contractually committed to be used and
subsequent to such date such contract is terminated or expires without such
portion being so used, such remaining portion shall be applied on the date of
such termination or expiration as a mandatory repayment and/or commitment
reduction as provided above (without giving effect to the immediately preceding
proviso). Notwithstanding the foregoing provisions of this Section 4.02(e), so
long as no Default or Event of Default shall have occurred and be continuing, no
mandatory repayment and/or commitment reduction shall be required pursuant to
this Section 4.02(e) until the date on which the sum of (x) the Net Cash
Proceeds required to be
applied as mandatory repayments and/or commitment reductions in the absence of
this sentence plus (y) the Net Cash Proceeds required to be applied as mandatory
----
repayments and/or commitment reductions pursuant to Section 4.02(d) in the
absence of the last sentence in said Section, equals or exceeds $1,000,000.
(f) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, within 10 days following each date on
or after the Effective Date on which the Borrower or any of its Subsidiaries
receives any cash proceeds from any Recovery Event, an amount equal to 100% of
the proceeds of such Recovery Event (net of reasonable costs (including, without
limitation, legal costs and expenses) and taxes incurred in connection with such
Recovery Event and the amount of such proceeds required to be used to repay any
Indebtedness (other than Indebtedness of the Banks pursuant to this Agreement)
which is secured by the respective assets subject to such Recovery Event) shall
be applied as a mandatory repayment and/or commitment reduction in accordance
with the requirements of Sections 4.02(h) and (i), provided that (x) so long as
--------
no Default or Event of Default then exists and such proceeds do not exceed
$3,500,000, such proceeds shall not be required to be so applied on such date to
the extent that an Authorized Officer of the Borrower has delivered a
certificate to the Administrative Agent on or prior to such date stating that
such proceeds shall be used or shall be committed to be used to replace or
restore any properties or assets in respect of which such proceeds were paid
within 360 days following the date of such Recovery Event (which certificate
shall set forth the estimates of the proceeds to be so expended) and (y) so long
as no Default or Event of Default then exists and to the extent that (a) the
amount of such proceeds exceeds $3,500,000, (b) the amount of such proceeds,
together with other cash available to the Borrower and its Subsidiaries and
permitted to be spent by them on Capital Expenditures during the relevant
period, equals at least 100% of the cost of replacement or restoration of the
properties or assets in respect of which such proceeds were paid as determined
by the Borrower and as supported by such estimates or bids from contractors or
subcontractors or such other supporting information as the Administrative Agent
may reasonably accept, (c) an Authorized Officer of the Borrower has delivered
to the Administrative Agent a certificate on or prior to the date the respective
mandatory repayment and/or commitment reduction would otherwise be required
pursuant to this Section 4.02(f) in the form described in clause (x) above and
also certifying its determination as required by preceding clause (b) and
certifying the sufficiency of business interruption insurance as required by
succeeding clause (d), and (d) an Authorized Officer of the Borrower has
delivered to the Administrative Agent such evidence as the Administrative Agent
may reasonably request in form and substance reasonably satisfactory to the
Administrative Agent establishing that the Borrower has sufficient business
interruption insurance and that the Borrower will receive payment thereunder in
such amounts and at such times as are necessary to satisfy all obligations and
expenses of the Borrower (including, without limitation, all debt service
requirements, including pursuant to this Agreement), without any delay or
extension thereof, for the period from the date of the respective casualty,
condemnation or other event giving rise to the Recovery Event and continuing
through the completion of the replacement or restoration of the respective
properties or assets, then the entire amount of the proceeds of such Recovery
Event and not just the portion in excess of $3,500,000 shall be deposited with
the Administrative Agent pursuant to a cash collateral arrangement reasonably
satisfactory to the Administrative Agent whereby such proceeds shall be
disbursed to the Borrower from time to
time as needed to pay or reimburse the Borrower or such Subsidiary actual costs
incurred by it in connection with the replacement or restoration of the
respective properties or assets (pursuant to such certification requirements as
may be established by the Administrative Agent), provided further, that at any
----------------
time while an Event of Default has occurred and is continuing, the Required
Banks may direct the Administrative Agent (in which case the Administrative
Agent shall, and is hereby authorized by the Borrower to, follow said
directions) to apply any or all proceeds then on deposit in such collateral
account to the repayment of Obligations hereunder in the same manner as proceeds
would be applied pursuant to the Security Agreement, and provided further, that
----------------
if all or any portion of such proceeds not required to be applied as a mandatory
repayment and/or commitment reduction pursuant to the second preceding proviso
(whether pursuant to clause (x) or (y) thereof) are either (A) not so used or
committed to be so used within 360 days after the date of the respective
Recovery Event or (B) if committed to be used within 360 days after the date of
receipt of such net proceeds and not so used within 18 months after the date of
respective Recovery Event then, in either such case, such remaining portion not
used or committed to be used in the case of preceding clause (A) and not used in
the case of preceding clause (B) shall be applied on the date occurring 360 days
after the date of the respective Recovery Event in the case of clause (A) above
or the date occurring 18 months after the date of the respective Recovery Event
in the case of clause (B) above as a mandatory repayment and/or commitment
reduction in accordance with the requirements of Sections 4.02(h) and (i).
(g) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each Excess Cash Flow Payment Date,
an amount equal to the Applicable Excess Cash Flow Percentage of the Excess Cash
Flow for the relevant Excess Cash Flow Payment Period shall be applied as a
mandatory repayment and/or commitment reduction in accordance with the
requirements of Sections 4.02(h) and (i).
(h) Each amount required to be applied pursuant to Sections 4.02(c),
(d), (e), (f) and (g) in accordance with this Section 4.02(h) shall be applied
(i) first, to repay the outstanding principal amount of Term Loans and (ii)
second, to the extent in excess of the amounts required to be applied pursuant
to preceding clause (i), to reduce the Total Revolving Loan Commitment (it being
understood and agreed that (x) the amount of any reduction to the Total
Revolving Loan Commitment as provided in immediately preceding clause (ii) shall
be deemed to be an application of proceeds for purposes of this Section 4.02(h)
even though cash is not actually applied and (y) any cash received by the
Borrower or such Subsidiary will be retained by such Person except to the extent
that such cash is otherwise required to be applied as provided in Section
4.02(a) as a result of any reduction to the Total Revolving Loan Commitment).
All repayments of outstanding Term Loans pursuant to Sections 4.02(c), (d), (e),
(f) or (g) shall be applied to reduce the then remaining Scheduled Repayments on
a pro rata basis (based upon the then remaining Scheduled Repayments after
--- ----
giving effect to all prior reductions thereto).
(i) With respect to each repayment of Loans required by this Section
4.02, the Borrower may designate the Types of Loans of the respective Tranche
which are to be repaid and, in the case of Eurodollar Loans, the specific
Borrowing or Borrowings of the respective Tranche pursuant to which made,
provided that: (i) repayments of Eurodollar Loans pursuant to
--------
this Section 4.02 may only be made on the last day of an Interest Period
applicable thereto unless (x) all Eurodollar Loans of the respective Tranche
with Interest Periods ending on such date of required repayment and all Base
Rate Loans of the respective Tranche have been paid in full and/or (y)
concurrently with such repayment, the Borrower pays all breakage costs and other
amounts owing to each Bank pursuant to Section 1.11; (ii) if any repayment of
Eurodollar Loans made pursuant to a single Borrowing shall reduce the
outstanding Eurodollar Loans made pursuant to such Borrowing to an amount less
than the Minimum Borrowing Amount applicable thereto, such Borrowing shall be
converted at the end of the then current Interest Period into a Borrowing of
Base Rate Loans; and (iii) each repayment of any Tranche of Loans made pursuant
to a Borrowing shall be applied pro rata among such Tranche of Loans. In the
--- ----
absence of a designation by the Borrower as described in the preceding sentence,
the Administrative Agent shall, subject to the above, make such designation in
its sole discretion with a view, but no obligation, to minimize breakage costs
owing under Section 1.11. Notwithstanding the foregoing provisions of this
Section 4.02, if at any time the mandatory repayment of Loans pursuant to this
Section 4.02 would result, after giving effect to the procedures set forth in
this clause (i) above, in the Borrower incurring breakage costs under Section
1.11 as a result of Eurodollar Loans being repaid other than on the last day of
an Interest Period applicable thereto (any such Eurodollar Loans, "Affected
Loans"), the Borrower may elect, by written notice to the Administrative Agent,
to have the provisions of the following sentence be applicable. At the time any
Affected Loans are otherwise required to be prepaid, the Borrower may elect to
deposit 100% (or such lesser percentage elected by the Borrower as not being
repaid) of the principal amounts that otherwise would have been paid in respect
of the Affected Loans with the Administrative Agent to be held as security for
the obligations of the Borrower hereunder pursuant to a cash collateral
agreement to be entered into in form and substance satisfactory to the
Administrative Agent, with such cash collateral to be released from such cash
collateral account (and applied to repay the principal amount of such Eurodollar
Loans) upon each occurrence thereafter of the last day of an Interest Period
applicable to Eurodollar Loans (or such earlier date or dates as shall be
requested by the Borrower), with the amount to be so released and applied on the
last day of each Interest Period to be the amount of such Eurodollar Loans to
which such Interest Period applies (or, if less, the amount remaining in such
cash collateral account).
(j) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, (i) all then outstanding Swingline Loans shall be repaid in full
on the Swingline Expiry Date and (ii) all other then outstanding Loans shall be
repaid in full on the respective Maturity Date for such Loans.
4.03 Method and Place of Payment. Except as otherwise specifically
---------------------------
provided herein, all payments under this Agreement or any Note shall be made to
the Administrative Agent for the ratable account of the Bank or Banks entitled
thereto not later than 12:00 Noon (New York time) on the date when due and shall
be made in U.S. Dollars in immediately available funds at the Payment Office.
Any payments under this Agreement or under any Note which are made later than
12:00 Noon (New York time) on any Business Day shall be deemed to have been made
on the next succeeding Business Day. Whenever any payment to be made hereunder
or under any Note shall be stated to be due on a day which is not a Business
Day, the
due date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable during such
extension at the applicable rate in effect immediately prior to such extension.
4.04 Net Payments. (a) All payments made by the Borrower hereunder
------------
or under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed with respect to such payments by any jurisdiction or by
any political subdivision or taxing authority thereof or therein with respect to
such payments (but excluding, in the case of each Bank, except as provided in
the second succeeding sentence, any tax, including any income, branch profits,
franchise or similar tax, which in each case is imposed on or measured by the
net income, net profits or capital of such Bank pursuant to the laws of the
jurisdiction in which such Bank is organized or the jurisdiction in which the
principal office or applicable lending office of such Bank is located or any
political subdivision or taxing authority thereof or therein) and all interest,
penalties or similar liabilities with respect to such nonexcluded taxes, levies,
imposts, duties, fees, assessments or other charges (all such nonexcluded taxes,
levies, imposts, duties, fees, assessments or other charges being referred to
collectively as "Taxes"). If any Taxes are so levied or imposed, the Borrower
agrees to pay the full amount of such Taxes, and such additional amounts as may
be necessary so that every payment of all amounts due by the Borrower under this
Agreement or under any Note, after withholding or deduction for or on account of
any Taxes, will not be less than the amount provided for herein or in such Note.
If any amounts are payable in respect of Taxes pursuant to the preceding
sentence (any such amounts, the "Gross-Up Amount"), the Borrower agrees to
reimburse each Bank, upon the written request of such Bank, for the net amount,
if any, of any taxes such Bank shall determine are incurred by such Bank (taking
into account in calculating such net amount any allowable credit, deduction or
other benefit available as a result of, or with respect to, the payment by the
Borrower to such Bank of (i) the Gross-Up Amount or (ii) any amount paid
pursuant to this sentence) that would not have been incurred in the absence of
the payment by the Borrower of (i) the Gross-Up Amount or (ii) any amount paid
pursuant to this sentence. The Borrower will furnish to the Administrative Agent
within 45 days after the date the payment of any Taxes is due pursuant to
applicable law certified copies of tax receipts evidencing such payment by the
Borrower. The Borrower agrees to indemnify and hold harmless each Bank, and
reimburse such Bank upon its written request, for the amount of any Taxes so
levied or imposed and paid by such Bank in respect of any payments by or on
behalf of the Borrower.
(b) Each Bank party to this Agreement on the Effective Date hereby
represents that, as of the Effective Date, all payments of principal, interest,
and fees to be made to it by the Borrower pursuant to this Agreement will be
totally exempt from withholding of United States federal tax. Each Bank that is
not a United States person (as such term is defined in Section 7701(a)(30) of
the Code) for U.S. Federal income tax purposes agrees to deliver to the Borrower
and the Administrative Agent on or prior to the Effective Date, or in the case
of a Bank that is an assignee or transferee of an interest under this Agreement
pursuant to Section 1.13 or 13.04, on the date of such assignment or transfer to
such Bank, (i) two accurate and complete
original signed copies of Internal Revenue Service Form W-8ECI or Form W-8BEN
(with respect to a complete exemption under an income tax treaty) (or successor
forms) certifying to such Bank's entitlement to a complete exemption from United
States withholding tax with respect to payments to be made under this Agreement
and under any Note, or (ii) if the Bank is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue
Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption under
an income tax treaty) pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit D (any such certificate, a "Section
4.04(b)(ii) Certificate") and (y) two accurate and complete original signed
copies of Internal Revenue Service Form W-8BEN (with respect to the portfolio
interest exemption) (or successor form) certifying to such Bank's entitlement to
a complete exemption from United States withholding tax with respect to payments
of interest to be made under this Agreement and under any Note. In addition,
each Bank agrees that (a) from time to time after the Effective Date, when a
lapse in time or change in circumstances renders the previous certification
obsolete or inaccurate in any material respect, and (b) upon the Borrower's
reasonable request after the occurrence of any other event requiring the
delivery of a Form W-8ECI, Form W-8BEN or any successor form in addition to or
in replacement of the forms previously delivered, it will deliver to the
Borrower and the Administrative Agent two new accurate and complete original
signed copies of Internal Revenue Service Form W-8ECI, Form W-8BEN (with respect
to the benefits of any income tax treaty) , Form W-8BEN (with respect to the
portfolio interest exemption) and a Section 4.04(b)(ii) Certificate, or any
successor form, as the case may be, and such other forms as may be required in
order to confirm or establish the entitlement of such Bank to a continued
exemption from or reduction in United States withholding tax with respect to
payments under this Agreement and any Note, or it shall immediately notify the
Borrower and the Administrative Agent of its inability to deliver any such form
or certificate in which case such Bank shall not be required to deliver any such
form or certificate pursuant to this Section 4.04(b). Notwithstanding anything
to the contrary contained in Section 4.04(a), but subject to the immediately
succeeding sentence, (x) the Borrower shall be entitled, to the extent it is
required to do so by law, to deduct or withhold income or similar taxes imposed
by the United States (or any political subdivision or taxing authority thereof
or therein) from interest, fees or other amounts payable hereunder for the
account of any Bank which is not a United States person (as such term is defined
in Section 7701(a)(30) of the Code) for federal income tax purposes to the
extent that such Bank has not provided to the Borrower U.S. Internal Revenue
Service forms that establish a complete exemption from such deduction or
withholding and (y) the Borrower shall not be obligated pursuant to Section
4.04(a) hereof to gross-up payments to be made to such Bank, or to indemnify and
hold harmless or reimburse such Bank, in respect of income or similar taxes
imposed by the United States if (I) such Bank has not provided to the Borrower
the Internal Revenue Service forms required to be provided to the Borrower
pursuant to this Section 4.04(b) or (II) in the case of a payment, other than
interest, to a Bank described in clause (ii) above, to the extent that such
forms do not establish a complete exemption from withholding of such taxes.
Notwithstanding anything to the contrary contained in the preceding sentence or
elsewhere in this Section 4.04 and except as set forth in Section 13.04(b), the
Borrower agrees to pay additional amounts and to indemnify each Bank in the
manner set forth in Section 4.04(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any Taxes
deducted or withheld by it as described in the immediately preceding
sentence as a result of any changes after the Effective Date in any applicable
law, treaty, governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of such Taxes.
For purposes of the immediately preceding sentence, the final U.S. Treasury
regulations that were issued October 6, 1997 and amended as of December 31, 1998
with respect to the withholding of United States Federal income tax (the "New
Withholding Regulations") shall not be considered to constitute a change after
the Effective Date, or otherwise, in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof, relating
to the deducting or withholding of Taxes, notwithstanding that the New
Withholding Regulations generally are only effective for payments made after
December 31, 1999. The Borrower shall not be required to pay any additional
amounts or indemnification under Section 4.04(a) to any Bank to the extent that
the obligation to pay such additional amounts or indemnification would not have
arisen but for the representation set forth in the first sentence of Section
4.04(b) above made by the Bank not being true.
(c) If the Borrower pays any additional amount under this Section
4.04 with respect to taxes imposed on any payments made to or on behalf of a
Bank and such Bank determines in its sole discretion that it has actually
received or realized in connection therewith any refund of tax, or any reduction
of, or credit against, its tax liabilities (a "Tax Benefit"), such Bank shall
pay to the Borrower an amount that the Bank shall, in its sole discretion,
determine is equal to the net benefit, after tax, which was obtained by the Bank
as a consequence of such refund, reduction or credit; provided, however, that
-------- -------
(i) any Bank may determine, in its sole discretion consistent with the policies
of such Bank, whether to seek a Tax Benefit and (ii) nothing in this Section
4.04(c) shall require the Bank to disclose any confidential information to the
Borrower (including, without limitation, its tax returns).
(d) Each Bank shall use reasonable efforts (consistent with legal and
regulatory restrictions and subject to overall policy considerations of such
Bank) (i) to file any certificate or document or to furnish any information as
reasonably requested by the Borrower pursuant to any applicable treaty, law or
regulation or (ii) to designate a different applicable lending office of such
Bank, if the making of such filing or the furnishing of such information or the
designation of such other lending office would avoid the need for or reduce the
amount of any additional amounts payable by the Borrower and would not, in the
sole discretion of such Bank, be disadvantageous to such Bank.
(e) The provisions of this Section 4.04 are subject to the provisions
of Section 13.18 (to the extent applicable).
SECTION 5. Conditions Precedent to Initial Credit Events. The
---------------------------------------------
obligation of each Bank to make each Loan hereunder, and the obligation of the
Letter of Credit Issuer to issue each Letter of Credit hereunder, in each case
on the Initial Borrowing Date, is subject at the time of the making of such Loan
or the issuance of such Letter of Credit, as the case may be, to the
satisfaction of the following conditions:
5.01 Execution of Agreement; Notes. On or prior to the Initial
-----------------------------
Borrowing Date, (i) the Effective Date shall have occurred and (ii) there shall
have been delivered to the Administrative Agent for the account of each Bank
requesting same the appropriate Term Note and/or Revolving Note and to BTCo, if
so requested, the Swingline Note, in each case executed by the Borrower and in
the amount, maturity and as otherwise provided herein.
5.02 Officer's Certificate. On the Initial Borrowing Date, the
---------------------
Administrative Agent shall have received a certificate dated such date signed by
an appropriate officer of the Borrower stating that all of the applicable
conditions set forth in Sections 5.05 through 5.09, inclusive, and 6.01 (other
than such conditions that are subject to the satisfaction of the Agents and/or
the Required Banks), have been satisfied on such date.
5.03 Opinions of Counsel. On the Initial Borrowing Date, the
-------------------
Administrative Agent shall have received opinions, addressed to each Agent, the
Collateral Agent and each of the Banks and dated the Initial Borrowing Date,
from (i) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, special New York counsel to the Credit Parties,
which opinion shall cover the matters contained in Exhibit E-1 and such other
matters incident to the transactions contemplated herein as the Agents and the
Required Banks may reasonably request and be in form and substance reasonably
satisfactory to the Agents and the Required Banks, (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇, special Tennessee counsel to the Credit Parties, which opinion shall
cover the matters contained in Exhibit E-2 and such other matters incident to
the transactions contemplated herein as the Agents and the Required Banks may
reasonably request and be in form and substance reasonably satisfactory to the
Agents and the Required Banks, (iii) counsel rendering such opinions, reliance
letters addressed to each Agent and each of the Banks and dated the Initial
Borrowing Date with respect to all legal opinions delivered in connection with
the Transaction, which opinions shall cover such matters as the Agents may
reasonably request and be in form and substance reasonably satisfactory to the
Agents and (iv) local counsel to the Credit Parties and/or the Agents reasonably
satisfactory to the Agents, which opinions (x) shall be addressed to each Agent,
the Collateral Agent and each of the Banks and be dated the Initial Borrowing
Date, (y) shall cover the perfection of the security interests granted pursuant
to the Security Documents and such other matters incident to the transactions
contemplated herein as the Agents may reasonably request and (z) shall be in
form and substance reasonably satisfactory to the Agents.
5.04 Company Documents; Proceedings. (a) On the Initial Borrowing
------------------------------
Date, the Administrative Agent shall have received from the Borrower and each
other Credit Party a certificate, dated the Initial Borrowing Date, signed by
the chairman, a vice-chairman, the president or any vice-president of such
Credit Party, and attested to by the secretary or any assistant secretary of
such Credit Party, in the form of Exhibit F with appropriate insertions,
together with copies of the certificate of incorporation, by-laws or equivalent
organizational documents of such Credit Party and the resolutions of such Credit
Party referred to in such certificate and all of the foregoing (including each
such certificate of incorporation, by-laws or other organizational document)
shall be reasonably satisfactory to the Agents.
(b) On the Initial Borrowing Date, all Company and legal proceedings
and all instruments and agreements in connection with the transactions
contemplated by this Agreement
and the other Documents shall be reasonably satisfactory in form and substance
to the Agents, and the Administrative Agent shall have received all information
and copies of all certificates, documents and papers, including good standing
certificates, bring-down certificates and any other records of Company
proceedings and governmental approvals, if any, which any Agent reasonably may
have requested in connection therewith, such documents and papers, where
appropriate, to be certified by proper Company or governmental authorities.
(c) On the Initial Borrowing Date and after giving effect to the
Transaction, the capital structure (including, without limitation, the terms of
any capital stock, options, warrants or other securities issued by the Borrower
or any of its Subsidiaries), and management of the Borrower and its Subsidiaries
shall be in form and substance satisfactory to the Agents.
5.05 Adverse Change, etc. (a) On the Initial Borrowing Date, since
--------------------
December 31, 1998, nothing shall have occurred which (i) the Required Banks or
any Agent shall reasonably determine has had, or could reasonably be expected to
have, a material adverse effect on the rights or remedies of the Banks or the
Agents, or on the ability of any Credit Party to perform its obligations to them
hereunder or under any other Credit Document or (ii) has had a material adverse
effect on the Transaction or a Material Adverse Effect.
(b) On the Initial Borrowing Date, there shall not have occurred and
be continuing any material adverse change to the syndication market for credit
facilities similar in nature to this Agreement and there shall not have occurred
and be continuing a material disruption or a material adverse change in
financial, banking or capital markets that would have a material adverse effect
on the syndication, in each case as determined by the Agents in their reasonable
discretion.
5.06 Litigation. On the Initial Borrowing Date, there shall be no
----------
actions, suits, proceedings or investigations pending or threatened (a) with
respect to this Agreement or any other Document or the Transaction, (b) with
respect to any Existing Indebtedness, (c) which could reasonably be expected to
have a Material Adverse Effect or (d) which any Agent or the Required Banks
shall determine could reasonably be expected to have (i) a Material Adverse
Effect or (ii) a material adverse effect on the Transaction, the rights or
remedies of the Banks or the Agents hereunder or under any other Credit Document
or on the ability of any Credit Party to perform its respective obligations to
the Banks or the Agents hereunder or under any other Credit Document.
5.07 Approvals. On the Initial Borrowing Date, (i) all necessary
---------
governmental (domestic and foreign), regulatory and third party approvals in
connection with any Existing Indebtedness, the Transaction, the transactions
contemplated by the Documents and otherwise referred to herein or therein shall
have been obtained and remain in full force and effect and evidence thereof
shall have been provided to the Administrative Agent, and (ii) all applicable
waiting periods shall have expired without any action being taken by any
competent authority which restrains, prevents or imposes materially adverse
conditions upon the consummation of the Transaction, the making of the Loans and
the transactions contemplated by the Documents or otherwise referred to herein
or therein. Additionally, there shall not exist any judgment, order,
injunction or other restraint issued or filed or a hearing seeking injunctive
relief or other restraint pending or notified prohibiting or imposing materially
adverse conditions upon, or materially delaying, or making economically
unfeasible, the consummation of the Transaction or the making of the Loans.
5.08 Consummation of the Recapitalization; Equity Financing, etc.
------------------------------------------------------------
(a) On the Initial Borrowing Date, Acquisition Corp., APL and the Borrower
shall have effected the Recapitalization (i) pursuant to which Acquisition Corp.
shall have acquired all of the capital stock (other than the equity subject to
the LTS Equity Rollover) of the Borrower pursuant to, and in accordance with the
terms of, the Stock Purchase Agreement (the "Acquisition") and (ii) as a result
of which (immediately after giving effect thereto) (x) Acquisition Corp. shall
own approximately 93% of the issued and outstanding shares of Borrower Common
Stock, (y) APL shall retain shares of Borrower Common Stock with a value of
approximately $7,500,000 (the "LTS Equity Rollover"), representing approximately
7.0% of the issued and outstanding shares of Borrower Common Stock, and (z) cash
in an aggregate amount not to exceed $300,000,000 shall have been distributed to
APL (other than in respect to equity being retained pursuant to the LTS Equity
Rollover) (the "Recap Distribution"). Concurrently with the consummation of the
Recapitalization, the Borrower shall have caused an amendment to its Certificate
of Incorporation to be filed with the Secretary of State of the State of
Tennessee, which amendment shall change the name of the Borrower to "Pacer
International, Inc."
(b) On the Initial Borrowing Date and immediately after giving effect
to the Recapitalization, (i) the Borrower shall have acquired all of the capital
stock (other than the equity subject to the Pacer Logistics Equity Rollover) of
Pacer Logistics, by way of a one-step merger of Pacer Logistics Acquisition
Corp. with and into Pacer Logistics, with Pacer Logistics as the surviving
corporation of such merger, pursuant to, and in accordance with the terms of the
Pacer Logistics Acquisition Documents, for aggregate cash consideration equal to
approximately $72.0 million (the "Pacer Logistics Acquisition") and (ii) Pacer
Logistics shall have issued 24,333.94 shares of 7.5% Series B Perpetual
Participating Exchangeable Preferred Stock, par value $.01 per share, with an
aggregate liquidation preference of $24,333,940 (the "Pacer Logistics Preferred
Stock") to certain existing managers of Pacer Logistics in exchange for existing
Preferred Stock of Pacer Logistics held by them with a like aggregate
liquidation preference (the "Pacer Logistics Equity Rollover").
(c) On the Initial Borrowing Date, (i) Acquisition Corp. shall have
received cash proceeds in an amount equal to at least $96,000,000 from the
issuance of common stock of Acquisition Corp. to Apollo Investment Fund IV, L.P.
(the "Apollo Equity Financing" and, together with the LTS Equity Rollover and
the Pacer Logistics Equity Rollover, the "Equity Financing") and shall have
utilized the full amount of such cash proceeds to make payments owing in
connection with the Transaction prior to utilizing any proceeds of Loans for
such purpose and (ii) the Borrower shall have received gross cash proceeds in
the aggregate amount of (x) $150,000,000 from the issuance of the Senior
Subordinated Notes and (y) $40,000,000 from the sale of certain assets by the
Borrower that will be leased-back from the purchaser thereof (the "Sale-
Leaseback Transaction") and shall have utilized the full amount of such cash
proceeds to
make payments owing in connection with the Transaction prior to utilizing any
proceeds of Loans for such purpose.
(d) On the Initial Borrowing Date, (i) the Administrative Agent shall
have received true and correct copies of all Recapitalization Documents, Senior
Subordinated Notes Documents, Sale-Leaseback Transaction Documents, Equity
Financing Documents and Pacer Logistics Acquisition Documents, certified as such
by appropriate officer of the Borrower, (ii) all such Documents, and all terms
and conditions thereof (including, without limitation, in the case of the Senior
Subordinated Notes Documents and the Equity Financing Documents, amortization,
maturities, interest rates, dividend rates, limitation on cash dividends
payable, covenants, defaults, remedies, sinking fund provisions, conversion
features and subordination provisions), shall be in form and substance
reasonably satisfactory to each Agent and the Required Banks and (iii) all such
Documents shall be in full force and effect. All conditions precedent to the
consummation of the Transaction as set forth in the Recapitalization Documents,
the Senior Subordinated Notes Documents, the Sale-Leaseback Transaction
Documents, the Equity Financing Documents and the Pacer Logistics Acquisition
Documents shall have been satisfied, and not waived unless consented to by each
Agent and the Required Banks, to the reasonable satisfaction of each Agent and
the Required Banks. Each of the Recapitalization, the issuance of the Senior
Subordinated Notes, the Sale-Leaseback Transaction, the Equity Financing and the
Pacer Logistics Acquisition shall have been consummated in accordance with the
terms and conditions of the applicable Documents and all applicable law.
5.09 Refinancing. (a) On the Initial Borrowing Date (after having
-----------
given effect to the Recapitalization and the Pacer Logistics Acquisition) and
concurrently with the incurrence of Loans on such date, (i) approximately
$58,600,000 of Indebtedness of the Borrower and its Subsidiaries (including
Pacer Logistics) shall have been repaid in full, together with all fees and
other amounts owing thereon (the "Refinanced Indebtedness"), all commitments
under the documents evidencing Refinanced Indebtedness shall have been
terminated and all letters of credit issued pursuant to the documents evidencing
the Refinanced Indebtedness shall have been terminated, incorporated hereunder
as Letters of Credit as contemplated by Section 2.01(e) or supported by a back-
stop Letter of Credit issued hereunder, (ii) 350,000 shares of outstanding
Preferred Stock of Pacer Logistics, par value $.01 per share, with an aggregate
liquidation preference equal to $3,528,000 shall have been redeemed in full, and
(iii) the Borrower shall have made cash payments not to exceed $500,000 to
satisfy earn-out obligations owing in connection with acquisitions consummated
by Pacer Logistics and its Subsidiaries prior to the Initial Borrowing Date.
(b) On the Initial Borrowing Date and concurrently with the
incurrence of Loans on such date, all security interests in respect of, and
Liens securing, the Refinanced Indebtedness shall have been terminated and
released, and the Administrative Agent shall have received all such releases as
may have been requested by the Administrative Agent, which releases shall be in
form and substance satisfactory to the Agents and the Required Banks. Without
limiting the foregoing, there shall have been delivered to the Administrative
Agent (x) proper termination statements (Form UCC-3 or the appropriate
equivalent) for filing under the UCC of each jurisdiction where a financing
statement (Form UCC-1 or the appropriate
equivalent) was filed with respect to the Borrower or any of its Subsidiaries in
connection with the security interests created with respect to the Refinanced
Indebtedness and the documentation related thereto, (y) terminations or
reassignments of any security interest in, or Lien on, any patents, trademarks,
copyrights, or similar interests of the Borrower or any of its Subsidiaries on
which filings have been made and (z) terminations of all mortgages, leasehold
mortgages and deeds of trust created with respect to property of the Borrower or
any of its Subsidiaries, in each case, to secure the obligations under the
Refinanced Indebtedness, all of which shall be in form and substance
satisfactory to the Agents and the Required Banks.
(c) On the Initial Borrowing Date and after giving effect to the
Transaction, the Borrower and its Subsidiaries shall have no Indebtedness or
Preferred Stock outstanding other than (i) the Loans, (ii) the Senior
Subordinated Notes, (iii) certain other indebtedness existing on the Initial
Borrowing Date as listed on Schedule IV in an aggregate outstanding principal
amount not to exceed $400,000 (with the Indebtedness described in this sub-
clause (iii) being herein called the "Existing Indebtedness") and (iv) 24,333.94
shares of Pacer Logistics Preferred Stock. On and as of the Initial Borrowing
Date, all of the Existing Indebtedness shall remain outstanding after giving
effect to the Transaction and the other transactions contemplated hereby without
any default or event of default existing thereunder or arising as a result of
the Transaction and the other transactions contemplated hereby (except to the
extent amended or waived by the parties thereto on terms and conditions
satisfactory to the Agents and the Required Banks), and there shall not be any
amendments or modifications to the Existing Indebtedness Agreements other than
as requested or approved by the Agents or the Required Banks.
(d) The Administrative Agent shall have received evidence in form,
scope and substance reasonably satisfactory to the Agents and the Required Banks
that the matters set forth in this Section 5.09 have been satisfied on the
Initial Borrowing Date.
5.10 Security Documents; etc. (a) On the Initial Borrowing Date,
------------------------
each of the Credit Parties shall have duly authorized, executed and delivered a
Pledge Agreement in the form of Exhibit G (as amended, restated, modified and/or
supplemented from time to time in accordance with the terms thereof and hereof,
the "Pledge Agreement") and shall have delivered to the Collateral Agent, as
pledgee thereunder, all of the Pledged Securities referred to therein then owned
by such Credit Parties and required to be pledged pursuant to the terms thereof,
endorsed in blank in the case of promissory notes or accompanied by executed and
undated stock powers in the case of capital stock, along with evidence that all
other actions necessary or, in the reasonable opinion of the Collateral Agent,
desirable, to perfect the security interests purported to be created by the
Pledge Agreement have been taken, and the Pledge Agreement shall be in full
force and effect.
(b) On the Initial Borrowing Date, each of the Credit Parties shall
have duly authorized, executed and delivered a Security Agreement in the form of
Exhibit H (as amended, restated, modified and/or supplemented from time to time
in accordance with the terms thereof and hereof, the "Security Agreement")
covering all of the Security Agreement Collateral, together with:
(i) executed copies of financing statements (Form UCC-1 and PPSA
Form 1-C) or appropriate local equivalent in appropriate form for filing
under the UCC, the PPSA or appropriate local equivalent of each
jurisdiction as may be necessary or, in the reasonable opinion of the
Collateral Agent, desirable to perfect the security interests purported to
be created by the Security Agreement;
(ii) certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, each of a recent date listing all effective
financing statements that name the Borrower or any of its Subsidiaries as
debtor and that are filed in the jurisdictions referred to in clause (i)
above, together with copies of such financing statements (none of which
shall cover the Collateral except (x) those with respect to which
appropriate termination statements executed by the secured lender
thereunder have been delivered to the Administrative Agent and (y) to the
extent evidencing Permitted Liens);
(iii) evidence of the completion of all other recordings and filings
of, or with respect to, the Security Agreement as may be necessary or, in
the reasonable opinion of the Collateral Agent, desirable, to perfect the
security interests purported to be created by the Security Agreement; and
(iv) evidence that all other actions necessary or, in the reasonable
opinion of the Collateral Agent, desirable, to perfect the security
interests purported to be created by the Security Agreement have been
taken;
and the Security Agreement shall be in full force and effect.
5.11 Subsidiaries Guaranty. On the Initial Borrowing Date, each
---------------------
Subsidiary Guarantor shall have duly authorized, executed and delivered a
Subsidiaries Guaranty in the form of Exhibit I (as amended, restated, modified
and/or supplemented from time to time in accordance with the terms thereof and
hereof, the "Subsidiaries Guaranty"), and the Subsidiaries Guaranty shall be in
full force and effect.
5.12 Employee Benefit Plans; Shareholders' Agreements; Management
------------------------------------------------------------
Agreements; Employment Agreements; Collective Bargaining Agreements; Existing
-----------------------------------------------------------------------------
Indebtedness Agreements; Material Contracts; Tax Allocation Agreements. On or
----------------------------------------------------------------------
prior to the Initial Borrowing Date, there shall have been delivered to the
Administrative Agent true and correct copies, certified as true and complete by
an appropriate officer of the Borrower of the following documents, in each case
as same will be in effect on the Initial Borrowing Date after the consummation
of the Transaction:
(i) all Plans (and for each Plan that is required to file an annual
report on Internal Revenue Service Form 5500-series, a copy of the most
recent such report (including, to the extent required, the related
financial and actuarial statements and opinions and other supporting
statements, certifications, schedules and information), and for each Plan
that is a "single-employer plan," as defined in Section 4001(a)(15) of
ERISA, the most recently prepared actuarial valuation therefor) and any
other "employee benefit plans," as defined in Section 3(3) of ERISA, and
any other material agreements,
plans or arrangements, with or for the benefit of current or former
employees of the Borrower or any of its Subsidiaries or any ERISA Affiliate
(provided that the foregoing shall apply in the case of any Multiemployer
Plan, only to the extent that any document described therein is in the
possession of the Borrower or any Subsidiary of the Borrower or any ERISA
Affiliate) (collectively, the "Employee Benefit Plans");
(ii) all agreements (including, without limitation, shareholders'
agreements, subscription agreements and registration rights agreements)
entered into by the Borrower or any of its Subsidiaries governing the terms
and relative rights of its capital stock and any agreements entered into by
shareholders relating to any such entity with respect to its capital stock
(collectively, the "Shareholders' Agreements");
(iii) all material agreements with members of, or with respect to,
the management of the Borrower or any of its Subsidiaries after giving
effect to the Transaction (collectively, the "Management Agreements");
(iv) any material employment agreements entered into by the Borrower
or any of its Subsidiaries after giving effect to the Transaction
(collectively, the "Employment Agreements");
(v) all collective bargaining agreements applying or relating to
any employee of the Borrower or any of its Subsidiaries after giving effect
to the Transaction (collectively, the "Collective Bargaining Agreements");
(vi) all agreements evidencing or relating to Existing Indebtedness
of the Borrower or any of its Subsidiaries after giving effect to the
Refinancing (collectively, the "Existing Indebtedness Agreements");
(vii) all other material contracts and licenses (other than
certificates of need) of the Borrower and any of its Subsidiaries after
giving effect to the Transaction (collectively, the "Material Contracts");
and
(viii) any tax sharing or tax allocation agreements entered into by
the Borrower or any of its Subsidiaries (collectively, the "Tax Allocation
Agreements");
all of which Employee Benefit Plans, Shareholders' Agreements, Management
Agreements, Employment Agreements, Collective Bargaining Agreements, Existing
Indebtedness Agreements, Material Contracts and Tax Allocation Agreements shall
be in form and substance satisfactory to the Agents and the Required Banks and
shall be in full force and effect on the Initial Borrowing Date.
5.13 Consent Letter. On the Initial Borrowing Date, the
--------------
Administrative Agent shall have received a letter from CT Corporation System,
presently located at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, substantially in
the form of Exhibit J, indicating its consent to its appointment by the Borrower
as its agent to receive service of process as specified in Section 13.08.
5.14 Solvency Certificate; Insurance Certificates. On or before the
--------------------------------------------
Initial Borrowing Date, the Administrative Agent shall have received:
(a) a solvency certificate in the form of Exhibit K from the chief
financial officer of the Borrower, dated the Initial Borrowing Date, and
supporting the conclusion that, after giving effect to the Transaction and
the incurrence of all financings contemplated herein, the Borrower (on a
stand-alone basis) and the Borrower and its Subsidiaries (on a consolidated
basis), in each case, are not insolvent and will not be rendered insolvent
by the indebtedness incurred in connection herewith, will not be left with
unreasonably small capital with which to engage in its or their respective
businesses and will not have incurred debts beyond its or their ability to
pay such debts as they mature and become due; and
(b) evidence of insurance complying with the requirements of Section
8.03 for the business and properties of the Borrower and its Subsidiaries,
in scope, form and substance reasonably satisfactory to the Agents and the
Required Banks and naming the Collateral Agent as an additional insured
and/or loss payee, and stating that such insurance shall not be canceled or
revised without at least 30 days' prior written notice by the insurer to
the Collateral Agent.
5.15. Financial Statements; Projections. (a) On or prior to the
---------------------------------
Initial Borrowing Date, there shall have been delivered to the Administrative
Agent (i) true and correct copies of the financial statements referred to in
Section 7.10(b) and (ii) an unaudited pro forma consolidated balance sheet of
--- -----
the Borrower and its Subsidiaries as of April 2, 1999 and, after giving effect
to the Transaction and the incurrence of all Indebtedness (including the Loans
and the Senior Subordinated Notes) contemplated herein (the "Pro Forma Balance
--- -----
Sheet"), together with a related funds flow statement, which financial
statements, Pro Forma Balance Sheet and funds flow statement shall be reasonably
--- -----
satisfactory to the Agents and the Required Banks.
(b) On or prior to the Initial Borrowing Date, there shall have been
delivered to the Administrative Agent detailed projected consolidated financial
statements of the Borrower and its Subsidiaries certified by the chief financial
officer or the chief operating officer of the Borrower for the five fiscal years
ended after the Initial Borrowing Date (the "Projections"), which Projections
(x) shall reflect the forecasted consolidated financial conditions and income
and expenses of the Borrower and its Subsidiaries after giving effect to the
Transaction and the related financing thereof and the other transactions
contemplated hereby and (y) shall be reasonably satisfactory in form and
substance to the Agents and the Required Banks.
5.16 Payment of Fees. On the Initial Borrowing Date, all costs, fees
----------------
and expenses, and all other compensation due to the Agents or the Banks
(including, without limitation, legal fees and expenses) shall have been paid to
the extent due.
SECTION 6. Conditions Precedent to All Credit Events. The obligation
-----------------------------------------
of each Bank to make Loans (including Loans made on the Initial Borrowing Date
but excluding Mandatory Borrowings made thereafter, which shall be made as
provided in Section 1.01(d)), and the obligation of a Letter of Credit Issuer to
issue any Letter of Credit, is subject, at the time
of each such Credit Event (except as hereinafter indicated), to the satisfaction
of the following conditions:
6.01 No Default; Representations and Warranties. At the time of each
------------------------------------------
such Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein or in any other Credit Document shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of such Credit Event (it being understood
and agreed that any representation or warranty which by its terms is made as of
a specified date shall be required to be true and correct in all material
respects only as of such specified date).
6.02 Notice of Borrowing; Letter of Credit Request. (a) Prior to
---------------------------------------------
the making of each Loan (excluding Swingline Loans and Mandatory Borrowings),
the Administrative Agent shall have received a Notice of Borrowing meeting the
requirements of Section 1.03(a). Prior to the making of any Swingline Loan,
BTCo shall have received the notice required by Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the
Administrative Agent and the respective Letter of Credit Issuer shall have
received a Letter of Credit Request meeting the requirements of Section 2.02(a).
The occurrence of the Initial Borrowing Date and the acceptance of the
benefits or proceeds of each Credit Event shall constitute a representation and
warranty by the Borrower to each Agent and each of the Banks that all the
conditions specified in Section 5 and in this Section 6 and applicable to such
Credit Event (other than such conditions that are subject to the satisfaction of
the Agents and/or the Required Banks) exist as of that time. All of the Notes,
certificates, legal opinions and other documents and papers referred to in
Section 5 and in this Section 6, unless otherwise specified, shall be delivered
to the Administrative Agent at the Notice Office for the account of each of the
Banks and, except for the Notes, in sufficient counterparts or copies for each
of the Banks and shall be in form and substance satisfactory to the Banks.
SECTION 7. Representations and Warranties. In order to induce the
------------------------------
Banks to enter into this Agreement and to make the Loans and issue and/or
participate in the Letters of Credit provided for herein, the Borrower makes the
following representations and warranties to the Banks, in each case after giving
effect to the Transaction, all of which shall survive the execution and delivery
of this Agreement, the making of the Loans and the issuance of the Letters of
Credit (with the occurrence of the Initial Borrowing Date and each Credit Event
on and after the Initial Borrowing Date being deemed to constitute a
representation and warranty by the Borrower that the matters specified in this
Section 7 are true and correct in all material respects on and as of the Initial
Borrowing Date and the date of each such Credit Event, unless stated to relate
to a specific earlier date in which case such representations and warranties
shall be true and correct in all material respects as of such earlier date):
7.01 Company Status. Each of the Borrower and each of its
--------------
Subsidiaries (i) is a duly organized and validly existing Company in good
standing under the laws of the jurisdiction of its organization, (ii) has the
Company power and authority to own its property and assets and to transact the
business in which it is engaged and presently proposes to engage and (iii) is
duly qualified and is authorized to do business and is in good standing in all
jurisdictions where it is required to be so qualified and where the failure to
be so qualified would have a Material Adverse Effect.
7.02 Company Power and Authority. Each Credit Party has the Company
---------------------------
power and authority to execute, deliver and carry out the terms and provisions
of the Documents to which it is a party and has taken all necessary Company
action to authorize the execution, delivery and performance of the Documents to
which it is a party. Each Credit Party has duly executed and delivered each
Document to which it is a party and each such Document constitutes the legal,
valid and binding obligation of such Credit Party enforceable in accordance with
its terms, except to the extent that the enforceability thereof may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
generally affecting creditors' rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law).
7.03 No Violation. Neither the execution, delivery or performance by
------------
any Credit Party of the Documents to which it is a party, nor compliance by any
Credit Party with the terms and provisions thereof, nor the consummation of the
transactions contemplated herein or therein, (i) will contravene any material
provision of any applicable law, statute, rule or regulation, or any order,
writ, injunction or decree of any court or governmental instrumentality, (ii)
will conflict or be inconsistent with or result in any breach of, any of the
terms, covenants, conditions or provisions of, or constitute a default under, or
(other than pursuant to the Security Documents) result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of the
property or assets of such Credit Party or any of its Subsidiaries pursuant to
the terms of any indenture, mortgage, deed of trust, loan agreement, credit
agreement or any other material agreement or instrument to which such Credit
Party or any of its Subsidiaries is a party or by which it or any of its
property or assets are bound or to which such Credit Party and any of its
Subsidiaries may be subject (including, without limitation, the Existing
Indebtedness Agreements and the Senior Subordinated Notes Indenture) or (iii)
will violate any provision of the certificate of incorporation, by-laws,
certificate of partnership, partnership agreement, certificate of limited
liability company, limited liability company agreement or equivalent
organizational document, as the case may be, of such Credit Party or any of its
Subsidiaries.
7.04 Litigation. There are no actions, suits, proceedings or
----------
investigations pending or, to the best knowledge of the Borrower, threatened (i)
with respect to any Credit Document, (ii) with respect to the Transaction or any
other Document, or (iii) with respect to the Borrower or any of its Subsidiaries
(x) that could reasonably be expected to have a Material Adverse Effect or (y)
that could reasonably be expected to have a material adverse effect on the
rights or remedies of the Agents or the Banks or on the ability of any Credit
Party to perform its respective obligations to the Agents or the Banks hereunder
and under the other Credit Documents to which it is, or will be, a party.
Additionally, there does not exist any judgment,
order or injunction prohibiting or imposing material adverse conditions upon the
occurrence of any Credit Event.
7.05 Use of Proceeds; Margin Regulations. (a) The proceeds of the
-----------------------------------
Term Loans shall be utilized by the Borrower on the Initial Borrowing Date
solely to (x) finance the Recapitalization, the Refinancing and the Pacer
Logistics Acquisition and (y) pay fees and expenses (not to exceed $24.3
million) incurred in connection with the Transaction.
(b) The proceeds of all Revolving Loans and Swingline Loans shall
be utilized by the Borrower for the general corporate and working capital
purposes of the Borrower and its Subsidiaries (including, but not limited to,
Permitted Acquisitions but excluding payments in connection with the
Transaction).
(c) Neither the making of any Loan, nor the use of the proceeds
thereof, nor the occurrence of any other Credit Event, will violate or be
inconsistent with the provisions of Regulation T, U or X of the Board of
Governors of the Federal Reserve System and no part of any Credit Event (or the
proceeds thereof) will be used to purchase or carry any Margin Stock or to
extend credit for the purpose of purchasing or carrying any Margin Stock.
7.06 Governmental Approvals. Except as may have been obtained or
----------------------
made on or prior to the Initial Borrowing Date (and which remain in full force
and effect on the Initial Borrowing Date), no order, consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, is required to authorize or is required in
connection with (i) the execution, delivery and performance of any Document or
(ii) the legality, validity, binding effect or enforceability of any Document.
7.07 Investment Company Act. Neither the Borrower nor any of its
----------------------
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7.08 Public Utility Holding Company Act. Neither the Borrower nor
----------------------------------
any of its Subsidiaries is 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.
7.09 True and Complete Disclosure. All factual information (taken as
----------------------------
a whole) heretofore or contemporaneously furnished by or on behalf of the
Borrower or any of its Subsidiaries in writing to any Agent or any Bank
(including, without limitation, all information contained in the Documents) for
purposes of or in connection with this Agreement or any transaction contemplated
herein or therein is, and all other such factual information (taken as a whole)
hereafter furnished by or on behalf of any such Persons in writing to any Agent
or any Bank will be, true and accurate in all material respects on the date as
of which such information is dated or certified and not incomplete by omitting
to state any material fact necessary to make such information (taken as a whole)
not misleading at such time in light of the circumstances under which such
information was provided, it being understood and agreed that for purposes of
this Section 7.09, such factual information shall not include the Projections or
any pro forma financial information.
--- -----
7.10 Financial Condition; Financial Statements. (a) On and as of
-----------------------------------------
the Initial Borrowing Date, on a pro forma basis after giving effect to the
--- -----
Transaction and to all Indebtedness (including the Loans and the Senior
Subordinated Notes) incurred, and to be incurred, and Liens created, and to be
created, by each Credit Party in connection therewith, with respect to the
Borrower (on a stand-alone basis) and the Borrower and its Subsidiaries (on a
consolidated basis), (x) the sum of the assets, at a fair valuation, of the
Borrower (on a stand-alone basis) and the Borrower and its Subsidiaries (on a
consolidated basis) will exceed its or their debts, (y) it has or they have not
incurred nor intended to, nor believes or believe that it or they will, incur
debts beyond its or their ability to pay such debts as such debts mature and (z)
it or they will have sufficient capital with which to conduct its or their
business. For purposes of this Section 7.10, "debt" means any liability on a
claim, and "claim" means (i) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (ii)
right to an equitable remedy for breach of performance if such breach gives rise
to a payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
(b) (I) (i) The audited statements of assets, liabilities and
divisional control account of American President Lines Stacktrain Services (a
division of Land Transport Services, Inc.) as of December 27, 1996, December 26,
1997 and December 25, 1998 for the fiscal years ended as of said dates, (ii) the
audited statements of operations and cash flows of American President Lines
Stacktrain Services for the fiscal year ended December 27, 1996, the period
commencing December 28, 1996 and ending November 12, 1997, the period commencing
November 13, 1997 and ending December 26, 1997 and the fiscal year ended
December 25, 1998, (iii) the unaudited statements of assets, liabilities and
divisional control account of American President Lines Stacktrain Services as of
December 25, 1998 and April 2, 1999 for the fiscal year or three-month period,
as the case may be, ended as of said dates, (iv) the unaudited statements of
operations and cash flows of American President Lines Stacktrain Services for
the three-month periods ended April 3, 1998 and April 2, 1999 and (v) the Pro
---
Forma Balance Sheet, in each case furnished to each Bank prior to the Initial
-----
Borrowing Date pursuant to Section 5.15(a), present fairly in all material
respects the consolidated financial condition of the Borrower at the dates of
said financial statements and the results for the periods covered thereby (or,
in the case of the Pro Forma Balance Sheet, presents a good faith estimate of
--- -----
the consolidated pro forma financial condition of the Borrower (after giving
--- -----
effect to the Transaction at the date thereof)), subject, in the case of
unaudited financial statements, to normal year-end adjustments. All such
financial statements (other than the aforesaid Pro Forma Balance Sheet) have
--- -----
been prepared in accordance with GAAP consistently applied except to the extent
provided in the notes to said financial statements and subject, in the case of
the three-month statements, to
normal year-end audit adjustments (all of which are of a recurring nature and
none of which, individually or in the aggregate, would be material) and the
absence of footnotes.
(II) (i) The audited consolidated balance sheets of Pacer Logistics
and its Subsidiaries at March 31, 1997, December 31, 1997 and December 31, 1998
for the three-month period or fiscal years ended, as the case may be, as of said
dates (ii) the audited statements of operations, cash flows and changes in
shareholders' equity of Pacer Logistics for the fiscal year ended December 31,
1996, the period commencing January 1, 1997 and ending March 31, 1997, the
period commencing March 31, 1997 and ending December 31, 1997 and the fiscal
year ended December 31, 1998, (iii) the unaudited consolidated balance sheets of
Pacer Logistics and its Subsidiaries at December 31, 1998 and March 31, 1999 for
the fiscal year or three-month period, as the case may be, ended as of said
dates and (iv) the unaudited statements of operations and cash flows for the
three-month periods ended March 31, 1998 and March 31, 1999, in each case
furnished to each Bank prior to the Initial Borrowing Date pursuant to Section
5.15(a), present fairly in all material respects the consolidated financial
condition of Pacer Logistics at the dates of said financial statements and the
results for the periods covered thereby, subject, in the case of unaudited
financial statements, to normal year-end adjustments. All such financial
statements have been prepared in accordance with GAAP consistently applied
except to the extent provided in the notes to said financial statements and
subject, in the case of the three-month statements, to normal year-end audit
adjustments (all of which are of a recurring nature and none of which,
individually or in the aggregate, would be material) and the absence of
footnotes.
(c) Since December 31, 1998 (but after giving effect to the
Transaction as if same had occurred prior thereto), nothing has occurred that
has had or could reasonably be expected to have a Material Adverse Effect.
(d) Except as fully reflected in the financial statements described
in Section 7.10(b) and the Indebtedness incurred under this Agreement and the
Senior Subordinated Notes (i) as of the Initial Borrowing Date (and after giving
effect to any Loans made on such date), there were no liabilities or obligations
(excluding current obligations incurred in the ordinary course of business) with
respect to the Borrower or any of its Subsidiaries of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and whether or not due)
which, either individually or in the aggregate, could reasonably be expected to
be material to the Borrower and its Subsidiaries taken as a whole and (ii) the
Borrower does not know of any basis for the assertion against it or any of its
Subsidiaries of any such liability or obligation which, either individually or
in the aggregate, are or would be reasonably likely to have, a Material Adverse
Effect.
(e) The Projections have been prepared on a basis consistent with the
financial statements referred to in Section 7.10(b), and have been prepared in
good faith and are based on reasonable assumptions under the then known facts
and circumstances. On the Initial Borrowing Date, the management of the
Borrower believes that the Projections are reasonable and attainable based upon
the then known facts and circumstances (it being understood that nothing
contained in this Section 7.10(e) shall constitute a representation that the
results forecasted in such Projections will in fact be achieved). There is no
fact known to the Borrower or any of its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect, which has not been disclosed herein or in such other documents,
certificates and statements furnished to the Banks for use in connection with
the transactions contemplated hereby.
7.11 Security Interests. On and after the Initial Borrowing Date,
------------------
each of the Security Documents creates (or after the execution and delivery
thereof will create), as security for the Obligations, a valid and enforceable
perfected security interest in and Lien on all of the Collateral subject
thereto, superior to and prior to the rights of all third Persons, and subject
to no other Liens (except that (i) the Security Agreement Collateral may be
subject to Permitted Liens relating thereto and (ii) the Pledge Agreement
Collateral may be subject to the Liens described in clauses (a) and (e) of
Section 9.03), in favor of the Collateral Agent. No filings or recordings are
required in order to perfect and/or render enforceable as against third parties
the security interests created under any Security Document except for filings or
recordings required in connection with any such Security Document which shall
have been made on or prior to the Initial Borrowing Date as contemplated by
Section 5.10 or on or prior to the execution and delivery thereof as
contemplated by Sections 8.11, 8.12 and 9.15.
7.12 Compliance with ERISA. (a) Part A of Schedule V sets forth
---------------------
each Plan and each Multiemployer Plan; except as set forth in Part B of Schedule
V, each Plan (and each related trust, insurance contract or fund) is in
substantial compliance with its terms and with all applicable laws, including
without limitation ERISA and the Code; except as set forth in Part C of Schedule
V, each Plan (and each related trust, if any) which is intended to be qualified
under Section 401(a) of the Code has received a determination letter from the
Internal Revenue Service to the effect that it meets the requirements of
Sections 401(a) and 501(a) of the Code; no Reportable Event has occurred; to the
best knowledge of the Borrower after due inquiry, no Multiemployer Plan is
insolvent or in reorganization; no Plan has an Unfunded Current Liability; no
Plan which is subject to Section 412 of the Code or Section 302 of ERISA has an
accumulated funding deficiency, within the meaning of such sections of the Code
or ERISA, or has applied for or received a waiver of an accumulated funding
deficiency or an extension of any amortization period, within the meaning of
Section 412 of the Code or Section 303 or 304 of ERISA; all contributions
required to be made with respect to a Plan, a Multiemployer Plan and a Foreign
Pension Plan have been timely made by the Borrower and each Subsidiary of the
Borrower; neither the Borrower nor any Subsidiary of the Borrower has incurred
any material liability (including any indirect, contingent or secondary
liability) to or on account of a Plan pursuant to Section 409, 502(i) or 502(l)
of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or expects to incur any
such liability under any of the foregoing sections with respect to any Plan;
neither the Borrower nor any Subsidiary of the Borrower nor any ERISA Affiliate
has incurred any material liability (including any indirect, contingent or
secondary liability) to or on account of a Plan pursuant to Section 4062, 4063,
4064 or 4069 of ERISA or Section 401(a)(29) or 4971 of the Code or expects to
incur any such liability under any of the foregoing sections with respect to any
Plan; to the knowledge of the Borrower and its Subsidiaries, neither the
Borrower nor any Subsidiary of the Borrower nor any ERISA Affiliate has incurred
any material liability (including any indirect, contingent or secondary
liability) to or on account of a Multiemployer Plan pursuant to Section 515,
4201, 4204, or 4212 of ERISA; no condition exists which presents a material risk
to the Borrower or any Subsidiary of the Borrower or any ERISA
Affiliate of incurring a liability to or on account of a Plan or, to the best
knowledge of the Borrower after due inquiry, a Multiemployer Plan pursuant to
the foregoing provisions of ERISA and the Code; no proceedings have been
instituted to terminate or appoint a trustee to administer any Plan which is
subject to Title IV of ERISA; except as set forth in Part D of Schedule V, no
action, suit, proceeding, hearing, audit or investigation with respect to the
administration, operation or the investment of assets of any Plan (other than
routine claims for benefits) is pending, expected or, to the best knowledge of
the Borrower after due inquiry, threatened; using actuarial assumptions and
computation methods consistent with Part 1 of subtitle E of Title IV of ERISA,
the aggregate liabilities of the Borrower and its Subsidiaries and its ERISA
Affiliates to all Multiemployer Plans in the event of a complete withdrawal
therefrom, as of the close of the most recent fiscal year of each such
Multiemployer Plan ended prior to the date of the most recent Credit Event,
would not exceed an amount that could reasonably be expected to have a Material
Adverse Effect; each group health plan (as defined in Section 607(1) of ERISA or
Section 4980B(g)(2) of the Code) maintained by the Borrower or any Subsidiary
which covers or has covered employees or former employees of the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate has at all times been operated
in compliance with the provisions of Part 6 of subtitle B of Title I of ERISA
and Section 4980B of the Code; no lien imposed under the Code or ERISA on the
assets of the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate
exists or is likely to arise on account of any Plan; and the Borrower and its
Subsidiaries may cease contributions to or terminate any employee benefit plan
maintained by any of them without incurring any material liability.
(b) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities. Neither the
Borrower nor any of its Subsidiaries has incurred any liability in connection
with the termination of or withdrawal from any Foreign Pension Plan that has not
been accrued or otherwise properly reserved on the Borrower's or such
Subsidiary's balance sheet. With respect to each Foreign Pension Plan that is
required by applicable local law or by its terms to be funded through a separate
funding vehicle, the present value of the accrued benefit liabilities (whether
or not vested) under each such Foreign Pension Plan, determined as of the latest
valuation date for such Foreign Pension Plan on the basis of actuarial
assumptions, each of which is reasonable, did not exceed the current value of
the assets of such Foreign Pension Plan allocable to such benefit liabilities by
an amount which, when added to the aggregate amount of the accrued benefit
liabilities with respect to all other Foreign Pension Plans, could reasonably be
expected to have a Material Adverse Effect.
7.13 Capitalization. On the Initial Borrowing Date and after giving
--------------
effect to the Transaction, the authorized capital stock of the Borrower shall
consist of (i) 20,000,000 shares of common stock, $.01 par value per share (such
authorized shares of common stock, together with any subsequently authorized
shares of common stock of the Borrower, the "Borrower Common Stock"), 10,440,000
of which shares shall be issued and outstanding and (ii) 1,000,000 shares of
Preferred Stock, $.01 par value per share, none of which shares shall be issued
and outstanding. All such outstanding shares have been duly and validly issued,
are fully paid and nonassessable and have been issued free of preemptive rights.
Except as set forth on Schedule X hereto, the
Borrower does not have outstanding any securities convertible into or
exchangeable for its capital stock or outstanding any rights to subscribe for or
to purchase, or any options for the purchase of, or any agreements providing for
the issuance (contingent or otherwise) of, or any calls, commitments or claims
of any character relating to, its capital stock.
7.14 Subsidiaries. (a) Prior to the consummation of the
------------
Transaction, Acquisition Corp. has no Subsidiaries.
(b) On and as of the Initial Borrowing Date and after giving effect
to the Transaction, the Borrower has no Subsidiaries other than those
Subsidiaries listed on Schedule VII. Schedule VII correctly sets forth, as of
the Initial Borrowing Date and after giving effect to the Transaction, the
percentage ownership (direct and indirect) of the Borrower in each class of
capital stock or other equity interests of each of its Subsidiaries and also
identifies the direct owner thereof. All outstanding shares of capital stock of
each Subsidiary of the Borrower have been duly and validly issued, are fully
paid and non-assessable and have been issued free of preemptive rights. No
Subsidiary of the Borrower has outstanding any securities convertible into or
exchangeable for its capital stock or outstanding any right to subscribe for or
to purchase, or any options or warrants for the purchase of, or any agreement
providing for the issuance (contingent or otherwise) of or any calls,
commitments or claims of any character relating to, its capital stock or any
stock appreciation or similar rights.
7.15 Intellectual Property, etc. Each of the Borrower and each of
---------------------------
its Subsidiaries owns or has a valid existing license to use all patents,
trademarks, permits, service marks, trade names, copyrights, licenses,
franchises and other rights with respect to the foregoing reasonably necessary
for the conduct of its business, without any known conflict with the rights of
others which, or the failure to obtain which, as the case may be, would result
in a Material Adverse Effect.
7.16 Compliance with Statutes, etc. Each of the Borrower and each of
------------------------------
its Subsidiaries is in compliance with all applicable statutes, regulations,
rules and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property, except such non-compliance as is not
reasonably likely to, individually or in the aggregate, have a Material Adverse
Effect.
7.17 Environmental Matters. (a) Each of the Borrower and its
---------------------
Subsidiaries has complied with, and on the date of each Credit Event is in
material compliance with, all applicable Environmental Laws and the requirements
of any permits issued under such Environmental Laws and neither the Borrower nor
any of its Subsidiaries is liable for any material penalties, fines or
forfeitures for failure to comply with any of the foregoing. There are no
pending or past or, to the best knowledge of the Borrower after due inquiry,
threatened Environmental Claims against the Borrower or any of its Subsidiaries,
or against any Real Property owned or operated by the Borrower or any of its
Subsidiaries. There are no facts, circumstances, conditions or occurrences with
respect to the business or operations of the Borrower or any of its Subsidiaries
or any Real Property at any time owned or operated by the Borrower or any of its
Subsidiaries or any property adjoining or in the vicinity of any such Real
Property that would reasonably be expected
(i) to form the basis of an Environmental Claim against the Borrower or any of
its Subsidiaries or any such Real Property or (ii) to cause any such Real
Property to be subject to any restrictions on the ownership, occupancy, use or
transferability of such Real Property by the Borrower or any of its Subsidiaries
under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported by the Borrower or any of its Subsidiaries
or by any Person acting for or under contract to the Borrower or any of its
Subsidiaries or, to the knowledge of the Borrower, by any other Person, to or
from any Real Property owned or operated by the Borrower or any of its
Subsidiaries except in material compliance with all applicable Environmental
Laws and as reasonably required in connection with the operation, use and
maintenance of such Real Property or by the Borrower's or such Subsidiary's
business. Hazardous Materials have not at any time been Released by the Borrower
or any of its Subsidiaries or by any Person acting for or under contract to the
Borrower or any of its Subsidiaries or, to the knowledge of the Borrower, by any
other Person on or from any Real Property owned or operated by the Borrower or
any of its Subsidiaries, except in compliance with all applicable Environmental
Laws and as reasonably required in connection with the operation, use and
maintenance of such Real Property or by the Borrower's or such Subsidiary's
business. Except as set forth on Schedule XII, there are not now any
underground storage tanks located on any Real Property owned or operated by the
Borrower or any of its Subsidiaries.
(c) Notwithstanding anything to the contrary in this Section 7.17,
the representations made in this Section 7.17 shall only be untrue if the
aggregate effect of all conditions, failures, noncompliances, Environmental
Claims, Releases and presence of underground storage tanks, in each case of the
types described above, would reasonably be expected to have a Material Adverse
Effect.
7.18 Properties. All Real Property owned by the Borrower or any of
----------
its Subsidiaries and all material Leaseholds leased by the Borrower or any of
its Subsidiaries, in each case as of the Initial Borrowing Date and after giving
effect to the Transaction, and the nature of the interest therein, is correctly
set forth in Schedule III. Each of the Borrower and each of its Subsidiaries
has good and marketable title to, or a validly subsisting leasehold interest in,
all material properties owned or leased by it, including all Real Property
reflected in Schedule III and in the financial statements (including the Pro
---
Forma Balance Sheet) referred to in Section 7.10(b) (except such properties sold
-----
in the ordinary course of business since the dates of the respective financial
statements referred to therein), free and clear of all Liens, other than
Permitted Liens.
7.19 Labor Relations. Neither the Borrower nor any of its
---------------
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a Material Adverse Effect. There is (i) no unfair labor
practice complaint pending against the Borrower or any of its Subsidiaries or,
to the best knowledge of the Borrower and its Subsidiaries, threatened against
any of them, before the National Labor Relations Board, and no grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against the Borrower or any of its Subsidiaries or, to
the best knowledge of the Borrower and its
Subsidiaries, threatened against any of them, (ii) no strike, labor dispute,
slowdown or stoppage pending against the Borrower or any of its Subsidiaries or,
to the best knowledge of the Borrower and its Subsidiaries, threatened against
the Borrower or any of its Subsidiaries and (iii) no union representation
question existing with respect to the employees of the Borrower or any of its
Subsidiaries and, to the best knowledge of the Borrower and its Subsidiaries, no
union organizing activities are taking place, except (with respect to any matter
specified in clause (i), (ii) or (iii) above, either individually or in the
aggregate) such as is not reasonably likely to have a Material Adverse Effect.
7.20 Tax Returns and Payments. Each of the Borrower and each of its
------------------------
Subsidiaries has filed all federal income tax returns and all other material tax
returns, domestic and foreign, required to be filed by it and has paid all
material taxes and assessments payable by it which have become due, except for
those contested in good faith and fully provided for on the financial statements
of the Borrower and its Subsidiaries in accordance with generally accepted
accounting principles. Each of the Borrower and each of its Subsidiaries has
provided adequate reserves (in the good faith judgment of the management of the
Borrower) for the payment of all federal, state and foreign income taxes which
have not yet become due. There is no material action, suit, proceeding,
investigation, audit, or claim now pending or, to the knowledge of the Borrower
or any of its Subsidiaries, threatened by any authority regarding any taxes
relating to the Borrower or any of its Subsidiaries. Neither the Borrower nor
any of its Subsidiaries has entered into an agreement or waiver or been
requested to enter into an agreement or waiver extending any statute of
limitations relating to the payment or collection of taxes of the Borrower or
any of its Subsidiaries, or is aware of any circumstances that would cause the
taxable years or other taxable periods of the Borrower or any of its
Subsidiaries not to be subject to the normally applicable statute of
limitations, in each case except to the extent the liability for taxes of the
Borrower or such Subsidiary giving rise to any extension of any such normally
applicable statute of limitation is not material.
7.21 Existing Indebtedness. Schedule IV sets forth a true and
---------------------
complete list of all Existing Indebtedness of the Borrower and its Subsidiaries
as of the Initial Borrowing Date after giving effect to the Transaction, in each
case showing the aggregate principal amount thereof and the name of the
respective borrower and any other entity which directly or indirectly guaranteed
such debt.
7.22 Insurance. Set forth on Schedule VIII hereto is a true, correct
---------
and complete summary of all insurance carried by each Credit Party on and as of
the Initial Borrowing Date, with the amounts insured set forth therein.
7.23 Representations and Warranties in Other Documents. All
-------------------------------------------------
representations and warranties set forth in the other Documents were true and
correct in all material respects at the time as of which such representations
and warranties were made (or deemed made) and shall be true and correct in all
material respects as of the Initial Borrowing Date as if such representations or
warranties were made on and as of such date, unless stated to relate to a
specific earlier date, in which case such representations or warranties shall be
true and correct in all material respects as of such earlier date.
7.24 The Transaction. At the time of consummation thereof, the
---------------
Transaction shall have been consummated in all material respects in accordance
with the terms of the relevant Documents therefor and all applicable laws. At
the time of consummation thereof, all material consents and approvals of, and
filings and registrations with, and all other actions in respect of, all
governmental agencies, authorities or instrumentalities required in order to
make or consummate the Transaction in accordance with the terms of the relevant
Documents therefor and all applicable laws have been obtained, given, filed or
taken and are or will be in full force and effect (or effective judicial relief
with respect thereto has been obtained). All applicable waiting periods with
respect thereto have or, prior to the time when required, will have, expired
without, in all such cases, any action being taken by any competent authority
which restrains, prevents, or imposes material adverse conditions upon the
Transaction. Additionally, there does not exist any judgment, order or
injunction prohibiting or imposing material adverse conditions upon any element
of the Transaction, the occurrence of any Credit Event, or the performance by
the Borrower and its Subsidiaries of their respective obligations under the
Documents and all applicable laws.
7.25 Special Purpose Corporation. Pacer Logistics Acquisition Corp.
---------------------------
was formed to effect the Pacer Logistics Acquisition. Prior to the consummation
of the Transaction, Pacer Logistics Acquisition Corp. had no significant assets
or liabilities (other than those liabilities under the Pacer Logistics
Acquisition Documents and such other liabilities arising in connection with the
Pacer Logistics Acquisition).
7.26 Subordination. The subordination provisions contained in the
-------------
Senior Subordinated Notes Documents and, on and after the execution and delivery
thereof, each of the agreements or instruments relating to the Shareholder
Subordinated Notes, Permitted Subordinated Refinancing Indebtedness and
Permitted Subordinated Indebtedness, are enforceable against the Borrower, the
Subsidiary Guarantors and the holders of such Indebtedness, except to the extent
that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws generally affecting
creditors' rights and by equitable principles (regardless of whether enforcement
is sought in equity or at law), and all Obligations hereunder and all
obligations of the Credit Parties under the other Credit Documents (including
without limitation, the Subsidiaries Guaranty) are within the definitions of
"Senior Debt" (or "Guarantor Senior Debt" in the case of the obligations of any
Subsidiary Guarantor) and "Designated Senior Debt" included in such
subordination provisions.
7.27 Year 2000 Representation. Any reprogramming required to permit
------------------------
the proper functioning, in and following the year 2000, of (i) the Borrower's
and its Subsidiaries' computer systems and (ii) equipment containing embedded
microchips (including systems and equipment supplied by others or with which the
Borrower's and its Subsidiaries' systems interface) and the testing of all such
systems and equipment, as so reprogrammed, will be completed by November 15,
1999, except to the extent the failure to complete such reprogramming would not
reasonably be expected to result in a Default, an Event of Default or a Material
Adverse Effect. The cost to the Borrower and its Subsidiaries of such
reprogramming and testing and of the reasonably foreseeable consequences of year
2000 to the Borrower and its Subsidiaries (including, without limitation,
reprogramming errors and the failure of others'
systems or equipment) could not reasonably be expected to result in a Default,
an Event of Default or a Material Adverse Effect. Except for such of the
reprogramming referred to in the preceding sentence as may be necessary, the
computer and management information systems of the Borrower and its Subsidiaries
are and, with ordinary course upgrading and maintenance, will continue for the
term of this Agreement to be, sufficient to permit the Borrower and its
Subsidiaries to conduct their respective businesses without a Material Adverse
Effect.
SECTION 8. Affirmative Covenants. The Borrower hereby covenants and
---------------------
agrees that as of the Effective Date and thereafter for so long as this
Agreement is in effect and until the Total Commitment has terminated, no Letters
of Credit or Notes are outstanding and the Loans and Unpaid Drawings, together
with interest, Fees and all other Obligations (other than any indemnities
described in Section 13.13 which are not then due and payable) incurred
hereunder, are paid in full:
8.01 Information Covenants. The Borrower will furnish to each Bank:
---------------------
(a) Monthly Reports. Within 60 days after the end of each fiscal
---------------
month of the Borrower, (i) the consolidated balance sheet of the Borrower
and its Subsidiaries as at the end of such fiscal month and the related
consolidated statements of income for such fiscal month and for the elapsed
portion of the fiscal year ended with the last day of such fiscal month, in
each case (x) without giving effect to any Permitted Acquisition
consummated in the 60-day period prior to the end of such fiscal month and
(y) setting forth comparative figures for the corresponding fiscal month in
the prior fiscal year and comparable budgeted figures for such fiscal month
as set forth in the respective budget delivered pursuant to Section 8.01(d)
and (ii) the consolidated statements of income for such fiscal month for
each Acquired Business acquired during the 60-day period prior to the end
of such fiscal month, all of which shall be certified by the chief
financial officer or other Authorized Officer of the Borrower, subject to
normal year-end audit adjustments and the absence of footnotes.
(b) Quarterly Financial Statements. Within 45 days after the close
of the first three quarterly accounting periods in each fiscal year of the
Borrower, (i) the consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such quarterly accounting period and the
related consolidated statements of income and retained earnings and of cash
flows for such quarterly accounting period and for the elapsed portion of
the fiscal year ended with the last day of such quarterly accounting period
and the budgeted figures for such quarterly period as set forth in the
respective budget delivered pursuant to Section 8.01(d) and (ii)
management's discussion and analysis of significant operational and
financial developments during such quarterly period, all of which shall be
in reasonable detail and certified by the chief financial officer or other
Authorized Officer of the Borrower that they fairly present in all material
respects the financial condition of the Borrower and its Subsidiaries as of
the dates indicated and the results of their operations and changes in
their cash flows for the periods indicated, subject to normal year-end
audit adjustments and the absence of footnotes. If the Borrower has
designated any Unrestricted Subsidiaries hereunder, then the quarterly
financial information required by this Section 8.01(b) shall include a
reasonably detailed presentation, either on the face of the financial
statements or in the footnotes thereto, and in management's discussion and
analysis of operational and financial developments, of the financial
condition and results of operations of the Borrower and its Subsidiaries
separate from the financial condition and results of operations of the
Unrestricted Subsidiaries of the Borrower.
(c) Annual Financial Statements. Within 90 days after the close of
---------------------------
each fiscal year of the Borrower, the consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such fiscal year and the
related consolidated statements of income and retained earnings and of cash
flows for such fiscal year and setting forth comparative consolidated
figures for the preceding fiscal year and comparable budgeted figures for
such fiscal year as set forth in the respective budget delivered pursuant
to Section 8.01(d) and (except for such comparable budgeted figures)
certified by PriceWaterhouseCoopers LLC or such other independent certified
public accountants of recognized national standing as shall be reasonably
acceptable to the Administrative Agent, in each case to the effect that
such statements fairly present in all material respects the financial
condition of the Borrower and its Subsidiaries as of the dates indicated
and the results of their operations and changes in financial position for
the periods indicated in conformity with GAAP applied on a basis consistent
with prior years, together with a certificate of such accounting firm
stating that in the course of its regular audit of the business of the
Borrower and its Subsidiaries, which audit was conducted in accordance with
generally accepted auditing standards, no Default or Event of Default which
has occurred and is continuing has come to their attention or, if such a
Default or an Event of Default has come to their attention, a statement as
to the nature thereof. If the Borrower has designated any Unrestricted
Subsidiaries hereunder, then the annual financial information required by
this Section 8.01(c) shall include a reasonably detailed presentation,
either on the face of the financial statements or in the footnotes thereto,
and in management's discussion and analysis of operational and financial
developments, of the financial condition and results of operations of the
Borrower and its Subsidiaries separate from the financial condition and
results of operations of the Unrestricted Subsidiaries of the Borrower.
(d) Budgets, etc. Not more than 60 days after the commencement of
-------------
each fiscal year of the Borrower, consolidated budgets of the Borrower and
its Subsidiaries (x) in reasonable detail for each of the four fiscal
quarters of such fiscal year and (y) in summary form for each of the five
fiscal years immediately following such fiscal year, in each case as
customarily prepared by management for its internal use setting forth, with
appropriate discussion, the principal assumptions upon which such budgets
are based. Together with each delivery of financial statements pursuant to
Sections 8.01(b) and (c), a comparison of the current year to date
financial results against the budgets required to be submitted pursuant to
this clause (d) shall be presented.
(e) Officer's Certificates. At the time of the delivery of the
----------------------
financial statements provided for in Sections 8.01(b) and (c), a
certificate of the chief financial officer
or other Authorized Officer of the Borrower to the effect that, to the best
of such officer's knowledge, no Default or Event of Default exists or, if
any Default or Event of Default does exist, specifying the nature and
extent thereof, which certificate shall, (I) if delivered in connection
with the financial statements in respect of a period ending on the last day
of a fiscal quarter or fiscal year of the Borrower, set forth (x) the
calculations required to establish whether the Borrower and its
Subsidiaries were in compliance with the provisions of Sections 3.03, 4.02,
9.02, 9.04(d), (g), (j) and (k), 9.05(a), (f), (g), (l), (p) and (r), 9.09,
9.10 and 9.11 as at the end of such fiscal quarter or year, as the case may
be, and (y) the calculation of the Total Leverage Ratio, the Adjusted Total
Leverage Ratio and the Adjusted Senior Leverage Ratio as at the last day of
the respective fiscal quarter or fiscal year of the Borrower, as the case
may be and (II) if delivered with the financial statements required by
Section 8.01(c), set forth in reasonable detail the amount of (and the
calculations required to establish the amount of) Excess Cash Flow for the
respective Excess Cash Flow Payment Period.
(f) Notice of Default or Litigation. Promptly, and in any event
-------------------------------
within three Business Days after an executive officer of the Borrower or
any of its Subsidiaries obtains actual knowledge thereof, notice of (i) the
occurrence of any event which constitutes a Default or an Event of Default,
which notice shall specify the nature and period of existence thereof and
what action the Borrower proposes to take with respect thereto, (ii) any
litigation or proceeding pending or threatened (x) against the Borrower or
any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect, (y) with respect to any material Indebtedness of
the Borrower or any of its Subsidiaries or (z) with respect to any Document
(other than such Documents referred to in clause (ix) of the definition
thereof), (iii) any governmental investigation pending or threatened
against the Borrower or any of its Subsidiaries and (iv) any other event
which could reasonably be expected to have a Material Adverse Effect.
(g) Auditors' Reports. Promptly upon receipt thereof, a copy of each
-----------------
report or "management letter" submitted to the Borrower or any of its
Subsidiaries by its independent accountants in connection with any annual,
interim or special audit made by them of the books of the Borrower or any
of its Subsidiaries and the management's non-privileged responses thereto.
(h) Environmental Matters. Promptly after an executive officer of the
---------------------
Borrower or any of its Subsidiaries obtains actual knowledge of any of the
following (but only to the extent that any of the following, either
individually or in the aggregate, could reasonably be expected to (x) have
a Material Adverse Effect or (y) result in a remedial cost to the Borrower
or any of its Subsidiaries in excess of $250,000, written notice of:
(i) any pending or threatened Environmental Claim against the
Borrower or any of its Subsidiaries or any Real Property owned or
operated by the Borrower or any of its Subsidiaries;
(ii) any condition or occurrence on any Real Property at any
time owned or operated by the Borrower or any of its Subsidiaries that
(x) results in noncompliance by the Borrower or any of its
Subsidiaries with any applicable Environmental Law or (y) could
reasonably be anticipated to form the basis of an Environmental Claim
against the Borrower or any of its Subsidiaries or any such Real
Property;
(iii) any condition or occurrence on any Real Property owned or
operated by the Borrower or any of its Subsidiaries that could
reasonably be anticipated to cause such Real Property to be subject to
any restrictions on the ownership, occupancy, use or transferability
by the Borrower or such Subsidiary, as the case may be, of its
interest in such Real Property under any Environmental Law; and
(iv) the taking of any removal or remedial action in response
to the actual or alleged presence of any Hazardous Material on any
Real Property owned or operated by the Borrower or any of its
Subsidiaries.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial action
and the Borrower's response or proposed response thereto. In addition, the
Borrower agrees to provide the Banks with copies of all material
communications by the Borrower or any of its Subsidiaries with any Person,
government or governmental agency relating to Environmental Laws or to any
of the matters set forth in clauses (i)-(iv) above, and such reasonably
detailed reports relating to any of the matters set forth in clauses (i)-
(iv) above as may reasonably be requested by the Administrative Agent or
the Required Banks.
(i) Annual Meetings with Banks. At the written request of the
--------------------------
Administrative Agent, the Borrower shall within 120 days after the close of
each of its fiscal years, hold a meeting (at a mutually agreeable location
and time) open to all of the Banks at which meeting shall be reviewed the
financial results of the previous fiscal year and the financial condition
of the Borrower and its Subsidiaries and the budgets presented for the
current fiscal year of the Borrower and its Subsidiaries.
(j) Notice of Commitment Reductions and Mandatory Repayments. On or
--------------------------------------------------------
prior to the date of any reduction to the Total Revolving Loan Commitment
or any mandatory repayment of outstanding Term Loans pursuant to any of
Sections 4.02(c) through (f), inclusive, the Borrower shall provide written
notice of the amount of the respective reduction or repayment, as the case
may be, to the Total Revolving Loan Commitment or the outstanding Term
Loans, as applicable, and the calculation thereof (in reasonable detail).
(k) Special Reports Relating to Tractor Trailers. At the time of the
---------------------------------------------
delivery of the financial statements provided for in Sections 8.01(c), a
schedule of all of the Tractor Trailers owned by the Borrower or any of its
Subsidiaries as of the fiscal quarter most recently ended, which schedule
shall specify (i) the state in which the respective Tractor
Trailer is registered or titled, (ii) whether a security interest has been
recorded on the certificate of title for the respective Tractor Trailer in
favor of the Collateral Agent for the benefit of the Secured Creditors,
(iii) whether the certificate of title for the respective Tractor Trailer
(as modified to reflect the security interest in favor of the Collateral
Agent) has been reregistered with the appropriate state governmental agency
(and, if not, the date by which such reregistration must be accomplished in
accordance with the terms of the relevant Security Agreement), (iv) in the
case of Tractor Trailers operated in Canada, whether a financing statement
or hypothec registration has been filed with the appropriate province, (v)
the date of the acquisition of each new Tractor Trailer acquired on or
after the Initial Borrowing Date, and (vi) each Tractor Trailer listed
thereon acquired since the date of the delivery of the previous schedule
pursuant to this Section 8.01(k).
(l) Other Information. Promptly upon transmission thereof, copies
-----------------
of any filings and registrations with, and reports to, the SEC by the
Borrower or any of its Subsidiaries and copies of all financial statements,
proxy statements, notices and reports as the Borrower or any of its
Subsidiaries shall send generally to analysts and the holders of their
capital stock or of any Permitted Debt or the Senior Subordinated Notes, in
their capacity as such holders (to the extent not theretofore delivered to
the Banks pursuant to this Agreement) and, with reasonable promptness, such
other information or documents (financial or otherwise) as any Agent on its
own behalf or on behalf of the Required Banks may reasonably request from
time to time.
8.02 Books, Records and Inspections. The Borrower will, and will
------------------------------
cause each of its Subsidiaries to, keep proper books of record and account in
which full, true and correct entries in conformity with GAAP and all
requirements of law shall be made of all dealings and transactions in relation
to its business and activities. The Borrower will, and will cause each of its
Subsidiaries to, permit, upon reasonable notice to the chief financial officer
or other Authorized Officer of the Borrower, officers and designated
representatives of any Agent or the Required Banks to visit and inspect under
the guidance of officers of the Borrower any of the properties or assets of the
Borrower and any of its Subsidiaries in whomsoever's possession, and to examine
the books of account of the Borrower and any of its Subsidiaries and discuss the
affairs, finances and accounts of the Borrower and of any of its Subsidiaries
with, and be advised as to the same by, their officers and independent
accountants, all at such reasonable times and intervals and to such reasonable
extent as such Agent or the Required Banks may desire, provided that so long as
--------
no Default or Event of Default is then in existence, the Borrower shall have the
right to participate in any discussions of the Agents or the Banks with any
independent accountants of the Borrower.
8.03 Insurance. (a) The Borrower will, and will cause each of its
---------
Subsidiaries to (i) maintain, with financially sound and reputable insurance
companies, insurance on all its property in at least such amounts and against at
least such risks as is consistent and in accordance with industry practice and
(ii) furnish to the Administrative Agent and each of the Banks, upon request,
full information as to the insurance carried. In addition to the requirements of
the immediately preceding sentence, the Borrower will at all times cause
insurance of the types
described in Schedule VIII to be maintained (with the same scope of coverage as
that described in Schedule VIII) at levels which are consistent with its
practices immediately before the Initial Borrowing Date, taking into account the
age and fair market value of equipment. Such insurance shall include physical
damage insurance on all real and personal property (whether now owned or
hereafter acquired) on an all risk basis and business interruption insurance.
The provisions of this Section 8.03 shall be deemed supplemental to, but not
duplicative of, the provisions of any Security Documents that require the
maintenance of insurance.
(b) The Borrower will, and will cause each of its Subsidiaries to,
at all times keep the respective property of the Borrower and its Subsidiaries
(except real or personal property leased or financed through third parties in
accordance with this Agreement) insured in favor of the Collateral Agent, and
all policies or certificates with respect to such insurance (and any other
insurance maintained by, or on behalf of, the Borrower or any Subsidiary of the
Borrower) (i) shall be endorsed to the Collateral Agent's satisfaction for the
benefit of the Collateral Agent (including, without limitation, by naming the
Collateral Agent as certificate holder, mortgagee and loss payee with respect to
real property, certificate holder and loss payee with respect to personal
property, additional insured with respect to general liability and umbrella
liability coverage and certificate holder with respect to workers' compensation
insurance), (ii) shall state that such insurance policies shall not be cancelled
or materially changed without at least 30 days' prior written notice thereof by
the respective insurer to the Collateral Agent and (iii) shall, upon the request
of the Collateral Agent, be deposited with the Collateral Agent.
(c) If the Borrower or any of its Subsidiaries shall fail to
maintain all insurance in accordance with this Section 8.03, or if the Borrower
or any of its Subsidiaries shall fail to so name the Collateral Agent as an
additional insured, mortgagee or loss payee, as the case may be, or so deposit
all certificates with respect thereto, the Administrative Agent and/or the
Collateral Agent shall have the right (but shall be under no obligation) to
procure such insurance, and the Credit Parties agree to jointly and severally
reimburse the Administrative Agent or the Collateral Agent, as the case may be,
for all costs and expenses of procuring such insurance.
8.04 Payment of Taxes. The Borrower will pay and discharge, and will
----------------
cause each of its Subsidiaries to pay and discharge, all material taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any material properties belonging to it, prior to the
date on which penalties attach thereto, and all material lawful claims for sums
that have become due and payable which, if unpaid, might become a Lien not
otherwise permitted under Section 9.03(a); provided, that neither the Borrower
--------
nor any of its Subsidiaries shall be required to pay any such tax, assessment,
charge, levy or claim which is being contested in good faith and by proper
proceedings if it has maintained adequate reserves with respect thereto in
accordance with GAAP.
8.05 Corporate Franchises. The Borrower will do, and will cause each
--------------------
of its Subsidiaries to do, or cause to be done, all things necessary to preserve
and keep in full force and effect its existence and its material rights,
franchises, authority to do business, licenses and patents, except for rights,
franchises, authority to do business, licenses and patents the loss of which
(individually or in the aggregate) could not reasonably be expected to have a
Material
Adverse Effect; provided, however, that any transaction permitted by Section
-------- -------
9.02 will not constitute a breach of this Section 8.05.
8.06 Compliance with Statutes; etc. The Borrower will, and will
------------------------------
cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property, except for such noncompliances as
would not, either individually or in the aggregate, have a Material Adverse
Effect or a material adverse effect on the ability of any Credit Party to
perform its obligations under any Credit Document to which it is a party.
8.07 Compliance with Environmental Laws. (a) (i) The Borrower will
----------------------------------
comply, and will cause each of its Subsidiaries to comply, in all material
respects with all Environmental Laws applicable to their businesses or the
ownership or use of its Real Property now or hereafter owned or operated by the
Borrower or any of its Subsidiaries, will promptly pay or, with respect to any
of its Subsidiaries, cause to be paid all costs and expenses incurred in
connection with such compliance, and will keep or cause to be kept all such Real
Property free and clear of any Liens imposed pursuant to such Environmental Laws
and (ii) neither the Borrower nor any of its Subsidiaries will generate, use,
treat, store, Release or dispose of, or permit the generation, use, treatment,
storage, release or disposal of, Hazardous Materials on any Real Property owned
or operated by the Borrower or any of its Subsidiaries other than in compliance
with Environmental Laws and as required in connection with the normal business
operations of the Borrower and its Subsidiaries, or transport or permit the
transportation of Hazardous Materials other than in compliance with
Environmental Laws and as required in connection with the normal business
operations of the Borrower and its Subsidiaries, unless the failure to comply
with the requirements specified in clause (i) or (ii) above, either individually
or in the aggregate, would not reasonably be expected to have a Material Adverse
Effect. If the Borrower or any of its Subsidiaries or any tenant or occupant of
any Real Property owned or operated by the Borrower or any of its Subsidiaries
causes or permits any intentional or unintentional act or omission resulting in
the presence or Release of any Hazardous Material in a quantity or concentration
sufficient to require reporting or to trigger an obligation to undertake clean-
up, removal or remedial action under applicable Environmental Laws, the Borrower
agrees to undertake, and/or to cause any of its Subsidiaries, tenants or
occupants to undertake, at their sole expense, any clean up, removal, remedial
or other action required pursuant to Environmental Laws to remove and clean up
any Hazardous Materials from any Real Property except where the failure to do so
would not reasonably be expected to have a Material Adverse Effect; provided
--------
that neither the Borrower nor any of its Subsidiaries shall be required to
undertake any clean up, removal, remedial or other action while the requirement
to undertake such clean up, removal, remedial or other action is being contested
in good faith and by proper proceedings so long as it has maintained adequate
reserves with respect to such clean up, removal, remedial or other action to the
extent required in accordance with GAAP. Notwithstanding any provision of this
Section 8.07(a), the Borrower shall not be required by this Section to exercise
any degree of control over the operations of any of its Subsidiaries that could
reasonably be construed under applicable Environmental Law to make the Borrower
liable for Environmental Claims arising from or casually related to the Real
Property or operations of such Subsidiary as an owner or an operator or upon any
other basis.
(b) At the written request of the Administrative Agent or the
Required Banks, which request shall specify in reasonable detail the basis
therefor, at any time and from time to time, the Borrower will provide, at its
sole cost and expense, an environmental site assessment report concerning any
Real Property now or hereafter owned or operated by the Borrower or any of its
Subsidiaries, prepared by an environmental consulting firm approved by the
Administrative Agent, addressing the matters in clause (i), (ii) or (iii) below
which gives rise to such request (or, in the case of a request pursuant to
following clause (i), addressing such matter as may be requested by the
Administrative Agent or the Required Banks) and estimating the range of the
potential costs of any removal, remedial or other corrective action in
connection with any such matter, provided that in no event shall such request be
--------
made unless (i) an Event of Default has occurred and is continuing, (ii) the
Banks receive notice under Section 8.01(h) for any event for which notice is
required to be delivered for any such Real Property or (iii) the Administrative
Agent or the Required Banks reasonably believe that there was a breach of any
representation, warranty or covenant contained in Section 7.17 or 8.07(a). If
the Borrower fails to provide the same within 60 days after such request was
made, the Administrative Agent may order the same, and the Borrower shall grant
and hereby grants, to the Administrative Agent and the Banks and their agents
access to such Real Property owned or operated by the Borrower or any of its
Subsidiaries, and specifically grants the Administrative Agent and the Banks and
their agents an irrevocable non-exclusive license, subject to the rights of
tenants, to undertake such an assessment, all at the Borrower's expense.
8.08 ERISA. As soon as possible and, in any event, within ten
-----
Business Days after the Borrower or any Subsidiary of the Borrower or any ERISA
Affiliate knows or has reason to know of the occurrence of any of the following,
the Borrower will deliver to each of the Banks a certificate of the chief
financial officer of the Borrower setting forth the full details as to such
occurrence and the action, if any, that the Borrower, such Subsidiary or such
ERISA Affiliate is required or proposes to take, together with any notices
required or proposed to be given to or filed with or by the Borrower, the
Subsidiary, the ERISA Affiliate, the PBGC or any other governmental agency, a
Plan or, to the extent received by the Borrower, Multiemployer Plan participant
or the Plan or Multiemployer Plan administrator with respect thereto: that a
Reportable Event has occurred (except to the extent that the Borrower has
previously delivered to the Banks a certificate and notices (if any) concerning
such event pursuant to the next clause hereof); that a contributing sponsor (as
defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA
is subject to the advance reporting requirement of PBGC Regulation Section
4043.61 (without regard to subparagraph (b)(1) thereof), and an event described
in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section
4043 is reasonably expected to occur within the following 30 days; that an
accumulated funding deficiency, within the meaning of Section 412 of the Code or
Section 302 of ERISA, has been incurred or an application has been made or is
reasonably expected to be made for a waiver or modification of the minimum
funding standard (including any required installment payments) or an extension
of any amortization period under Section 412 of the Code or Section 303 or 304
of ERISA with respect to a Plan; that any contribution required to be made by
the Borrower, any Subsidiary or any ERISA Affiliate with respect to a Plan, a
Multiemployer Plan or Foreign Pension Plan has not been timely made; that a Plan
or a Multiemployer Plan has been or is reasonably expected to be terminated,
reorganized, partitioned or declared insolvent under Title
IV of ERISA; that a Plan has an Unfunded Current Liability; that proceedings
have been or are reasonably expected to be instituted to terminate or appoint a
trustee to administer a Plan or a Multiemployer Plan which is subject to Title
IV of ERISA; that a proceeding has been instituted against the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate pursuant to Section 515 of
ERISA to collect a delinquent contribution to a Multiemployer Plan; that the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate will or is
reasonably expected to incur any liability (including any indirect, contingent,
or secondary liability) to or on account of the termination of or withdrawal
from a Plan or a Multiemployer Plan under Section 4062, 4063, 4064, 4069, 4201,
4204 or 4212 of ERISA or with respect to a Plan under Section 401(a)(29), 4971
or 4980 of the Code or with respect to a group health plan (as defined in
Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B
of the Code; that the Borrower or any Subsidiary of the Borrower will or is
reasonably expected to incur any liability (including any indirect, contingent,
or secondary liability) with respect to a Plan under Section 4975 of the Code or
Section 409, 502 (i) or 502(1) of ERISA; or that the Borrower or any Subsidiary
of the Borrower will or is reasonably expected to incur any material liability
pursuant to any employee welfare benefit plan (as defined in Section 3(1) of
ERISA) that provides benefits to retired employees or other former employees
(other than as required by Section 601 of ERISA) or any Plan. The Borrower will
deliver to each of the Banks (i) at the request of any Bank on ten Business
Days' notice a complete copy of the annual report (on Internal Revenue Service
Form 5500-series) of each Plan (including, to the extent required, the related
financial and actuarial statements and opinions and other supporting statements,
certifications, schedules and information) required to be filed with the
Internal Revenue Service and (ii) copies of any records, documents or other
information that must be furnished to the PBGC with respect to any Plan pursuant
to Section 4010 of ERISA. In addition to any certificates or notices delivered
to the Banks pursuant to the first sentence hereof, copies of any material
documents or other information required to be furnished to the PBGC, and any
material notices received by the Borrower, any Subsidiary of the Borrower or any
ERISA Affiliate with respect to any Plan, Multiemployer Plan or Foreign Pension
Plan shall be delivered to the Banks no later than ten Business Days after the
date such documents and/or information has been furnished to the PBGC or such
notice has been received by the Borrower, such Subsidiary or such ERISA
Affiliate, as applicable.
8.09 Good Repair. The Borrower will, and will cause each of its
-----------
Subsidiaries to, ensure that its material properties and equipment used in its
business are kept in good repair, working order and condition, ordinary wear and
tear excepted, and that from time to time there are made in such properties and
equipment all needful and proper repairs, renewals, replacements, extensions,
additions, betterments and improvements thereto, to the extent and in the manner
useful or customary for companies in similar businesses.
8.10 End of Fiscal Years; Fiscal Quarters. The Borrower will, for
------------------------------------
financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries' (other than Pacer Logistics' and Pacer Logistics' Subsidiaries'),
fiscal years to end on the Friday nearest to December 31 of each calendar year
and (ii) each of its, and each of its Subsidiaries' (other than Pacer Logistics'
and Pacer Logistics' Subsidiaries'), (x) first fiscal quarter in each fiscal
year to end on last day of the 14/th/ week of such fiscal year, (y) the second
and third fiscal quarters in each fiscal year to end
on the last day of the 26/th/ and 38/th/ weeks, respectively, of such fiscal
year and (z) the fourth fiscal quarter in each fiscal year to end on the last
day of the 52nd week (or in the case of the fiscal year ending on the Friday
nearest to December 31, 2004, the 53rd week) of such fiscal year. The Borrower
will, for financial reporting purposes, cause (i) Pacer Logistics' and each of
its Subsidiaries' fiscal years to end on December 31 of each calendar year and
(ii) Pacer Logistics' and each of its Subsidiaries' fiscal quarters to end on
March 31, June 30, September 30 and December 31 of each year.
8.11 Additional Security; Further Assurances. (a) The Borrower
---------------------------------------
will, and will cause each of its Wholly-Owned Domestic Subsidiaries (and to the
extent Section 8.12 is operative, each of its Wholly-Owned Foreign Subsidiaries)
to, grant to the Collateral Agent security interests and mortgages in such
assets and real property of the Borrower and its Subsidiaries as are not covered
by the original Security Documents, in each case to the extent requested from
time to time by the Administrative Agent or the Required Banks (collectively,
the "Additional Security Documents"). All such security interests and mortgages
shall be granted pursuant to documentation reasonably satisfactory in form and
substance to the Collateral Agent and shall constitute valid and enforceable
perfected security interests, hypothecations and mortgages superior to and prior
to the rights of all third Persons and enforceable as against third parties and
subject to no other Liens except for Permitted Liens. The Additional Security
Documents or instruments related thereto shall have been duly recorded or filed
in such manner and in such places as are required by law to establish, perfect,
preserve and protect the Liens in favor of the Collateral Agent required to be
granted pursuant to the Additional Security Documents and all taxes, fees and
other charges payable in connection therewith shall have been paid in full.
Notwithstanding the foregoing, this Section 8.11(a) shall not apply to (and the
Borrower and its Subsidiaries shall not be required to grant a mortgage in) any
Real Property the fair market value of which (as determined in good faith by
senior management of the Borrower) is less than $5,000,000.
(b) The Borrower will, and will cause each of its Subsidiaries to,
at the expense of the Borrower, make, execute, endorse, acknowledge, file and/or
deliver to the Collateral Agent from time to time such vouchers, invoices,
schedules, confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, real property surveys, reports
and other assurances or instruments and take such further steps relating to the
Collateral covered by any of the Security Documents as the Collateral Agent may
reasonably require (including, without limitation, (x) reregistering the
certificate of title of any Tractor Trailer in any state in which such Tractor
Trailer primarily operates, to the extent the Collateral Agent determines, in
its reasonable discretion, that such action is required to ensure the perfection
or the enforceability as against third parties of its security interest in such
Collateral and (y) furnishing a schedule of all units of Rolling Stock owned by
the Borrower and its Subsidiaries and the serial or other identification number
assigned to each such unit). Furthermore, the Borrower shall cause to be
delivered to the Collateral Agent such opinions of counsel, title insurance and
other related documents as may be reasonably requested by the Collateral Agent
to assure itself that this Section 8.11 has been complied with.
(c) The Borrower agrees that each action required above by this
Section 8.11 shall be completed as soon as possible, but in no event later than
90 days after such action is either requested to be taken by the Administrative
Agent, the Collateral Agent or the Required Banks or required to be taken by the
Borrower and its Subsidiaries pursuant to the terms of this Section 8.11;
provided that in no event will the Borrower or any of its Subsidiaries be
--------
required to take any action, other than using its commercially reasonable
efforts, to obtain consents from third parties with respect to its compliance
with this Section 8.11.
8.12 Foreign Subsidiaries Security. If following a change in the
-----------------------------
relevant sections of the Code or the regulations, rules, rulings, notices or
other official pronouncements issued or promulgated thereunder, counsel for the
Borrower reasonably acceptable to the Administrative Agent does not within 30
days after a request from the Administrative Agent or the Required Banks deliver
evidence, in form and substance mutually satisfactory to the Administrative
Agent and the Borrower, with respect to any Foreign Subsidiary (and in the case
of clause (i) below, any Foreign Unrestricted Subsidiary) of the Borrower which
has not already had all of its stock pledged pursuant to the Pledge Agreement
that (i) a pledge of more than 66-2/3% of the total combined voting power of all
classes of capital stock of such Foreign Subsidiary (or Foreign Unrestricted
Subsidiary) entitled to vote, (ii) the entering into by such Foreign Subsidiary
of a security agreement in substantially the form of the Security Agreement,
(iii) the entering into by such Foreign Subsidiary of a pledge agreement in
substantially the form of the Pledge Agreement and (iv) the entering into by
such Foreign Subsidiary of a guaranty in substantially the form of the
Subsidiaries Guaranty, in any such case could reasonably be expected to cause
(I) the undistributed earnings of such Foreign Subsidiary (or Foreign
Unrestricted Subsidiary) as determined for Federal income tax purposes to be
treated as a deemed dividend to such Foreign Subsidiary's (or Foreign
Unrestricted Subsidiary's) United States parent for Federal income tax purposes
or (II) other material adverse Federal income tax consequences to the Credit
Parties, then in the case of a failure to deliver the evidence described in
clause (i) above, that portion of such Foreign Subsidiary's (or Foreign
Unrestricted Subsidiary's, as the case may be) outstanding capital stock so
issued by such Foreign Subsidiary (or Foreign Unrestricted Subsidiary, as the
case may be), in each case not theretofore pledged pursuant to the Pledge
Agreement shall be pledged to the Collateral Agent for the benefit of the
Secured Creditors pursuant to the Pledge Agreement (or another pledge agreement
in substantially similar form, if needed), and in the case of a failure to
deliver the evidence described in clause (ii) or (iii) above, such Foreign
Subsidiary (to the extent same is a Wholly-Owned Foreign Subsidiary) shall
execute and deliver the Security Agreement (or another security agreement in
substantially similar form, if needed) or the Pledge Agreement (or another
pledge agreement in substantially similar form, if needed), as the case may be,
granting to the Collateral Agent for the benefit of the Secured Creditors a
security interest in all of such Foreign Subsidiary's assets or the capital
stock and promissory notes owned by such Foreign Subsidiary, as the case may be,
and securing the obligations of the Borrower under the Credit Documents and
under any Interest Rate Protection Agreement or Other Hedging Agreement and, in
the event the Subsidiaries Guaranty shall have been executed by such Foreign
Subsidiary, the obligations of such Foreign Subsidiary thereunder, and in the
case of a failure to deliver the evidence described in clause (iv) above, such
Foreign Subsidiary (to the extent same is a Wholly-Owned Foreign Subsidiary)
shall execute and deliver the Subsidiaries Guaranty (or another guaranty in
substantially similar form, if needed), guaranteeing
the obligations of the Borrower under the Credit Documents and under any
Interest Rate Protection Agreement or Other Hedging Agreement, in each case to
the extent that the entering into of such Security Agreement, Pledge Agreement
or Subsidiaries Guaranty (or substantially similar document) is permitted by the
laws of the respective foreign jurisdiction and with all documents delivered
pursuant to this Section 8.12 to be in form and substance reasonably
satisfactory to the Administrative Agent and/or the Collateral Agent.
8.13 Use of Proceeds. All proceeds of the Loans shall be used as
---------------
provided in Section 7.05.
8.14 Permitted Acquisitions. (a) Subject to the provisions of this
----------------------
Section 8.14 and the requirements contained in the definition of Permitted
Acquisition, the Borrower and any of its Wholly-Owned Domestic Subsidiaries may
from time to time effect Permitted Acquisitions, so long as (in each case except
to the extent the Required Banks otherwise specifically agree in writing in the
case of a specific Permitted Acquisition): (i) no Default or Event of Default
shall be in existence at the time of the consummation of the proposed Permitted
Acquisition or immediately after giving effect thereto; (ii) the Borrower shall
have given the Administrative Agent and the Banks at least 5 Business Days'
prior written notice of any Permitted Acquisition; (iii) calculations are made
by the Borrower of compliance with the covenants contained in Sections 9.09 and
9.10 (in each case, giving effect to the last sentence appearing therein) for
the period of four consecutive fiscal quarters (taken as one accounting period)
most recently ended prior to the date of such Permitted Acquisition (each, a
"Calculation Period"), on a Pro Forma Basis as if the respective Permitted
--- -----
Acquisition (as well as all other Permitted Acquisitions theretofore consummated
after the first day of such Calculation Period) had occurred on the first day of
such Calculation Period, and such recalculations shall show that such financial
covenants would have been complied with if the Permitted Acquisition had
occurred on the first day of such Calculation Period (for this purpose, if the
first day of the respective Calculation Period occurs prior to the Initial
Borrowing Date, calculated as if the covenants contained in said Sections 9.09
and 9.10 (in each case, giving effect to the last sentence appearing therein)
had been applicable from the first day of the Calculation Period); (iv) based on
good faith projections prepared by the Borrower for the period from the date of
the consummation of the Permitted Acquisition to the date which is one year
thereafter, the level of financial performance measured by the covenants set
forth in Sections 9.09 and 9.10 (in each case, giving effect to the last
sentence appearing therein) shall be better than or equal to such level as would
be required to provide that no Default or Event of Default would exist under the
financial covenants contained in Sections 9.09 and 9.10 (in each case, giving
effect to the last sentence appearing therein) through the date which is one
year from the date of the consummation of the respective Permitted Acquisition;
(v) calculations are made by the Borrower demonstrating compliance with an
Adjusted Senior Leverage Ratio not to exceed 3.00:1.0 on the last day of the
relevant Calculation Period, on a Pro Forma Basis as if the respective Permitted
--- -----
Acquisition (as well as all other Permitted Acquisitions theretofore consummated
after the first day of such Calculation Period) had occurred on the first day of
such Calculation Period; (vi) the Maximum Permitted Consideration payable in
connection with the proposed Permitted Acquisition does not exceed $25,000,000
(or, in the case of the acquisition of Conex pursuant to a Permitted
Acquisition, $40,000,000); (vii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on and as of the date of such Permitted Acquisition
(both before and after giving effect thereto), unless stated to relate to a
specific earlier date, in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date; (viii) the
Borrower provides to the Administrative Agent and the Banks as soon as available
but not later than 5 Business Days after the execution thereof, a copy of any
executed purchase agreement or similar agreement with respect to such Permitted
Acquisition; (ix) after giving effect to such Permitted Acquisition and the
payment of all post-closing purchase price adjustments required (in the good
faith determination of the Borrower) in connection with such Permitted
Acquisition (and all other Permitted Acquisitions for which such purchase price
adjustments may be required to be made) and all capital expenditures (and the
financing thereof) reasonably anticipated by the Borrower to be made in the
business acquired pursuant to such Permitted Acquisition within the 90-day
period (such period for any Permitted Acquisition, a "Post-Closing Period")
following such Permitted Acquisition (and in the businesses acquired pursuant to
all other Permitted Acquisitions with Post-Closing Periods ended during the
Post-Closing Period of such Permitted Acquisition), the Total Unutilized
Revolving Loan Commitment shall equal or exceed $15,000,000; and (x) the
Borrower shall have delivered to the Administrative Agent an officer's
certificate executed by an Authorized Officer of the Borrower, certifying to the
best of his knowledge, compliance with the requirements of preceding clauses (i)
through (ix), inclusive, and containing the calculations required by the
preceding clauses (iii), (iv), (v), (vi) and (ix); provided, however, that so
-------- -------
long as (x) the Maximum Permitted Consideration payable in connection with the
proposed Permitted Acquisition does not exceed $2,500,000 and (y) the Maximum
Permitted Consideration paid in connection with the proposed Permitted
Acquisition, when combined with the Maximum Permitted Consideration paid in
connection with all other Permitted Acquisitions consummated in the same fiscal
quarter as such proposed Permitted Acquisition, does not exceed $5,000,000, the
Borrower shall not be required to comply with clauses (ii) and (viii) above in
connection with such Permitted Acquisition and the officer's certificate
otherwise required to be delivered pursuant to clause (x) above shall instead be
delivered to the Administrative Agent within 45 days following the end of the
fiscal quarter in which such Permitted Acquisition is consummated.
(b) At the time of each Permitted Acquisition involving the creation
or acquisition of a Subsidiary, or the acquisition of capital stock or other
equity interest of any Person, the capital stock or other equity interests
thereof created or acquired in connection with such Permitted Acquisition shall
be pledged for the benefit of the Secured Creditors pursuant to the Pledge
Agreement in accordance with the requirements of Section 9.15.
(c) The Borrower shall cause each Subsidiary which is formed to
effect, or is acquired pursuant to, a Permitted Acquisition to comply with, and
to execute and deliver, all of the documentation required by, Sections 8.11 and
9.15, to the reasonable satisfaction of the Administrative Agent.
(d) The consummation of each Permitted Acquisition shall be deemed to
be a representation and warranty by the Borrower that the certifications by the
Borrower (or by one or
more of its Authorized Officers) pursuant to Section 8.14(a) are true and
correct and that all conditions thereto have been satisfied and that same is
permitted in accordance with the terms of this Agreement, which representation
and warranty shall be deemed to be a representation and warranty for all
purposes hereunder, including, without limitation, Sections 6 and 10.
8.15 Performance of Obligations. The Borrower will, and will cause
--------------------------
each of its Subsidiaries to, perform all of its obligations under the terms of
each mortgage, deed of trust, indenture, loan agreement or credit agreement and
each other material agreement, contract or instrument by which it is bound,
except such non-performances as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
8.16 Maintenance of Company Separateness. The Borrower will, and
-----------------------------------
will cause each of its Subsidiaries and Unrestricted Subsidiaries to, satisfy
customary Company formalities, including, as applicable, the holding of regular
board of directors' and shareholders' meetings or action by directors or
shareholders without a meeting and the maintenance of Company offices and
records. Neither the Borrower nor any of its Subsidiaries shall make any
payment to a creditor of any Unrestricted Subsidiary in respect of any liability
of any Unrestricted Subsidiary, and no bank account of any Unrestricted
Subsidiary shall be commingled with any bank account of the Borrower or any of
its Subsidiaries. Any financial statements distributed to any creditors of any
Unrestricted Subsidiary shall clearly establish or indicate the Company
separateness of such Unrestricted Subsidiary from the Borrower and its
Subsidiaries. Finally, neither the Borrower nor any of its Subsidiaries shall
take any action, or conduct its affairs in a manner, which is likely to result
in the Company existence of the Borrower or any of its Subsidiaries or
Unrestricted Subsidiaries being ignored, or in the assets and liabilities of the
Borrower or any of its Subsidiaries being substantively consolidated with those
of any other such Person or any Unrestricted Subsidiary in a bankruptcy,
reorganization or other insolvency proceeding.
8.17 Year 2000 Compliance. The Borrower will ensure that its
--------------------
Information Systems and Equipment are at all times after November 15, 1999 Year
2000 Compliant in all material respects, and shall notify the Administrative
Agent and each Bank promptly upon detecting any failure of the Information
Systems and Equipment to be Year 2000 Compliant. In addition, the Borrower
shall provide the Administrative Agent and each Bank with such information about
its year 2000 computer readiness (including, without limitation, information as
to contingency plans, budgets and testing results) as the Administrative Agent
or such Bank shall reasonably request.
8.18 338(h)(10) Election. The Borrower will timely file or shall
--------------------
cause to be timely filed all forms required to be filed to effect a valid
election under Section 338(h)(10) of the Code with respect to the
Recapitalization, and the Borrower will timely satisfy or will cause to be
timely satisfied any requirements imposed by any state or local government to
give effect to an election analogous to the foregoing Section 338(h)(10)
election for all applicable state or local tax purposes.
8.19 Name Change. Immediately after giving effect to the Pacer
------------
Logistics Acquisition, the Borrower shall cause an amendment to the Certificate
of Incorporation of Pacer
Logistics to be filed with the Secretary of State of the State of Delaware,
which amendment shall change the name of Pacer Logistics from "Pacer
International, Inc." to "Pacer Logistics, Inc."
SECTION 9. Negative Covenants. The Borrower hereby covenants and
------------------
agrees that as of the Initial Borrowing Date and thereafter for so long as this
Agreement is in effect and until the Total Commitment has terminated, no Letters
of Credit or Notes are outstanding and the Loans, together with interest, Fees
and all other Obligations (other than any indemnities described in Section 13.13
which are not then due and payable) incurred hereunder, are paid in full:
9.01 Changes in Business. (a) The Borrower will not, and will not
-------------------
permit any of its Subsidiaries to, engage directly or indirectly in any business
other than a Permitted Business.
(b) No Unrestricted Subsidiary shall engage (directly or indirectly)
in any business other than a Permitted Business.
9.02 Consolidation; Merger; Sale or Purchase of Assets; etc. The
-------------------------------------------------------
Borrower will not, nor will the Borrower permit any of its Subsidiaries to, wind
up, liquidate or dissolve its affairs or enter into any transaction of merger,
amalgamation or consolidation, or convey, sell, lease or otherwise dispose of
all or any part of its property or assets (other than inventory in the ordinary
course of business), or enter into any sale-leaseback transactions, or purchase
or otherwise acquire (in one or a series of related transactions) any part of
the property or assets (other than purchases or other acquisitions of inventory,
materials, general intangibles, equipment, goods and services in the ordinary
course of business) of any Person or agree to do any of the foregoing at any
future time, except that the following shall be permitted:
(a) the Borrower and its Subsidiaries may, as lessee, enter into
operating leases in the ordinary course of business with respect to real,
personal, movable or immovable property;
(b) Capital Expenditures by the Borrower and its Subsidiaries to the
extent not in violation of Section 9.11;
(c) Investments permitted pursuant to Section 9.05 and the
disposition or liquidation of Cash Equivalents in the ordinary course of
business;
(d) the Borrower and any of its Subsidiaries may sell or otherwise
dispose of assets (excluding capital stock of, or other equity interests
in, Subsidiaries, Joint Ventures and Unrestricted Subsidiaries) which, in
the reasonable opinion of such Person, are obsolete, uneconomic or no
longer useful in the conduct of such Person's business, provided that
--------
except with respect to asset dispositions or transfers arising out of, or
in connection with, the events described in clauses (i) and (ii) of the
definition of Recovery Event, (w) each such sale or disposition shall be
for an amount at least equal to the fair market value thereof (as
determined in good faith by senior management of the Borrower), (x) to the
extent any such sale or disposition generates Net Sale Proceeds equal to or
greater than $250,000, such sale or disposition (I) results in
consideration at
least 80% of which (taking into account the amount of cash, the principal
amount of any promissory notes and the fair market value, as determined by
the Borrower in good faith, of any other consideration) shall be in the
form of cash or (II) in the case of an asset or assets subject to
Capitalized Lease Obligations, results in the assumption of all of the
Capitalized Lease Obligations or other purchase money obligations of the
Borrower or such Subsidiary in respect of such asset by the purchaser
thereof, (y) the aggregate Net Sale Proceeds from all assets sold or
otherwise disposed of pursuant to this clause (d), when added to the
aggregate amount of all Capitalized Lease Obligations and all other
purchase money obligations assigned in connection with all assets sold or
otherwise disposed of pursuant to this clause (d) shall not exceed
$10,000,000 in the aggregate in any fiscal year of the Borrower and (z) in
the case of any sale or disposition of an asset constituting an Asset Sale,
the Net Sale Proceeds therefrom are either applied to repay Term Loans
and/or reduce the Total Revolving Loan Commitment as provided in Section
4.02(c) or reinvested in replacement assets or retained to the extent
permitted by Section 4.02(c) and/or the other relevant provisions of this
Agreement;
(e) any Subsidiary of the Borrower may convey, lease, license, sell
or otherwise transfer all or any part of its business, properties and
assets to the Borrower or to any Subsidiary Guarantor, so long as any
security interests granted to the Collateral Agent for the benefit of the
Secured Creditors pursuant to the Security Documents in the assets so
transferred shall remain in full force and effect and perfected (to at
least the same extent as in effect immediately prior to such transfer) and
all actions required to maintain said perfected status have been taken;
(f) any Subsidiary of the Borrower may merge with and into, or be
dissolved or liquidated into, the Borrower or any Subsidiary Guarantor, so
long as (i) the Borrower or such Subsidiary Guarantor is the surviving
corporation of any such merger, dissolution or liquidation and (ii) any
security interests granted to the Collateral Agent for the benefit of the
Secured Creditors pursuant to the Security Documents in the assets of such
Subsidiary shall remain in full force and effect and perfected (to at least
the same extent as in effect immediately prior to such merger, dissolution
or liquidation) and all actions required to maintain said perfected status
have been taken;
(g) any Foreign Subsidiary may be merged or amalgamated with and
into, or be dissolved or liquidated into, or transfer any of its assets to,
any Wholly-Owned Foreign Subsidiary of the Borrower, so long as (i) such
Wholly-Owned Foreign Subsidiary is the surviving corporation of any such
merger, amalgamation, dissolution or liquidation and (ii) any security
interests granted to the Collateral Agent for the benefit of the Secured
Creditors pursuant to the Security Documents in the assets of such Wholly-
Owned Foreign Subsidiary and such Foreign Subsidiary shall remain in full
force and effect and perfected (to at least the same extent as in effect
immediately prior to such merger, amalgamation, dissolution, liquidation or
transfer) and all actions required to maintain said perfected status have
been taken;
(h) the Borrower and its Wholly-Owned Domestic Subsidiaries shall be
permitted to make Permitted Acquisitions, so long as such Permitted
Acquisitions are effected in accordance with the requirements of Section
8.14;
(i) the Recapitalization, the Pacer Logistics Acquisition and the
Sale-Leaseback Transaction shall be permitted to the extent consummated in
accordance with the relevant requirements of Section 5.08 of this
Agreement;
(j) the Borrower and its Subsidiaries may, in the ordinary course of
business, license, as licensor or licensee, patents, trademarks, copyrights
and know-how to or from third Persons or one another, so long as any such
license by the Borrower or any of its Subsidiaries in its capacity as
licensor is permitted to be assigned pursuant to the Security Agreement (to
the extent that a security interest in such patents, trademarks, copyrights
and know-how is granted thereunder) and does not otherwise prohibit the
granting of a Lien by the Borrower or any of its Subsidiaries pursuant to
the Security Agreement in the intellectual property covered by such
license;
(k) the Borrower and its Domestic Subsidiaries may transfer assets
to Wholly-Owned Foreign Subsidiaries, so long as (x) no Default or Event of
Default exists as the time of the respective transfer and (y) the aggregate
fair market value of all such assets so transferred (determined in good
faith by the Board of Directors or senior management of the Borrower) to
all such Foreign Subsidiaries on and after the Effective Date does not
exceed the sum of (i) $7,500,000 plus (ii) the aggregate fair market value
----
of all assets of Foreign Subsidiaries of the Borrower (as determined in
good faith by senior management of the Borrower) transferred by such
Foreign Subsidiaries to the Borrower and any Subsidiary Guarantor pursuant
to Section 9.02(e) after the Effective Date;
(l) the Borrower and any of its Subsidiaries may sell or otherwise
dispose of the capital stock of, or other equity interests in, any of their
respective Subsidiaries, Joint Ventures and Unrestricted Subsidiaries,
provided that (v) in the case of a sale or other disposition of the capital
--------
stock or other equity interests of any Wholly-Owned Subsidiary of the
Borrower, 100% of the capital stock or other equity interests of such
Subsidiary shall be so sold or disposed of, (w) each such sale or
disposition shall be for an amount at least equal to the fair market value
thereof (as determined in good faith by senior management of the Borrower),
(x) each such sale results in consideration at least 80% of which (taking
into account the amount of cash, the principal amount of any promissory
notes and the fair market value, as determined by the Borrower in good
faith, of any other consideration) shall be in the form of cash, (y) the
aggregate Net Sale Proceeds of all assets sold or otherwise disposed of
pursuant to this clause (l) after the Effective Date shall not exceed
$15,000,000 in the aggregate and (z) the Net Sale Proceeds therefrom are
either applied to repay Term Loans and/or reduce the Total Revolving Loan
Commitment as provided in Section 4.02(c) or reinvested in replacement
assets or retained to the extent permitted by Section 4.02(c) and/or the
other relevant provisions of this Agreement;
(m) the Borrower and its Subsidiaries may enter into agreements to
effect acquisitions and dispositions of stock or assets, so long as the
respective transaction is permitted pursuant to the provisions of this
Section 9.02; provided that the Borrower and its Subsidiaries may enter
--------
into agreements to effect acquisitions and dispositions of capital stock or
assets in transactions not permitted by the provisions of this Section 9.02
at the time the respective agreement is entered into, so long as in the
case of each such agreement, such agreement shall be expressly conditioned
upon obtaining the requisite consent of the Required Banks under this
Agreement or the repayment of all Obligations hereunder as a condition
precedent to the consummation of the respective transaction and, if for any
reason the transaction is not consummated because of a failure to obtain
such consent, the aggregate liability of the Borrower and its Subsidiaries
under any such agreement shall not exceed $2,500,000; and
(n) the Borrower or any of its Subsidiaries may effect Permitted
Sale-Leaseback Transactions in accordance with the definition thereof;
provided that (x) the aggregate amount of all proceeds received by the
--------
Borrower and its Subsidiaries from all Permitted Sale-Leaseback
Transactions consummated on and after the Effective Date shall not exceed
$15,000,000 and (y) the Net Sale Proceeds therefrom are applied to repay
Term Loans and/or reduce the Total Revolving Loan Commitment as provided in
Section 4.02(c) or reinvested in replacement assets or retained to the
extent permitted by Section 4.02(c).
To the extent the Required Banks waive the provisions of this Section 9.02 with
respect to the sale or other disposition of any Collateral, or any Collateral is
sold or otherwise disposed of as permitted by this Section 9.02, such Collateral
(unless transferred to the Borrower or a Subsidiary thereof) shall (except as
otherwise provided above) be sold or otherwise disposed of free and clear of the
Liens created by the Security Documents and the Administrative Agent shall take
such actions (including, without limitation, directing the Collateral Agent to
take such actions) as are appropriate in connection therewith.
9.03 Liens. The Borrower will not, and will not permit any of its
-----
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of any kind (real or personal, tangible or
intangible, movable or immovable) of the Borrower or any of its Subsidiaries,
whether now owned or hereafter acquired, or sell any such property or assets
subject to an understanding or agreement, contingent or otherwise, to repurchase
such property or assets (including sales of accounts receivable or notes with
recourse to the Borrower or any of its Subsidiaries) or assign any right to
receive income, except for the following (collectively, the "Permitted Liens"):
(a) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due and payable or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves have been established
in accordance with GAAP;
(b) Liens in respect of property or assets of the Borrower or any of
its Subsidiaries imposed by law which were incurred in the ordinary course
of business and which have not arisen to secure Indebtedness for borrowed
money, such as carriers', materialmen's, warehousemen's and mechanics'
Liens, statutory and common law landlord's Liens, and other similar Liens
arising in the ordinary course of business, and which either (x) do not in
the aggregate materially detract from the value of such property or assets
or materially impair the use thereof in the operation of the business of
the Borrower or any of its Subsidiaries or (y) are being contested in good
faith by appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or asset subject to such
Lien;
(c) Liens created by or pursuant to this Agreement and the Security
Documents;
(d) Liens in existence on the Initial Borrowing Date which are
listed, and the property subject thereto described, in Schedule IX, without
giving effect to any extensions or renewals thereof;
(e) Liens arising from judgments, decrees, awards or attachments in
circumstances not constituting an Event of Default under Section 10.09,
provided that the amount of cash and property (determined on a fair market
--------
value basis) deposited or delivered to secure the respective judgment or
decree or subject to attachment shall not exceed $5,000,000 at any time;
(f) Liens (other than any Lien imposed by ERISA) (x) incurred or
deposits made in the ordinary course of business of the Borrower and its
Subsidiaries in connection with workers' compensation, unemployment
insurance and other types of social security, (y) to secure the performance
by the Borrower and its Subsidiaries of tenders, statutory obligations
(other than excise taxes), surety, stay, customs and appeal bonds,
statutory bonds, bids, leases, government contracts, trade contracts,
performance and return of money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money) or (z) to
secure the performance by the Borrower and its Subsidiaries of leases of
Real Property, to the extent incurred or made in the ordinary course of
business consistent with past practices, provided that the aggregate amount
--------
of deposits at any time pursuant to sub-clauses (y) and (z) above shall not
exceed $5,000,000 in the aggregate;
(g) licenses, sublicenses, leases or subleases granted to third
Persons in the ordinary course of business not interfering in any material
respect with the business of the Borrower or any of its Subsidiaries;
(h) easements, rights-of-way, restrictions, minor defects or
irregularities in title, encroachments and other similar charges or
encumbrances, in each case not securing Indebtedness and not interfering in
any material respect with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(i) Liens arising from precautionary UCC financing statements
regarding operating leases;
(j) Liens created pursuant to Capital Leases permitted pursuant to
Section 9.04(d), provided that (x) such Liens only serve to secure the
--------
payment of Indebtedness arising under such Capitalized Lease Obligation
(and other Indebtedness permitted by Section 9.04(d) and incurred from the
same Person as such Indebtedness) and (y) the Lien encumbering the asset
giving rise to the Capitalized Lease Obligation does not encumber any other
asset of the Borrower or any of its Subsidiaries (other than other assets
subject to Capitalized Lease Obligations and/or Indebtedness incurred
pursuant to Section 9.04(d), in each case owing to the same Person as such
Capitalized Lease Obligation);
(k) Permitted Encumbrances;
(l) Liens arising pursuant to purchase money mortgages or security
interests securing Indebtedness representing the purchase price (or
financing of the purchase price within 90 days after the respective
purchase) of assets acquired after the Effective Date, provided that (i)
--------
any such Liens attach only to the assets so purchased, upgrades thereon
and, if the asset so purchased is an upgrade, the original asset itself
(and such other assets financed by the same financing source), (ii) the
Indebtedness (other than Indebtedness incurred from the same financing
source to purchase other assets and excluding Indebtedness representing
obligations to pay installation and delivery charges for the property so
purchased) secured by any such Lien does not exceed 100%, nor is less than
80%, of the lesser of the fair market value or the purchase price of the
property being purchased at the time of the incurrence of such Indebtedness
and (iii) the Indebtedness secured thereby is permitted to be incurred
pursuant to Section 9.04(d);
(m) Liens on property or assets acquired pursuant to a Permitted
Acquisition, or on property or assets of a Subsidiary of the Borrower in
existence at the time such Subsidiary is acquired pursuant to a Permitted
Acquisition, provided that (i) any Indebtedness that is secured by such
--------
Liens is permitted to exist under Section 9.04(d), and (ii) such Liens are
not incurred in connection with, or in contemplation or anticipation of,
such Permitted Acquisition and do not attach to any other asset of the
Borrower or any of its Subsidiaries;
(n) Liens arising out of consignment or similar arrangements for the
sale of goods entered into by the Borrower or any of its Subsidiaries in
the ordinary course of business; and
(o) additional Liens incurred by the Borrower and its Subsidiaries,
so long as the value of the property subject to such Liens, and the
Indebtedness and other obligations secured thereby, do not exceed
$5,000,000.
9.04 Indebtedness. The Borrower will not, and will not permit any of
------------
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(b) Existing Indebtedness outstanding on the Initial Borrowing Date
and listed on Schedule IV (as reduced by any repayments thereof before, on
or after the Initial Borrowing Date), without giving effect to any
subsequent extension, renewal or refinancing thereof;
(c) Indebtedness under (i) Interest Rate Protection Agreements
entered into to protect the Borrower against fluctuations in interest rates
in respect of Indebtedness otherwise permitted under this Agreement or (ii)
Other Hedging Agreements providing protection against fluctuations in
currency values in connection with the Borrower's or any of its
Subsidiaries' operations, so long as management of the Borrower or such
Subsidiary, as the case may be, has determined that the entering into of
any such Other Hedging Agreement is a bona fide hedging activity (and is
not for speculative purposes) and is in the ordinary course of business and
consistent with its past practices;
(d) (x) Indebtedness of a Subsidiary acquired pursuant to a
Permitted Acquisition (or Indebtedness assumed by the Borrower or any
Wholly-Owned Domestic Subsidiary pursuant to a Permitted Acquisition as a
result of a merger or consolidation or the acquisition of an asset securing
such Indebtedness) (the "Permitted Acquired Debt"), so long as (i) such
Indebtedness was not incurred in connection with, or in anticipation or
contemplation of, such Permitted Acquisition and (ii) such Indebtedness
does not constitute debt for borrowed money (except to the extent such
Indebtedness cannot be repaid in accordance with its terms at the time of
its assumption pursuant to such Permitted Acquisition (without the payment
of a penalty or premium) and the aggregate principal amount of all such
Indebtedness for borrowed money permitted pursuant to this parenthetical
does not exceed $15,000,000), it being understood and agreed that
Capitalized Lease Obligations and purchase money Indebtedness shall not
constitute debt for borrowed money for purposes of this clause (ii) and (y)
Capitalized Lease Obligations and Indebtedness of the Borrower and its
Subsidiaries representing purchase money Indebtedness secured by Liens
permitted pursuant to Section 9.03(l), provided, that the sum of (I) the
--------
aggregate principal amount of all Permitted Acquired Debt at any time
outstanding plus (II) the aggregate amount of Capitalized Lease Obligations
----
incurred on and after the Initial Borrowing Date and outstanding at any
time (including Indebtedness evidenced by Capitalized Lease Obligations
arising from Permitted Sale-Leaseback Transactions) plus (III) the
----
aggregate principal amount of all such purchase money Indebtedness incurred
on and after the Initial Borrowing Date and outstanding at any time, shall
not exceed $20,000,000;
(e) Indebtedness constituting Intercompany Loans to the extent
permitted by Section 9.05(f);
(f) Permitted Subordinated Refinancing Indebtedness, so long as no
Default or Event of Default is in existence at the time of any incurrence
thereof and immediately after giving effect thereto;
(g) unsecured Indebtedness of the Borrower and the Subsidiary
Guarantors incurred under the Senior Subordinated Notes and the other
Senior Subordinated Notes Documents in an aggregate principal amount not to
exceed $150,000,000 less the amount of any repayments of principal thereof
----
after the Initial Borrowing Date;
(h) Indebtedness of the Borrower or any of its Subsidiaries which
may be deemed to exist in connection with agreements providing for
indemnification, purchase price adjustments and similar obligations in
connection with acquisitions or sales of assets and/or businesses effected
in accordance with the requirements of this Agreement (so long as any such
obligations are those of the Person making the respective acquisition or
sale, and are not guaranteed by any other Person);
(i) Contingent Obligations of (x) the Borrower or any of its
Subsidiaries as a guarantor of the lessee under any lease pursuant to which
the Borrower or any of its Wholly-Owned Subsidiaries is the lessee so long
as such lease is otherwise permitted hereunder, (y) the Borrower or any of
its Subsidiaries as a guarantor of any Capitalized Lease Obligation to
which a Joint Venture is a party or any contract entered into by such Joint
Venture in the ordinary course of business; provided that the maximum
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liability of the Borrower or any of its Subsidiaries in respect of any
obligations as described pursuant to preceding clause (y) is permitted as
an Investment on such date pursuant to the requirements of Section 9.05(l)
and (z) the Borrower which may be deemed to exist pursuant to acquisition
agreements entered into in connection with Permitted Acquisitions
(including any obligation to pay the purchase price therefor and any
indemnification, purchase price adjustment and similar obligations);
(j) Indebtedness with respect to performance bonds, surety bonds,
appeal bonds or customs bonds required in the ordinary course of business
or in connection with the enforcement of rights or claims of the Borrower
or any of its Subsidiaries or in connection with judgments that do not
result in a Default or an Event of Default, provided that the aggregate
--------
outstanding amount of all such performance bonds, surety bonds, appeal
bonds and customs bonds permitted by this subsection (j) shall not at any
time exceed $5,000,000;
(k) Indebtedness of the Borrower under the Shareholder Subordinated
Notes issued after the Effective Date in connection with a redemption or
repurchase of Borrower Common Stock pursuant to Section 9.06(ii); and
(l) (x) Permitted Subordinated Indebtedness incurred in accordance
with the requirements of the definition thereof and (y) additional
unsecured Indebtedness of the Borrower and its Subsidiaries not otherwise
permitted pursuant to this Section 9.04, so long as the aggregate principal
amount of all Indebtedness permitted by this clause (l), when added to the
aggregate liquidation preference for all Disqualified Preferred Stock
issued after the Initial Borrowing Date pursuant to Section 9.13(c), does
not exceed $25,000,000 at any time outstanding.
9.05 Advances; Investments; Loans. The Borrower will not, and will
----------------------------
not permit any of its Subsidiaries to, lend money or extend credit or make
advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any Person, or purchase or own a futures contract or otherwise become liable for
the purchase or sale of currency or other commodities at a future date in the
nature of a futures contract, or hold any cash or Cash Equivalents (any of the
foregoing, an "Investment"), except:
(a) the Borrower and its Subsidiaries may invest in cash and Cash
Equivalents, provided that during any time that (i) Revolving Loans or
--------
Swingline Loans are outstanding and (ii) the Total Revolving Loan
Commitment exceeds $40,000,000, the aggregate amount of cash and Cash
Equivalents held by the Borrower and its Subsidiaries shall not exceed
$10,000,000 for any period of three consecutive Business Days;
(b) the Borrower and its Subsidiaries may acquire and hold
receivables owing to it, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade
terms (including the dating of receivables) of the Borrower or such
Subsidiary;
(c) the Borrower and its Subsidiaries may acquire and own
investments (including debt obligations and equity securities) received in
connection with the bankruptcy or reorganization of suppliers and customers
and in settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(d) Interest Rate Protection Agreements and Other Hedging Agreements
entered into in compliance with Section 9.04(c) shall be permitted;
(e) advances, loans and investments in existence on the Initial
Borrowing Date and listed on Schedule VI shall be permitted, without giving
effect to any additions thereto or replacements thereof, it being
understood that any additional Investments made with respect to such
existing Investments shall be permitted only if independently justified
under the other provisions of this Section 9.05;
(f) any Credit Party may make intercompany loans and advances to any
other Credit Party and any Foreign Subsidiary (collectively, "Intercompany
Loans"), provided, that (w) at no time shall the aggregate outstanding
--------
principal amount of all Intercompany Loans made pursuant to this clause (f)
by the Credit Parties to Foreign Subsidiaries, when added to the amount of
contributions, capitalizations and forgivenesses theretofore made pursuant
to Section 9.05(p), exceed $10,000,000 (determined without regard to any
write-downs or write-offs of such loans and advances), (x) each
Intercompany Loan shall be evidenced by an Intercompany Note and (y) each
such Intercompany Note shall be pledged to the Collateral Agent pursuant to
the Pledge Agreement;
(g) loans and advances by the Borrower and its Subsidiaries to
employees of the Borrower and its Subsidiaries in connection with
relocations, purchases by such employees of Borrower Common Stock or
options or similar rights to purchase Borrower Common Stock and other
ordinary course of business purposes (including travel and entertainment
expenses) shall be permitted, so long as the aggregate principal amount
thereof at any time outstanding (determined without regard to any write-
downs or write-offs of such loans and advances) shall not exceed
$5,000,000;
(h) the Borrower may acquire and hold obligations of one or more
officers or other employees of the Borrower or its Subsidiaries in
connection with such officers' or employees' acquisition of shares of
Borrower Common Stock, so long as no cash is actually advanced by the
Borrower or any of its Subsidiaries to such officers or employees in
connection with the acquisition of any such obligations;
(i) the Recapitalization and the Pacer Logistics Acquisition shall
be permitted to be consummated in accordance with the requirements of
Section 5.08;
(j) the Borrower and any of its Wholly-Owned Domestic Subsidiaries
may make Permitted Acquisitions in accordance with the relevant
requirements of Section 8.14 and the component definitions as used therein;
(k) the Borrower and its Subsidiaries may own the capital stock of
their respective Subsidiaries created or acquired in accordance with the
terms of this Agreement (so long as all amounts invested in such
Subsidiaries are independently justified under another provision of this
Section 9.05);
(l) so long as no Default or Event of Default exists or would exist
immediately after giving effect to the respective Investment, the Borrower
and its Wholly-Owned Domestic Subsidiaries shall be permitted to make
Investments in any Joint Venture or any Unrestricted Subsidiary on any date
in an amount not to exceed the Available Basket Amount on such date (after
giving effect to all prior and contemporaneous adjustments thereto, except
as a result of such Investment), it being understood and agreed that (i) to
the extent the Borrower or one or more other Credit Parties (after the
respective Investment has been made) receives a cash return from the
respective Joint Venture or Unrestricted Subsidiary of amounts previously
invested pursuant to this clause (l) (which cash return may be made by way
of repayment of principal in the case of loans and cash equity returns
(whether as a distribution, dividend or redemption) in the case of equity
investments) or a return in the form of an asset distribution from the
respective Joint Venture or Unrestricted Subsidiary of any asset previously
contributed pursuant to this clause (l), then the amount of such cash
return of investment or the fair market value of such distributed asset (as
determined in good faith by senior management of the Borrower), as the case
may be, shall, upon the Administrative Agent's receipt of a certification
of the amount of the return of investment from an Authorized Officer, apply
to increase the Available Basket Amount, provided that the aggregate amount
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of increases to the Available Basket Amount described above shall not
exceed the amount of
returned investment and, in no event, shall the amount of the increases
made to the Available Basket Amount in respect of any Investment exceed the
amount previously invested pursuant to this clause (l);
(m) the Borrower and its Subsidiaries may receive and hold
promissory notes and other non-cash consideration received in connection
with any asset sale permitted by Sections 9.02(d) and (l);
(n) the Borrower and its Subsidiaries may convey, lease, license,
sell or otherwise transfer or acquire assets and properties to the extent
permitted by Sections 9.02(e), (f), (g), (k) and (n);
(o) the Borrower and its Subsidiaries may make advances in the form
of a prepayment of expenses, so long as such expenses were incurred in the
ordinary course of business and are being paid in accordance with customary
trade terms of the Borrower or such Subsidiary;
(p) the Borrower and its Domestic Subsidiaries may make cash capital
contributions to Foreign Subsidiaries, and may capitalize or forgive any
Indebtedness owed to them by a Foreign Subsidiary and outstanding under
clause (f) of this Section 9.05, provided that the aggregate amount of such
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contributions, capitalizations and forgiveness on and after the Initial
Borrowing Date, when added to the aggregate outstanding principal amount of
Intercompany Loans made to Foreign Subsidiaries under such clause (f)
(determined without regard to any write-downs or write-offs thereof) shall
not exceed an amount equal to $10,000,000;
(q) the Borrower and any Subsidiary Guarantor may make cash equity
contributions to any Subsidiary Guarantor; and
(r) in addition to investments permitted by clauses (a) through (q)
of this Section 9.05, the Borrower and its Subsidiaries may make additional
loans, advances and other Investments to or in a Person in an aggregate
amount for all loans, advances and other Investments made pursuant to this
clause (r) (determined without regard to any write-downs or write-offs
thereof), net of cash repayments of principal in the case of loans, sale
proceeds in the case of Investments in the form of debt instruments and
cash equity returns (whether as a distribution, dividend, redemption or
sale) in the case of equity investments, not to exceed $15,000,000 at any
time outstanding.
9.06 Dividends; etc. The Borrower will not, and will not permit any
---------------
of its Subsidiaries to, declare or pay any dividends (other than dividends
payable solely in common stock of the Borrower or any such Subsidiary, as the
case may be) or return any capital to, its stockholders or authorize or make any
other distribution, payment or delivery of property or cash to its stockholders
as such, or redeem, retire, purchase or otherwise acquire, directly or
indirectly, for a consideration, any shares of any class of its capital stock,
now or hereafter outstanding (or any warrants for or options or stock
appreciation rights in respect of any of such shares), or set aside any funds
for any of the foregoing purposes, and the Borrower will not permit any of its
Subsidiaries to purchase or otherwise acquire for consideration any shares of
any class of the capital stock of the Borrower or any other Subsidiary, as the
case may be, now or hereafter outstanding (or any options or warrants or stock
appreciation rights issued by such Person with respect to its capital stock)
(all of the foregoing "Dividends"), except that:
(i) any Subsidiary of the Borrower may pay Dividends to the Borrower
or any Subsidiary Guarantor;
(ii) the Borrower may redeem or purchase shares of Borrower Common
Stock or options to purchase Borrower Common Stock, as the case may be,
held by former employees of the Borrower or any of its Subsidiaries
following the termination of their employment (by death, disability or
otherwise), provided that (x) the only consideration paid by the Borrower
--------
in respect of such redemptions and/or purchases shall be cash, forgiveness
of liabilities and/or Shareholder Subordinated Notes, (y) the sum of (A)
the aggregate amount paid by the Borrower in cash in respect of all such
redemptions and/or purchases plus (B) the aggregate amount of liabilities
so forgiven and (C) the aggregate amount of all cash principal and interest
payments made on Shareholder Subordinated Notes, in each case after the
Initial Borrowing Date, shall not exceed $5,000,000, and (z) at the time of
any cash payment or forgiveness of liabilities permitted to be made
pursuant to this Section 9.06(ii), including any cash payment under a
Shareholder Subordinated Note, no Default or Event of Default shall then
exist or result therefrom;
(iii) so long as no Default or Event of Default exists or would
result therefrom, the Borrower may pay regularly accruing cash Dividends on
Disqualified Preferred Stock issued pursuant to Section 9.13(c), with such
Dividends to be paid in accordance with the terms of the respective
certificate of designation therefor;
(iv) any Subsidiary of the Borrower that is not a Wholly-Owned
Subsidiary may pay cash Dividends to its shareholders or partners
generally, so long as the Borrower or its respective Subsidiary which owns
the equity interest or interests in the Subsidiary paying such Dividends
receives at least its proportionate share thereof (based upon its relative
holdings of equity interest in the Subsidiary paying such Dividends and
taking into account the relative preferences, if any, of the various
classes of equity interests in such Subsidiary or the terms of any
agreements applicable thereto);
(v) the Recapitalization shall be permitted; and
(vi) Pacer Logistics may pay regularly accruing Dividends with
respect to Pacer Logistics Preferred Stock through the issuance of
additional shares of Pacer Logistics Preferred Stock in accordance with the
terms of the relevant Equity Financing Documents governing the same;
(vii) to the extent the issuance of Borrower Exchange PIK Preferred
Stock or Borrower Common Stock in exchange for Pacer Logistics Preferred
Stock may be deemed to constitute a Dividend, same shall be permitted so
long as (x) in the case of any such issuance of Borrower Exchange PIK
Preferred Stock, any such issuance (and
exchange) is consummated in accordance (and consistent) with the
requirements of Section 9.13(e) and (y) in the case of any issuance of
Borrower Common Stock, any such issuance (and exchange) is consummated in
accordance with (and consistent) with the requirements of the relevant
Equity Financing Documents governing the Pacer Logistics Preferred Stock;
(viii) on and after the issuance of Borrower Exchange PIK Preferred
Stock in accordance with the requirements of Section 9.13(e), the Borrower
may pay regularly accruing Dividends with respect thereto through the
issuance of additional shares of Borrower Exchange PIK Preferred Stock in
accordance with the terms of the Borrower Exchange PIK Preferred Stock
Documents governing the same; and
(ix) the Borrower may pay regularly accruing Dividends with respect
to Qualified Preferred Stock through the issuance of additional shares of
Qualified Preferred Stock (but not in cash) in accordance with the terms of
the documentation governing the same.
9.07 Transactions with Affiliates and Unrestricted Subsidiaries.
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The Borrower will not, and will not permit any of its Subsidiaries to, enter
into any transaction or series of transactions with any Affiliate of the
Borrower or any of its Subsidiaries or any of its Unrestricted Subsidiaries
other than on terms and conditions substantially as favorable to the Borrower or
such Subsidiary as would be reasonably expected to be obtainable by the Borrower
or such Subsidiary at the time in a comparable arm's-length transaction with a
Person other than an Affiliate; provided, that the following shall in any event
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be permitted: (i) the Transaction; (ii) intercompany transactions among the
Borrower and its Subsidiaries to the extent expressly permitted by Sections
9.02, 9.04, 9.05 and 9.06 shall be permitted; (iii) so long as no Default or
Event of Default is then in existence or would result therefrom, the payment, on
a quarterly basis, of management fees to Apollo Group in an aggregate amount not
to exceed $125,000 in any fiscal quarter of the Borrower pursuant to, and in
accordance with the terms of, the Apollo Management Agreement, provided that if
--------
during any fiscal quarter of the Borrower, a Default or Event of Default is in
existence and such management fees cannot be paid as provided above, such fees
shall continue to accrue and may be paid at such time as all Defaults and Events
of Default have been cured or waived and so long as no Default or Event of
Default will exist immediately after giving effect to the payment thereof; (iv)
customary fees to non-officer directors of the Borrower and its Subsidiaries;
(v) the Borrower and its Subsidiaries may enter into employment arrangements
with respect to the procurement of services with their respective officers and
employees in the ordinary course of business; (vi) the payment on the Initial
Borrowing Date of one time consulting and advisory fees to Apollo Group in an
aggregate amount not to exceed $1,500,000; (vii) the reimbursement of Apollo
Group for its reasonable out-of-pocket expenses incurred in connection with
performing management services to the Borrower and its Subsidiaries pursuant to
the Apollo Management Agreement or in connection with the Transaction; (viii) so
long as no Default or Event of Default is then in existence or would result
therefrom, the payment to Apollo Group of merger advisory fees for each
Permitted Acquisition in an amount not to exceed 1% of the fair market value of
the business or assets acquired pursuant to such Permitted Acquisition
(determined in good faith by senior
management of the Borrower); and (ix) the payment of consulting, management or
other fees to the Borrower or any Subsidiary Guarantor by any of their
respective Subsidiaries in the ordinary course of business. In no event shall
any management, consulting or similar fee be paid or payable by the Borrower or
any of its Subsidiaries to any Person except as specifically provided in this
Section 9.07.
9.08 Designated Senior Debt. The Borrower shall not designate any
----------------------
Indebtedness (other than the Obligations) as "Designated Senior Debt" (as
defined in the Senior Subordinated Notes Indenture and, on and after the
execution and delivery thereof, any agreement relating to Permitted Subordinated
Indebtedness and Permitted Subordinated Refinancing Indebtedness).
9.09 Consolidated Interest Coverage Ratio. The Borrower will not
------------------------------------
permit the Consolidated Interest Coverage Ratio for any Test Period ending on
the last day of any fiscal quarter of the Borrower specified below to be less
than the ratio set forth opposite such fiscal quarter below:
Fiscal Quarter Ended Closest to Ratio
------------------------------- -----
September 30, 1999 1.75:1.0
December 31, 1999 1.75:1.0
March 31, 2000 1.75:1.0
June 30, 2000 1.75:1.0
September 30, 2000 1.75:1.0
December 31, 2000 1.75:1.0
March 31, 2001 1.90:1.0
June 30, 2001 1.90:1.0
September 30, 2001 1.90:1.0
December 31, 2001 1.90:1.0
March 31, 2002 2.00:1.0
June 30, 2002 2.00:1.0
September 30, 2002 2.00:1.0
December 31, 2002 2.00:1.0
March 31, 2003 2.10:1.0
June 30, 2003 2.10:1.0
September 30, 2003 2.10:1.0
December 31, 2003 2.10:1.0
March 31, 2004 2.25:1.0
June 30, 2004 2.25:1.0
September 30, 2004 2.25:1.0
December 31, 2004 2.25:1.0
March 31, 2005 2.25:1.0
June 30, 2005 2.25:1.0
September 30, 2005 2.25:1.0
December 31, 2005 2.25:1.0
March 31, 2006 2.25:1.0
Notwithstanding anything to the contrary contained in this Agreement, all
calculations of compliance with this Section 9.09 shall be made on a Pro Forma
--- -----
Basis.
9.10 Adjusted Total Leverage Ratio. The Borrower will not permit the
-----------------------------
Adjusted Total Leverage Ratio on the last day of any fiscal quarter specified
below to exceed the respective ratio set forth opposite such fiscal quarter
below:
Fiscal Quarter Ended Closest to Ratio
------------------------------- -----
September 30, 1999 5.50:1.0
December 31, 1999 5.50:1.0
March 31, 2000 5.50:1.0
June 30, 2000 5.50:1.0
September 30, 2000 5.50:1.0
December 31, 2000 5.50:1.0
March 31, 2001 5.25:1.0
June 30, 2001 5.25:1.0
September 30, 2001 5.25:1.0
December 31, 2001 5.25:1.0
March 31, 2002 5.00:1.0
June 30, 2002 5.00:1.0
September 30, 2002 5.00:1.0
December 31, 2002 5.00:1.0
March 31, 2003 4.75:1.0
June 30, 2003 4.75:1.0
September 30, 2003 4.75:1.0
December 31, 2003 4.75:1.0
March 31, 2004 4.50:1.0
June 30, 2004 4.50:1.0
September 30, 2004 4.50:1.0
December 31, 2004 4.50:1.0
March 31, 2005 4.50:1.0
June 30, 2005 4.50:1.0
September 30, 2005 4.50:1.0
December 31, 2005 4.50:1.0
March 31, 2006 4.50:1.0
Notwithstanding anything contrary contained above or elsewhere in this
Agreement, (i) all calculations of compliance with this Section 9.10 shall be
made on a Pro Forma Basis and (ii) in no event shall the Adjusted Total Leverage
--- -----
Ratio be greater than the Maximum Permitted Acquisition Leverage Ratio upon the
consummation of, and after giving effect on a Pro Forma Basis to, any Permitted
--- -----
Acquisition.
9.11 Capital Expenditures. (a) The Borrower will not, and will not
--------------------
permit any of its Subsidiaries to, make any Capital Expenditures, except that
during any fiscal year set forth below, the Borrower and its Subsidiaries may
make Capital Expenditures, so long as the aggregate amount of such Capital
Expenditures does not exceed in any fiscal year set forth below the sum of (x)
the amount set forth opposite such fiscal year below plus (y) for each Acquired
----
Business acquired after the Effective Date and prior to the first day of the
respective fiscal year set forth below, 25% of the Acquired EBITDA of such
Acquired Business for the trailing twelve months of such Acquired Business
immediately preceding its acquisition for which financial statements have been
made available to the Borrower and the Banks plus (z) for each Acquired Business
----
acquired during the respective fiscal year, the amount for such Acquired
Business specified in preceding clause (y) multiplied by a percentage, the
numerator of which is the number of days in the fiscal year after the date of
the respective acquisition and the denominator of which is 365 or 366, as the
case may be:
Fiscal Year Ending Amount
------------------ ------
December 31, 1999 $5,000,000
December 31, 2000 $5,500,000
December 31, 2001 $6,000,000
December 31, 2002 $6,500,000
December 31, 2003 $7,000,000
December 31, 2004 $7,500,000
December 31, 2005 $8,000,000
December 31, 2006 $4,250,000
(b) Notwithstanding the foregoing, in the event that the amount of
Capital Expenditures permitted to be made by the Borrower and its Subsidiaries
pursuant to clause (a) above in any fiscal year (before giving effect to any
increase in such permitted expenditure amount pursuant to this clause (b)) is
greater than the amount of such Capital Expenditures made by the Borrower and
its Subsidiaries during such fiscal year, such excess (the "Rollover Amount")
may be carried forward and utilized to make Capital Expenditures in succeeding
fiscal years, provided that in no event shall the Rollover Amount available to
--------
be utilized in succeeding fiscal years exceed $5,000,000 at any time.
(c) Notwithstanding the foregoing, the Borrower and its Subsidiaries
may make Capital Expenditures (which Capital Expenditures will not be included
in any determination under the foregoing clause (a)) with the insurance proceeds
received by the Borrower or any of its Subsidiaries from any Recovery Event so
long as such Capital Expenditures are used to replace or restore any properties
or assets in respect of which such proceeds were paid or committed to be paid
within 360 days following the date of the receipt of such insurance proceeds, in
each case to the extent such insurance proceeds do not require, or result in, a
mandatory repayment of Term Loans and/or a mandatory reduction to the Total
Revolving Loan Commitment pursuant to Section 4.02(f).
(d) Notwithstanding the foregoing, the Borrower and its Subsidiaries
may make Capital Expenditures (which Capital Expenditures will not be included
in any determination under the foregoing clause (a)) with the Net Sale Proceeds
of Asset Sales, to the extent such Net Sale Proceeds do not require, or result
in, a mandatory repayment of Term Loans and/or a mandatory reduction to the
Total Revolving Loan Commitment pursuant to Section 4.02(c) and such proceeds
are reinvested as required by said Section 4.02(c).
(e) Notwithstanding the foregoing, the Borrower and its Wholly-Owned
Domestic Subsidiaries may make Capital Expenditures (which Capital Expenditures
will not be included in any determination under the foregoing clause (a))
constituting Permitted Acquisitions effected in accordance with the requirements
of Section 9.02(h).
(f) Notwithstanding the foregoing, the Borrower may make Capital
Expenditures (which Capital Expenditures shall not be included in any
determination under foregoing clause (a)) pursuant to the Pacer Logistics
Acquisition to the extent same is effected in accordance with the requirements
of Section 5.08.
(g) Notwithstanding the foregoing, the Borrower and its Subsidiaries
may make additional Capital Expenditures (which Capital Expenditures will not be
included in any determination under foregoing clause (a)) consisting of IT
Upgrade Expenditures at any time and from time to time, so long as the aggregate
amount of such additional Capital Expenditures made by the Borrower and its
Subsidiaries pursuant to this clause (g) after the Effective Date does not
exceed $25,000,000 (it being understood that IT Upgrade Expenditures may exceed
the amounts set forth in this clause (g) so long as the Capital Expenditures
made in connection therewith are independently justified under clause (a) or (b)
above).
(h) Notwithstanding the foregoing, the Borrower and its Subsidiaries
may make additional Capital Expenditures (which Capital Expenditures will not be
included in any determination under foregoing clause (a)) consisting of
Container and Chassis Purchases at any time and from time to time, so long as
(i) the aggregate amount of such additional Capital Expenditures made by the
Borrower and its Subsidiaries pursuant to this clause (h) after the Effective
Date does not exceed $25,000,000 and (ii) the aggregate amount of such
additional Capital Expenditures made by the Borrower and its Subsidiaries
pursuant to this clause (h) in any fiscal year of the Borrower does not exceed
$10,000,000 (it being understood that Container and Chassis Purchases may exceed
the amounts set forth in this clause (h) so long as the Capital Expenditures
made in connection therewith are independently justified under clause (a) or (b)
above).
9.12 Limitation on Voluntary Payments and Modifications of
-----------------------------------------------------
Indebtedness; Modifications of Certificate of Incorporation, By-Laws and Certain
--------------------------------------------------------------------------------
Other Agreements; Issuances of Capital Stock; etc. The Borrower will not, and
-------------------------------------------------
will not permit any of its Subsidiaries to:
(i) amend or modify, or permit the amendment or modification of, any
provision of any Shareholder Subordinated Note, any Existing Indebtedness,
or, after the incurrence or issuance thereof, any Qualified Preferred
Stock, Pacer Logistics Preferred Stock, any Borrower Exchange PIK Preferred
Stock Document, Disqualified Preferred
Stock or Permitted Debt or of any agreement (including, without limitation,
any purchase agreement, indenture, loan agreement, security agreement or
certificate of designation) relating thereto in a manner that could
reasonably be expected to in any way be adverse to the interests of the
Banks;
(ii) make (or give any notice in respect of) any voluntary or
optional payment or prepayment on or redemption, repurchase or acquisition
for value of (including, without limitation, by way of depositing with the
trustee with respect thereto or any other Person money or securities before
due for the purpose of paying when due), or any prepayment or redemption as
a result of any asset sale, change of control or similar event of, any
Senior Subordinated Notes (except, in the case of the Senior Subordinated
Notes, through the issuance of Exchange Senior Subordinated Notes as
contemplated in the definition of Senior Subordinated Notes and consistent
with the requirements of the definition of Exchange Senior Subordinated
Notes), any Permitted Subordinated Refinancing Indebtedness or any
Permitted Subordinated Indebtedness; provided that, so long as no Default
--------
or Event of Default then exists or would result therefrom, (x) any Senior
Subordinated Notes may be refinanced with Permitted Subordinated
Refinancing Indebtedness, (y) the Borrower may repurchase Senior
Subordinated Notes on the open-market in an aggregate principal amount for
all purchases made pursuant to this clause (y) not to exceed $25,000,000 so
long as the Adjusted Total Leverage Ratio is less than 4.0:1.0 on the last
day of the Test Period most recently ended prior to the consummation of the
respective repurchase (as set forth in the officer's certificate most
recently delivered pursuant to Section 8.01(e)) and (z) the Borrower and
its Subsidiaries may make payments and prepayments in connection with
Existing Indebtedness;
(iii) make (or give any notice in respect of) any principal or
interest payment on, or any redemption or acquisition for value of, any
Shareholder Subordinated Note, except to the extent permitted by Section
9.06(ii);
(iv) amend or modify, or permit the amendment or modification of, any
provision of any Senior Subordinated Notes Document; or
(v) amend, modify or change in any way which could reasonably be
expected to be adverse to the interests of the Banks in any material
respect any Tax Allocation Agreement, any Management Agreement, any Equity
Financing Document, any Recapitalization Document, any Pacer Logistics
Acquisition Document, any APL Limited Agreement its certificate of
incorporation (including, without limitation, by the filing or modification
of any certificate of designation other than any certificates of
designation relating to Qualified Preferred Stock or Disqualified Preferred
Stock issued as permitted herein), by-laws, certificate of partnership,
partnership agreement, certificate of limited liability company, limited
liability company agreement or any agreement entered into by it, with
respect to its capital stock or other equity interest (including any
Shareholders' Agreement), or enter into any new Tax Allocation Agreement,
Management Agreement or agreement with respect to its capital stock or
other equity interest which could reasonably be expected to in any way be
adverse to the interests of
the Banks or, in the case of any Management Agreement, which involves the
payment by the Borrower or any of its Subsidiaries of any amount which
could give rise to a violation of this Agreement; provided that the
--------
foregoing clause shall not restrict the ability of the Borrower and its
Subsidiaries to amend their respective certificates of incorporation to
authorize the issuance of capital stock otherwise permitted to be issued
pursuant to the terms of this Agreement.
9.13 Limitation on Issuance of Capital Stock. (a) The Borrower will
---------------------------------------
not, and will not permit any of its Subsidiaries to, issue (i) any Preferred
Stock (other than (x) Preferred Stock issued pursuant to clauses (c), (d) and
(e) below, (y) Pacer Logistics Preferred Stock issued on the Initial Borrowing
Date in accordance with the requirements of Section 5.08 and (z) the issuance of
shares of Pacer Logistics Preferred Stock in payment of regularly accruing
dividends on theretofore outstanding shares of Pacer Logistics Preferred Stock)
or any options, warrants or rights to purchase Preferred Stock or (ii) any
redeemable common stock unless, in either case, the issuance thereof is, and all
terms thereof are, satisfactory to the Required Banks in their sole discretion.
(b) The Borrower shall not permit any of its Subsidiaries to issue
any capital stock (including by way of sales of treasury stock) or any options
or warrants to purchase, or securities convertible into, capital stock, except
(i) for transfers and replacements of then outstanding shares of capital stock,
(ii) for stock splits, stock dividends and additional issuances which do not
decrease the percentage ownership of the Borrower or any of its Subsidiaries in
any class of the capital stock of such Subsidiaries, (iii) to qualify directors
to the extent required by applicable law, (iv) Subsidiaries formed after the
Initial Borrowing Date pursuant to Section 9.15 may issue capital stock in
accordance with the requirements of Section 9.15, (v) that Subsidiaries may
issue common stock to the Borrower and its Subsidiaries in connection with any
transaction permitted by Section 9.05(p) or (q) and (vi) that Pacer Logistics
may issue Pacer Logistics Preferred Stock in accordance with, and as
contemplated by, clauses (y) and (z) of the parenthetical contained in Section
9.13(a)(i). All capital stock issued in accordance with this Section 9.13(b)
shall, to the extent owned by any Credit Party and required by the Pledge
Agreement, be delivered to the Collateral Agent for pledge pursuant to the
Pledge Agreement.
(c) The Borrower may issue Disqualified Preferred Stock so long as
(i) no Default or Event of Default then exists or would exist immediately after
giving effect to the respective issuance, (ii) the aggregate liquidation
preference for all Disqualified Preferred Stock issued after the Initial
Borrowing Date pursuant to this Section 9.13(c) shall not to exceed, when
combined with the aggregate principal amount of all then outstanding
Indebtedness permitted by Section 9.04(l), $25,000,000, (iii) with respect to
each issue of Disqualified Preferred Stock, the gross cash proceeds therefrom
(or in the case of Disqualified Preferred Stock directly issued as consideration
for a Permitted Acquisition, the fair market value thereof (as determined in
good faith by the Borrower) of the assets received therefor) shall not exceed
the liquidation preference thereof at the time of issuance, (iv) calculations
are made by the Borrower of compliance with the covenants contained in Sections
9.09 and 9.10 for the Calculation Period most recently ended prior to the date
of the respective issuance of Disqualified Preferred Stock, on a Pro Forma Basis
--- -----
after giving effect to the respective issuance of Disqualified Preferred Stock,
and such
calculations shall show that such financial covenants would have been complied
with if such issuance of Disqualified Preferred Stock had been consummated on
the first day of the respective Calculation Period, and (v) the Borrower shall
furnish to the Administrative Agent a certificate by an Authorized Officer of
the Borrower certifying to the best of his or her knowledge as to compliance
with the requirements of this Section 9.13(c) and containing the pro forma
--- -----
calculations required by the preceding clause (iv).
(d) The Borrower may issue Qualified Preferred Stock (x) in payment
of regularly accruing dividends on theretofore outstanding shares of Qualified
Preferred Stock as contemplated by Section 9.06(ix) and (y) so long as, with
respect to each other issue of Qualified Preferred Stock, the Borrower receives
reasonably equivalent consideration (as determined in good faith by the
Borrower).
(e) The Borrower may issue Borrower Exchange PIK Preferred Stock in
exchange for Pacer Logistics Preferred Stock pursuant to, and in accordance with
the terms of, the Borrower Exchange PIK Preferred Stock Documents and in
accordance with the terms of the relevant Equity Financing Documents governing
the Pacer Logistics Preferred Stock.
9.14 Limitation on Certain Restrictions on Subsidiaries. The
--------------------------------------------------
Borrower will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective,
any encumbrance or restriction on the ability of any such Subsidiary to (x) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Borrower or any Subsidiary
of the Borrower, or pay any Indebtedness owed to the Borrower or a Subsidiary of
the Borrower, (y) make loans or advances to the Borrower or any Subsidiary of
the Borrower or (z) transfer any of its properties or assets to the Borrower or
any of its Subsidiaries, except for such encumbrances or restrictions existing
under or by reason of (i) applicable law, (ii) this Agreement and the other
Credit Documents, (iii) the provisions contained in the Existing Indebtedness,
(iv) customary provisions restricting subletting or assignment of any lease
governing a leasehold interest of the Borrower or a Subsidiary of the Borrower
entered into in the ordinary course of business and consistent with past
practices, (v) customary provisions restricting assignment of any contract
entered into by the Borrower or any Subsidiary of the Borrower in the ordinary
course of business, (vi) any agreement or instrument governing Permitted
Acquired Debt, which encumbrance or restriction is not applicable to any Person
or the properties or assets of any Person, other than the Person or the
properties or assets of the Person acquired pursuant to the respective Permitted
Acquisition and so long as the respective encumbrances or restrictions were not
created (or made more restrictive) in connection with or in anticipation of the
respective Permitted Acquisition, (vii) customary provisions restricting the
assignment of licensing agreements, management agreements or franchise
agreements entered into by the Borrower or any of its Subsidiaries in the
ordinary course of business; (viii) restrictions applicable to any Joint Venture
that is a Subsidiary existing at the time of the acquisition thereof as a result
of an Investment pursuant to Section 9.05 or a Permitted Acquisition effected in
accordance with Section 8.14, provided that the restrictions applicable to the
--------
respective such Joint Venture are not made worse, or more burdensome, from the
perspective of the Borrower and its Subsidiaries, than those as in effect
immediately before giving effect to the consummation of the respective
Investment or Permitted Acquisition, (ix) any restriction or encumbrance with
respect to a Subsidiary imposed pursuant to an agreement which has been entered
into for the sale or disposition of all or substantially all of the capital
stock or assets of such Subsidiary, so long as such sale or disposition of all
or substantially all of the capital stock or assets of such Subsidiary is
permitted under this Agreement, (x) the documentation governing Permitted Debt
(other than Permitted Acquired Debt) and (xi) the Senior Subordinated Note
Documents.
9.15 Limitation on the Creation of Subsidiaries, Joint Ventures and
--------------------------------------------------------------
Unrestricted Subsidiaries. (a) Notwithstanding anything to the contrary
-------------------------
contained in this Agreement, the Borrower will not, and will not permit any of
its Subsidiaries to, establish, create or acquire after the Initial Borrowing
Date any Subsidiary or Unrestricted Subsidiary (other than Joint Ventures
permitted to be established in accordance with the requirements of Section
9.05(l)); provided that (A) the Borrower, any of its Wholly-Owned Domestic
--------
Subsidiaries and any Unrestricted Subsidiary shall be permitted to establish or
create an Unrestricted Subsidiary, so long as (i) if a Domestic Unrestricted
Subsidiary of the Borrower, all of the capital stock or other equity interests
of such new Domestic Unrestricted Subsidiary owned by the Borrower or any such
Wholly-Owned Domestic Subsidiary shall be pledged pursuant to the Pledge
Agreement and the certificates representing such stock or other equity
interests, together with appropriate powers duly executed in blank, shall be
delivered to the Collateral Agent, (ii) if a Foreign Unrestricted Subsidiary of
the Borrower, all of the capital stock or other equity interests of such new
Foreign Unrestricted Subsidiary owned by the Borrower or any such Wholly-Owned
Domestic Subsidiary (except that not more than 65% of the outstanding voting
stock of any Foreign Unrestricted Subsidiary need be so pledged, except in the
circumstances contemplated by Section 8.12) shall be pledged pursuant to the
Pledge Agreement and the certificates representing such stock or other equity
interests, together with appropriate powers duly executed in blank, shall be
delivered to the Collateral Agent and (iii) all Investments by the Borrower and
its Subsidiaries in any Unrestricted Subsidiary are permitted pursuant to
Section 9.05(l), (B) the Borrower and its Wholly-Owned Subsidiaries shall be
permitted to establish or create Wholly-Owned Subsidiaries so long as, in each
case, (i) at least 10 days' prior written notice thereof is given to the
Administrative Agent (or such shorter period of time as is acceptable to the
Administrative Agent), (ii) the capital stock or other equity interests of such
new Subsidiary are promptly pledged pursuant to, and to the extent required by,
this Agreement and the Pledge Agreement and the certificates, if any,
representing such stock or other equity interests, together with stock or other
appropriate powers duly executed in blank, are delivered to the Collateral
Agent, (iii) in the case of a Domestic Subsidiary, such new Domestic Subsidiary
promptly executes a counterpart of the Subsidiaries Guaranty, the Pledge
Agreement and the relevant Security Documents, (iv) in the case of any Foreign
Subsidiary, such new Foreign Subsidiary promptly executes a counterpart of the
Subsidiaries Guaranty, the Pledge Agreement and the Security Agreement (or
similar document) to the extent required pursuant to Section 8.12, and (v) to
the extent requested by the Administrative Agent or the Required Banks, such new
Subsidiary takes all actions required pursuant to Section 8.11 and (C)
Subsidiaries may be acquired pursuant to Permitted Acquisitions so long as, in
each such case (i) with respect to each Wholly-Owned Subsidiary acquired
pursuant to a Permitted Acquisition, the actions specified in preceding clauses
(B) and (C), as applicable, shall be taken and (ii) with respect to each
Subsidiary which is not a Wholly-Owned Subsidiary and is acquired pursuant to a
Permitted Acquisition, all capital stock or other
equity interests thereof owned by any Credit Party shall be pledged pursuant to
the Pledge Agreement. In addition, each new Subsidiary that is required to
execute any Credit Document shall execute and deliver, or cause to be executed
and delivered, all other relevant documentation of the type described in Section
5 as such new Subsidiary would have had to deliver if such new Subsidiary were a
Credit Party on the Initial Borrowing Date.
(b) The Borrower will not, nor will the Borrower permit any of its
Subsidiaries to, enter into any Joint Venture, except to the extent permitted by
Section 9.05(l).
SECTION 10. Events of Default. Upon the occurrence of any of the
-----------------
following specified events (each, an "Event of Default"):
10.01 Payments. The Borrower shall (i) default in the payment when
--------
due of any principal of the Loans or (ii) default, and such default shall
continue for three or more Business Days, in the payment when due of any Unpaid
Drawing, any interest on the Loans or any Fees or any other amounts owing
hereunder or under any other Credit Document; or
10.02 Representations, etc. Any representation, warranty or
---------------------
statement made by any Credit Party herein or in any other Credit Document or in
any statement or certificate delivered pursuant hereto or thereto shall prove to
be untrue in any material respect on the date as of which made or deemed made;
or
10.03 Covenants. Any Credit Party shall (a) default in the due
---------
performance or observance by it of any term, covenant or agreement contained in
Section 8.01(f)(i), 8.10, 8.13, 8.14 or 9, or (b) default in the due performance
or observance by it of any term, covenant or agreement (other than those
referred to in Section 10.01, 10.02 or clause (a) of this Section 10.03)
contained in this Agreement and such default shall continue unremedied for a
period of at least 30 days after notice to the defaulting party by the
Administrative Agent or the Required Banks; or
10.04 Default Under Other Agreements. (a) The Borrower or any of
------------------------------
its Subsidiaries shall (i) default in any payment with respect to any
Indebtedness (other than the Obligations) beyond the period of grace, if any,
provided in the instrument or agreement under which Indebtedness was created or
(ii) default in the observance or performance of any agreement or condition
relating to any such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause (determined without regard
to whether any notice is required), any such Indebtedness to become due prior to
its stated maturity; or (b) any Indebtedness (other than the Obligations) of the
Borrower or any of its Subsidiaries shall be declared to be due and payable, or
shall be required to be prepaid other than by a regularly scheduled required
prepayment or as a mandatory prepayment (unless such required prepayment or
mandatory prepayment results from a default thereunder or an event of the type
that constitutes an Event of Default), prior to the stated maturity thereof;
provided, that it shall not constitute an Event of Default pursuant to clause
--------
(a) or (b) of this Section 10.04 unless the principal amount of any one issue of
such Indebtedness, or
the aggregate amount of all such Indebtedness referred to in clauses (a) and (b)
above, exceeds $3,500,000 at any one time; or
10.05 Bankruptcy, etc. The Borrower or any of its Subsidiaries shall
----------------
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against the
Borrower or any of its Subsidiaries and the petition is not controverted within
20 days, or is not dismissed within 60 days, after commencement of the case; or
a custodian (as defined in the Bankruptcy Code) is appointed for, or takes
charge of, all or substantially all of the property of the Borrower or any of
its Subsidiaries; or the Borrower or any of its Subsidiaries commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Borrower or any
of its Subsidiaries; or there is commenced against the Borrower or any of its
Subsidiaries any such proceeding which remains undismissed for a period of 60
days; or the Borrower or any of its Subsidiaries is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or the Borrower or any of its Subsidiaries suffers any
appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days; or the
Borrower or any of its Subsidiaries makes a general assignment for the benefit
of creditors; or any corporate action is taken by the Borrower or any of its
Subsidiaries for the purpose of effecting any of the foregoing; or
10.06 ERISA. (a) (i) Any Plan or Multiemployer Plan shall fail to
-----
satisfy the minimum funding standard required for any plan year or part thereof
under Section 412 of the Code or Section 302 of ERISA or a waiver of such
standard or extension of any amortization period is sought or granted under
Section 412 of the Code or Section 303 or 304 of ERISA, (ii) a Reportable Event
shall have occurred, (iii) a contributing sponsor (as defined in Section
4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA shall be subject to
the advance reporting requirement of PBGC Regulation Section 4043.61 (without
regard to subparagraph (b)(1) thereof) and an event described in subsection .62,
.63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 shall be
reasonably expected to occur within the following 30 days, (iv) any Plan which
is subject to Title IV of ERISA shall have had or is likely to have a trustee
appointed to administer such Plan, (v) any Plan which is subject to Title IV of
ERISA is, shall have been or is likely to be terminated or to be the subject of
termination proceedings under ERISA, (vi) any Plan shall have an Unfunded
Current Liability, (vii) a contribution required to be made by the Borrower or
any Subsidiary of the Borrower with respect to a Plan, a Multiemployer Plan or a
Foreign Pension Plan has not been timely made, (viii) the Borrower or any
Subsidiary of the Borrower has incurred or is likely to incur any liability to
or on account of a Plan or Multiemployer Plan under Section 409, 502(i) or
502(1) of ERISA or Section 4975 of the Code, (ix) the Borrower or any Subsidiary
of any Borrower or any ERISA Affiliate has incurred or is likely to incur any
liability to or on account of a Plan under Section 4062, 4063, 4064, 4069 of
ERISA or Section 401(a)(29) or 4971 of the Code or on account of a group health
plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code)
under Section 4980B of the Code, (x) the Borrower or any Subsidiary of the
Borrower or any ERISA Affiliate
has incurred or is likely to incur any liability to or on account of a
Multiemployer Plan under Section 515, 4201, 4204 or 4212 of ERISA; or (ix) the
Borrower or any Subsidiary of the Borrower has incurred or is likely to incur
liabilities pursuant to one or more employee welfare benefit plans (as defined
in Section 3(1) of ERISA) that provide benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or pursuant to
any Plan or Foreign Pension Plan; (b) there shall result from any such event or
events the imposition of a lien, the granting of a security interest, or a
liability or a material risk of incurring a liability; and (c) such lien,
security interest or liability, individually, and/or in the aggregate, in the
opinion of the Required Banks, has had, or could reasonably be expected to have,
a Material Adverse Effect; or
10.07 Security Documents. (a) Any Security Document shall cease to
------------------
be in full force and effect, or shall cease to give the Collateral Agent the
Liens, rights, powers and privileges purported to be created thereby in favor of
the Collateral Agent, superior to and prior to the rights of all third Persons
(except as permitted by Section 9.03), and subject to no other Liens (except as
permitted by Section 9.03), or (b) any Credit Party shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to any such Security Document and such default
shall continue beyond any cure or grace period specifically applicable thereto
pursuant to the terms of any such Security Document; or
10.08 Guaranties. Any Guaranty or any provision thereof shall cease
----------
to be in full force and effect, or any Guarantor or any Person acting by or on
behalf of such Guarantor shall deny or disaffirm such Guarantor's obligations
under the relevant Guaranty or any Guarantor shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to any Guaranty; or
10.09 Judgments. One or more judgments or decrees shall be entered
---------
against the Borrower or any of its Subsidiaries involving a liability (to the
extent not paid or not fully covered by insurance) in excess of $3,500,000 for
all such judgments and decrees and all such judgments or decrees shall not have
been vacated, discharged or stayed or bonded pending appeal within 60 days from
the entry thereof; or
10.10 Ownership. A Change of Control Event shall have occurred;
---------
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent shall, upon the written
request of the Required Banks, by written notice to the Borrower, take any or
all of the following actions, without prejudice to the rights of any Agent or
any Bank to enforce its claims against any Guarantor or the Borrower, except as
otherwise specifically provided for in this Agreement (provided, that if an
--------
Event of Default specified in Section 10.05 shall occur with respect to the
Borrower, the result which would occur upon the giving of written notice by the
Administrative Agent as specified in clauses (i), (ii) and (iii) below shall
occur automatically without the giving of any such notice): (i) declare the
Total Commitment terminated, whereupon the Commitment of each Bank shall
forthwith terminate immediately and any Commitment Fees shall forthwith become
due and
payable without any other notice of any kind; (ii) declare the principal of and
any accrued interest in respect of all Loans and all Obligations owing hereunder
(including Unpaid Drawings) to be, whereupon the same shall become, forthwith
due and payable by the Borrower without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower; (iii)
enforce, as Collateral Agent (or direct the Collateral Agent to enforce), any or
all of the Liens and security interests created pursuant to the Security
Documents; (iv) terminate any Letter of Credit which may be terminated in
accordance with its terms; (v) direct the Borrower to pay (and the Borrower
hereby agrees upon receipt of such notice, or upon the occurrence of any Event
of Default specified in Section 10.05, to pay) to the Collateral Agent at the
Payment Office such additional amounts of cash, to be held as security for the
Borrower's reimbursement obligations in respect of Letters of Credit then
outstanding, equal to the aggregate Stated Amount of all Letters of Credit then
outstanding; and (vi) apply any cash collateral as provided in Section 4.02.
SECTION 11. Definitions. As used herein, the following terms shall
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have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
"Acquired Business" shall mean any Person or business, division or
product line acquired pursuant to a Permitted Acquisition.
"Acquired EBITDA" shall mean, for any Acquired Business for any
period, the Consolidated EBITDA as determined for such Acquired Business on a
basis substantially the same (with necessary reference changes) as provided in
the first sentence of the definition of Consolidated EBITDA contained herein
(without giving effect to the proviso thereto), except that (i) all references
therein and in the component definitions used in determining Consolidated EBITDA
to "the Borrower and its Subsidiaries" shall be deemed to be references to the
respective Acquired Business and (ii) the adjustments contained in clause (ii)
of the definition of Consolidated EBITDA shall not be made. All calculations of
Acquired EBITDA shall be made on a Pro Forma Basis (for such purpose treating
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(x) each reference to "Consolidated EBITDA" contained in the definition of Pro
Forma Basis as if it were a reference to "Acquired EBITDA", (y) clause (v) of
said definition as if same applied to a determination of Acquired EBITDA for
purposes of Section 9.11, and (z) the text "the two fiscal quarters comprising
the respective Test Period" appearing in clause (v) of said definition as if
same were a reference to "the trailing twelve month period immediately preceding
the respective Permitted Acquisition" and disregarding subclauses (y) and (z) of
clause (v) of said definition).
"Acquired Person" shall have the meaning provided in the definition of
Permitted Acquisition.
"Acquisition Corp." shall mean Coyote Acquisition LLC, a Delaware
limited liability company.
"Acquisition" shall have the meaning provided in Section 5.08(a).
"Additional Security Documents" shall have the meaning provided in
Section 8.11.
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the sum
(rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing (x)
the most recent weekly average dealer offering rate for negotiable certificates
of deposit with a three-month maturity in the secondary market as published in
the most recent Federal Reserve System publication entitled "Select Interest
Rates", published weekly on Form H.15 as of the date hereof, or if such
publication or a substitute containing the foregoing rate information shall not
be published by the Federal Reserve System for any week, the weekly average
offering rate determined by the Administrative Agent on the basis of quotations
for such certificates received by it from three certificate of deposit dealers
in New York of recognized standing or, if such quotations are unavailable, then
on the basis of other sources reasonably selected by the Administrative Agent,
by (y) a percentage equal to 100% minus the stated maximum rate of all reserve
requirements as specified in Regulation D applicable on such day to a three-
month certificate of deposit of a member bank of the Federal Reserve System in
excess of $100,000 (including, without limitation, any marginal, emergency,
supplemental, special or other reserves), plus (2) the then daily net annual
----
assessment rate as estimated by the Administrative Agent for determining the
current annual assessment payable by BTCo to the Federal Deposit Insurance
Corporation for insuring three month certificates of deposit.
"Adjusted Consolidated Net Income" for any period shall mean
Consolidated Net Income for such period plus, without duplication, (i) the sum
of the amount of all net non-cash charges (including, without limitation,
depreciation, amortization, deferred tax expense and non-cash interest expense
but excluding any net non-cash charges reflected in Adjusted Consolidated
Working Capital) and net non-cash losses which were included in arriving at
Consolidated Net Income for such period less (ii) all net non-cash gains
(exclusive of items reflected in Adjusted Consolidated Working Capital) included
in arriving at Consolidated Net Income for such period.
"Adjusted Consolidated Working Capital" at any time shall mean
Consolidated Current Assets (but excluding therefrom all cash and Cash
Equivalents) less Consolidated Current Liabilities.
"Adjusted RL Percentage" shall mean (x) at a time when no Bank Default
exists, for each Bank, such Bank's RL Percentage and (y) at a time when a Bank
Default exists, (i) for each Bank that is a Defaulting Bank, zero and (ii) for
each Bank that is a Non-Defaulting Bank, the percentage determined by dividing
such Bank's Revolving Loan Commitment at such time by the Adjusted Total
Revolving Loan Commitment at such time, it being understood that all references
herein to Revolving Loan Commitments and the Adjusted Total Revolving Loan
Commitment at a time when the Total Revolving Loan Commitment or Adjusted Total
Revolving Loan Commitment, as the case may be, has been terminated shall be
references to the Revolving Loan Commitments or Adjusted Total Revolving Loan
Commitment, as the case may be, in effect immediately prior to such termination,
provided that (A) no Bank's Adjusted RL Percentage shall change upon the
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occurrence of a Bank Default from that in effect immediately prior to such Bank
Default if after giving effect to such Bank Default, and any repayment of
Revolving Loans and Swingline Loans at such time pursuant to Section 4.02(a) or
otherwise, the sum of (i) the aggregate outstanding principal amount of
Revolving Loans of all Non-Defaulting Banks, plus (ii) the aggregate outstanding
principal amount of Swingline Loans, plus (iii) the Letter of Credit
Outstandings, exceed the Adjusted Total Revolving Loan Commitment; (B) the
changes to the Adjusted RL Percentage that would have become effective upon the
occurrence of a Bank Default but that did not become effective as a result of
the preceding clause (A) shall become effective on the first date after the
occurrence of the relevant Bank Default on which the sum of (i) the aggregate
outstanding principal amount of the Revolving Loans of all Non-Defaulting Banks,
plus (ii) the aggregate outstanding principal amount of Swingline Loans, plus
(iii) the Letter of Credit Outstandings, is equal to or less than the Adjusted
Total Revolving Loan Commitment; and (C) if (i) a Non-Defaulting Bank's Adjusted
RL Percentage is changed pursuant to the preceding clause (B) and (ii) any
repayment of such Bank's Revolving Loans or of Unpaid Drawings or of Swingline
Loans that were made during the period commencing after the date of the relevant
Bank Default and ending on the date of such change to its Adjusted RL Percentage
must be returned to the Borrower as a preferential or similar payment in any
bankruptcy or similar proceeding of the Borrower, then the change to such Non-
Defaulting Bank's Adjusted RL Percentage effected pursuant to said clause (B)
shall be reduced to that positive change, if any, as would have been made to its
Adjusted RL Percentage if (x) such repayments had not been made and (y) the
maximum change to its Adjusted RL Percentage would have resulted in the sum of
the outstanding principal of Revolving Loans made by such Bank plus such Bank's
new Adjusted RL Percentage of the outstanding principal amount of Swingline
Loans and of Letter of Credit Outstandings equaling such Bank's Revolving Loan
Commitment at such time.
"Adjusted Senior Leverage Ratio" shall mean the Adjusted Total
Leverage Ratio, except that references to "Consolidated Debt" and "Adjusted
Total Leverage Ratio" therein shall instead be references to "Consolidated
Senior Debt" and "Adjusted Senior Leverage Ratio", respectively.
"Adjusted Total Revolving Loan Commitment" shall mean at any time the
Total Revolving Loan Commitment less the aggregate Revolving Loan Commitments of
----
all Defaulting Banks.
"Adjusted Total Leverage Ratio" shall mean, on any date, the ratio of
(i) Consolidated Debt on such date to (ii) Consolidated EBITDA for the Test
Period most recently ended on or prior to such date. All calculations of the
Adjusted Total Leverage Ratio shall be made on a Pro Forma Basis, with
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determinations of Adjusted Total Leverage Ratio to give effect to all
adjustments (including, without limitation, those specified in clauses (iv) and
(v)) contained in the definition of "Pro Forma Basis" contained herein.
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"Administrative Agent" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to Section 12.10.
"Affected Loans" shall have the meaning provided in Section 4.02(i).
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and officers of such Person), controlled by, or under direct or indirect common
control with such Person; provided, however, that for purposes of Section 9.07,
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an Affiliate of the Borrower shall include any Person that directly or
indirectly owns more than 5% of any class of the capital stock of the Borrower
and any officer or director of the Borrower or any such Person.
"Agent" shall have the meaning provided in the first paragraph of this
Agreement.
"Agreement" shall mean this Credit Agreement, as the same may be from
time to time modified, amended and/or supplemented.
"APL" shall mean APL Limited, a Delaware corporation.
"APL Limited Agreements" shall mean and include each of the Non-
Competition Agreement, Administrative Services Agreement, Information Technology
Outsourcing and License Agreement, Stacktrain Services Agreement, TPI Chassis
Sublet Agreement, Equipment Supply Agreement and Primary Obligation and Guaranty
Agreement, in each case referred to in the Offering Memorandum with respect to
the Senior Subordinated Notes, dated as of May 24, 1999, as such agreements may
be amended, modified or supplemented from time to time pursuant to the terms
hereof and thereof.
"Apollo Equity Financing" shall have the meaning provided in Section
5.08(c).
"Apollo Group" shall mean Apollo Advisors, L.P., Apollo Investment
Fund, L.P., Apollo Investment Fund IV, L.P. and Apollo Overseas Partners IV,
L.P., all Delaware limited partnerships.
"Apollo Management Agreement" shall mean the management agreement,
dated as of May 28, 1999, between Apollo Advisors, L.P. and the Borrower, as the
same may be amended, modified or supplemented from time to time in accordance
with the terms hereof and thereof.
"Applicable Excess Cash Flow Percentage" shall mean, with respect to
any Excess Cash Flow Payment Date, 75%; provided that so long as no Default or
--------
Event of Default is then in existence, if on the last day of the relevant Excess
Cash Flow Payment Period, the Adjusted Total Leverage Ratio for the Test Period
then most recently ended (as established pursuant to the officer's certificate
delivered (or required to be delivered) pursuant to Section 8.01(e)) (i) is less
than 3.50:1.00 but greater than or equal to 3.00:1.00, then the Applicable
Excess Cash Flow Percentage shall instead be 50%, (ii) is less than 3.00:1.00
but greater than or equal to 2.5:1.00, then the Applicable Excess Cash Flow
Percentage shall instead be 25% or (iii) is less than 2.50:1.0, then the
Applicable Excess Cash Flow Percentage shall instead be 0%.
"Applicable Margin" initially shall mean a percentage per annum equal
to (i) in the case of Revolving Loans maintained as (x) Base Rate Loans, 1.50%
and (y) Eurodollar Loans, 2.50%, (ii) in the case of Term Loans maintained as
(x) Base Rate Loans, 2.00% and (y)
Eurodollar Loans, 3.00%, (iii) in the case of Swingline Loans, 1.50% and (iv) in
the case of the Commitment Fee, 0.50%. From and after each day of delivery of
any certificate delivered in accordance with the first sentence of the following
paragraph indicating a different margin than that described in the immediately
preceding sentence (each, a "Start Date") to and including the applicable End
Date described below, the Applicable Margin shall (subject to any adjustment
pursuant to the immediately succeeding paragraph) be that set forth below
opposite the Total Leverage Ratio indicated to have been achieved in any
certificate delivered in accordance with the following sentence:
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Revolving Loan Revolving Term Loan Term Loan Applicable
Total Leverage Eurodollar Loan Base Eurodollar Base Rate Commitment
Ratio Margin Rate Margin Margin Margin Fee
---------------------------------------------------------------------------------------------------
Equal to or greater 2.75% 1.75% 3.00% 2.00% 0.500%
than 5.0:1
---------------------------------------------------------------------------------------------------
Equal to or greater 2.50% 1.50% 3.00% 2.00% 0.500%
than 4.0:1 but
less than 5.0:1
---------------------------------------------------------------------------------------------------
Equal to or greater 2.25% 1.25% 2.75% 1.75% 0.375%
than 3.50:1 but
less than 4.0:1
---------------------------------------------------------------------------------------------------
Less than 3.50:1 2.00% 1.00% 2.50% 1.50% 0.375%
---------------------------------------------------------------------------------------------------
The Total Leverage Ratio shall be determined based on the delivery of
a certificate of the Borrower by an Authorized Officer of the Borrower to the
Administrative Agent (with a copy to be sent by the Administrative Agent to each
Bank), within 45 days of the last day of any fiscal quarter of the Borrower,
which certificate shall set forth the calculation of the Total Leverage Ratio as
at the last day of the Test Period ended immediately prior to the relevant Start
Date (but determined on a Pro Forma Basis to give effect to any Permitted
Acquisition effected on or prior to the date of the delivery of such
certificate) and the Applicable Margins which shall be thereafter applicable
(until same are changed or cease to apply in accordance with the following
sentences); provided that at the time of the consummation of any Permitted
--------
Acquisition or any issuance of Permitted Debt or Disqualified Preferred Stock,
an Authorized Officer of the Borrower shall deliver to the Administrative Agent
a certificate setting forth the calculation of the Total Leverage Ratio on a Pro
---
Forma Basis as of the last day of the last Calculation Period ended prior to the
-----
date on which such Permitted Acquisition is consummated or such Permitted Debt
or Disqualified Preferred Stock is/are issued for which financial statements
have been made available (or were required to be made available) pursuant to
Section 8.01(b) or (c), as the case may be, and the date of such consummation
shall be deemed to be a Start Date and the Applicable Margins which shall be
thereafter applicable (until same are changed or cease to apply in accordance
with the following sentence) shall be based upon the Total Leverage Ratio as so
calculated. The Applicable Margins so determined shall apply, except as set
forth in the succeeding sentence, from the relevant Start Date to the earliest
of (x) the date on which the next certificate is delivered to the Administrative
Agent, (y) the date on
which the next Permitted Acquisition is consummated or Permitted Debt or
Disqualified Preferred Stock is/are issued or (z) the date which is 45 days
following the last day of the Test Period in which the previous Start Date
occurred (such earliest date, the "End Date"), at which time, if no certificate
has been delivered to the Administrative Agent indicating an entitlement to new
Applicable Margins (and thus commencing a new Start Date), the Applicable
Margins shall be those set forth in the table above determined as if the Total
Leverage Ratio were greater than 5.0:1.0 (such Applicable Margins as so
determined, the "Highest Applicable Margins"). Notwithstanding anything to the
contrary contained above in this definition, (x) the Applicable Margins shall be
the Highest Applicable Margins at all times during which there shall exist any
Default or Event of Default, (y) prior to the date of delivery of the financial
statements pursuant to Section 8.01(c) for the fiscal year ended December 31,
1999, in no event shall the Applicable Margins be less than those described in
the first sentence of this definition and (z) the Applicable Margin for the
Commitment Fee as otherwise determined above shall be increased by 0.25% for
each day that both (i) the Total Unutilized Revolving Loan Commitment exceeds
75% of the Total Revolving Loan Commitment then in effect and (ii) the Total
Revolving Loan Commitment then in effect exceeds $40,000,000.
"Applicable Prepayment Percentage" shall mean, at any time, (i) for
purposes of Sections 4.02(c) and (d), 100%, provided that if at any time the
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Adjusted Total Leverage Ratio is less than 3.50 to 1.00 (as established pursuant
to the officer's certificate last delivered (or required to be delivered)
pursuant to Section 8.01(e)), the Applicable Prepayment Percentage shall instead
be 75% and (ii) for purposes of Section 4.02(e), 50%, provided that if at any
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time the Adjusted Total Leverage Ratio is less than 3.50 to 1.00 (as established
pursuant to the officer's certificate last delivered (or required to be
delivered) pursuant to Section 8.01(e)), the Applicable Prepayment Percentage
shall instead be 0%. Notwithstanding anything to the contrary in this
definition, at any time a Default or Event of Default is then in existence, the
Applicable Prepayment Percentage for purposes of (x) Sections 4.02(c) and (d)
shall be 100% and (y) Section 4.02(e) shall be 50%.
"Asset Sale" shall mean any sale, transfer or other disposition by the
Borrower or any of its Subsidiaries to any Person other than the Borrower or any
Wholly-Owned Subsidiary of the Borrower of any asset (including, without
limitation, any capital stock or other securities of another Person, but
excluding the sale by such Person of its own capital stock) of the Borrower or
such Subsidiary other than (i) sales, transfers or other dispositions of
inventory made in the ordinary course of business, (ii) dispositions or
transfers arising out of, or in connection with, the events described in clauses
(i) and (ii) of the definition of Recovery Event, (iii) any sale or other
disposition of Cash Equivalents in the ordinary course of business, (iv) any
merger, consolidation or liquidation permitted by Sections 9.02(f) and (g), (v)
any transfer of assets permitted pursuant to Section 9.02(e), (g) or (k), (vi)
any transaction permitted pursuant to Section 9.02(j) or (n), (vii) the Sale-
Leaseback Transaction to the extent consummated in accordance with the
requirements of Section 5.08 and (viii) any other sales and dispositions that
generate Net Sale Proceeds of less than $750,000 in the aggregate in any fiscal
year of the Borrower.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit L (appropriately
completed).
"Authorized Officer" shall mean, with respect to (i) the delivery of
Notices of Borrowing, Notices of Conversion, Letter of Credit Requests and
similar notices, the chief financial officer, the chief operating officer, any
treasurer or other financial officer of the Borrower, (ii) delivery of financial
information and officer's certificates pursuant to this Agreement, the chief
operating officer, any treasurer or other financial officer of the Borrower and
(iii) any other matter in connection with this Agreement or any other Credit
Document, any officer (or a person or persons so designated by any two officers)
of the Borrower, in each case to the extent reasonably acceptable to the
Administrative Agent.
"Available Basket Amount" shall mean, on any date of determination, an
amount equal to the sum of (i) $20,000,000 minus (ii) the aggregate amount of
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Investments made (including for such purpose the fair market value of any assets
contributed to any Joint Venture or Unrestricted Subsidiary (as determined in
good faith by senior management of the Borrower), net of Indebtedness and,
without duplication, Capitalized Lease Obligations assigned to, and assumed by,
the respective Joint Venture or Unrestricted Subsidiary in connection therewith)
pursuant to Section 9.05(l) after the Effective Date, minus (iii) the aggregate
-----
amount of Indebtedness or other obligations (whether absolute, accrued,
contingent or otherwise and whether or not due) of any Joint Venture or
Unrestricted Subsidiary for which the Borrower or any of its Subsidiaries (other
than the respective Joint Venture or Unrestricted Subsidiary) is liable, minus
-----
(iv) all payments made by the Borrower or any of its Subsidiaries (other than
the respective Joint Venture or Unrestricted Subsidiary) in respect of
Indebtedness or other obligations of the respective Joint Venture or
Unrestricted Subsidiary (including, without limitation, payments in respect of
obligations described in preceding clause (iii)) after the Effective Date, plus
----
(v) the amount of any increase to the Available Basket Amount made after the
Effective Date in accordance with the provisions of Section 9.05(l). In
connection with the foregoing, it is understood that the acquisition of an
Acquired Person which has ownership interests in one or more Joint Ventures,
pursuant to a Permitted Acquisition effected in accordance with the relevant
requirements of this Agreement shall not be deemed to constitute an Investment
pursuant to Section 9.05(l) and the Available Basket Amount shall not be reduced
as a result of the payment of consideration owing to effect the Permitted
Acquisition (although the Available Basket Amount would be affected to the
extent preceding clauses (iii) or (iv) apply with respect to the Joint Venture
so acquired or to the extent additional Investments are made in the respective
Joint Venture pursuant to Section 9.05(l)).
"Bank" shall have the meaning provided in the first paragraph of this
Agreement.
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing (including a
Mandatory Borrowing) or to fund its portion of any unreimbursed payment under
Section 2.03 or (ii) a Bank having notified the Administrative Agent and/or the
Borrower that it does not intend to comply with the obligations under Section
1.01(b), 1.01(d) or 2.03, in the case of either clause (i) or (ii) above as a
result of
the appointment of a receiver or conservator with respect to such Bank at the
direction or request of any regulatory agency or authority.
"Bankruptcy Code" shall have the meaning provided in Section 10.05.
"Base Rate" at any time shall mean the highest of (x) the rate which
is 1/2 of 1% in excess of the Adjusted Certificate of Deposit Rate, (y) the rate
which is 1/2 of 1% in excess of the Federal Funds Rate and (z) the Prime Lending
Rate.
"Base Rate Loan" shall mean each Loan bearing interest at the rates
provided in Section 1.08(a).
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrower Common Stock" shall have the meaning provided in Section
7.13.
"Borrower Exchange PIK Preferred Stock" shall mean the Series A
Preferred Nonparticipating Pay-In-Kind Stock, par value $.01 per share, of the
Borrower to be issued, at the option of the Borrower, after the Initial
Borrowing Date pursuant to the Borrower Exchange PIK Preferred Stock Certificate
of Designation in exchange for Pacer Logistics Preferred Stock.
"Borrower Exchange PIK Preferred Stock Certificate of Designation"
shall mean the Certificate of Designation of the Borrower substantially in the
form of Exhibit O, as the same may be amended, modified or supplemented from
time to time in accordance with the terms hereof and thereof.
"Borrower Exchange PIK Preferred Stock Documents" shall mean and
include, on and after the issuance thereof, the Borrower Exchange PIK Preferred
Stock, the Borrower Exchange PIK Preferred Stock Certificate of Designation and
the other documents and instruments entered into in connection with the issuance
of the Borrower Exchange PIK Preferred Stock, as the same may be amended,
modified or supplemented from time to time in accordance with the terms hereof
and thereof.
"Borrowing" shall mean and include (i) the borrowing of Swingline
Loans from BTCo on a given date and (ii) the borrowing of one Type of Loan
pursuant to a single Tranche by the Borrower from all of the Banks having
Commitments with respect to such Tranche on a pro rata basis on a given date (or
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resulting from conversions on a given date), having in the case of Eurodollar
Loans the same Interest Period; provided, that Base Rate Loans incurred pursuant
--------
to Section 1.10(b) shall be considered part of any related Borrowing of
Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company, in its individual capacity,
and any successor corporation thereto by merger, consolidation or otherwise.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day except Saturday, Sunday and any day which shall be
in New York City a legal
holiday or a day on which banking institutions are authorized or required by law
or other government action to close and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Loans, any day which is a Business Day described in clause (i) above
and which is also a day for trading by and between banks in U.S. dollar deposits
in the New York or London interbank Eurodollar market.
"Calculation Period" shall have the meaning provided in Section 8.14.
"Capital Expenditures" shall mean, with respect to any Person, for any
period, all expenditures by such Person which should be capitalized in
accordance with GAAP during such period, including all such expenditures with
respect to fixed or capital assets (including, without limitation, expenditures
for maintenance and repairs which should be capitalized in accordance with GAAP)
and, without duplication, the amount of all Capitalized Lease Obligations
incurred by such Person during such period.
"Capital Lease," as applied to any Person, shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of the Borrower or any of its Subsidiaries, in each case taken at
the amount thereof accounted for as liabilities in accordance with GAAP.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued
or directly and fully guaranteed or insured by the United States or any agency
or instrumentality thereof (provided that the full faith and credit of the
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United States is pledged in support thereof) having maturities of not more than
six months from the date of acquisition, (ii) time deposits, certificates of
deposit and bankers' acceptances of any Bank or any commercial bank having, or
which is the principal banking subsidiary of a bank holding company organized
under the laws of the United States, any State thereof, the District of Columbia
or any foreign jurisdiction having capital, surplus and undivided profits
aggregating in excess of $200,000,000 and having a long-term unsecured debt
rating of at least "A" or the equivalent thereof from S&P or "A2" or the
equivalent thereof from ▇▇▇▇▇'▇, with maturities of not more than six months
from the date of acquisition by such Person, (iii) repurchase agreements with a
term of not more than 30 days, involving securities of the types described in
preceding clause (i), and entered into with commercial banks meeting the
requirements of preceding clause (ii), (iv) commercial paper issued by any
Person incorporated in the United States rated at least A-1 or the equivalent
thereof by S&P or at least P-1 or the equivalent thereof by ▇▇▇▇▇'▇ and in each
case maturing not more than six months after the date of acquisition by such
Person, (v) investments in money market funds substantially all of whose assets
are comprised of securities of the types described in clauses (i) through (iv)
above and (vi) overnight deposits and demand deposit accounts (in the respective
local currencies) maintained in the ordinary course of business.
"Change of Control Event" shall mean, (I) at any time prior to the
consummation of a Qualified IPO, (a) Apollo Group and its Affiliates shall cease
to own on a fully diluted basis in the aggregate at least 40% of the economic
and voting interest in the Borrower's capital stock
(for such purpose excluding any Qualified Preferred Stock and any Disqualified
Preferred Stock, in each case to the extent same is not Voting Stock) or (b)
Apollo Group and its Affiliates, together with the Management Participants and
other investors which own shares of Borrower Common Stock on the Initial
Borrowing Date, shall cease to own on a fully diluted basis in the aggregate at
least a majority of the outstanding Voting Stock of the Borrower or (c) any
Person or "group" (within the meaning of Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, as in effect on the Effective Date), other than
the Permitted Holders, shall (A) have acquired, directly or indirectly,
beneficial ownership on a fully diluted basis of a percentage of the voting
and/or economic interest in the Borrower's capital stock that exceeds the
percentage of the voting and/or economic interest in the Borrower's capital
stock then beneficially owned, directly or indirectly, on a fully diluted basis
by Apollo Group and its Affiliates or (B) obtained the power (whether or not
exercised) to elect a majority of the Borrower's directors or (d) the Board of
Directors of the Borrower shall cease to consist of a majority of Continuing
Directors or (e) a "change of control" or similar event shall occur as provided
in any Senior Subordinated Note Document or any Existing Indebtedness, Permitted
Debt, Pacer Logistics Preferred Stock, Borrower Exchange PIK Preferred Stock
Document, Disqualified Preferred Stock, Qualified Preferred Stock or the
documentation governing the same, to the extent the outstanding principal amount
or liquidation preference, as the case may be, of such Existing Indebtedness,
Permitted Debt, Pacer Logistics Preferred Stock, Borrower Exchange PIK Preferred
Stock Document, Disqualified Preferred Stock or Qualified Preferred Stock
exceeds $5,000,000 or (II) at any time after a Qualified IPO, (a) any Person or
"group" (within the meaning of Rules 13d-3 and 13d-5 under the Securities
Exchange Act of 1934, as in effect on the Effective Date), other than the
Permitted Holders, shall have acquired beneficial ownership of 25% or more on a
fully diluted basis of the voting and/or economic interest in the Borrower's
capital stock and Apollo Group and its Affiliates shall own less than such
Person or "group" on a fully diluted basis of the economic and voting interest
in the Borrower's capital stock or (b) the Board of Directors of the Borrower
shall cease to consist of a majority of Continuing Directors or (c) a "change of
control" or similar event shall occur as provided in any Senior Subordinated
Note Document or any Existing Indebtedness, Permitted Debt, Pacer Logistics
Preferred Stock, Borrower Exchange PIK Preferred Stock Document, Disqualified
Preferred Stock, Qualified Preferred Stock or the documentation governing the
same to the extent the outstanding principal amount or liquidation preference,
as the case may be, of such Existing Indebtedness, Permitted Debt, Pacer
Logistics Preferred Stock, Borrower Exchange PIK Preferred Stock Document,
Disqualified Preferred Stock or Qualified Preferred Stock exceeds $5,000,000.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated thereunder. Section references to
the Code are to the Code, as in effect at the date of this Agreement and any
subsequent provisions of the Code, amendatory thereof, supplemental thereto or
substituted therefor.
"Collateral" shall mean all property (whether real or personal,
movable or immovable) with respect to which any security interests have been
granted (or purported to be granted) pursuant to any Security Document,
including, without limitation, all Pledge Agreement Collateral, all Security
Agreement Collateral and all cash and Cash Equivalents delivered as collateral
pursuant to any Credit Document.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors.
"Collective Bargaining Agreements" shall have the meaning provided in
Section 5.12.
"Commitment" shall mean any of the commitments of any Bank, i.e.,
whether the Term Loan Commitment or the Revolving Loan Commitment.
"Commitment Fee" shall have the meaning provided in Section 3.01(a).
"Company" shall mean any corporation, limited liability company,
partnership or other business entity (or the adjectival form thereof, where
appropriate).
"Conex" shall mean Conex Freight Systems, Inc., a California
corporation.
"Consolidated Current Assets" shall mean, at any time, the current
assets of the Borrower and its Subsidiaries at such time determined on a
consolidated basis.
"Consolidated Current Liabilities" shall mean, at any time, the
current liabilities of the Borrower and its Subsidiaries determined on a
consolidated basis, but excluding the current portion of, and accrued but unpaid
interest on, any Indebtedness under this Agreement and any other long-term
Indebtedness which would otherwise be included therein.
"Consolidated Debt" shall mean, at any time, the sum of (without
duplication) (i) all Indebtedness of the Borrower and its Subsidiaries as would
be required to be reflected on the liability side of a balance sheet of such
Person in accordance with GAAP as determined on a consolidated basis, (ii) all
Indebtedness of the Borrower and its Subsidiaries of the type described in
clause (vii) of the definition of Indebtedness, (iii) unreimbursed drawings on
all letters of credit issued for the account of the Borrower or any of its
Subsidiaries and (iv) all Contingent Obligations of the Borrower and its
Subsidiaries in respect of Indebtedness of other Persons (i.e., Persons other
----
than the Borrower or any of its Subsidiaries) of the type referred to in
preceding clauses (i), (ii) and (iii) of this definition; provided, that for
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purposes of this definition, (x) the amount of Indebtedness in respect of
Interest Rate Protection Agreements and Other Hedging Agreements shall be at any
time the aggregate unrealized net loss position, if any, of the Borrower and/or
its Subsidiaries thereunder on a marked-to-market basis determined no more than
one month prior to such time, (y) any Disqualified Preferred Stock of the
Borrower, any Preferred Stock of any of its Subsidiaries (other than the Pacer
Logistics Preferred Stock) and, on and after the Pacer Logistics Preferred Stock
Trigger Date, any Pacer Logistics Preferred Stock shall be treated as
Indebtedness, with an amount equal to the greater of the liquidation preference
or the maximum mandatory fixed repurchase price of any such outstanding
Preferred Stock deemed to be a component of Consolidated Debt and (z) the amount
available to be drawn under letters of credit issued for the account of the
Borrower or any of its Subsidiaries (other than unreimbursed drawings) shall be
excluded in making any determination of "Consolidated Debt".
"Consolidated EBIT" shall mean, for any period, the Consolidated Net
Income of the Borrower and its Subsidiaries, determined on a consolidated basis,
before Consolidated Interest Expense (to the extent deducted in arriving at
Consolidated Net Income) and provision for taxes based on income, in each case
that were included in arriving at Consolidated Net Income.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT,
adjusted by adding thereto (in each case to the extent deducted in determining
Consolidated Net Income for such period and not already added back in
determining Consolidated EBIT) the amount of (i) all amortization and
depreciation and other non-cash items and (ii) any management fees and
consulting fees paid pursuant to, and in accordance with the requirements of,
clauses (iii) and (vi) of Section 9.07 during such period, in each case that
were deducted in arriving at Consolidated EBIT for such period; provided that
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Consolidated EBITDA for each Test Period ending on or prior to March 31, 2000
shall mean the sum of (x) Consolidated EBITDA for such Test Period as determined
without regard to this proviso plus (y) the amount set forth in Schedule XI
----
hereto as applicable to Consolidated EBITDA for such Test Period.
Notwithstanding anything to the contrary contained above, to the extent
Consolidated EBITDA is to be determined for any Test Period which ends prior to
the first anniversary of the Initial Borrowing Date, Consolidated EBITDA for all
portions of such period occurring prior to the Initial Borrowing Date shall be
calculated in accordance with the definition of Test Period contained herein.
"Consolidated Interest Coverage Ratio" for any period shall mean the
ratio of Consolidated EBITDA to Consolidated Interest Expense for such period.
All calculations of the Consolidated Interest Coverage Ratio shall be made on a
Pro Forma Basis, with determinations of Consolidated Interest Coverage Ratio to
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give effect to all adjustments (including, without limitation, those specified
in clauses (iv) and (v)) contained in the definition of "Pro Forma Basis"
--- -----
contained herein.
"Consolidated Interest Expense" shall mean, for any period, the total
consolidated interest expense of the Borrower and its Subsidiaries for such
period (calculated without regard to any limitations on the payment thereof)
plus, without duplication, (i) that portion of Capitalized Lease Obligations of
----
the Borrower and its Subsidiaries representing the interest factor for such
period, and capitalized interest expense, plus (ii) the product of (x) the
----
amount of all cash Dividend requirements (whether or not declared or paid) on
Disqualified Preferred Stock of the Borrower and on any Preferred Stock of any
of its Subsidiaries (other than, at any time prior to the Pacer Logistics
Preferred Stock Trigger Date, any Pacer Logistics Preferred Stock) paid, accrued
or scheduled to paid or accrued during such period multiplied by (y) a fraction,
the numerator of which is one and the denominator of which is one minus the then
current effective consolidated Federal, state, local and foreign tax rate
(expressed as a decimal number between one and zero) of the Borrower as
reflected in the audited consolidated financial statements of the Borrower for
its most recently completed fiscal year, which amounts described in preceding
clause (ii) shall be treated as interest expense of the Borrower and its
Subsidiaries for purposes of this definition regardless of the treatment of such
amounts under GAAP, in each case net of the total consolidated cash interest
income of the Borrower and its Subsidiaries for such period, but excluding the
amortization of any deferred financing costs or of any costs in respect of any
Interest Rate Protection Agreement. Notwithstanding anything to the contrary
contained above, to the extent Consolidated Interest Expense is to be determined
for any Test Period which ends prior to the first anniversary of the Initial
Borrowing Date, Consolidated Interest Expense for all portions of such period
occurring prior to the Initial Borrowing Date shall be calculated in accordance
with the definition of Test Period contained herein.
"Consolidated Net Income" shall mean, for any period, the net after-
tax income of the Borrower and its Subsidiaries determined on a consolidated
basis, without giving effect to any after-tax non-recurring gains or losses or
after-tax items classified as extraordinary gains or losses, any other non-cash
expenses incurred or payments made in connection with the Transaction, and
without giving effect to gains and losses from the sale or disposition of assets
(other than sales or dispositions of inventory, equipment, raw materials and
supplies in the ordinary course of business) by the Borrower and its
Subsidiaries; provided that the following items shall be excluded in computing
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Consolidated Net Income (without duplication): (i) the net income or net losses
of any Person in which any other Person or Persons (other than the Borrower and
its Wholly-Owned Domestic Subsidiaries) has an equity interest or interests,
except to the extent of the amount of dividends or other distributions actually
paid to the Borrower or such Wholly-Owned Subsidiaries by such Person during
such period, (ii) except for determinations expressly required to be made on a
Pro Forma Basis, the net income (or loss) of any Person accrued prior to the
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date it becomes a Subsidiary or all or substantially all of the property or
assets of such Person are acquired by a Subsidiary and (iii) the net income of
any Subsidiary to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary of such net income is not at the time
permitted by the operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to such Subsidiary.
"Consolidated Senior Debt" shall mean, at any time, (x) Consolidated
Debt less (y) the sum of (i) the aggregate outstanding principal amount of the
----
Senior Subordinated Notes at such time, (ii) the aggregate principal amount of
all other subordinated debt incurred pursuant to Sections 9.04 (f), (k) and (l)
and outstanding at such time and otherwise included in Consolidated Debt and
(iii) the aggregate liquidation preference of all Disqualified Preferred Stock
issued pursuant to Section 9.13(c) and otherwise included in Consolidated Debt.
"Container and Chassis Purchases" shall mean purchases of containers
and chassis by the Borrower and its Wholly-Owned Domestic Subsidiaries to be
used in a Permitted Business.
"Contingent Obligations" shall mean as to any Person any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary
obligor, (c) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or (d) otherwise
to assure or hold harmless the owner of such primary obligation against loss in
respect thereof; provided, however, that the term Contingent Obligation shall
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not include endorsements of instruments for deposit or collection or standard
contractual indemnities entered into, in each case in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Continuing Directors" shall mean the directors of the Borrower on the
Effective Date and each other director if such director's nomination for the
election to the Board of Directors of the Borrower is recommended by a majority
of the then Continuing Directors.
"Credit Documents" shall mean this Agreement, the Notes, each Guaranty
and each Security Document.
"Credit Event" shall mean the making of a Loan (other than a Revolving
Loan made pursuant to a Mandatory Borrowing) or the issuance of a Letter of
Credit.
"Credit Party" shall mean the Borrower and each Subsidiary Guarantor.
"CSFB" shall mean Credit Suisse First Boston in its individual
capacity and any successor thereto.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is in effect.
"Disqualified Preferred Stock" shall mean any Preferred Stock of the
Borrower other than Qualified Preferred Stock.
"Dividend" shall have the meaning provided in Section 9.06.
"Documentation Agent" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the Documentation
Agent designated pursuant to Section 12.10.
"Documents" shall mean and include (i) the Credit Documents, (ii) the
Equity Financing Documents, (iii) the Recapitalization Documents, (iv) the
Refinancing Documents, (v) the Senior Subordinated Notes Documents, (vi) the
Pacer Logistics Acquisition Documents, (vii)
the Sale-Leaseback Transaction Documents, (viii) the APL Limited Documents and
(ix) all other documents, agreements and instruments executed in connection with
the Transaction.
"Domestic Subsidiary" shall mean each Subsidiary of the Borrower
incorporated or organized in the United States or any State or territory
thereof.
"Domestic Unrestricted Subsidiary" shall mean any Unrestricted
Subsidiary which is not a Foreign Unrestricted Subsidiary.
"Effective Date" shall have the meaning set forth in Section 13.10.
"Eligible Transferee" shall mean and include a commercial bank,
insurance company, mutual fund, financial institution, a "qualified
institutional buyer" (as defined in Rule 144A of the Securities Act), any fund
that invests in bank loans or any other "accredited investor" (as defined in
Regulation D of the Securities Act) (other than an individual).
"Employee Benefit Plans" shall have the meaning set forth in Section
5.12.
"Employment Agreements" shall have the meaning set forth in Section
5.12.
"End Date" shall have the meaning provided in the definition of
Applicable Margin.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of non-compliance or violation, investigations or proceedings relating
in any way to any violation (or alleged violation) by the Borrower or any of its
Subsidiaries under any Environmental Law (hereafter "Claims") or any permit
issued to the Borrower or any of its Subsidiaries under any such law, including,
without limitation, (a) any and all Claims by governmental or regulatory
authorities for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law, and (b) any and
all Claims by any third party seeking damages, contribution, indemnification,
cost recovery, compensation or injunctive relief resulting from Hazardous
Materials or arising from alleged injury or threat of injury to health, safety
or the environment.
"Environmental Law" shall mean any federal, state, provincial, foreign
or local policy, statute, law, rule, regulation, ordinance, code or rule of
common law now or hereafter in effect and in each case as amended, and any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment (for purposes of this
definition (collectively, "Laws")), relating to the environment, or Hazardous
Materials or health and safety to the extent such health and safety issues arise
under the Occupational Safety and Health Act of 1970, as amended, or any such
similar Laws.
"Equity Financing" shall have the meaning provided in Section 5.08(c).
"Equity Financing Documents" shall mean the documents and agreements
entered into in connection with the Equity Financing.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at
the date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Borrower or a Subsidiary of the Borrower would
be deemed to be a "single employer" within the meaning of Section 414(b), (c),
(m) or (o) of the Code.
"Eurodollar Loans" shall mean each Loan bearing interest at the rates
provided in Section 1.08(b).
"Eurodollar Rate" shall mean with respect to each Interest Period for
a Eurodollar Loan, (i) the arithmetic average (rounded to the nearest 1/100 of
1%) of the offered quotation to first-class banks in the interbank Eurodollar
market by BTCo for U.S. dollar deposits of amounts in same day funds comparable
to the outstanding principal amount of the Eurodollar Loan of BTCo for which an
interest rate is then being determined with maturities comparable to the
Interest Period to be applicable to such Eurodollar Loan, determined as of 10:00
A.M. (New York time) on the date which is two Business Days prior to the
commencement of such Interest Period divided (and rounded upward to the next
whole multiple of 1/16 of 1%) by (ii) a percentage equal to 100% minus the then
stated maximum rate of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves) applicable to
any member bank of the Federal Reserve System in respect of Eurocurrency
liabilities as defined in Regulation D (or any successor category of liabilities
under Regulation D).
"Event of Default" shall have the meaning provided in Section 10.
"Excess Cash Flow" shall mean, for any period, the remainder of (a)
the sum of (i) Adjusted Consolidated Net Income for such period, and (ii) the
decrease, if any, in Adjusted Consolidated Working Capital from the first day to
the last day of such period, minus (b) the sum of (i) the amount of Capital
Expenditures made by the Borrower and its Subsidiaries on a consolidated basis
during such period pursuant to and in accordance with Sections 9.11(a) and (b),
except to the extent financed with the proceeds of Indebtedness (other than the
proceeds of Revolving Loans) or pursuant to Capitalized Lease Obligations, (ii)
the aggregate amount of permanent principal payments of Indebtedness for
borrowed money of the Borrower and its Subsidiaries and the permanent repayment
of the principal component of Capitalized Lease Obligations of the Borrower and
its Subsidiaries (excluding (1) payments with proceeds of asset sales, (2)
payments with the proceeds of Indebtedness or equity and (3) payments of Loans
or other Obligations, provided that repayment of Loans shall be deducted in
determining Excess Cash Flow if such payments were (x) required as a result of a
Scheduled Repayment under Section 4.02(b) or (y) made as a voluntary prepayment
pursuant to Section 4.01 with internally
generated funds (but in the case of a voluntary prepayment of Revolving Loans,
only to the extent accompanied by a voluntary reduction to the Total Revolving
Loan Commitment)) during such period, (iii) the increase, if any, in Adjusted
Consolidated Working Capital from the first day to the last day of such period
and (iv) without duplication of amounts deducted in the preceding clauses
(b)(i), (ii) and (iii), the amount of cash expended in respect of Permitted
Acquisitions during such period, except to the extent financed with
Indebtedness.
"Excess Cash Flow Payment Date" shall mean the date occurring 90 days
after the last day of a fiscal year of the Borrower.
"Excess Cash Flow Payment Period" shall mean, with respect to the
repayment required on each Excess Cash Flow Payment Date, the immediately
preceding fiscal year of the Borrower.
"Exchange Senior Subordinated Notes" means Senior Subordinated Notes
which are substantially identical securities to the Senior Subordinated Notes
issued on or prior to the Initial Borrowing Date, which Exchange Senior
Subordinated Notes shall be issued pursuant to a registered exchange offer or
private exchange offer for the Senior Subordinated Notes and pursuant to the
Senior Subordinated Notes Indenture. In no event will the issuance of any
Exchange Senior Subordinated Notes increase the aggregate principal amount of
Senior Subordinated Notes then outstanding or otherwise result in an increase in
an interest rate applicable to the Senior Subordinated Notes.
"Existing Indebtedness" shall have the meaning provided in Section
5.09(c).
"Existing Indebtedness Agreements" shall have the meaning provided in
Section 5.12.
"Existing Letter of Credit" shall have the meaning provided in Section
2.01(e)
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to, or referred to in,
Section 3.01.
"FNBC" shall mean First National Bank of Chicago in its individual
capacity and any successor thereto.
"Foreign Pension Plan" means any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by the Borrower or any one or
more of its Subsidiaries primarily for the benefit of employees of the Borrower
or any of its Subsidiaries residing outside the United States of America, which
plan, fund or other similar program provides, or results in, retirement income,
a deferral of income in contemplation of retirement or payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code.
"Foreign Subsidiary" shall mean each Subsidiary of the Borrower other
than a Domestic Subsidiary.
"Foreign Unrestricted Subsidiary" shall mean each Unrestricted
Subsidiary that is incorporated under the laws of any jurisdiction other than
the United States of America, any State thereof, the United States Virgin
Islands or Puerto Rico.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time; it being understood and
agreed that determinations in accordance with GAAP for purposes of Section 9,
including defined terms as used therein, are subject (to the extent provided
therein) to Section 13.07(a).
"Gross-Up Amount" shall have the meaning provided in Section 4.04(a).
"Guaranties" shall mean and include the Subsidiaries Guaranty and each
guaranty entered into pursuant to Section 8.12 or 8.14.
"Guarantors" shall mean each Subsidiary Guarantor and any other Person
party to a Guaranty.
"Hazardous Materials" shall mean (a) any petrochemical or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; and (b) any chemicals, materials or substances defined as or included
in the definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "restricted hazardous materials," "extremely hazardous wastes,"
"restrictive hazardous wastes," "toxic pollutants," "contaminants" or
"pollutants" under any Environmental Law, or words of similar meaning and
regulatory effect.
"Indebtedness" of any Person shall mean, without duplication, (i) all
indebtedness of such Person for borrowed money, (ii) the deferred purchase price
of assets or services payable to the sellers thereof or any of such seller's
assignees which in accordance with GAAP would be shown on the liability side of
the balance sheet of such Person but excluding deferred rent as determined in
accordance with GAAP, (iii) the face amount of all letters of credit issued for
the account of such Person and, without duplication, all drafts drawn
thereunder, (iv) all Indebtedness of a second Person secured by any Lien on any
property owned by such first Person, whether or not such Indebtedness has been
assumed, (v) all Capitalized Lease Obligations of such Person, (vi) all
obligations of such Person to pay a specified purchase price
for goods or services whether or not delivered or accepted, i.e., take-or-pay
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and similar obligations, (vii) all obligations under Interest Rate Protection
Agreements and Other Hedging Agreements and (viii) all Contingent Obligations of
such Person, provided, that Indebtedness shall not include trade payables and
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accrued expenses, in each case arising in the ordinary course of business.
"Information Systems and Equipment" shall mean all computer hardware,
firmware and software, as well as other information processing systems, or any
equipment containing embedded microchips, whether directly owned, licensed,
leased, operated or otherwise controlled by the Borrower or any of its
Subsidiaries, including through third-party service providers, and which, in
whole or in part, are used, operated, relied upon, or integral to, the
Borrower's or any of its Subsidiaries' conduct of their business.
"Initial Borrowing Date" shall mean the date upon which the initial
Borrowing of Loans occurs.
"Intercompany Loan" shall have the meaning provided in Section
9.05(f).
"Intercompany Notes" shall mean promissory notes, in the form of
Exhibit M, evidencing Intercompany Loans.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period," with respect to any Eurodollar Loan, shall mean the
interest period applicable thereto, as determined pursuant to Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate hedging agreement or other similar agreement or arrangement.
"Investment" shall have the meaning provided in the preamble to
Section 9.05.
"IT Upgrade Expenditures" means expenditures relating to the upgrade
of the Borrower's and its Subsidiaries' information technology systems to the
extent these expenditures would have been capitalized by the Borrower and its
Subsidiaries in accordance with their accounting policies in effect on the
Initial Borrowing Date.
"Joint Venture" shall mean any Person, other than an individual or a
Wholly-Owned Subsidiary of the Borrower, (i) in which the Borrower or a
Subsidiary of the Borrower holds or acquires an ownership interest (whether by
way of capital stock, partnership or limited liability company interest, or
other evidence of ownership) and (ii) which is engaged in a Permitted Business.
"L/C Supportable Indebtedness" shall mean obligations of the Borrower
or its Wholly-Owned Subsidiaries incurred in the ordinary course of business and
otherwise permitted to exist pursuant to the terms of this Agreement.
"Leasehold" of any Person shall mean all of the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section 2.01(a).
"Letter of Credit Fees" shall have the meaning provided in Section
3.01(b).
"Letter of Credit Issuer" shall mean BTCo, FNBC and any other Bank
which, at the request of the Borrower and with the consent of the Administrative
Agent, agrees in such Bank's sole discretion to become a Letter of Credit Issuer
for purposes of issuing Letters of Credit pursuant to Section 2. The sole
Letter of Credit Issuers on the Initial Borrowing Date are BTCo and FNBC.
"Letter of Credit Outstandings" shall mean, at any time, the sum of,
without duplication, (i) the aggregate Stated Amount of all outstanding Letters
of Credit and (ii) the aggregate amount of all Unpaid Drawings in respect of all
Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in Section
2.02(a).
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien, hypothec or charge of any kind (including any agreement to
give any of the foregoing, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC or
any similar recording or notice statute, and any lease having substantially the
same effect as the foregoing).
"Loan" shall mean each Term Loan, each Revolving Loan and each
Swingline Loan.
"LTS Equity Rollover" shall have the meaning provided in Section
5.08(a).
"Management Agreements" shall have the meaning provided in Section
5.12.
"Management Participants" shall mean members of senior management of
the Borrower and its Subsidiaries acceptable to the Administrative Agent.
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(d).
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on the
business, properties, assets, liabilities, condition (financial or otherwise) or
prospects of (i) the Borrower or the Borrower and its Subsidiaries taken as a
whole and (ii) in the case of any condition or
representation and warranty to be satisfied or made, as the case may be, on the
Initial Borrowing Date, Pacer Logistics and its Subsidiaries taken as a whole.
"Material Contracts" shall have the meaning provided in Section 5.12.
"Maturity Date", with respect to any Tranche of Loans, shall mean the
Term Loan Maturity Date, the Revolving Loan Maturity Date or the Swingline
Expiry Date, as the case may be.
"Maximum Permitted Acquisition Leverage Ratio" shall mean, at any
time, the maximum Adjusted Leverage Ratio which may exist pursuant to Section
9.10 without giving rise to a Default or Event of Default at such time, adjusted
by reducing the ratio appearing in such maximum Adjusted Leverage Ratio by 0.25.
"Maximum Permitted Consideration" shall mean, with respect to any
Permitted Acquisition, the sum (without duplication) of (i) the aggregate
liquidation preference of Preferred Stock issued by the Borrower as
consideration in connection with such Permitted Acquisition, (ii) the aggregate
principal amount of Permitted Acquired Debt acquired or assumed by the Borrower
or any of its Subsidiaries in connection with such Permitted Acquisition, (iii)
the aggregate principal amount of all cash paid (or to be paid) by the Borrower
or any of its Subsidiaries in connection with such Permitted Acquisition
(including payments of fees and costs and expenses in connection therewith),
(iv) the aggregate principal amount of all other Indebtedness assumed, incurred
and/or issued in connection with such Permitted Acquisition to the extent
permitted by Section 9.04 and (v) the fair market value (determined in good
faith by senior management of the Borrower) of all other consideration payable
in connection with such Permitted Acquisition (other than Borrower Common
Stock).
"Maximum Swingline Amount" shall mean $2,500,000.
"Minimum Borrowing Amount" shall mean (i) for Revolving Loans,
$1,000,000, (ii) for Term Loans, $5,000,000 and (iii) for Swingline Loans,
$500,000.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
"▇▇▇▇▇▇" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc. in its
individual capacity and any successor thereto.
"Multiemployer Plan" shall mean any multiemployer plan as defined in
Section 4001(a)(3) of ERISA, which is maintained or contributed to by (or to
which there is an obligation to contribute of) the Borrower, a Subsidiary of the
Borrower or an ERISA Affiliate, and each such plan for the five year period
immediately following the latest date on which the Borrower, a Subsidiary of the
Borrower or an ERISA Affiliate maintained, contributed to or had an obligation
to contribute to such plan.
"Net Cash Proceeds" shall mean for any event requiring a reduction of
the Total Revolving Loan Commitment and/or repayment of Term Loans pursuant to
Section 3.03 or 4.02,
as the case may be, the gross cash proceeds (including any cash received by way
of deferred payment pursuant to a promissory note, receivable or otherwise, but
only as and when received) received from such event, net of reasonable
transaction costs (including, as applicable, any underwriting, brokerage or
other customary commissions and reasonable legal, advisory and other fees and
expenses associated therewith) received from any such event.
"Net Sale Proceeds" shall mean for any sale of assets, the gross cash
proceeds (including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as and when received)
received from any sale of assets, net of (i) reasonable transaction costs
(including, without limitation, any underwriting, brokerage or other customary
selling commissions and reasonable legal, advisory and other fees and expenses,
including title and recording expenses, associated therewith) and payments of
unassumed liabilities relating to the assets sold at the time of, or within 30
days after, the date of such sale, (ii) the amount of such gross cash proceeds
required to be used to repay any Indebtedness (other than Indebtedness of the
Banks pursuant to this Agreement) which is secured by the respective assets
which were sold, and (iii) the estimated marginal increase in income taxes which
will be payable by the Borrower's consolidated group with respect to the fiscal
year in which the sale occurs as a result of such sale; provided, however, that
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such gross proceeds shall not include any portion of such gross cash proceeds
which the Borrower determines in good faith should be reserved for post-closing
adjustments (including indemnification payments) (in the event such amount of
gross cash proceeds so reserved exceeds $50,000, to the extent the Borrower
delivers to the Banks a certificate signed by its chief financial officer or
treasurer, controller or chief accounting officer as to such determination), it
being understood and agreed that on the day that all such post-closing
adjustments have been determined (which shall not be later than six months
following the date of the respective asset sale), the amount (if any) by which
the reserved amount in respect of such sale or disposition exceeds the actual
post-closing adjustments payable by the Borrower or any of its Subsidiaries
shall constitute Net Sale Proceeds on such date received by the Borrower and/or
any of its Subsidiaries from such sale, lease, transfer or other disposition.
The parties hereto acknowledge and agree that Net Sale Proceeds shall not
include any trade-in-credits or purchase price reductions received by the
Borrower or any of its Subsidiaries in connection with an exchange of equipment
for replacement equipment that is the functional equivalent of such exchanged
equipment.
"New Withholding Regulations" shall have the meaning provided in
Section 4.04(b).
"Non-Defaulting Bank" shall mean each Bank other than a Defaulting
Bank.
"Non-Wholly Owned Entity" shall have the meaning provided in the
definition of Permitted Acquisition.
"Note" shall mean each Term Note, each Revolving Note and/or the
Swingline Note, as the context may require.
"Notice of Borrowing" shall have the meaning provided in Section
1.03(a).
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent
located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such other
office as the Administrative Agent may designate to the Borrower and the Banks
from time to time.
"Obligations" shall mean all amounts, direct or indirect, contingent
or absolute, of every type or description, and at any time existing, owing to
the Administrative Agent, the Syndication Agent, the Documentation Agent, the
Collateral Agent or any Bank pursuant to the terms of this Agreement or any
other Credit Document.
"Other Hedging Agreements" shall mean any foreign exchange contracts,
currency swap agreements or other similar agreements or arrangements designed to
protect against fluctuations in currency values.
"Pacer Logistics" shall mean Pacer International, Inc., a Delaware
corporation, which corporation shall be renamed Pacer Logistics, Inc. on the
Initial Borrowing Date immediately after giving effect to the Transaction.
"Pacer Logistics Acquisition" shall have the meaning provided in
Section 5.08(b).
"Pacer Logistics Acquisition Corp." shall mean Mile High Acquisition
Corp. II, a Delaware corporation and a Wholly-Owned Subsidiary of the Borrower.
"Pacer Logistics Merger Agreement" shall mean the Agreement and Plan
of Merger, dated as of February 22, 1999, among the Borrower, Pacer Logistics
Acquisition Corp. and Pacer Logistics (including the schedules and exhibits
thereto), as the same may be amended, modified or supplemented from time to time
in accordance with the terms hereof and thereof.
"Pacer Logistics Acquisition Documents" shall mean the Pacer Logistics
Merger Agreement and all other agreements, instruments and documents entered
into or delivered in connection with the Pacer Logistics Acquisition.
"Pacer Logistics Equity Rollover" shall have the meaning provided in
Section 5.08(b).
"Pacer Logistics Preferred Stock" shall have the meaning provided in
Section 5.08(b).
"Pacer Logistics Preferred Stock Trigger Date" shall mean May 28,
2001.
"Participant" shall have the meaning provided in Section 2.03(a).
"Payment Office" shall mean the office of the Administrative Agent
located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such other
office as the Administrative Agent may designate to the Borrower and the Banks
from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Acquired Debt" shall have the meaning set forth in Section
9.04(d).
"Permitted Acquisition" shall mean the acquisition by the Borrower or
any of its Wholly-Owned Domestic Subsidiaries of assets constituting a business,
division or product line of any Person not already a Subsidiary of the Borrower
or any of its Wholly-Owned Subsidiaries or of 100% of the capital stock or other
equity interests of any such Person, provided that (A) the consideration paid by
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the Borrower or such Wholly-Owned Subsidiary consists solely of cash (including
proceeds of Revolving Loans), the issuance of the Borrower Common Stock, the
issuance of any Qualified Preferred Stock or Disqualified Preferred Stock
otherwise permitted in Section 9.13, the issuance of Indebtedness otherwise
permitted in Section 9.04 (including Permitted Subordinated Indebtedness) and
the assumption/acquisition of any Permitted Acquired Debt (calculated in
accordance with GAAP) relating to such business, division, product line or
Person which is permitted to remain outstanding in accordance with the
requirements of Section 9.04, (B) those acquisitions that are structured as
stock acquisitions shall be effected through a purchase of 100% of the capital
stock or other equity interests of such Person by the Borrower or such Wholly-
Owned Domestic Subsidiary or through a merger between such Person and a Wholly-
Owned Domestic Subsidiary of the Borrower, so that after giving effect to such
merger, 100% of the capital stock or other equity interests of the surviving
corporation of such merger is owned by the Borrower or a Wholly-Owned Domestic
Subsidiary, (C) in the case of the acquisition of 100% of the capital stock or
other equity interests of any Person, such Person (the "Acquired Person") shall
own no capital stock or other equity interests of any other Person unless either
(x) the Acquired Person owns 100% of the capital stock or other equity interests
of such other Person or (y) if the Acquired Person owns capital stock or equity
interests in any other Person which is not a Wholly-Owned Subsidiary of the
Acquired Person (a "Non-Wholly Owned Entity"), both (1) the Acquired Person
shall not have been created or established in contemplation of, or for purposes
of, the respective Permitted Acquisition and (2) any Non-Wholly Owned Entity of
the Acquired Person shall have been non-wholly-owned prior to the date of the
respective Permitted Acquisition and not created or established in contemplation
thereof, (D) substantially all of the business, division or product line
acquired pursuant to the respective Permitted Acquisition, or the business of
the Acquired Person and its Subsidiaries taken as a whole, is in the United
States, (E) the assets acquired, or the business of the Acquired Person and its
Subsidiaries, shall be in a Permitted Business and (F) all applicable
requirements of Sections 8.14 and 9.02 applicable to Permitted Acquisitions are
satisfied. Notwithstanding anything to the contrary contained in the
immediately preceding sentence, an acquisition which does not otherwise meet the
requirements set forth above in the definition of "Permitted Acquisition" shall
constitute a Permitted Acquisition if, and to the extent, the Required Banks
agree in writing that such acquisition shall constitute a Permitted Acquisition
for purposes of this Agreement.
"Permitted Acquisition Additional Cost-Savings" shall mean, in
connection with each Permitted Acquisition, those demonstrable cost-savings and
other adjustments (in each case not included pursuant to clause (iii) or (iv) of
the definition of Pro Forma Basis contained herein)
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reasonably anticipated by the Borrower to be achieved in connection with such
Permitted Acquisition for the 12 month period following the consummation of such
Permitted Acquisition, which cost-savings and other adjustments shall be
estimated on a good faith basis by the Borrower and, if requested by the
Administrative Agent, be verified by a nationally recognized accounting firm or
as otherwise agreed to by the Administrative Agent.
"Permitted Business" shall mean the freight and transportation-related
services and related businesses and including, without limitation, trucking
(including flatbed and specialized heavy haul trucking), railway shipping,
intermodal and other marketing (rail or over-the-road), transportation equipment
maintenance and inspections, warehousing and freight handling, freight
consolidation and deconsolidation, cross-dock, less-than-truckload common
carrier services, cartage and drayage, general consumer and specialized freight
services, comprehensive transportation management and services, traffic
management, railroad signal project management, rail terminal management and
logistics services to coordinate the foregoing services (including integrated
freight transportation), in each case as such businesses are conducted by the
Borrower and its Subsidiaries on the Effective Date and any other business or
activities as may be substantially similar, incidental or related thereto, and
reasonable extensions of the foregoing.
"Permitted Debt" shall mean and include Permitted Acquired Debt,
Permitted Subordinated Refinancing Indebtedness and Permitted Subordinated
Indebtedness.
"Permitted Encumbrances" shall mean (i) those liens, encumbrances,
hypothecs and other matters affecting title to any Real Property and found
reasonably acceptable by the Administrative Agent, (ii) as to any particular
Real Property at any time, such easements, encroachments, covenants, rights of
way, minor defects, irregularities or encumbrances on title which could not
reasonably be expected to materially impair such Real Property for the purpose
for which it is held by the mortgagor or grantor thereof, or the lien or
hypothec held by the Collateral Agent, (iii) zoning and other municipal
ordinances which are not violated in any material respect by the existing
improvements and the present use made by the mortgagor or grantor thereof of the
premises, (iv) general real estate taxes and assessments not yet delinquent, and
(v) such other similar items as the Administrative Agent may consent to (such
consent not to be unreasonably withheld).
"Permitted Holders" shall mean Apollo Group and its Affiliates and the
Management Participants (to the extent acting as a "group" within the meaning of
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as in effect on
the Effective Date).
"Permitted Liens" shall have the meaning provided in Section 9.03.
"Permitted Sale-Leaseback Transaction" shall mean any sale by the
Borrower or any of its Subsidiaries of any asset first acquired by the Borrower
or such Subsidiary after the Effective Date which asset is then leased back to
the Borrower or such Subsidiary, provided that (i) the proceeds of the
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respective sale shall be entirely cash and in an amount at least equal to 85% of
the aggregate amount expended by the Borrower or such Subsidiary in so acquiring
such asset, (ii) such sale and leaseback are effected within 90 days of the
acquisition by the Borrower
or such Subsidiary of such asset, and (iii) the respective transaction is
otherwise effected in accordance with the applicable requirements of Section
9.02(n).
"Permitted Subordinated Indebtedness" shall mean subordinated
Indebtedness of the Borrower incurred in connection with a Permitted Acquisition
and in accordance with Section 8.14, which Permitted Subordinated Indebtedness
and all terms and conditions thereof (including, without limitation, the
maturity thereof, the interest rate applicable thereto, amortization, defaults,
remedies, voting rights, subordination provisions, etc.), and the documentation
therefor, shall be reasonably satisfactory to the Administrative Agent,
provided, that in any event, unless the Required Banks otherwise expressly
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consent in writing prior to the incurrence thereof, (i) no such Indebtedness
shall be guaranteed by any Subsidiary of the Borrower, (ii) no such Indebtedness
shall be secured by any asset of the Borrower or any of its Subsidiaries and
(iii) such Indebtedness has substantially the same (or, from the perspective of
the Banks, more favorable) subordination provisions as are contained in the
Senior Subordinated Notes Documents. The incurrence of Permitted Subordinated
Indebtedness shall be deemed to be a representation and warranty by the Borrower
that all conditions thereto have been satisfied in all material respects and
that same is permitted in accordance with the terms of this Agreement, which
representation and warranty shall be deemed to be a representation and warranty
for all purposes hereunder, including, without limitation, Sections 6 and 10.
"Permitted Subordinated Refinancing Indebtedness" shall mean
Indebtedness of the Borrower issued or given in exchange for, or all the
proceeds of which are used to refinance, all of the outstanding Senior
Subordinated Notes, so long as (a) such Indebtedness has a weighted average life
to maturity greater than or equal to the weighted average life to maturity of
the Senior Subordinated Notes, (b) such refinancing does not (i) increase the
amount of such Indebtedness outstanding immediately prior to such refinancing or
(ii) add guarantors, obligors or security from that which applied to the Senior
Subordinated Notes, (c) such Indebtedness has substantially the same (or, from
the perspective of the Banks, more favorable) subordination provisions, if any,
as applied to the Senior Subordinated Notes, and (d) all other terms of such
refinancing (including, without limitation, with respect to the amortization
schedules, redemption provisions, maturities, covenants, defaults and remedies),
are not, taken as a whole, materially less favorable to the Borrower than those
previously existing with respect to the Senior Subordinated Notes.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) the Borrower or a Subsidiary of the Borrower or an
ERISA Affiliate, and each such plan for the five year period immediately
following the latest date on which the Borrower, or a Subsidiary of the Borrower
or an ERISA Affiliate maintained, contributed to or had an obligation to
contribute to such plan but excluding all Multiemployer Plans.
"Pledge Agreement" shall have the meaning provided in Section 5.10(a).
"Pledge Agreement Collateral" shall mean all of the "Collateral" as
defined in the Pledge Agreement.
"Pledged Securities" shall mean all the Pledged Securities as defined
in the Pledge Agreement.
"Post-Closing Period" shall have the meaning provided in Section
8.14(a).
"Preferred Stock," as applied to the capital stock of any Person,
means capital stock of such Person (other than common stock of such Person) of
any class or classes (however designed) that ranks prior, as to the payment of
dividends or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person, to shares of capital
stock of any other class of such Person, and shall include any Qualified
Preferred Stock, Disqualified Preferred Stock, Pacer Logistics Preferred Stock
and, on and after the issuance thereof, Borrower Exchange PIK Preferred Stock.
"Prime Lending Rate" shall mean the rate which BTCo announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. BTCo may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
"Pro Forma Balance Sheet" shall have the meaning provided in Section
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5.15.
"Pro Forma Basis" shall mean, in connection with any calculation of
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compliance with any financial covenant or financial term, the calculation
thereof after giving effect on a pro forma basis to (w) if the relevant period
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to be tested includes any period prior to the Initial Borrowing Date, the
consummation of the Transaction as if the same had occurred on the first day of
such period (for such purpose, without giving pro forma effect to synergies and
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cost savings which have been, or may be, realized in connection with the
Transaction, such synergies and cost savings having been independently accounted
for in the proviso to the definition of "Consolidated EBITDA"), (x) the
incurrence of any Indebtedness (other than revolving Indebtedness, except to the
extent same is incurred to finance the Transaction, to refinance other
outstanding Indebtedness or to finance Permitted Acquisitions) or Preferred
Stock (other than Qualified Preferred Stock of the Borrower) after the first day
of the relevant Calculation Period as if such Indebtedness or Preferred Stock
had been incurred or issued (and the proceeds thereof applied) on the first day
of the relevant Calculation Period, (y) the permanent repayment of any
Indebtedness (other than revolving Indebtedness except to the extent paid with
Permitted Debt or Disqualified Preferred Stock) or Preferred Stock (other than
Qualified Preferred Stock of the Borrower) after the first day of the relevant
Calculation Period as if such Indebtedness or Preferred Stock had been retired
or redeemed on the first day of the relevant Calculation Period and (z) the
Permitted Acquisition, if any, then being consummated as well as any other
Permitted Acquisition consummated after the first day of the relevant
Calculation Period and on or prior to
the date of the respective Permitted Acquisition then being effected, with the
following rules to apply in connection therewith:
(i) all Indebtedness and Preferred Stock (other than Qualified
Preferred Stock of the Borrower) (x) (other than revolving Indebtedness,
except to the extent same is incurred to finance the Transaction, to
refinance other outstanding Indebtedness, or to finance Permitted
Acquisitions) incurred or issued after the first day of the relevant
Calculation Period (whether incurred to finance a Permitted Acquisition, to
refinance Indebtedness or otherwise) shall be deemed to have been incurred
or issued (and the proceeds thereof applied) on the first day of the
respective Calculation Period and remain outstanding through the date of
determination (and thereafter in the case of projections pursuant to
Section 8.14(a)(iv)) and (y) (other than revolving Indebtedness except to
the extent paid with Permitted Debt or Disqualified Preferred Stock)
permanently retired or redeemed after the first day of the relevant
Calculation Period shall be deemed to have been retired or redeemed on the
first day of the respective Calculation Period and remain retired through
the date of determination (and thereafter in the case of projections
pursuant to Section 8.14(a)(iv));
(ii) all Indebtedness or Preferred Stock (other than Qualified
Preferred Stock of the Borrower) assumed to be outstanding pursuant to
preceding clause (i) shall be deemed to have borne interest or accrued
dividends, as the case may be, at (x) the rate applicable thereto, in the
case of fixed rate Indebtedness or Preferred Stock or (y) the rates which
would have been applicable thereto during the respective period when same
was deemed outstanding, in the case of floating rate Indebtedness or
Preferred Stock (although interest expense with respect to any Indebtedness
or Preferred Stock for periods while same was actually outstanding during
the respective period shall be calculated using the actual rates applicable
thereto while same was actually outstanding); provided that for purposes of
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calculations pursuant to Section 8.14(a)(iv), all Indebtedness or Preferred
Stock (whether actually outstanding or deemed outstanding) bearing interest
at a floating rate of interest shall be tested on the basis of the rates
applicable at the time the determination is made pursuant to said
provisions;
(iii) in making any determination of Consolidated EBITDA, pro forma
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effect shall be given to any Permitted Acquisition consummated after the
first day of the respective period being tested, taking into account, for
any portion of the relevant period being tested occurring prior to the
consummation of such Permitted Acquisition, demonstrable cost savings
actually achieved simultaneously with, or to be achieved within the one-
year period following, the closing of the respective Permitted Acquisition,
which cost savings would be permitted to be recognized in pro forma
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statements prepared in accordance with Regulation S-X under the Securities
Act, as if such cost-savings were realized on the first day of the relevant
period;
(iv) without duplication of adjustments provided above, in case of
any Permitted Acquisition consummated after the first day of the relevant
period being tested, pro forma effect shall be given to the termination or
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replacement of operating leases with
Capitalized Lease Obligations or other Indebtedness, and to any replacement
of Capitalized Lease Obligations or other Indebtedness with operating
leases, in each case effected at the time of the consummation of such
Permitted Acquisition or thereafter, in each case if effected after the
first day of the period being tested and prior to the date the respective
determination is being made, as if such termination or replacement had
occurred on the first day of the relevant period; and
(v) in making any determination of Consolidated EBITDA for purposes of
any calculation of the Adjusted Total Leverage Ratio, the Adjusted Senior
Leverage Ratio and the Consolidated Interest Coverage Ratio only, (x) for
any Permitted Acquisition which occurred during the last two fiscal
quarters comprising the respective Test Period (and, in the case of Section
8.14, thereafter and on or prior to the relevant date of determination),
there shall be added to Consolidated EBITDA the amount of Permitted
Acquisition Additional Cost Savings, determined in accordance with the
definition thereof contained herein, expected to be realized with respect
to such Permitted Acquisition, (y) for any Permitted Acquisition effected
in the second fiscal quarter of the respective Test Period, the
Consolidated EBITDA shall be increased by 50% of the Permitted Acquisition
Additional Cost Savings estimated to arise in connection with the
respective Permitted Acquisition and (z) for any Permitted Acquisition
effected in the first fiscal quarter of the respective Test Period, the
Consolidated EBITDA shall be increased by 25% of the Permitted Acquisition
Additional Cost Savings estimated to arise in connection with the
respective Permitted Acquisition; provided that the aggregate additions to
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Consolidated EBITDA, for any period being tested, pursuant to this clause
(v) shall not exceed 15% of the amount which would have been Consolidated
EBITDA in the absence of the adjustment pursuant to this clause (v).
Notwithstanding anything to the contrary contained above, (x) for purposes of
Sections 9.09 and 9.10 and, for purposes of all determinations of the
Applicable Margins, pro forma effect (as otherwise provided above) shall only be
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given for events or occurrences which occurred during the respective Test Period
but not thereafter and (y) for purposes of Section 8.14, pro forma effect (as
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otherwise provided above) shall be given for events or occurrences which
occurred during the respective Test Period and thereafter but on or prior to the
respective date of determination.
"Projections" shall have the meaning provided in Section 5.15(b).
"Qualified IPO" shall mean an underwritten public offering of Borrower
Common Stock which generates cash proceeds to the Borrower of at least
$50,000,000.
"Qualified Preferred Stock" shall mean any Preferred Stock of the
Borrower, the express terms of which shall provide that dividends thereon shall
not be required to be paid at any time (and to the extent) that such payment
would be prohibited by the terms of this Agreement or any other agreement of the
Borrower relating to outstanding indebtedness and which, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event (including any Change of
Control Event),
cannot mature and is not mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, and is not redeemable, or required to be repurchased,
at the sole option of the holder thereof (including, without limitation, upon
the occurrence of a Change of Control Event), in whole or in part, on or prior
to the date occurring two years after the Maturity Date.
"Quarterly Payment Date" shall mean the last Business Day of each
March, June, September and December.
"Real Property" of any Person shall mean all of the right, title and
interest of such Person in and to land, immovable property, improvements and
fixtures, including Leaseholds.
"Recap Distribution" shall have the meaning provided in Section
5.08(a).
"Recapitalization" shall mean and include the Acquisition, the LTS
Equity Rollover, the Recap Distribution and such other transactions contemplated
by the Recapitalization Documents.
"Recapitalization Documents" shall mean and include (i) the Stock
Purchase Agreement and (ii) all other agreements and documents governing, or
relating to, the Recapitalization.
"Recovery Event" shall mean the receipt by the Borrower or any of its
Subsidiaries of any insurance or condemnation proceeds (other than proceeds from
business interruption insurance) payable (i) by reason of theft, physical
destruction or damage or any other similar event with respect to any properties
or assets of the Borrower or any of its Subsidiaries, (whether under any policy
of insurance required to be maintained under Section 8.03 or otherwise) and (ii)
by reason of any condemnation, taking, seizing or similar event with respect to
any properties or assets of the Borrower or any of its Subsidiaries.
"Refinanced Indebtedness" shall have the meaning provided in Section
5.09(a).
"Refinancing" shall mean the refinancing transactions described in
Sections 5.09(a) and (b).
"Refinancing Documents" shall mean each of the agreements, documents
and instruments entered into in connection with the Refinancing.
"Register" shall have the meaning provided in Section 13.17.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from to time in effect and any successor to all or
any portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or any portion thereof.
"Release" means disposing, discharging, injecting, spilling, pumping,
leaking, leaching, dumping, emitting, escaping, emptying, seeping, placing,
pouring and the like, into or upon any land or water or air, or otherwise
entering into the environment.
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
.22, .23, .25, .27, or .28 of PBGC Regulation Section 4043.
"Required Banks" shall mean Non-Defaulting Banks, the sum of whose
outstanding Term Loans and Revolving Loan Commitments (or after the termination
thereof, outstanding Revolving Loans and Adjusted RL Percentage of outstanding
Swingline Loans and Letter of Credit Outstandings) represent an amount greater
than 50% of the sum of all outstanding Term Loans of Non-Defaulting Banks and
the Adjusted Total Revolving Loan Commitment (or after the termination thereof,
the sum of the then total outstanding Revolving Loans of Non-Defaulting Banks
and the aggregate Adjusted RL Percentages of all Non-Defaulting Banks of the
total outstanding Swingline Loans and Letter of Credit Outstandings at such
time).
"Revolving Loan" shall have the meaning provided in Section 1.01(b).
"Revolving Loan Commitment" shall mean, with respect to each RL Bank,
the amount set forth opposite such Bank's name in Schedule I directly below the
column entitled "Revolving Loan Commitment," as the same may be reduced from
time to time pursuant to Sections 3.02, 3.03, 4.02 and/or Section 10.
"Revolving Loan Maturity Date" shall mean May 28, 2004.
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"RL Bank" shall mean at any time each Bank with a Revolving Loan
Commitment or with outstanding Revolving Loans.
"RL Percentage" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such Bank at such time and the denominator of which is the Total
Revolving Loan Commitment at such time, provided that if the RL Percentage of
--------
any Bank is to be determined after the Total Revolving
Loan Commitment has been terminated, then the RL Percentages of the Banks shall
be determined immediately prior (and without giving effect) to such termination.
"Rolling Stock" shall mean railroad cars, locomotives, stacktrain cars
and other rolling stock (including superstructures, racks and accessories
thereto).
"Rollover Amount" shall have the meaning provided in Section 9.11(a).
"S&P" shall mean Standard & Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"Sale-Leaseback Transaction" shall have the meaning provided in
Section 5.08(c).
"Sale-Leaseback Transaction Documents" shall mean the Purchase, Sale
and Lease Agreement, dated as of May 28, 1999, between the Borrower, as Lessee,
and Transamerica Leasing Inc., as Lessor, and the other agreements and documents
entered into in connection with the Sale-Leaseback Transaction, each as in
effect on the Initial Borrowing Date and as the same may be amended, modified or
supplemented from time to time in accordance with the terms hereof and thereof.
"Scheduled Repayment" shall have the meaning provided in Section
4.02(b).
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning provided in the Security
Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Security Agreement" shall have the meaning provided in Section
5.10(b).
"Security Agreement Collateral" shall mean all of the "Collateral" as
defined in the Security Agreement.
"Security Documents" shall mean and include the Pledge Agreement, the
Security Agreement and each Additional Security Document, if any.
"Senior Subordinated Notes" shall mean the Borrower's 11-3/4% Senior
Subordinated Notes due 2007, issued pursuant to the Senior Subordinated Note
Indenture, as in effect on the Effective Date and as the same may be amended,
modified or supplemented from time to time in accordance with the terms hereof
and thereof. As used herein, the term "Senior Subordinated Notes" shall include
any Exchange Senior Subordinated Notes issued pursuant to the Senior
Subordinated Notes Indenture in exchange for theretofore outstanding Senior
Subordinated Notes, as contemplated by the Offering Memorandum, dated as of May
24, 1999, and the definition of Exchange Senior Subordinated Notes.
"Senior Subordinated Notes Documents" shall mean the Senior
Subordinated Notes, the Senior Subordinated Notes Indenture and all other
documents executed and delivered with respect to the Senior Subordinated Notes
or Senior Subordinated Notes Indenture, as in effect on the Effective Date and
as the same may be amended, modified or supplemented from time to time in
accordance with the terms hereof and thereof.
"Senior Subordinated Notes Indenture" shall mean the Indenture, dated
as of May 28, 1999, among the Borrower, the Subsidiary Guarantors and the Senior
Subordinated Notes Indenture Trustee, as in effect on the Effective Date and as
thereafter amended, modified or supplemented from time to time in accordance
with the requirements hereof and thereof.
"Senior Subordinated Notes Indenture Trustee" shall mean Wilmington
Trust Company or any successor thereto.
"Shareholder Subordinated Note" shall mean an unsecured junior
subordinated note issued by the Borrower (and not guaranteed or supported in any
way by the Borrower or any of its Subsidiaries) in the form of Exhibit N.
"Shareholders' Agreements" shall have the meaning provided in Section
5.12.
"Standby Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Start Date" shall have the meaning provided in the definition of
Applicable Margin.
"Stated Amount" of each Letter of Credit shall mean the maximum amount
available to be drawn thereunder (regardless of whether any conditions for
drawing could then be met).
"Stock Purchase Agreement" shall mean the Stock Purchase Agreement,
dated as of March 15, 1999, between Acquisition Corp. and APL, as in effect on
the Effective Date and as the same may be amended, modified or supplemented from
time to time pursuant to the terms hereof and thereof.
"STB" shall mean the Surface Transportation Board or any successor
thereto.
"Subsidiaries Guaranty" shall have the meaning provided in Section
5.11.
"Subsidiary" of any Person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity (other than
a corporation) in which such Person directly or indirectly through Subsidiaries,
has more than a 50% equity interest at the time. Notwithstanding the foregoing
(and except for purposes of Sections 7.01, 7.04, 7.12, 7.16, 7.17, 7.20,
8.01(h), 8.07, 8.08, 10.05, 10.06 and 10.09, and the definitions of Unrestricted
Subsidiary and Wholly-Owned Unrestricted Subsidiary contained herein), an
Unrestricted Subsidiary shall be deemed not to be a Subsidiary of the Borrower
or any of its other Subsidiaries for purposes of this Agreement.
"Subsidiary Guarantor" shall mean each Wholly-Owned Domestic
Subsidiary (and, to the extent required by Section 8.12, each Wholly-Owned
Foreign Subsidiary) of the Borrower that is or becomes a party to a Guaranty.
"Swingline Expiry Date" shall mean the date which is five Business
Days prior to the Revolving Loan Maturity Date.
"Swingline Loan" shall have the meaning provided in Section 1.01(c).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
"Syndication Agent" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the Syndication
Agent designated pursuant to Section 12.10.
"Syndication Date" shall mean that date upon which the Administrative
Agent determines (and notifies the Borrower and the Banks) that the primary
syndication of the Loans and Commitments (and resultant addition of Persons as
Banks pursuant to Section 13.04(b)) has been completed.
"Tax Act" shall have the meaning provided in Section 4.04(f).
"Tax Allocation Agreements" shall have the meaning provided in Section
5.12.
"Tax Benefit" shall have the meaning provided in Section 4.04(c).
"Taxes" shall have the meaning provided in Section 4.04(a).
"Term Loan" shall have the meaning provided in Section 1.01(a).
"Term Loan Commitment" shall mean, with respect to each Bank, the
amount set forth opposite such Bank's name in Schedule I directly below the
column entitled "Term Loan Commitment," as the same may be terminated pursuant
to Sections 3.03 and/or 10.
"Term Loan Maturity Date" shall mean May 28, 2006.
"Term Note" shall have the meaning provided in Section 1.05(a).
"Test Period" shall mean each period of four consecutive fiscal
quarters then last ended, in each case taken as one accounting period.
Notwithstanding anything to the contrary
contained above or in Section 13.07 or otherwise required by GAAP, in the case
of any Test Period ending prior to the first anniversary of the Initial
Borrowing Date, such period shall be a one-year period ending on the last day of
the fiscal quarter last ended, with any calculations of (x) Consolidated
Interest Expense required in determining compliance with Section 9.09 to be made
on a pro forma basis in accordance with, and to the extent provided in, the
--- -----
immediately succeeding sentence and (y) Consolidated EBITDA required in
determining compliance with Sections 9.09 and 9.10 and determining the Adjusted
Total Leverage Ratio, the Total Leverage Ratio and the Adjusted Senior Leverage
Ratio for all purposes of this Agreement to be made on a pro forma basis in
--- -----
accordance with, and to the extent provided in, the second succeeding sentence.
To the extent the respective Test Period (i) includes the fourth fiscal quarter
of the fiscal year ended December 31, 1998, Consolidated Interest Expense for
such fiscal quarter shall be deemed to be $7,000,000, (ii) includes the first
fiscal quarter of the fiscal year ended December 31, 1999, Consolidated Interest
Expense for such fiscal quarter shall be deemed to be $7,000,000 and (iii)
includes the second fiscal quarter for the year ended December 31, 1999,
Consolidated Interest Expense shall be determined by (x) taking actual
Consolidated Interest Expense determined in accordance with the definition
thereof for any period beginning on, and ending after, the Initial Borrowing
Date and (y) for each day of such fiscal quarter occurring prior to the Initial
Borrowing Date, using a per-day Consolidated Interest Expense of $77,777.78;
provided that any additional adjustments required by the definition of Pro Forma
-------- --- -----
Basis for occurrences after the Initial Borrowing Date shall also be made. To
the extent the respective Test Period (i) includes the fourth fiscal quarter of
the fiscal year ended December 31, 1998, Consolidated EBITDA for such fiscal
quarter shall be deemed to be $23,699,000, (ii) includes the first fiscal
quarter of the fiscal year ended December 31, 1999, Consolidated EBITDA for such
fiscal quarter shall be deemed to be $17,400,000 and (iii) includes the second
fiscal quarter of the fiscal year ended December 31, 1999, Consolidated EBITDA
shall be determined by (x) taking actual Consolidated EBITDA determined in
accordance with the definition thereof for any period beginning on, and ending
after, the Initial Borrowing Date and (y) for each day of such fiscal quarter
occurring prior to the Initial Borrowing Date, using a per-day Consolidated
EBITDA of $200,555; provided that any additional adjustments required by the
--------
definition of Pro Forma Basis for occurrences after the Initial Borrowing Date
--- -----
shall also be made.
"Total Commitment" shall mean, at any time, the sum of the Total Term
Loan Commitment and the Total Revolving Loan Commitment.
"Total Leverage Ratio" shall mean on any date the ratio of (i)
Consolidated Debt on such date to (ii) Consolidated EBITDA for the Test Period
most recently ended on or prior to such date. All calculations of the Total
Leverage Ratio shall be made on a Pro Forma Basis, it being understood and
--- -----
agreed that, as provided in the definition of Pro Forma Basis, the adjustments
--- -----
contained in clause (v) thereof shall not be taken into account in determining
the Total Leverage Ratio.
"Total Revolving Loan Commitment" shall mean the sum of the Revolving
Loan Commitments of each of the Banks.
"Total Term Loan Commitment" shall mean the sum of the Term Loan
Commitments of each of the Banks.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time,
(i) the Total Revolving Loan Commitment at such time less (ii) the sum of (I)
----
the aggregate principal amount of all Revolving Loans and Swingline Loans
outstanding at such time plus (II) the Letter of Credit Outstandings at such
----
time.
"Tractor Trailer" shall mean any truck, tractor, tank trailer or other
trailer and any similar vehicle or trailer used in a Permitted Business.
"Trade Letter of Credit" shall have the meaning set forth in Section
2.01(a).
"Tranche" shall mean the respective facility and commitments utilized
in making Loans hereunder, with there being three separate Tranches, i.e., Term
----
Loans, Revolving Loans and Swingline Loans.
"Transaction" shall mean, collectively, (i) the consummation of the
Recapitalization, (ii) the Equity Financing, (iii) the consummation of the
Refinancing, (iv) the entering into of the Credit Documents and the incurrence
of all Loans hereunder on the Initial Borrowing Date, (v) the consummation of
the Sale-Leaseback Transaction, (vi) the consummation of the Pacer Logistics
Acquisition and (vii) the payment of fees and expenses in connection with the
foregoing.
"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or a Eurodollar Loan.
----
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the value of the accumulated plan benefits under the Plan
determined on a plan termination basis in accordance with actuarial assumptions
at such time consistent with those prescribed by the PBGC for purposes of
Section 4044 of ERISA, exceeds the fair market value of all plan assets
allocable to such liabilities under Title IV of ERISA (excluding any accrued but
unpaid contributions).
"Unpaid Drawing" shall have the meaning provided in Section 2.04(a).
"Unrestricted Subsidiary" shall mean any Subsidiary of the Borrower
that is acquired or created after the Initial Borrowing Date and designated by
the Borrower as an Unrestricted Subsidiary hereunder by written notice to the
Administrative Agent, provided that the Borrower shall only be permitted to so
--------
designate a new Unrestricted Subsidiary after the Initial Borrowing Date and so
long as (i) no Default or Event of Default exists or would result therefrom,
(ii) in the case of any Unrestricted Subsidiary directly owned by the Borrower
or any of its Wholly-Owned Domestic Subsidiaries, 100% of the capital stock of
such newly-designated
Unrestricted Subsidiary is owned by the Borrower or such Wholly-Owned Domestic
Subsidiary and (iii) all of the provisions of Section 9.15 shall have been
complied with in respect of such newly-designated Unrestricted Subsidiary and
such Unrestricted Subsidiary shall be capitalized (to the extent capitalized by
the Borrower or any of its Subsidiaries) through Investments as permitted by,
and in compliance with, Section 9.05(l), with any assets owned by such
Unrestricted Subsidiary at the time of the initial designation thereof to be
treated as Investments pursuant to Section 9.05(l), provided that at the time of
--------
the initial Investment by the Borrower or any Wholly-Owned Domestic Subsidiary
in such Subsidiary, the Borrower shall designate such entity as an Unrestricted
Subsidiary in a written notice to the Administrative Agent.
"Unutilized Revolving Loan Commitment" with respect to any RL Bank at
any time shall mean such RL Bank's Revolving Loan Commitment at such time less
----
the sum of (i) the aggregate outstanding principal amount of all Revolving Loans
made by such RL Bank and (ii) such RL Bank's RL Percentage of the total Letter
of Credit Outstandings at such time.
"U.S. Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States of America.
"Voting Stock" shall mean, as to any Person, any class or classes of
capital stock of such Person pursuant to which the holders thereof have the
general voting power under ordinary circumstances to elect at least a majority
of the Board of Directors of such Person.
"Wholly-Owned Domestic Subsidiary" shall mean, as to any Person, any
Wholly-Owned Subsidiary of such Person which is a Domestic Subsidiary.
"Wholly-Owned Foreign Subsidiary" shall mean, as to any Person, any
Wholly-Owned Subsidiary of such Person which is a Foreign Subsidiary.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying shares
and/or other nominal amounts of shares required to be held other than by such
Person under applicable law) is at the time owned by such Person and/or one or
more Wholly-Owned Subsidiaries of such Person and (ii) any partnership,
association, joint venture or other entity in which such Person and/or one or
more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such
time; provided that (I) (x) except as provided in the last sentence of the
definition of Subsidiary and (y) other than in the definition of Wholly-Owned
Unrestricted Subsidiary, no Unrestricted Subsidiary shall be considered a
Wholly-Owned Subsidiary and (II) Pacer Logistics shall be deemed to be a Wholly-
Owned Subsidiary of the Borrower for all purposes of this Agreement, so long as
the only capital stock of Pacer Logistics not owned by the Borrower and its
Wholly-Owned Subsidiaries is the Pacer Logistics Preferred Stock issued as
contemplated by clauses (y) and (z) of the parenthetical appearing in Section
9.13(a)(i).
"Wholly-Owned Unrestricted Subsidiary" shall mean any Wholly-Owned
Subsidiary which is an Unrestricted Subsidiary.
"Written" (whether lower or upper case) or "in writing" shall mean any
form of written communication or a communication by means of telex, facsimile
device, telegraph or cable.
"Year 2000 Compliant" shall mean that all Information Systems and
Equipment accurately process date data (including, but not limited to,
calculating, comparing and sequencing), before, during and after the year 2000,
as well as same and multi-century dates, or between the years 1999 and 2000,
taking into account all leap years, including the fact that the year 2000 is a
leap year, and further, that when used in combination with, or interfacing with,
other Information Systems and Equipment, shall accurately accept, release and
exchange date data, and shall in all material respects continue to function in
the same manner as it performs today and shall not otherwise impair the accuracy
or functionality of Information Systems and Equipment.
SECTION 12. The Agents.
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12.01 Appointment. Each Bank hereby irrevocably designates and
-----------
appoints BTCo as Administrative Agent of such Bank (for purposes of this Section
12, the term "Administrative Agent" shall mean BTCo in its capacity as
Administrative Agent hereunder and Collateral Agent pursuant to the Security
Documents), ▇▇▇▇▇▇ as Syndication Agent and CSFB as Documentation Agent to act
as specified herein and in the other Credit Documents, and each such Bank hereby
irrevocably authorizes the Administrative Agent, the Syndication Agent and the
Documentation Agent to take such action on its behalf under the provisions of
this Agreement and the other Credit Documents and to exercise such powers and
perform such duties as are expressly delegated to the Administrative Agent, the
Syndication Agent and the Documentation Agent by the terms of this Agreement and
the other Credit Documents, together with such other powers as are reasonably
incidental thereto. Each of the Administrative Agent, the Syndication Agent and
the Documentation Agent agrees to act as such upon the express conditions
contained in this Section 12. Notwithstanding any provision to the contrary
elsewhere in this Agreement or in any other Credit Document, the Administrative
Agent, the Syndication Agent and the Documentation Agent shall not have any
duties or responsibilities, except those expressly set forth herein or in the
other Credit Documents, or any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or otherwise exist against the
Administrative Agent, the Syndication Agent or the Documentation Agent. The
provisions of this Section 12 are solely for the benefit of the Administrative
Agent, the Syndication Agent, the Documentation Agent and the Banks, and neither
the Borrower nor any of its Subsidiaries shall have any rights as a third party
beneficiary of any of the provisions hereof. In performing its functions and
duties under this Agreement, each of the Administrative Agent, the Syndication
Agent and the Documentation Agent shall act solely as agent of the Banks and
does not assume and shall not be deemed to have assumed any obligation or
relationship of agency or trust with or for any Borrower or any of its
Subsidiaries.
12.02 Delegation of Duties. Each of the Administrative Agent, the
--------------------
Syndication Agent and the Documentation Agent may execute any of its duties
under this Agreement or any
other Credit Document by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
None of the Administrative Agent, the Syndication Agent or the Documentation
Agent shall be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
12.03 Exculpatory Provisions. None of the Administrative Agent, the
----------------------
Syndication Agent, the Documentation Agent or any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such person
in its capacity as Administrative Agent, Syndication Agent or Documentation
Agent, as the case may be, under or in connection with this Agreement or the
other Credit Documents (except for its own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Banks for any
recitals, statements, representations or warranties made by the Borrower, any of
its Subsidiaries or any of their respective officers contained in this Agreement
or the other Credit Documents, any other Document or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent, the Syndication Agent or the Documentation Agent under or
in connection with, this Agreement or any other Document or for any failure of
the Borrower or any of its Subsidiaries or any of their respective officers to
perform its obligations hereunder or thereunder. None of the Administrative
Agent, the Syndication Agent or the Documentation Agent shall be under any
obligation to any Bank to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or the other Documents, or to inspect the properties, books or records
of the Borrower or any of its Subsidiaries. None of the Administrative Agent,
the Syndication Agent or the Documentation Agent shall be responsible to any
Bank for the effectiveness, genuineness, validity, enforceability,
collectability or sufficiency of this Agreement or any other Document or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statement or in any financial or other statements,
instruments, reports, certificates or any other documents in connection herewith
or therewith furnished or made by the Administrative Agent, the Syndication
Agent or the Documentation Agent, as the case may be, to the Banks or by or on
behalf of the Borrower or any of its Subsidiaries to the Administrative Agent,
the Syndication Agent or the Documentation Agent, as the case may be, or any
Bank or be required to ascertain or inquire as to the performance or observance
of any of the terms, conditions, provisions, covenants or agreements contained
herein or therein or as to the use of the proceeds of the Loans or of the
existence or possible existence of any Default or Event of Default.
12.04 Reliance by Agents. The Administrative Agent, the Syndication
------------------
Agent and the Documentation Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, facsimile, telex or
teletype message, statement, order or other document or conversation reasonably
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower or any of their
respective Subsidiaries), independent accountants and other experts selected by
the Administrative Agent, the Syndication Agent or the Documentation Agent, as
the case may be. Each of the Administrative Agent, the Syndication Agent and
the Documentation Agent shall be fully justified in failing or refusing to take
any
action under this Agreement or any other Credit Document unless it shall first
receive such advice or concurrence of the Required Banks as it deems appropriate
or it shall first be 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. The Administrative Agent, the Syndication
Agent and the Documentation Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other Credit
Documents in accordance with a request of the Required Banks, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Banks.
12.05 Notice of Default. None of the Administrative Agent, the
-----------------
Syndication Agent or the Documentation Agent shall be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default unless the
Administrative Agent, the Syndication Agent or the Documentation Agent, as the
case may be, has actually received 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." In the event that the Administrative
Agent, the Syndication Agent or the Documentation Agent receives such a notice,
the Administrative Agent, the Syndication Agent or the Documentation Agent, as
the case may be, shall give prompt notice thereof to the Banks. The
Administrative Agent, the Syndication Agent or the Documentation Agent, as the
case may be, shall take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Required Banks; provided, that,
--------
unless and until the Administrative Agent, the Syndication Agent or the
Documentation Agent, as the case may be, shall have received such directions,
the Administrative Agent, the Syndication Agent, or the Documentation Agent, as
the case may be, may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Banks.
12.06 Nonreliance on Agents and Other Banks. Each Bank expressly
-------------------------------------
acknowledges that none of the Administrative Agent, the Syndication Agent, the
Documentation Agent or any of their respective officers, directors, employees,
agents, attorneys-in-fact or affiliates has made any representations or
warranties to it and that no act by the Administrative Agent, the Syndication
Agent or Documentation Agent hereinafter taken, including any review of the
affairs of the Borrower or any of its Subsidiaries, shall be deemed to
constitute any representation or warranty by the Administrative Agent, the
Syndication Agent or the Documentation Agent to any Bank. Each Bank represents
to the Administrative Agent, the Syndication Agent and the Documentation Agent
that it has, independently and without reliance upon the Administrative Agent,
the Syndication Agent, the Documentation Agent or any other Bank, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, assets, operations, property,
financial and other condition, prospects and creditworthiness of the Borrower
and its Subsidiaries and made its own decision to make its Loans hereunder and
enter into this Agreement. Each Bank also represents that it will, independently
and without reliance upon the Administrative Agent, the Syndication Agent, the
Documentation Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, assets, operations,
property, financial and other condition, prospects and creditworthiness of the
Borrower and its Subsidiaries. None of the Administrative Agent, the Syndication
Agent or the Documentation Agent shall have any duty or responsibility to
provide any Bank with any credit or other information concerning the business,
operations, assets, property, financial and other condition, prospects or
creditworthiness of any Borrower or any of its Subsidiaries which may come into
the possession of the Administrative Agent, the Syndication Agent, the
Documentation Agent or any of their respective officers, directors, employees,
agents, attorneys-in-fact or affiliates.
12.07 Indemnification. The Banks agree to indemnify each of the
---------------
Administrative Agent, the Syndication Agent and the Documentation Agent in their
respective capacities as such ratably according to their respective
"percentages" as used in determining the Required Banks at such time or, if the
Commitments have terminated and all Loans have been repaid in full, as
determined immediately prior to such termination and repayment (with such
"percentages" to be determined as if there are no Defaulting Banks), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, reasonable expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Obligations) be imposed on, incurred by or
asserted against the Administrative Agent, the Syndication Agent or the
Documentation Agent in their respective capacities as such in any way relating
to or arising out of this Agreement or any other Credit Document, or any
documents contemplated by or referred to herein or the transactions contemplated
hereby or any action taken or omitted to be taken by the Administrative Agent,
the Syndication Agent or the Documentation Agent under or in connection with any
of the foregoing, but only to the extent that any of the foregoing is not paid
by the Borrower or any of its Subsidiaries; provided, that no Bank shall be
--------
liable to the Administrative Agent, the Syndication Agent or the Documentation
Agent for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting primarily from the gross negligence or willful misconduct of the
Administrative Agent, the Syndication Agent or the Documentation Agent. If any
indemnity furnished to the Administrative Agent, the Syndication Agent or the
Documentation Agent for any purpose shall, in the opinion of the Administrative
Agent, the Syndication Agent or the Documentation Agent be insufficient or
become impaired, the Administrative Agent, the Syndication Agent or the
Documentation Agent, as the case may be, may call for additional indemnity and
cease, or not commence, to do the acts indemnified against until such additional
indemnity is furnished. The agreements in this Section 12.07 shall survive the
payment of all Obligations.
12.08 Agents in their Individual Capacities. Each of the
-------------------------------------
Administrative Agent, the Syndication Agent and the Documentation Agent and
their respective affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrower and its Subsidiaries
as though the Administrative Agent, the Syndication Agent or the Documentation
Agent, as the case may be, were not the Administrative Agent, the Syndication
Agent or the Documentation Agent, as the case may be, hereunder. With respect
to the Loans made by it and all Obligations owing to it, each of the
Administrative Agent, the Syndication Agent and the Documentation Agent shall
have the same rights and powers under this Agreement as any Bank and may
exercise the same as though it were not the Administrative Agent, the
Syndication Agent or the Documentation Agent, as the case may be, and the terms
"Bank" and "Banks" shall include the Administrative Agent, the Syndication Agent
and the Documentation Agent in their individual capacities.
12.09 Holders. The Administrative Agent may deem and treat the payee
-------
of any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person or entity 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, assignee or
indorsee, as the case may be, of such Note or of any Note or Notes issued in
exchange therefor.
12.10 Resignation of the Agents. (a) The Administrative Agent may
-------------------------
resign from the performance of all its functions and duties hereunder and/or
under the other Credit Documents at any time by giving 30 Business Days' prior
written notice to the Borrower and the Banks. Such resignation shall take
effect upon the appointment of a successor Administrative Agent pursuant to
clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Banks shall
appoint a successor Administrative Agent hereunder or thereunder who shall be a
commercial bank or trust company reasonably acceptable to the Borrower.
(c) If a successor Administrative Agent shall not have been so
appointed within such 30 Business Day period, the Administrative Agent, with the
consent of the Borrower (which consent shall not be unreasonably withheld or
delayed), shall then appoint a successor Administrative Agent who shall serve as
Administrative Agent hereunder or thereunder until such time, if any, as the
Required Banks appoint a successor Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed pursuant
to clause (b) or (c) above by the 30th Business Day after the date such notice
of resignation was given by the Administrative Agent, the Administrative Agent's
resignation shall become effective and the Required Banks shall thereafter
perform all the duties of the Administrative Agent hereunder and/or under any
other Credit Document until such time, if any, as the Banks appoint a successor
Administrative Agent as provided above.
(e) The Syndication Agent may resign from the performance of all its
functions and duties hereunder and/or under the other Credit Documents at any
time by giving five Business Days' prior written notice to the Banks. Such
resignation shall take effect at the end of such five Business Day period. Upon
the effectiveness of the resignation of the Syndication Agent, the
Administrative Agent shall assume all of the functions and duties of the
Syndication Agent hereunder and/or under the other Credit Documents.
(f) The Documentation Agent may resign from the performance of all
its functions and duties hereunder and/or under the other Credit Documents at
any time by giving five Business Days' prior written notice to the Banks. Such
resignation shall take effect at the
end of such five Business Day period. Upon the effectiveness of the resignation
of the Documentation Agent, the Administrative Agent shall assume all of the
functions and duties of the Documentation Agent hereunder and/or under the other
Credit Documents.
SECTION 13. Miscellaneous.
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13.01 Payment of Expenses, etc. The Borrower agrees to: (i) pay all
-------------------------
reasonable out-of-pocket costs and expenses of the Agents (including, without
limitation, the reasonable fees and disbursements of White & Case LLP and local
counsel) in connection with the negotiation, preparation, execution and delivery
of the Credit Documents and the documents and instruments referred to therein
and any amendment, waiver or consent relating thereto and in connection with the
Agents' syndication efforts with respect to this Agreement; (ii) pay all
reasonable out-of-pocket costs and expenses of each Agent, each Letter of Credit
Issuer and each of the Banks in connection with the enforcement of the Credit
Documents and the documents and instruments referred to therein and, after an
Event of Default shall have occurred and be continuing, the protection of the
rights of each Agent, each Letter of Credit Issuer and each of the Banks
thereunder (including, without limitation, the reasonable fees and disbursements
of counsel (including in-house counsel) for each Agent, for each Letter of
Credit Issuer and for each of the Banks); (iii) pay and hold each of the Banks
harmless from and against any and all present and future stamp and other similar
taxes with respect to the foregoing matters and save each of the Banks harmless
from and against any and all liabilities with respect to or resulting from any
delay or omission (other than to the extent attributable to such Bank) to pay
such taxes; and (iv) indemnify each Agent, the Collateral Agent, each Letter of
Credit Issuer and each Bank, their respective officers, directors, employees,
representatives, trustees and agents from and hold each of them harmless against
any and all losses, liabilities, claims, damages or expenses incurred by any of
them as a result of, or arising out of, or in any way related to, or by reason
of, (a) any investigation, litigation or other proceeding (whether or not any
Agent, the Collateral Agent, any Letter of Credit Issuer or any Bank is a party
thereto and whether or not any such investigation, litigation or other
proceeding is between or among any Agent, the Collateral Agent, any Letter of
Credit Issuer, any Bank, any Credit Party or any third Person or otherwise)
related to the entering into and/or performance of this Agreement or any other
Document or the use of the proceeds of any Loans hereunder or any drawing on any
Letter of Credit or the Transaction or the consummation of any other
transactions contemplated in any Document (but excluding any such losses,
liabilities, claims, damages or expenses to the extent incurred by reason of the
gross negligence or willful misconduct of the Person to be indemnified), or (b)
the actual or alleged presence of Hazardous Materials in the air, surface water
or groundwater or on the surface or subsurface of any Real Property or any
Environmental Claim, in each case, including, without limitation, the reasonable
fees and disbursements of counsel and independent consultants incurred in
connection with any such investigation, litigation or other proceeding. To the
extent that the undertaking to indemnify, pay or hold harmless any Agent or any
Bank set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Borrower shall make the maximum
contribution to the payment and satisfaction of each of the indemnified
liabilities which is permissible under applicable law.
13.02 Right of Setoff. In addition to any rights now or hereafter
---------------
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, each Agent, each Letter
of Credit Issuer and each Bank is hereby authorized at any time or from time to
time, without presentment, demand, protest or other notice of any kind to the
Borrower or any of its Subsidiaries or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and apply any and
all deposits (general or special) and any other Indebtedness at any time held or
owing by such Agent, such Letter of Credit Issuer or such Bank (including,
without limitation, by branches and agencies of such Agent, such Letter of
Credit Issuer and such Bank wherever located) to or for the credit or the
account of the Borrower or any of its Subsidiaries against and on account of the
Obligations of the Borrower or any of its Subsidiaries to such Agent, such
Letter of Credit Issuer or such Bank under this Agreement or under any of the
other Credit Documents, including, without limitation, all interests in
Obligations of the Borrower or any of its Subsidiaries purchased by such Bank
pursuant to Section 13.06(b), and all other claims of any nature or description
arising out of or connected with this Agreement or any other Credit Document,
irrespective of whether or not such Agent, such Letter of Credit Issuer or such
Bank shall have made any demand hereunder and although said Obligations shall be
contingent or unmatured.
13.03 Notices. Except as otherwise expressly provided herein, all
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notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered, if to any Credit Party,
at the address specified opposite its signature below or in the other relevant
Credit Documents, as the case may be; if to any Bank, at its address specified
for such Bank on Schedule II; or, at such other address as shall be designated
by any party in a written notice to the other parties hereto. All such notices
and communications shall be mailed, telegraphed, telexed, telecopied or cabled
or sent by overnight courier, and shall be effective when received.
(b) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent or BTCo (in the case of a Borrowing of Swingline Loans) or
any Letter of Credit Issuer (in the case of the issuance of a Letter of Credit),
as the case may be, may prior to receipt of written confirmation act without
liability upon the basis of such telephonic notice, believed by the
Administrative Agent or BTCo or any Letter of Credit Issuer in good faith to be
from an Authorized Officer of the Borrower. In each such case, the Borrower
hereby waives the right to dispute the Administrative Agent's, BTCo's or such
Letter of Credit Issuer's record of the terms of such telephonic notice.
13.04 Benefit of Agreement. (a) This Agreement shall be binding
--------------------
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided, however, the Borrower may not
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assign or transfer any of its rights, obligations or interest hereunder or under
any other Credit Document without the prior written consent of each of the Banks
and, provided further, that, although any Bank may grant participations in its
----------------
rights hereunder, such Bank shall remain a "Bank" for all purposes hereunder
(and may not transfer or assign all or any portion of its Commitments or Loans
hereunder except as provided in
Section 13.04(b)) and the participant shall not constitute a "Bank" hereunder
and, provided further, that no Bank shall transfer or grant any participation
----------------
under which the participant shall have rights to approve any amendment to or
waiver of this Agreement or any other Credit Document except to the extent such
amendment or waiver would (i) extend the final scheduled maturity of any Loan,
Note or Letter of Credit (unless such Letter of Credit is not extended beyond
the Revolving Loan Maturity Date) in which such participant is participating, or
reduce the rate or extend the time of payment of interest or Fees thereon
(except in connection with a waiver of applicability of any post-default
increase in interest rates) or reduce the principal amount thereof, or increase
the amount of the participant's participation over the amount thereof then in
effect (it being understood that a waiver of any Default or Event of Default or
of a mandatory reduction in the Total Commitment or of a mandatory repayment of
Loans shall not constitute a change in the terms of such participation, that an
increase in any Commitment or Loan shall be permitted without the consent of any
participant if the participant's participation is not increased as a result
thereof and that any amendment or modification to the financial definitions in
this Agreement shall not constitute a reduction in any rate of interest or fees
for purposes of this clause (i)), (ii) consent to the assignment or transfer by
the Borrower of any of its rights and obligations under this Agreement or (iii)
release all or substantially all of the Collateral under all of the Security
Documents (except as expressly provided in the Security Documents) supporting
the Loans hereunder in which such participant is participating. In the case of
any such participation, the participant shall not have any rights under this
Agreement or any of the other Credit Documents (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 all amounts payable by the Borrower hereunder shall be determined as if such
Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together with
one or more other Banks) may (x) assign all or a portion of its Revolving Loan
Commitment (and related outstanding Obligations hereunder) and/or its
outstanding Term Loans to (i) its parent company and/or any affiliate of such
Bank which is at least 50% owned by such Bank or its parent company or to one or
more Banks or (ii) in the case of any Bank that is a fund that invests in bank
loans or that manages (directly or through an Affiliate) any fund that invests
in bank loans, any fund that invests in bank loans and is managed by the same
investment advisor as such Bank, by an Affiliate of such investment advisor or
by such Bank, as the case may be, or (y) assign all, or if less than all, a
portion equal to at least $5,000,000 in the aggregate for the assigning Bank or
assigning Banks, of such Revolving Loan Commitments (and related outstanding
Obligations hereunder) and outstanding principal amount of Term Loans to one or
more Eligible Transferees (treating (x) any fund that invests in bank loans and
(y) any other fund that invests in bank loans and is managed by the same
investment advisor as such fund or by an Affiliate of such investment advisor,
as a single Eligible Transferee), each of which assignees shall become a party
to this Agreement as a Bank by execution of an Assignment and Assumption
Agreement, provided that, (i) at such time Schedule I shall be deemed modified
--------
to reflect the Revolving Loan Commitments and/or outstanding Term Loans, as the
case may be, of such new Bank and of the existing Banks, (ii) upon surrender of
the old Notes (or the furnishing of a standard indemnity letter from the
respective assigning Bank in respect of any lost Notes reasonably acceptable to
the Borrower), new Notes will be issued, at the Borrower's expense, to
such new Bank and to the assigning Bank, such new Notes to be in conformity with
the requirements of Section 1.05 (with appropriate modifications) to the extent
needed to reflect the revised Revolving Loan Commitments and/or outstanding Term
Loans, as the case may be, (iii) the consent of the Administrative Agent and, so
long as no Default or Event of Default is then in existence, the Borrower shall
be required in connection with any assignment to an Eligible Transferee pursuant
to clause (y) of this Section 13.04(b) (which consent, in each case, shall not
be unreasonably withheld or delayed), (iv) the consent of each Letter of Credit
Issuer shall be required in connection with any assignment of Revolving Loan
Commitments pursuant to clause (y) of this Section 13.04(b) (which consent shall
not be unreasonably withheld or delayed) and (v) the Administrative Agent shall
receive at the time of each assignment, from the assigning or assignee Bank, the
payment of a non-refundable assignment fee of $5,000 and, provided further, that
----------------
such transfer or assignment will not be effective until recorded by the
Administrative Agent on the Register pursuant to Section 13.17. To the extent
of any assignment pursuant to this Section 13.04(b), the assigning Bank shall be
relieved of its obligations hereunder with respect to its assigned Revolving
Loan Commitments and/or outstanding Term Loans. At the time of each assignment
pursuant to this Section 13.04(b) to a Person which is not already a Bank
hereunder and which is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes, the
respective assignee Bank shall provide to the Borrower and the Administrative
Agent the appropriate Internal Revenue Service Forms (and, if applicable a
Section 4.04(b)(ii) Certificate) described in Section 4.04(b). To the extent
that an assignment of all or any portion of a Bank's Revolving Loan Commitment
and outstanding Obligations pursuant to Section 1.13 or this Section 13.04(b)
would, due to circumstances existing at the time of such assignment, result in
increased costs under Section 1.10, 1.11, 2.05 or 4.04 from those being charged
by the respective assigning Bank prior to such assignment, then the Borrower
shall not be obligated to pay such increased costs (although the Borrower shall
be obligated to pay any other increased costs of the type described above
resulting from changes after the date of the respective assignment).
Notwithstanding anything to the contrary contained above, at any time after the
termination of the Total Revolving Loan Commitment, if any Revolving Loans or
Letters of Credit remain outstanding, assignments may be made as provided above,
except that the respective assignment shall be of a portion of the outstanding
Revolving Loans of the respective RL Bank and its participation in Letters of
Credit and its obligation to make Mandatory Borrowings, although any such
assignment effected after the termination of the Total Revolving Loan Commitment
shall not release the assigning RL Bank from its obligations as a Participant
with respect to outstanding Letters of Credit or to fund its share of any
Mandatory Borrowing (although the respective assignee may agree, as between
itself and the respective assigning RL Bank, that it shall be responsible for
such amounts).
(c) Nothing in this Agreement shall prevent or prohibit any Bank or
BTCo from pledging its Loans and Notes hereunder to a Federal Reserve Bank in
support of borrowings made by such Bank from such Federal Reserve Bank and, with
the consent of the Administrative Agent, any Bank which is a fund may pledge all
or any portion of its Notes or Loans to its trustee in support of its
obligations to its trustee. No pledge pursuant to this clause (c) shall release
the transferor Bank from any of its obligations hereunder.
13.05 No Waiver; Remedies Cumulative. No failure or delay on the
------------------------------
part of any Agent, the Collateral Agent or any Bank in exercising any right,
power or privilege hereunder or under any other Credit Document and no course of
dealing between any Credit Party and any Agent, the Collateral Agent or any Bank
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder or under any other Credit Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder or thereunder. The rights and remedies
herein expressly provided are cumulative and not exclusive of any rights or
remedies which any Agent, the Collateral Agent or any Bank would otherwise have.
No notice to or demand on any Credit Party in any case shall entitle any Credit
Party to any other or further notice or demand in similar or other circumstances
or constitute a waiver of the rights of the Agents, the Collateral Agent or the
Banks to any other or further action in any circumstances without notice or
demand.
13.06 Payments Pro Rata. (a) The Administrative Agent agrees that
-----------------
promptly after its receipt of each payment from or on behalf of any Credit Party
in respect of any Obligations of such Credit Party, it shall, except as
otherwise provided in this Agreement, distribute such payment to the Banks
(other than any Bank that has consented in writing to waive its pro rata share
--- ----
of such payment) pro rata based upon their respective shares, if any, of the
--- ----
Obligations with respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings or Fees, of a sum which with respect to the
related sum or sums received by other Banks is in a greater proportion than the
total of such Obligation then owed and due to such Bank bears to the total of
such Obligation then owed and due to all of the Banks immediately prior to such
receipt, then such Bank receiving such excess payment shall purchase for cash
without recourse or warranty from the other Banks an interest in the Obligations
of the respective Credit Party to such Banks in such amount as shall result in a
proportional participation by all of the Banks in such amount; provided, that if
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all or any portion of such excess amount is thereafter recovered from such Bank,
such purchase shall be rescinded and the purchase price restored to the extent
of such recovery, but without interest.
13.07 Calculations; Computations. (a) The financial statements to
--------------------------
be furnished to the Banks pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrower to the Banks); provided, that except as otherwise specifically
--------
provided herein, all computations determining the Adjusted Total Leverage Ratio,
the Total Leverage Ratio and the Adjusted Senior Leverage Ratio and compliance
with Sections 4.02, 8.14 and 9, including definitions used therein shall, in
each case, utilize accounting principles and policies in effect at the time of
the preparation of, and in conformity with those used to prepare, the December
31, 1998 financial statements of the Borrower delivered to the Banks pursuant to
Section 7.10(b); provided further, that (i) to the extent expressly required
----------------
pursuant to the provisions of this Agreement, certain calculations shall be made
on a Pro Forma
--- -----
Basis, (ii) to the extent compliance with any of Section 9.09 or 9.10 or the
determination of any of the Adjusted Total Leverage Ratio, the Total Leverage
Ratio and the Adjusted Senior Leverage Ratio would include periods occurring
prior to the Initial Borrowing Date, such calculation shall be adjusted on a Pro
---
Forma Basis to give effect to the Transaction as if same had occurred on the
-----
first day of the respective period, (iii) in the case of any determinations of
Consolidated Interest Expense or Consolidated EBITDA for any portion of any Test
Period which ends prior to the Initial Borrowing Date, all computations
determining compliance with Sections 9.09 or 9.10 and all determinations of the
Adjusted Total Leverage Ratio, the Adjusted Senior Leverage Ratio and the Total
Leverage Ratio (including as used in the definition of Applicable Margin) shall
be calculated in accordance with the definition of Test Period contained herein
and (iv) for purposes of calculating the Applicable Margins, financial ratios,
financial terms, all covenants and related definitions, all such calculations
based on the operations of the Borrower and its Subsidiaries on a consolidated
basis shall be made without giving effect to the operations of any Unrestricted
Subsidiaries.
(b) All computations of interest and Fees hereunder shall be made on
the actual number of days elapsed over a year of 360 days.
13.08 Governing Law; Submission to Jurisdiction; Venue. (a) THIS
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AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding
with respect to this Agreement or any other Credit Document may be brought in
the courts of the State of New York or of the United States for the Southern
District of New York, and, by execution and delivery of this Agreement, the
Borrower hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts. The
Borrower hereby irrevocably designates, appoints and empowers CT Corporation
System, with offices on the date hereof at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ as
its designee, appointee and agent to receive, accept and acknowledge for and on
its behalf, and in respect of the property of the Borrower and its Subsidiaries,
service of any and all legal process, summons, notices and documents which may
be served in any such action or proceeding. If for any reason such designee,
appointee and agent shall cease to be available to act as such, the Borrower
agrees to designate a new designee, appointee and agent in New York City on the
terms and for the purposes of this provision satisfactory to the Administrative
Agent under this Agreement. The Borrower hereby further irrevocably waives any
claim that any such courts lack jurisdiction over the Borrower, and agrees not
to plead or claim, in any legal action or proceeding with respect to this
Agreement or any other Credit Document brought in any of the aforesaid courts,
that any such court lacks jurisdiction over the Borrower. The Borrower further
irrevocably consents to the service of process in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to the Borrower, at its address for notices pursuant to Section 13.03,
such service to become effective 30 days after such mailing. The Borrower
hereby irrevocably waives any objection to such service of process and further
irrevocably waives and agrees not to plead or claim in any action or proceeding
commenced hereunder or under any other Credit Document that service of process
was in any way invalid or ineffective. Nothing
herein shall affect the right of any Agent, the Collateral Agent, any Bank or
the holder of any Note to serve process in any other manner permitted by law or
to commence legal proceedings or otherwise proceed against any Credit Party in
any other jurisdiction.
(b) The Borrower hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in clause (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been brought in
an inconvenient forum.
13.09 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts executed by all the parties hereto shall be lodged with the
Borrower and the Administrative Agent.
13.10 Effectiveness. This Agreement shall become effective on the
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date (the "Effective Date") on which the Borrower, the Administrative Agent, the
Syndication Agent and the Documentation Agent and each Bank shall have signed a
counterpart hereof (whether the same or different counterparts) and shall have
delivered the same (including by way of facsimile transmission) to the
Administrative Agent at the Notice Office or at the office of Agents' counsel.
The Administrative Agent will give the Borrower and each Bank prompt written
notice of the occurrence of the Effective Date.
13.11 Headings Descriptive. The headings of the several sections and
--------------------
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
13.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any
-------------------------
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Banks, provided that no such change, waiver, discharge or termination
--------
shall, without the consent of each Bank (other than a Defaulting Bank) (with
Obligations being directly affected thereby in the case of the following clause
(i)), (i) extend the final scheduled maturity of any Loan or Note or extend the
stated maturity of any Letter of Credit beyond the Revolving Loan Maturity Date,
or reduce the rate or extend the time of payment of interest or Fees thereon, or
reduce the principal amount thereof (it being understood that any amendment or
modification to the financial definitions in this Agreement shall not constitute
a reduction in any rate of interest or fees for purposes of this clause (i)),
(ii) release all or substantially all of the Collateral (except as expressly
provided in the Security Documents) under all the Security Documents, (iii)
amend, modify or waive any provision of this Section 13.12, (iv) reduce the
percentage specified in the definition of Required Banks (it being understood
that, with the consent of the Required Banks, additional extensions of credit
pursuant to this Agreement may be included in the determination of the Required
Banks on
substantially the same basis as the extensions of Term Loans and Revolving Loan
Commitments are included on the Effective Date) or (v) consent to the assignment
or transfer by the Borrower of any of its rights and obligations under this
Agreement or any other Credit Document; provided further, that no such change,
----------------
waiver, discharge or termination shall (v) increase the Commitments of any Bank
over the amount thereof then in effect without the consent of such Bank (it
being understood that waivers or modifications of conditions precedent,
covenants, Defaults or Events of Default or of a mandatory reduction in the
Total Commitment shall not constitute an increase of the Commitment of any Bank,
and that an increase in the available portion of any Commitment of any Bank
shall not constitute an increase in the Commitment of such Bank), (w) without
the consent of each Letter of Credit Issuer, amend, modify or waive any
provision of Section 2 or alter its rights or obligations with respect to
Letters of Credit, (x) without the consent of BTCo, alter its rights or
obligations with respect to Swingline Loans, (y) without the consent of the
Agents, amend, modify or waive any provision of Section 12 as same applies to
the Agents or any other provision as same relates to the rights or obligations
of the Agents and (z) without the consent of the Collateral Agent, amend, modify
or waive any provision relating to the rights or obligations of the Collateral
Agent.
(b) If, in connection with any proposed change, waiver, discharge or
termination of or to any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Section 13.12(a),
the consent of the Required Banks is obtained but the consent of one or more of
such other Banks whose consent is required is not obtained, then the Borrower
shall have the right, so long as all non-consenting Banks whose individual
consent is required are treated as described in either clause (A) or (B) below,
to either (A) replace each such non-consenting Bank or Banks (or, at the option
of the Borrower if the respective Bank's consent is required with respect to
less than all Tranches of Loans (or related Commitments), to replace only the
Revolving Loan Commitments and/or Loans of the respective non-consenting Bank
which gave rise to the need to obtain such Bank's individual consent) with one
or more Replacement Banks pursuant to Section 1.13 so long as at the time of
such replacement, each such Replacement Bank consents to the proposed change,
waiver, discharge or termination or (B) terminate such non-consenting Bank's
Revolving Loan Commitment (if such Bank's consent is required as a result of its
Revolving Loan Commitment) and/or repay each Tranche of outstanding Loans of
such Bank which gave rise to the need to obtain such Bank's consent and/or cash
collateralize its applicable Adjusted RL Percentage of the Letter of Credit of
Outstandings, in accordance with Sections 3.02(b) and/or 4.01(b), provided that,
--------
unless the Commitments which are terminated and Loans which are repaid pursuant
to preceding clause (B) are immediately replaced in full at such time through
the addition of new Banks or the increase of the Commitments and/or outstanding
Loans of existing Banks (who in each case must specifically consent thereto),
then in the case of any action pursuant to preceding clause (B), the Required
Banks (determined after giving effect to the proposed action) shall specifically
consent thereto, provided further, that the Borrower shall not have the right to
----------------
replace a Bank, terminate its Commitment or repay its Loans solely as a result
of the exercise of such Bank's rights (and the withholding of any required
consent by such Bank) pursuant to the second proviso to Section 13.12(a).
13.13 Survival. All indemnities set forth herein including, without
--------
limitation, in Sections 1.10, 1.11, 2.05, 4.04, 12.07 and 13.01, shall, subject
to the provisions of Section 13.18 (to the extent applicable), survive the
execution and delivery of this Agreement and the making and repayment of the
Loans.
13.14 Domicile of Loans and Commitments. Each Bank may transfer and
---------------------------------
carry its Loans and/or Commitments at, to or for the account of any branch
office, subsidiary or affiliate of such Bank; provided, that the Borrower shall
--------
not be responsible for costs arising under Section 1.10, 1.11, 2.05 or 4.04
resulting from any such transfer (other than a transfer pursuant to Section
1.12) to the extent such costs would not otherwise be applicable to such Bank in
the absence of such transfer.
13.15 Confidentiality. (a) Each of the Banks agrees that it will
---------------
use its reasonable efforts not to disclose without the prior consent of the
Borrower (other than to its directors, trustees, employees, officers, auditors,
counsel or other professional advisors, to affiliates or to another Bank if the
Bank or such Bank's holding or parent company in its sole discretion determines
that any such party should have access to such information, provided that such
--------
persons shall be subject to the provisions of this Section 13.15 to the same
extent as such Bank) any information with respect to the Borrower or any of its
Subsidiaries which is furnished by the Borrower or any of its Subsidiaries
pursuant to this Agreement; provided, that any Bank may disclose any such
--------
information (a) which is publicly known at the time of the disclosure or which
has become generally available to the public, (b) as may be required or
appropriate (x) in any report, statement or testimony submitted to any
municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such Bank or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or similar organizations (whether in the United
States or elsewhere) or their successors or (y) in connection with any request
or requirement of any such regulatory body (including any securities exchange or
self-regulatory organization), (c) as may be required or appropriate in response
to any summons or subpoena or in connection with any litigation or other legal
process, (d) to comply with any law, order, regulation or ruling applicable to
such Bank, and (e) to any prospective transferee in connection with any
contemplated transfer of any of the Notes or any interest therein by such Bank;
provided, that such prospective transferee agrees to be bound by this Section
--------
13.15 to the same extent as such Bank.
(b) The Borrower hereby acknowledges and agrees that each Bank may
share with any of its affiliates any information related to the Borrower or any
of its Subsidiaries (including, without limitation, any nonpublic customer
information regarding the creditworthiness of the Borrower and its
Subsidiaries), provided that such Persons shall be subject to the provisions of
--------
this Section 13.15 to the same extent as such Bank.
13.16 Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT
--------------------
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
13.17 Register. The Borrower hereby designates the Administrative
--------
Agent to serve as the Borrower's agent, solely for purposes of this Section
13.17, to maintain a register (the "Register") on which it will record the
Commitments from time to time of each of the Banks, the Loans made by each of
the Banks and each repayment in respect of the principal amount of the Loans of
each Bank. Failure to make any such recordation, or any error in such
recordation shall not affect the Borrower's obligations in respect of such
Loans. With respect to any Bank, the transfer of any Commitment of such Bank
and the rights to the principal of, and interest on, any Loan shall not be
effective until such transfer is recorded on the Register maintained by the
Administrative Agent with respect to ownership of such Commitment and Loans and
prior to such recordation all amounts owing to the transferor with respect to
such Commitment and Loans shall remain owing to the transferor. The
registration of assignment or transfer of all or part of any Commitment and
Loans shall be recorded by the Administrative Agent on the Register only upon
the acceptance by the Administrative Agent of a properly executed and delivered
Assignment and Assumption Agreement pursuant to Section 13.04(b). Coincident
with the delivery of such an Assignment and Assumption Agreement to the
Administrative Agent for acceptance and registration of assignment or transfer
of all or part of a Commitment and/or Loan, or as soon thereafter as
practicable, the assigning or transferor Bank shall surrender the Note
evidencing such Commitment and/or Loan, and thereupon one or more new Notes in
the same aggregate principal amount shall be issued to the assigning or
transferor Bank and/or the new Bank. The Borrower agrees to indemnify the
Administrative Agent from and against any and all losses, claims, damages and
liabilities of whatsoever nature which may be imposed on, asserted against or
incurred by the Administrative Agent in performing its duties under this Section
13.17.
13.18 Limitation on Additional Amounts, etc. Notwithstanding
--------------------------------------
anything to the contrary contained in Section 1.10, 1.11, 2.05 or 4.04 of this
Agreement, unless a Bank gives notice to the Borrower that it is obligated to
pay an amount under such Section within six months after the later of (x) the
date the Bank incurs the respective increased costs, Taxes, loss, expense or
liability, reduction in amounts received or receivable or reduction in return on
capital or (y) the date such Bank has actual knowledge of its incurrence of the
respective increased costs, Taxes, loss, expense or liability, reductions in
amounts received or receivable or reduction in return on capital, then such Bank
shall only be entitled to be compensated for such amount by the Borrower
pursuant to said Section 1.10, 1.11, 2.05 or 4.04, as the case may be, to the
extent of the costs, Taxes, loss, expense or liability, reduction in amounts
received or receivable or reduction in return on capital that are incurred or
suffered on or after the date which occurs six months prior to such Bank giving
notice to the Borrower that it is obligated to pay the respective amounts
pursuant to said Section 1.10, 1.11, 2.05 or 4.04, as the case may be. This
Section 13.18 shall have no applicability to any Section of this Agreement other
than said Sections 1.10, 1.11, 2.05 and 4.04.
13.19 Post-Closing Actions. Notwithstanding anything to the contrary
--------------------
contained in this Agreement or the other Credit Documents, the parties hereto
acknowledge and agree that:
(a) Security Document Filings. Form UCC-1 and PPSA Form 1-C financing
-------------------------
statements (or other appropriate local equivalent) delivered by the
Borrower to the
Collateral Agent on the Initial Borrowing Date shall be filed in the
appropriate governmental office within 5 days following the Initial
Borrowing Date.
(b) UCC-3 Termination Statements. Within 15 days following the
----------------------------
Initial Borrowing Date (or such later date as shall have been determined by
the Administrative Agent in its sole discretion), the Administrative Agent
shall have received Form UCC-3 termination statements in respect of the
Liens listed on Part B of Schedule IX hereto and same shall be filed in the
appropriate governmental office within 15 days following the Initial
Borrowing Date (or such later date as shall have been determined by the
Administrative Agent in its sole discretion).
(c) Opinions of Local Counsel. Within 60 days following the Initial
-------------------------
Borrowing Date, the Collateral Agent shall have received additional
opinions, addressed to each Agent, the Collateral Agent and each of the
Banks from local counsel to Credit Parties and/or the Agents reasonably
satisfactory to the Collateral Agent (including an opinion from special STB
counsel), which opinions (x) shall cover the perfection and enforceability
as against third parties of the security interests granted pursuant to the
Security Documents and such other matters relating to the transactions
contemplated herein as the Collateral Agent may reasonably request and (y)
shall be in form and substance reasonably satisfactory to the Collateral
Agent.
(d) STB Filing, etc. (i) Within 30 days following the Initial
----------------
Borrowing Date, the Borrower shall have caused to be delivered and filed
with the STB transmittal letters in the form required by 49 C.F.R. 1177
(appropriately completed) from each Credit Party which owns Rolling Stock
on the Initial Borrowing Date, together with executed copies of the
Security Agreement, in respect of all of the Rolling Stock owned by such
Credit Party on the Initial Borrowing Date.
(ii) Within 45 days following the Initial Borrowing Date, the Borrower
shall have caused to be delivered and filed with the Office of the
Registrar General of Canada fully executed copies of the Security Agreement
in accordance with the requirements of the Canada Transportation Act and,
promptly after such filing, published notice thereof in the Canada Gazette.
(e) Certificates of Title. Certificates of title in respect of all
----------------------
Tractor Trailers owned by the Borrower and its Subsidiaries on the Initial
Borrowing Date (other than Tractor Trailers securing Existing Indebtedness
not refinanced on the Initial Borrowing Date) noting the Collateral Agent's
security interest in the respective Tractor Trailer covered thereby shall
be registered in the appropriate state or provincial governmental office
within 90 days following the Initial Borrowing Date.
All provisions of this Credit Agreement and the other Credit Documents
(including, without limitation, all conditions precedent, representations,
warranties, covenants, events of default and other agreements herein and
therein) shall be deemed modified to the extent necessary to effect the
foregoing (and to permit the taking of the actions described above within the
time periods, required above, rather than as otherwise provided in the Credit
Documents);
provided, that (x) to the extent any representation and warranty would not be
--------
true because the foregoing actions were not taken on the Initial Borrowing Date,
the respective representation and warranty shall be required to be true and
correct in all material respects at the time the respective action is taken (or
was required to be taken) in accordance with the foregoing provisions of this
Section 13.19 and (y) all representations and warranties relating to the
Collateral Documents shall be required to be true immediately after the actions
required to be taken by Section 13.19 have been taken (or were required to be
taken). The acceptance of the benefits of the Loans shall constitute a
representation, warranty and covenant by the Borrower to each of the Banks that
the actions required pursuant to this Section 13.19 will be, or have been, taken
within the relevant time periods referred to in this Section 13.19 and that, at
such time, all representations and warranties contained in this Credit Agreement
and the other Credit Documents shall then be true and correct without any
modification pursuant to this Section 13.19. The parties hereto acknowledge and
agree that the failure to take any of the actions required above, within the
relevant time periods required above, shall give rise to an immediate Event of
Default pursuant to this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
PACER INTERNATIONAL, INC. (f/k/a Land Transport
Services, Inc.)
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
Title: Executive Vice President & Chief
Financial Officer
BANKERS TRUST COMPANY,
Individually and as Administrative Agent
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------
Title: Principal
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.,
Individually and as Syndication Agent
By: /s/ ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇▇▇▇
--------------------------
Title: Vice President
CREDIT SUISSE FIRST BOSTON
Individually and as Documentation Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------
Title: Director
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
-----------------
Title: Vice President
BANKBOSTON, N.A.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------
Title: Managing Director
BANK UNITED
By: /s/ ▇▇▇▇ ▇▇▇▇▇
---------------
Title: Director Commercial Syndications
ABN AMRO BANK N.V.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Title: Group Vice President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------
Title: Vice President
CREDIT LYONNAIS AMERICAS NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇ ▇▇▇
---------------
Title: Senior Vice President
FIRST UNION NATIONAL BANK
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
------------------
Title: Vice President
▇▇▇▇▇▇ FINANCIAL
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------
Title: Assistant Vice President
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By: /s/ Takuya Honjo
------------------
Title: Senior Vice President
THE MITSUBISHI TRUST AND BANKING CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------
Title: Senior Vice President
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: /s/ B. ▇▇▇▇ ▇▇▇▇▇
-------------------
Title: Vice President
TRANSAMERICA BUSINESS CREDIT CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------
Title: Senior Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
Title: Vice President
SCHEDULE I
----------
LIST OF BANKS AND COMMITMENTS
-----------------------------
Term Loan Revolving Loan
Bank Commitment Commitment
---- ---------- --------------
Bankers Trust Company 9,765,957.45 $ 7,234,042.55
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc. 9,765,957.45 $ 7,234,042.55
Credit Suisse First Boston 9,765,957.45 $ 7,234,042.55
ABN Amro Bank N.V. 9,765,957.45 $ 7,234,042.55
BankBoston, N.A. 8,329,787.23 $ 6,170,212.77
Bank One/The First National Bank of Chicago 9,765,957.45 $ 7,234,042.55
Bank United 8,329,787.23 $ 6,170,212.77
Credit Lyonnais Americas New York Branch 9,765,957.45 $ 7,234,042.55
First Union National Bank 8,329,787.23 $ 6,170,212.77
▇▇▇▇▇▇ Financial 8,329,787.23 $ 6,170,212.77
The Industrial Bank of Japan, Limited 8,329,787.23 $ 6,170,212.77
The Mitsubishi Trust & Banking Corporation 8,329,787.23 $ 6,170,212.77
The Prudential Insurance Company of America 8,329,787.23 $ 6,170,212.77
Transamerica Business Credit Corporation 8,329,787.23 $ 6,170,212.77
Union Bank of California, N.A. 9,765,957.45 $ 7,234,042.55
Total 135,000,000.00 $100,000,000.00
SCHEDULE II
-----------
BANK ADDRESSES
--------------
Bank Address
---- -------
Bankers Trust Company ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
ABN AMRO Bank N.V. Loan Administration
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Bank United ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
BankBoston, N.A. Diversified Finance, ▇▇ ▇▇-▇▇-▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Credit Lyonnais Americas New York Branch 1301 Avenue of the Americas, ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ Tabouret
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Schedule II
page 2
Credit Suisse First Boston ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
The First National Bank of Chicago One First ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
First Union Capital Markets One South Penn Square
▇▇▇▇▇▇▇ ▇▇▇▇-▇▇/▇▇/ ▇▇▇▇▇
▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ Financial ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ Galehugh
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
IBJ, Ltd. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
The Mitsubishi Trust & Banking Corporation ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc. ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇'▇▇▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Schedule II
page 2
Prudential ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
c/o Prudential Capital Group
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Transamerica Business Credit Corporation ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇-▇▇▇
▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Union Bank of California Union Bank of California
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE III
------------
REAL PROPERTIES
---------------
SCHEDULE IV
-----------
SCHEDULED EXISTING INDEBTEDNESS
-------------------------------
SCHEDULE V
----------
PLANS
-----
SCHEDULE VI
-----------
EXISTING INVESTMENTS
--------------------
SCHEDULE VII
------------
SUBSIDIARIES
------------
SCHEDULE VII
------------
INSURANCE
---------
SCHEDULE IX
-----------
EXISTING LIENS
--------------
Filing File
Location Debtor Secured Party Number FileDate of Collateral
-------- ------ ------------- ------ -------- -------------
SCHEDULE X
----------
CAPITALIZATION
--------------
SCHEDULE XI
-----------
CONSOLIDATED EBITDA ADJUSTMENTS
-------------------------------
Relevant Fiscal
Quarter Ended
-------------
June 30, 1999 $38,111.11
September 30, 1999 $28,888.89
December 30, 1999 $27,777.70
Each amount set forth above opposite a fiscal quarter to be included in the
relevant Test Period represents a per diem amount for such fiscal quarter.
Adjustments to Consolidated EBITDA pursuant to this Schedule shall only be made
in the case of any fiscal quarter set forth above for each day during such
fiscal quarter occurring after the Initial Borrowing Date.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
PACER INTERNATIONAL, INC. (f/k/a Land Transport
Services, Inc.)
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Title: Executive Vice President & Chief
Financial Officer
BANKERS TRUST COMPANY,
Individually and as Administrative Agent
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Title: Principal
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.,
Individually and as Syndication Agent
By: /s/ ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇▇▇▇
-----------------------------
Title: Vice President
CREDIT SUISSE FIRST BOSTON
Individually and as Documentation Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Title: Director
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
-----------------------------
Title: Vice President
BANKBOSTON, N.A.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Title: Managing Director
BANK UNITED
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------
Title: Director Commercial Syndications
ABN AMRO BANK N.V.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Title: Group Vice President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Title: Vice President
CREDIT LYONNAIS AMERICAS NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇ ▇▇▇
-----------------------------
Title: Senior Vice President
-2-
FIRST UNION NATIONAL BANK
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Title: Vice President
▇▇▇▇▇▇ FINANCIAL
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------
Title: Assistant Vice President
THE INDUSTRIAL BANK OF JAPAN,
LIMITED
By: /s/ Takuya Honjo
---------------------------
Title: Senior Vice President
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Title: Senior Vice President
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: /s/ B. ▇▇▇▇ ▇▇▇▇▇
---------------------------
Title: Vice President
-3-
TRANSAMERICA BUSINESS CREDIT CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------
Title: Senior Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Title: Vice President
-4-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date first above
written.
Pacer International Inc.,
(f/k/a Land Transport Services, Inc.),
as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Pacer Logistics, Inc.,
(f/k/a Pacer International, Inc.),
as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Cross Con Transport, Inc.,
as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Cross Con Terminals, Inc.,
as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Pacer International Rail Services LLC,
as an Assignor
By: Pacer Logistics, Inc., as manager
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Pacer International Consulting LLC,
as an Assignor
By: Pacer Logistics, Inc., as manager
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Pacer Rail Services LLC,
as an Assignor
By: Pacer Logistics, Inc., as manager
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Pacific Motor Transport Company,
as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
-2-
Pacer Integrated Logistics, Inc.,
as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------
Title: Executive Vice President/CFO
PLM Acquisition Corporation,
as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Manufacturers Consolidation Service, Inc.,
as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Keystone Terminals Acquisition Corp.,
as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
-3-
Interstate Consolidation Service, Inc.,
as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Interstate Consolidation, Inc.,
as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Intermodal Container Service, Inc.,
as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Levcon, Inc., as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Manufacturers Consolidation Service of Canada,
Inc., as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
-4-
Pacer Express, Inc.,
as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Bankers Trust Company,
as Collateral Agent, as Assignee
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------
Title: Principal
-5-
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed
and delivered as of the date first above written.
Pacer Logistics, Inc.,
(f/k/a Pacer International, Inc.),
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------
Title: Executive Vice President/CFO
Cross Con Transport, Inc.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------
Title: Executive Vice President/CFO
Cross Con Terminals, Inc.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------
Title: Executive Vice President/CFO
Pacer International Rail Services LLC,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------
Title: Executive Vice President/CFO
Pacer International Consulting LLC,
as a Guarantor
By: Pacer Logistics, Inc., as manager
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------
Title: Executive Vice President/CFO
Pacer Rail Services LLC,
as a Guarantor
By: Pacer Logistics, Inc., as manager
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------
Title: Executive Vice President/CFO
Pacific Motor Transport Company,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------
Title: Executive Vice President/CFO
-2-
Pacer Integrated Logistics, Inc.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------
Title: Executive Vice President/CFO
PLM Acquisition Corporation,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------
Title: Executive Vice President/CFO
Manufacturers Consolidation Service, Inc.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------
Title: Executive Vice President/CFO
Keystone Terminals Acquisition Corp.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------
Title: Executive Vice President/CFO
-3-
Interstate Consolidation Service, Inc.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------
Title: Executive Vice President/CFO
Interstate Consolidation, Inc.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------
Title: Executive Vice President/CFO
Intermodal Container Service, Inc.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------
Title: Executive Vice President/CFO
Levcon, Inc., as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------
Title: Executive Vice President/CFO
-4-
Manufacturers Consolidation Service of Canada,
Inc., as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------
Title: Executive Vice President/CFO
Pacer Express, Inc.,
as a Guarantor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------
Title: Executive Vice President/CFO
-5-
Accepted and Agreed to:
Bankers Trust Company,
as Administrative Agent for the Banks
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------
Title: Principal
-6-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date first above
written.
Pacer International Inc.,
(f/k/a Land Transport Services, Inc.),
as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Pacer Logistics, Inc.,
(f/k/a Pacer International, Inc.),
as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Cross Con Transport, Inc.,
as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Cross Con Terminals, Inc.,
as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Pacer International Rail Services LLC,
as an Assignor
By: Pacer Logistics, Inc., as manager
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Pacer International Consulting LLC,
as an Assignor
By: Pacer Logistics, Inc., as manager
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Pacer Rail Services LLC,
as an Assignor
By: Pacer Logistics, Inc., as manager
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Pacific Motor Transport Company,
as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
-2-
Pacer Integrated Logistics, Inc.,
as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------
Title: Executive Vice President/CFO
PLM Acquisition Corporation,
as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Manufacturers Consolidation Service, Inc.,
as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Keystone Terminals Acquisition Corp.,
as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
-3-
Interstate Consolidation Service, Inc.,
as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Interstate Consolidation, Inc.,
as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Intermodal Container Service, Inc.,
as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Levcon, Inc., as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Manufacturers Consolidation Service of Canada,
Inc., as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
-4-
Pacer Express, Inc.,
as an Assignor
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: Executive Vice President/CFO
Bankers Trust Company,
as Collateral Agent, as Assignee
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------
Title: Principal
-5-
