EXHIBIT 10.1
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
dated as of June 11, 1999
among
UNITED ROAD SERVICES, INC.,
VARIOUS FINANCIAL INSTITUTIONS,
BANKBOSTON, N.A.,
as Syndication Agent,
CIBC INC.,
as Documentation Agent,
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent
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BANC OF AMERICA SECURITIES LLC
Lead Arranger and Book Manager
TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS......................................................................1
1.1 Definitions............................................................1
1.2 Other Interpretive Provisions.........................................14
SECTION 2 COMMITMENTS OF THE BANKS; LETTER OF CREDIT, BORROWING,
CONVERSION AND CONTINUATION PROCEDURES............................................15
2.1 Commitments...........................................................15
2.1.1 Revolving Commitments................................................15
2.1.2 Term Loan Commitments.................................................15
2.1.3 L/C Commitment........................................................15
2.2 Loan Procedures.......................................................16
2.2.1 Various Types of Loans................................................16
2.2.2 Borrowing Procedures..................................................16
2.2.3 Conversion and Continuation Procedures................................16
2.3 Letter of Credit Procedures...........................................17
2.3.1 L/C Applications......................................................17
2.3.2 Participation in Letters of Credit....................................18
2.3.3 Reimbursement Obligations.............................................18
2.3.4 Limitation on Obligations of Issuing Banks............................19
2.3.5 Funding by Revolving Banks to Issuing Banks...........................19
2.4 Swing Line Loans......................................................19
2.4.1 Swing Line Loans......................................................19
2.4.2 Swing Line Loan Procedures............................................20
2.4.3 Refunding of, or Funding of Participations in, Swing Line Loans.......20
2.4.4 Repayment of Participations...........................................21
2.4.5 Participation Obligations Unconditional...............................21
2.5 Commitments Several...................................................21
2.6 Certain Conditions....................................................21
SECTION 3 NOTES EVIDENCING LOANS..........................................................22
3.1 Notes.................................................................22
3.1.1 Revolving Notes.......................................................22
3.1.2 Swing Line Note.......................................................22
3.1.3 Term Notes............................................................22
3.2 Recordkeeping.........................................................22
SECTION 4 INTEREST........................................................................22
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4.1 Interest Rates........................................................22
4.2 Interest Payment Dates................................................23
4.3 Setting and Notice of IBOR Rates......................................23
4.4 Computation of Interest...............................................23
SECTION 5 FEES............................................................................24
5.1 Non-Use Fee...........................................................24
5.2 Letter of Credit Fees.................................................24
5.3 Ticking Fee...........................................................24
5.4 Arrangement and Agent's Fees..........................................25
5.5 Closing and Cancellation Fees.........................................25
SECTION 6 INCREASE, REDUCTION OR TERMINATION OF THE COMMITMENTS;
PREPAYMENTS.......................................................................25
6.1 Changes in Commitment Amounts.........................................25
6.1.1 Reduction or Termination of the Commitments...........................25
6.1.2 Optional Increase in Revolving Commitment Amount......................25
6.2 Voluntary Prepayments.................................................26
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.................................26
7.1 Making of Payments....................................................26
7.2 Application of Certain Payments.......................................26
7.3 Due Date Extension....................................................27
7.4 Setoff................................................................27
7.5 Sharing of Payments, Etc..............................................27
7.6 Taxes.................................................................27
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR
EURODOLLAR LOANS..................................................................28
8.1 Increased Costs.......................................................28
8.2 Basis for Determining Interest Rate Inadequate or Unfair..............30
8.3 Changes in Law Rendering Eurodollar Loans Unlawful....................30
8.4 Funding Losses........................................................31
8.5 Right of Banks to Fund through Other Offices..........................31
8.6 Discretion of Banks as to Manner of Funding...........................31
8.7 Mitigation of Circumstances; Replacement of Affected Bank.............31
8.8 Conclusiveness of Statements; Survival of Provisions..................32
SECTION 9 WARRANTIES......................................................................32
9.1 Organization, etc.....................................................32
9.2 Authorization; No Conflict............................................32
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9.3 Validity and Binding Nature...........................................33
9.4 Financial Condition...................................................33
9.5 No Material Adverse Change............................................33
9.6 Litigation and Contingent Liabilities.................................33
9.7 Ownership of Properties; Liens........................................34
9.8 Subsidiaries..........................................................34
9.9 Pension and Welfare Plans.............................................34
9.10 Investment Company Act................................................34
9.11 Public Utility Holding Company Act....................................34
9.12 Regulation U..........................................................35
9.13 Taxes.................................................................35
9.14 Solvency, etc.........................................................35
9.15 Environmental Matters.................................................35
9.16 Year 2000 Problem.....................................................36
9.17 Copyrights, Patents, Trademarks and Licenses, etc.....................36
9.18 Transactions with Affiliates..........................................37
9.19 Information...........................................................37
SECTION 10 COVENANTS......................................................................37
10.1 Reports, Certificates and Other Information...........................37
10.1.1 Audit Report..........................................................37
10.1.2 Quarterly Reports.....................................................38
10.1.3 Monthly Reports.......................................................38
10.1.4 Compliance Certificates...............................................38
10.1.5 Reports to SEC and to Shareholders....................................38
10.1.6 Notice of Default, Litigation and ERISA Matters.......................39
10.1.7 Subsidiaries..........................................................40
10.1.8 Management Reports....................................................40
10.1.9 Projections...........................................................40
10.1.10 Contracts.............................................................40
10.1.11 Fleet Audit Reports...................................................40
10.1.12 Other Information.....................................................40
10.2 Books, Records and Inspections........................................40
10.3 Insurance.............................................................41
10.4 Compliance with Laws; Payment of Taxes and Liabilities................41
10.5 Maintenance of Existence, etc.........................................41
10.6 Financial Covenants...................................................41
10.6.1 Minimum Consolidated Net Income.......................................41
10.6.2 Funded Debt to Capitalization Ratio...................................41
10.6.3 Funded Debt to EBITDA Ratio...........................................41
10.6.4 Capital Expenditures..................................................41
10.6.5 EBITR to Adjusted Interest Expense plus Rental Expense Ratio..........42
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10.6.6 Senior Funded Debt to Tangible Assets Ratio...........................42
10.6.7 Senior Funded Debt to EBITDA Ratio....................................42
10.7 Limitations on Debt...................................................42
10.8 Liens.................................................................43
10.9 Restricted Payments...................................................44
10.10 Mergers, Consolidations, Sales........................................45
10.11 Modification of Organizational Documents..............................45
10.12 Use of Proceeds.......................................................45
10.13 Further Assurances....................................................46
10.14 Transactions with Affiliates..........................................46
10.15 Employee Benefit Plans................................................46
10.16 Environmental Matters.................................................46
10.17 Unconditional Purchase Obligations....................................47
10.18 Inconsistent Agreements...............................................47
10.19 Business Activities...................................................47
10.20 Advances and Other Investments........................................47
10.21 Maintenance of Property...............................................48
10.22 Performance of Obligations............................................48
10.23 Leases................................................................48
10.24 Assignability of Contracts............................................49
10.25 Limitation on Foreign Assets and Margin Stock.........................49
10.26 Financial Information re: Certain Acquisitions........................49
SECTION 11 EFFECTIVENESS; CONDITIONS OF LENDING, ETC......................................49
11.1 Initial Credit Extensions.............................................49
11.1.1 Notes.................................................................50
11.1.2 Resolutions...........................................................50
11.1.3 Consents, etc.........................................................50
11.1.4 Incumbency and Signature Certificates.................................50
11.1.5 Guaranty..............................................................50
11.1.6 Security Agreement and Amendment......................................50
11.1.7 Pledge Agreements.....................................................50
11.1.8 Confirmation..........................................................50
11.1.9 FRB Forms.............................................................51
11.1.10 Opinions of Counsels for the Company and the Guarantors...............51
11.1.11 Other.................................................................51
11.2 Conditions............................................................51
11.2.1 Compliance with Warranties, No Default, etc...........................51
11.2.2 Confirmatory Certificate..............................................52
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT.............................................52
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12.1 Events of Default.....................................................52
12.1.1 Non-Payment of the Loans, etc.........................................52
12.1.2 Non-Payment of Other Debt.............................................52
12.1.3 Other Material Obligations............................................52
12.1.4 Bankruptcy, Insolvency, etc...........................................52
12.1.5 Non-Compliance with Provisions of This Agreement......................53
12.1.6 Warranties............................................................53
12.1.7 Pension Plans.........................................................53
12.1.8 Judgments.............................................................53
12.1.9 Invalidity of Guaranty, etc...........................................53
12.1.10 Invalidity of Collateral Documents, etc...............................54
12.1.11 Change in Control.....................................................54
12.2 Effect of Event of Default............................................54
SECTION 13 THE AGENT......................................................................55
13.1 Appointment and Authorization.........................................55
13.2 Delegation of Duties..................................................55
13.3 Liability of Agent....................................................55
13.4 Reliance by Agent.....................................................56
13.5 Notice of Default.....................................................56
13.6 Credit Decision.......................................................56
13.7 Indemnification.......................................................57
13.8 Agent in Individual Capacity..........................................58
13.9 Successor Agent.......................................................58
13.10 Withholding Tax.......................................................59
13.11 Collateral Matters....................................................60
13.12 Funding Reliance......................................................61
13.13 Other Agents..........................................................61
SECTION 14 GENERAL........................................................................61
14.1 Waiver; Amendments....................................................61
14.2 Confirmations.........................................................62
14.3 Notices...............................................................62
14.4 Computations..........................................................63
14.5 Regulation U..........................................................63
14.6 Costs, Expenses and Taxes.............................................63
14.7 Subsidiary References.................................................63
14.8 Captions..............................................................64
14.9 Assignments; Participations...........................................64
14.9.1 Assignments...........................................................64
14.9.2 Participations........................................................65
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14.10 Governing Law.........................................................66
14.11 Counterparts..........................................................66
14.12 Successors and Assigns................................................66
14.13 Indemnification by the Company........................................66
14.14 Forum Selection and Consent to Jurisdiction...........................67
14.15 Waiver of Jury Trial..................................................68
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SCHEDULES
SCHEDULE 1.1 Pricing Schedule
SCHEDULE 2.1.1 Revolving Banks, Revolving Commitments and
Revolving Percentages
SCHEDULE 2.1.2 Term Banks, Term Commitments and Term Percentages
SCHEDULE 3.1.3 Scheduled Term Loan Installments
SCHEDULE 9.6 Litigation and Contingent Liabilities
SCHEDULE 9.8 Subsidiaries
SCHEDULE 9.15 Environmental Matters
SCHEDULE 10.7 Existing Debt
SCHEDULE 10.8 Existing Liens
SCHEDULE 14.3 Addresses for Notices
EXHIBITS
EXHIBIT A-1 Form of Revolving Note
(Section 3.1.1)
EXHIBIT A-2 Form of Swing Line Note
(Section 3.1.2)
EXHIBIT A-3 Form of Term Note
(Section 3.1.3)
EXHIBIT B Form of Compliance Certificate
(Section 10.1.4)
EXHIBIT C Copy of Guaranty
(Section 1)
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EXHIBIT D Copy of Security Agreement
(Section 1)
EXHIBIT E Copy of Company Pledge Agreement
(Section 1)
EXHIBIT F Form of Subsidiary Pledge Agreement
(Section 11.1.7)
EXHIBIT G Form of Assignment Agreement
(Section 14.9)
EXHIBIT H Form of Notice of Borrowing
(Section 2.2.2)
EXHIBIT I Form of Notice of Conversion/Continuation
(Section 2.2.3)
EXHIBIT J Form of Confirmation
(Section 11.1.8)
EXHIBIT K Form of Request for Increase
(Section 6.1.2)
EXHIBIT L-1 Copy of Omnibus Amendment (November 2, 1998)
(Section 1.1)
EXHIBIT L-2 Copy of Omnibus Amendment (December 3, 1998)
(Section 1.1)
EXHIBIT M Form of Amendment to Security Agreement
(Section 11.1.6)
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
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This SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 11, 1999
(this "Agreement") is entered into among UNITED ROAD SERVICES, INC., a Delaware
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corporation (the "Company"), the financial institutions that are or may from
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time to time become parties hereto (together with their respective successors
and assigns, the "Banks"), BANKBOSTON, N.A., as Syndication Agent, CIBC INC., as
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Documentation Agent, and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
(in its individual capacity, "BofA"), as Administrative Agent for the Banks.
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WHEREAS, the Company, certain of Banks and BofA, as agent, are parties to
an Amended and Restated Credit Agreement dated as of November 2, 1998 (as
heretofore amended, the "Existing Agreement");
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WHEREAS, the parties hereto have agreed to amend and restate the Existing
Agreement; and
WHEREAS, the parties hereto intend that this Agreement and the documents
executed in connection herewith not effect a novation of the obligations of the
Company under the Existing Agreement, but merely a restatement and, where
applicable, an amendment of the terms governing such obligations;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1 DEFINITIONS.
1.1 Definitions. When used herein the following terms shall have the
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following meanings:
Adjusted Interest Expense means, for any period, Interest Expense for such
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period excluding any non-cash interest paid on Subordinated Debt by the issuance
of additional Subordinated Debt.
Affected Bank means (a) any Bank that has given notice to the Company
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(which has not been rescinded) of (i) any obligation by the Company to pay any
amount pursuant to Section 7.6 or 8.1 or (ii) the occurrence of any
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circumstances of the nature described in Section 8.2 or 8.3 and (b) any
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Revolving Bank that has rejected (or failed to respond within 30 days to) a
request from the Company to extend the Revolving Termination Date so long as
Revolving Banks having Revolving Percentages in an aggregate amount of more than
50% have consented to such request.
Affiliate of any Person means (i) any other Person which, directly or
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indirectly, controls or is controlled by or is under common control with such
Person and (ii) any officer or director of such Person.
Agent means BofA in its capacity as administrative agent for the Banks
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hereunder and any successor thereto in such capacity.
Agent-Related Persons means BofA in its capacity as Agent and any successor
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agent arising under Section 13.9, together with their respective Affiliates
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(including, in the case of BofA, the Arranger), and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.
Agreement - see the Preamble.
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Arranger means Banc of America Securities LLC, a Delaware limited liability
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company.
Assignment Agreement - see Section 14.9.1.
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Bank - see the Preamble.
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Base Rate means at any time the greater of (a) the Federal Funds Rate plus
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0.5% and (b) the Reference Rate.
Base Rate Loan means any Loan which bears interest at or by reference to
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the Base Rate.
Base Rate Margin - see Schedule 1.1.
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BofA - see the Preamble.
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Business Day means any day on which BofA is open for commercial banking
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business in Chicago, New York, Charlotte and San Francisco and, in the case of a
Business Day which relates to a Eurodollar Loan, on which dealings are carried
on in the interbank eurodollar market.
Cancellation Date means the earlier of (a) the date prior to the Effective
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Date on which all of the Commitments under this Agreement are terminated or (b)
if the Effective Date does not occur prior to such date, the date 90 days after
the Signing Date.
Capital Expenditures means all expenditures which, in accordance with GAAP,
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would be required to be capitalized and shown on the consolidated balance sheet
of the Company, but excluding expenditures made in connection with the
replacement, substitution or restoration of assets to the extent financed within
three months (i) from insurance proceeds (or other similar recoveries) paid on
account
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of the loss of or damage to the assets being replaced or restored or (ii) with
awards of compensation arising from the taking by eminent domain or condemnation
of the assets being replaced.
Capital Lease means, with respect to any Person, any lease of (or other
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agreement conveying the right to use) any real or personal property by such
Person that, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of such Person.
Cash Equivalent Investment means, at any time, (a) any evidence of Debt,
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maturing not more than one year after such time, issued or guaranteed by the
United States government or any agency thereof, (b) commercial paper, maturing
not more than one year from the date of issue, or corporate demand notes, in
each case (unless issued by a Bank or its holding company) rated at least A-l by
Standard & Poor's Ratings Services Group, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc. or P-l by ▇▇▇▇▇'▇ Investors Service, Inc., (c) any certificate
of deposit (or time deposits represented by such certificates of deposit) or
bankers acceptance, maturing not more than one year after such time, or
overnight Federal Funds transactions that are issued or sold by a commercial
banking institution that is a member of the Federal Reserve System and has a
combined capital and surplus and undivided profits of not less than
$500,000,000, (d) any repurchase agreement entered into with any Bank (or other
commercial banking institution of the stature referred to in clause (c)) which
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(i) is secured by a fully perfected security interest in any obligation of the
type described in any of clauses (a) through (c) and (ii) has a market value at
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the time such repurchase agreement is entered into of not less than 100% of the
repurchase obligation of such Bank (or other commercial banking institution)
thereunder and (e) investments in short-term asset management accounts offered
by any Bank for the purpose of investing in loans to any corporation (other than
the Company or an Affiliate of the Company), state or municipality, in each case
organized under the laws of any state of the United States or of the District of
Columbia.
Centurion Acquisition means the acquisition by the Company or a Subsidiary
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of the following affiliated companies (each of which is a Florida corporation)
as a group: Centurion Auto Transport, Inc., Automobile Transport Clearinghouse
of Florida, Inc., Eagle Auto Transport of Jacksonville, Inc., Nationwide Auto
Transport, Inc. and Centurion Leasing Company.
CERCLA - see Section 9.15.
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Charterhouse Subordinated Notes means the 8% Convertible Subordinated
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Debentures due 2008 issued by the Company in the original principal amount of
$75,000,000 and includes any additional convertible subordinated debentures
issued in payment of interest thereon.
Code means the Internal Revenue Code of 1986.
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Collateral Documents means the Company Pledge Agreement, each Subsidiary
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Pledge Agreement, the Security Agreement and any other agreement pursuant to
which the Company or any Guarantor grants collateral to the Agent for the
benefit of the Banks.
Commitment means, with respect to any Bank, such Bank's Revolving
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Commitment and/or such Bank's Term Commitment.
Company - see the Preamble.
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Company Pledge Agreement means the pledge agreement between the Company and
------------------------
the Agent, a copy of which is attached hereto as Exhibit E, as amended by the
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Omnibus Amendments.
Computation Period means each period of four consecutive Fiscal Quarters
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ending on the last day of a Fiscal Quarter.
Confirmation means the Confirmation among the Company, its Subsidiaries and
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the Agent, substantially in the form of Exhibit J.
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Consolidated Net Income means, with respect to the Company and its
-----------------------
Subsidiaries for any period, the net income (or loss) of the Company and its
Subsidiaries for such period, excluding any extraordinary gains during such
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period.
Controlled Group means all members of a controlled group of corporations
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and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with the Company, are treated
as a single employer under Section 414 of the Code or Section 4001 of ERISA.
Debt of any Person means, without duplication, (a) all indebtedness of such
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Person for borrowed money, whether or not evidenced by bonds, debentures, notes
or similar instruments, (b) all obligations of such Person as lessee under
Capital Leases which have been or should be recorded as liabilities on a balance
sheet of such Person, (c) all obligations of such Person to pay the deferred
purchase price of property or services (excluding trade accounts payable in the
ordinary course of business), (d) all indebtedness secured by a Lien on the
property of such Person, whether or not such indebtedness shall have been
assumed by such Person (it being understood that if such Person has not assumed
or otherwise become personally liable for any such indebtedness, the amount of
the Debt of such Person in connection therewith shall be limited to the lesser
of the face amount of such indebtedness or the fair market value of all property
of such Person securing such indebtedness), (e) all obligations, contingent or
otherwise, with respect to the face amount of all letters of credit (whether or
not drawn) and banker's acceptances issued for the account of such Person
(including the Letters of Credit), (f) net liabilities of such Person under all
Hedging Obligations and (g) all Suretyship Liabilities of such Person.
4
Disposal - see the definition of "Release".
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Distributed Shares means all Purchased Common Shares which have been
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subsequently used as consideration in completing a purchase or acquisition
described in clause (c) of Section 10.10, excluding any Unused Shares.
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Dollar and the sign "$" mean lawful money of the United States.
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EBITDA means, for any period, Consolidated Net Income for such period plus,
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to the extent deducted in determining such Consolidated Net Income, Interest
Expense, income tax expense, depreciation and amortization for such period;
provided that for purposes of calculating EBITDA for any period, the
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consolidated net income of any Person acquired by the Company or any Subsidiary
during such period (plus, to the extent deducted in determining such
consolidated net income, interest expense, income tax expense, depreciation and
amortization of such Person) shall be included on a pro forma basis for such
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period (assuming the consummation of each such acquisition and the incurrence or
assumption of any Debt in connection therewith occurred on the first day of such
period) in accordance with Article 11 of Regulation S-X of the SEC.
EBITR means, for any period, Consolidated Net Income for such period plus
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Rental Expense and, to the extent deducted in determining such Consolidated Net
Income, Interest Expense and income tax expense.
Effective Date - see Section 11.1.
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Environmental Claims means all claims, however asserted, by any
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governmental, regulatory or judicial authority or other Person alleging
potential liability or responsibility for violation of any Environmental Law, or
for release or injury to the environment.
Environmental Laws means all federal, state or local laws, statutes, common
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law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any governmental authority, in each case
relating to environmental matters.
Equipment has the meaning assigned to such term in the Security Agreement.
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ERISA means the Employee Retirement Income Security Act of 1974.
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References to sections of ERISA also refer to any successor sections.
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Eurocurrency Reserve Percentage means, with respect to any Eurodollar Loan
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for any Interest Period, a percentage (expressed as a decimal) equal to the
daily average during such Interest Period of the percentage in effect on each
day of such Interest Period, as prescribed by the FRB, for determining
5
the aggregate maximum reserve requirements applicable to "Eurocurrency
Liabilities" pursuant to Regulation D of the FRB or any other then applicable
regulation of FRB which prescribes reserve requirements applicable to
"Eurocurrency Liabilities" as presently defined in such Regulation D.
Eurodollar Loan means any Loan which bears interest at a rate determined by
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reference to the Eurodollar Rate (Reserve Adjusted).
Eurodollar Margin - see Schedule 1.1.
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Eurodollar Office means with respect to any Bank the office or offices of
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such Bank which shall be making or maintaining the Eurodollar Loans of such Bank
hereunder or, in the case of BofA, such other office or offices through which
BofA determines the IBOR Rate. A Eurodollar Office of any Bank may be, at the
option of such Bank, either a domestic or foreign office.
Eurodollar Rate (Reserve Adjusted) means, with respect to any Eurodollar
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Loan for any Interest Period, a rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) determined pursuant to the following formula:
Eurodollar Rate = IBOR Rate
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(Reserve Adjusted) 1-Eurocurrency
Reserve Percentage
Event of Default means any of the events described in Section 12.1.
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Existing Agreement - see the Recitals.
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Existing Letters of Credit means the "Letters of Credit" under and as
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defined in the Existing Agreement which are outstanding on the Effective Date.
Federal Funds Rate means, for any day, the rate set forth in the weekly
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statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of New York (including any such successor
publication, "H.15(519)") on the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Agent of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on
that day by each of three leading brokers of Federal funds transactions in New
York City selected by the Agent.
Financial Letter of Credit means any Letter of Credit determined by the
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applicable Issuing Bank to be a "financial guaranty-type Standby Letter of
Credit" as defined in footnote 13 to Appendix
6
A to the Risk Based Capital Guidelines issued by the Comptroller of the Currency
(or in any successor regulation, guideline or ruling by any applicable banking
regulatory authority).
Fiscal Quarter means a fiscal quarter of a Fiscal Year.
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Fiscal Year means the fiscal year of the Company and its Subsidiaries,
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which period shall be the 12-month period ending on December 31 of each year.
References to a Fiscal Year with a number corresponding to any calendar year
(e.g., "Fiscal Year 1998") refer to the Fiscal Year ending on December 31 of
such calendar year.
Foreign Subsidiary means any Subsidiary which is organized under the laws
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of a jurisdiction other than a state of the United States and which conducts
substantially all of its business outside the United States.
FRB means the Board of Governors of the Federal Reserve System (or any
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successor).
Funded Debt means all Debt of the Company and its Subsidiaries, excluding
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(i) contingent obligations in respect of undrawn letters of credit (other than
letters of credit supporting Debt of a Person other than the Company or any
Subsidiary), (ii) the first $6,000,000 of Suretyship Liabilities in respect of
guarantees of lease obligations described in Section 10.7(h) and any other
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Suretyship Liabilities except (in the case of such other Suretyship Liabilities)
to the extent in respect of Debt of a Person which is not the Company or a
Subsidiary, (iii) Hedging Obligations, (iv) Debt of the Company to Subsidiaries
and Debt of Subsidiaries to the Company or to other Subsidiaries, and (v) the
Charterhouse Subordinated Notes.
Funded Debt to Capitalization Ratio means, at any time, the ratio of (a)
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Funded Debt to (b) the sum of Funded Debt plus Net Worth plus the principal
amount of the Charterhouse Subordinated Notes.
Funded Debt to EBITDA Ratio means, as of the last day of any Fiscal
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Quarter, the ratio of (i) Funded Debt as of the last day of such Fiscal Quarter
to (ii) EBITDA for the Computation Period ending on the last day of such Fiscal
Quarter.
GAAP means generally accepted accounting principles set forth from time to
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time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
7
Group - see Section 2.2.1.
----- -------------
Guarantor means, on any day, each Subsidiary that has executed a
---------
counterpart of the Guaranty on or prior to that day (or is required to execute a
counterpart of the Guaranty on that date).
Guaranty means the guaranty executed by various Subsidiaries of the
--------
Company, a copy of which is attached hereto as Exhibit C, as amended by the
---------
Omnibus Amendments.
Hazardous Substances - see Section 9.15.
-------------------- ------------
Hedging Obligations means, with respect to any Person, all liabilities of
-------------------
such Person under interest rate, currency and commodity swap agreements, cap
agreements and collar agreements, and all other agreements or arrangements
designed to protect such Person against fluctuations in interest rates, currency
exchange rates or commodity prices.
IBOR Rate means, with respect to any Eurodollar Loan for any Interest
---------
Period, the rate per annum at which Dollar deposits in immediately available
funds are offered to the Eurodollar Office of BofA two Business Days prior to
the beginning of such Interest Period by major banks in the interbank eurodollar
market as at or about 10:00 A.M., Chicago time, for delivery on the first day of
such Interest Period, for the number of days comprised therein and in an amount
equal or comparable to the amount of the Eurodollar Loan of BofA for such
Interest Period.
Interest Expense means for any period the consolidated interest expense of
----------------
the Company and its Subsidiaries for such period (including all imputed interest
on Capital Leases and before giving effect to any capitalization of interest but
excluding amortization of deferred financing costs).
Interest Period means, as to any Eurodollar Loan, the period commencing on
---------------
the date such Loan is borrowed or continued as, or converted into, a Eurodollar
Loan and ending on the date one, two, three or six months thereafter as selected
by the Company pursuant to Section 2.2.2 or 2.2.3, as the case may be; provided
------------- ----- --------
that:
(i) if any Interest Period would otherwise end on a day that is not a
Business Day, such Interest Period shall be extended to the following
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event such Interest
Period shall end on the preceding Business Day;
(ii) any Interest Period that begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period shall end on the last Business Day of the calendar month at
the end of such Interest Period;
(iii) the Company may not select any Interest Period for a Revolving
Loan which would extend beyond the scheduled Revolving Termination Date;
and
8
(iv) the Company may not select any Interest Period for a Term Loan
if, after giving effect to such selection, the aggregate principal amount
of all Term Loans having Interest Periods ending after any date on which an
installment of the Term Loans is scheduled to be repaid would exceed the
aggregate principal amount of the Term Loans scheduled to be outstanding
after giving effect to such repayment.
Investment means, relative to any Person, (a) any loan or advance made by
----------
such Person to any other Person (excluding any commission, travel or similar
advances made to directors, officers and employees of the Company or any of its
Subsidiaries), (b) any Suretyship Liability of such Person, (c) any ownership or
similar interest held by such Person in any other Person and (d) deposits and
the like relating to prospective acquisitions of businesses.
Issuing Bank means BofA in its capacity as an issuer of Letters of Credit
------------
hereunder and any other Revolving Bank which, with the written consent of the
Company and the Agent, is the issuer of one or more Letters of Credit hereunder.
L/C Application means, with respect to any request for the issuance of a
---------------
Letter of Credit, a letter of credit application in the form being used by the
applicable Issuing Bank at the time of such request for the type of letter of
credit requested.
Letter of Credit - see Section 2.1.3.
---------------- -------------
Lien means, with respect to any Person, any interest granted by such Person
----
in any real or personal property, asset or other right owned or being purchased
or acquired by such Person which secures payment or performance of any
obligation and shall include any mortgage, lien, encumbrance, charge or other
security interest of any kind, whether arising by contract, as a matter of law,
by judicial process or otherwise.
Loan Documents means this Agreement, the Notes, the Guaranty, the L/C
--------------
Applications and the Collateral Documents.
Loans means Revolving Loans, Swing Line Loans and Term Loans.
-----
Margin Stock means any "margin stock" as defined in Regulation U of the
------------
FRB.
Material Adverse Effect means (a) a material adverse change in, or a
-----------------------
material adverse effect upon, the financial condition, operations, assets,
business, properties or prospects of the Company and its Subsidiaries taken as a
whole, or (b) a material adverse effect upon any substantial portion of the
collateral under the Collateral Documents or upon the legality, validity,
binding effect or enforceability against the Company or any Guarantor of any
Loan Document.
9
Multiemployer Pension Plan means a multiemployer plan, as such term is
--------------------------
defined in Section 4001(a)(3) of ERISA, and to which the Company or any member
of the Controlled Group may have any liability.
Net Worth means the Company's consolidated stockholders' equity (including
---------
preferred stock accounts).
Non-Financial Letter of Credit means any Letter of Credit other than a
------------------------------
Financial Letter of Credit.
Note means a Revolving Note, the Swing Line Note or a Term Note.
----
Notice of Borrowing means a notice substantially in the Form of Exhibit H.
------------------- ---------
Notice of Conversion/Continuation means a notice substantially in the form
---------------------------------
of Exhibit I.
---------
Omnibus Amendments means the Confirmation and Omnibus Amendment dated as of
------------------
November 2, 1998 among the Company, various Subsidiaries thereof and the Agent,
and the Second Confirmation and Omnibus Amendment dated as of December 3, 1998
among the Company, various Subsidiaries thereof and the Agent, copies of which
are attached hereto as Exhibit L-1 and L-2 respectively.
----------- ---
Operating Lease means any lease of (or other agreement conveying the right
---------------
to use) any real or personal property by the Company or any Subsidiary, as
lessee, other than any Capital Lease.
PBGC means the Pension Benefit Guaranty Corporation and any entity
----
succeeding to any or all of its functions under ERISA.
Pension Plan means a "pension plan", as such term is defined in Section
------------
3(2) of ERISA, which is subject to Title IV of ERISA (other than a Multiemployer
Pension Plan), and to which the Company or any member of the Controlled Group
may have any liability, including any liability by reason of having been a
substantial employer within the meaning of Section 4063 of ERISA at any time
during the preceding five years, or by reason of being deemed to be a
contributing sponsor under Section 4069 of ERISA.
Person means any natural person, corporation, partnership, trust, limited
------
liability company, association, governmental authority or unit, or any other
entity, whether acting in an individual, fiduciary or other capacity.
Purchased Common Shares means shares of common stock of the Company
-----------------------
purchased by the Company in accordance with Section 10.9. For purposes of
------------
10
determining the purchase price of Purchased Common Shares in Section 10.9 and
------------
10.10 and whether any Purchased Common Shares have become Unused Shares,
-----
Purchased Common Shares shall be deemed to be used as consideration for
purchases or acquisitions pursuant to Section 10.10 or to become Unused Shares
-------------
in the same chronological order in which such Purchased Common Shares were
purchased by the Company (i.e., on a first-in, first-out basis).
RCRA - see Section 9.15.
---- ------------
Reference Rate means, for any day, the rate of interest in effect for such
--------------
day as publicly announced from time to time by BofA in San Francisco,
California, as its "reference rate." (The "reference rate" is a rate set by
BofA based upon various factors, including BofA's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate.) Any change in the reference rate announced by BofA shall take effect at
the opening of business on the day specified in the public announcement of such
change.
Release has the meaning specified in CERCLA and the term "Disposal" (or
------- --------
"Disposed") has the meaning specified in RCRA; provided that in the event either
--------- --------
CERCLA or RCRA is amended so as to broaden the meaning of any term defined
thereby, such broader meaning shall apply as of the effective date of such
amendment; and provided, further, that to the extent that the laws of a state
-------- -------
wherein any affected property lies establish a meaning for "Release" or
-------
"Disposal" which is broader than is specified in either CERCLA or RCRA, such
---------
broader meaning shall apply.
Rental Expense means for any period the consolidated rental expense
--------------
(excluding payments on Capital Leases) of the Company and its Subsidiaries for
such period.
Required Banks means Banks having Total Percentages aggregating more than
--------------
50%.
Revolving Bank means each Bank listed on Schedule 2.1.1 as a "Revolving
-------------- --------------
Bank" and any successor thereof or assignee of all or a portion of such Bank's
Revolving Commitment (or, after the Revolving Commitments have terminated, such
Bank's Revolving Loans).
Revolving Commitment means, with respect to any Revolving Bank, the
--------------------
commitment of such Revolving Bank to make Revolving Loans, and to participate in
Letters of Credit and Swing Line Loans, in the amount set forth opposite such
Revolving Bank's name on Schedule 2.1.1, as adjusted from time to time by any
--------------
applicable adjustment to the Revolving Commitment Amount or any assignment by or
to such Revolving Bank.
Revolving Commitment Amount means $140,000,000, as such amount may be
---------------------------
adjusted from time to time pursuant to Section 6.1.
-----------
11
Revolving Loans - see Section 2.1.1.
--------------- -------------
Revolving Note - see Section 3.1.1.
-------------- -------------
Revolving Percentage means, with respect to any Revolving Bank, the
--------------------
percentage which the amount of such Bank's Revolving Commitment is of the
Revolving Commitment Amount (or, after termination of the Revolving Commitments,
which the principal amount of such Bank's Revolving Loans plus such Bank's
participation in all Letters of Credit and Swing Line Loans is of the Total
Revolving Outstandings).
Revolving Termination Date means the earliest to occur of (a) June 30,
--------------------------
2002, or such later date to which the Revolving Termination Date may be extended
at the request of the Company and with the consent of all Revolving Banks, (b)
the Cancellation Date or (c) such other date on which the Revolving Commitments
shall terminate pursuant to Section 6 or 12.
--------- --
SEC means the Securities and Exchange Commission.
---
Security Agreement means the Security Agreement among the Company, various
------------------
Subsidiaries of the Company and the Agent, a copy of which is attached hereto as
Exhibit D, as amended by the Omnibus Amendments.
---------
Senior Funded Debt means all Funded Debt of the Company and its
------------------
Subsidiaries other than Subordinated Debt.
Senior Funded Debt to EBITDA Ratio means, as of the last day of any Fiscal
----------------------------------
Quarter, the ratio of (i) Senior Funded Debt as of the last day of such Fiscal
Quarter to (ii) EBITDA for the Computation Period ending on the last day of such
Fiscal Quarter.
Signing Date means the date on which this Agreement is executed by all of
------------
the initial parties hereto.
Stated Amount means, with respect to any Letter of Credit at any date of
-------------
determination, the maximum aggregate amount available for drawing thereunder at
any time during the then ensuing term of such Letter of Credit under any and all
circumstances, plus the aggregate amount of all unreimbursed payments and
disbursements under such Letter of Credit.
Subordinated Debt means (i) the Charterhouse Subordinated Notes and (ii)
-----------------
any other unsecured indebtedness of the Company which (x) is owed to Persons
other than officers, employees, directors or Affiliates of the Company, (y) has
no amortization prior to the 91st day following the date on which the Term Loans
are scheduled to be paid in full and (z) has subordination terms, covenants,
12
pricing and other terms applicable to such indebtedness which have been approved
in writing by the Required Banks.
Subsidiary means, with respect to any Person, a corporation of which such
----------
Person and/or its other Subsidiaries own, directly or indirectly, such number of
outstanding shares as have more than 50% of the ordinary voting power for the
election of directors. Unless the context otherwise requires, each reference to
Subsidiaries herein shall be a reference to Subsidiaries of the Company.
Subsidiary Pledge Agreement means each pledge agreement substantially in
---------------------------
the form of Exhibit F issued by any Subsidiary, whether pursuant to Section
--------- -------
11.1.7 or Section 10.14.
------ -------------
Supermajority Banks means Banks having Total Percentages aggregating 66-
-------------------
2/3/% or more.
Suretyship Liability means any agreement, undertaking or arrangement by
--------------------
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to or otherwise to invest in a
debtor, or otherwise to assure a creditor against loss) any indebtedness,
obligation or other liability of any other Person (other than by endorsements of
instruments in the course of collection), or guarantees the payment of dividends
or other distributions upon the shares of any other Person. The amount of any
Person's obligation in respect of any Suretyship Liability shall (subject to any
limitation set forth therein) be deemed to be the principal amount of the debt,
obligation or other liability supported thereby.
Swing Line Bank means BofA in its capacity as swing line lender hereunder,
---------------
together with any replacement swing line lender arising under Section 13.9.
------------
Swing Line Loan - see Section 2.4.1.
--------------- -------------
Swing Line Note - see Section 3.1.2.
--------------- -------------
Tangible Assets means at any time all assets of the Company and its
---------------
Subsidiaries excluding (i) amounts in excess of $5,000,000 in the aggregate of
---------
cash and Cash Equivalent Investments, and (ii) all Intangible Assets. For
purposes of the foregoing, "Intangible Assets" means goodwill, patents,
-----------------
tradenames, trademarks, copyrights, franchises, experimental expense,
organization expense, deferred financing costs and any other assets that are
properly classified as intangible assets in accordance with GAAP.
Term Bank means each Bank listed on Schedule 2.1.2 as a "Term Bank" and any
--------- --------------
successor thereof or assignee of all or a portion of such Bank's Term Commitment
or Term Loan.
13
Term Commitment means, with respect to any Term Bank, the commitment of
---------------
such Term Bank to make a Term Loan in the amount set forth opposite such Term
Bank's name on Schedule 2.1.2, as adjusted from time to time by any assignment
--------------
by or to such Term Bank or by the addition of a Term Bank on or before the
Effective Date.
Term Commitment Amount means $75,000,000, as such amount may be adjusted
----------------------
from time to time pursuant to Section 6.1.2.
-------------
Term Loan - see Section 2.1.2.
--------- -------------
Term Note - see Section 3.1.3.
--------- -------------
Term Percentage means, with respect to any Term Bank, the percentage which
---------------
the amount of such Bank's Term Commitment is of the Term Commitment Amount (or,
after the making of the Term Loans, which the principal amount of such Bank's
Term Loan is of the aggregate principal amount of all Term Loans).
Total Percentage means, with respect to any Bank, the percentage which (a)
----------------
the sum of the amount of such Bank's Revolving Commitment (or, after the
termination of the Revolving Commitments, the principal amount of such Bank's
Revolving Loans plus such Bank's participation in all Letters of Credit and
Swing Line Loans) plus the amount of such Bank's Term Commitment (or, after the
making of the Term Loans, the principal amount of such Bank's Term Loan) is of
(b) the sum of the Revolving Commitment Amount (or, after the termination of the
Revolving Commitments, the Total Revolving Outstandings) plus the Term
Commitment Amount (or, after the making of the Term Loans, the aggregate
principal amount of all Term Loans); provided that if and so long as any
--------
Revolving Bank fails to fund its participation in any Letter of Credit when
required by Section 2.3.5 or its participation in any Swing Line Loan when
-------------
required by Section 2.4.3, such Revolving Bank's Total Percentage shall be
-------------
deemed for purposes of the definition of Required Banks and Supermajority Banks
to be reduced by the percentage which the defaulted amount constitutes of such
Revolving Bank's Total Percentage, and the Total Percentage of the applicable
Issuing Bank and/or the Swing Line Bank shall be deemed for purposes of the
definition of Required Banks and Supermajority Banks to be increased by such
percentage.
Total Revolving Outstandings means at any time the aggregate outstanding
----------------------------
principal amount of all Revolving Loans and Swing Line Loans plus the aggregate
Stated Amount of all Letters of Credit.
Type of Loan or Borrowing - see Section 2.2.1. The types of Loans or
------------------------- -------------
borrowings under this Agreement are as follows: Base Rate Loans or borrowings
and Eurodollar Loans or borrowings.
Unmatured Event of Default means any event that, if it continues uncured,
--------------------------
will, with lapse of time or notice or both, constitute an Event of Default.
14
Unused Shares means any Purchased Common Shares which do not become
-------------
Distributed Shares within 180 days after the purchase thereof by the Company.
U.S. and United States means the United States of America.
---- -------------
Waggoners Acquisition means the acquisition by the Company or a Subsidiary
---------------------
of The Waggoners Trucking, a Montana corporation.
Welfare Plan means a "welfare plan", as such term is defined in Section
------------
3(1) of ERISA.
1.2 Other Interpretive Provisions. (a) The meanings of defined terms are
-----------------------------
equally applicable to the singular and plural forms of the defined terms.
(b) Section, Schedule and Exhibit references are to this Agreement
------- -------- -------
unless otherwise specified.
(c) (i) The term "including" is not limiting and means "including
without limitation."
(ii In the computation of periods of time from a specified date
to a later specified date, the word "from" means "from and including"; the
words "to" and "until" each mean "to but excluding", and the word "through"
means "to and including."
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such statute
or regulation.
(e) This Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.
(f) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, the Company,
the Banks and the other parties thereto and are the products of all parties.
Accordingly, they shall not be construed against the Agent or the Banks merely
because of the Agent's or Banks' involvement in their preparation.
15
SECTION 2 COMMITMENTS OF THE BANKS; LETTER OF CREDIT, BORROWING,
CONVERSION AND CONTINUATION PROCEDURES; SWING LINE LOANS.
2.1 Commitments. On and subject to the terms and conditions of this
-----------
Agreement, each of the Banks, severally and for itself alone, agrees to make
loans to, and to issue or participate in the issuance of letters of credit for
the account of, the Company as follows:
2.1.1 Revolving Commitments. Each Revolving Bank agrees to make loans on
---------------------
a revolving basis ("Revolving Loans") from time to time during the period from
---------------
the Effective Date to the Revolving Termination Date in such Revolving Bank's
Revolving Percentage of such aggregate amounts as the Company may from time to
time request from all Revolving Banks; provided that the Total Revolving
--------
Outstandings shall not at any time exceed the Revolving Commitment Amount.
2.1.2 Term Loan Commitments. Each Term Bank agrees to make a loan to the
---------------------
Company (each such loan, a "Term Loan") on the Effective Date in such Term
---------
Bank's Term Percentage of the Term Commitment Amount. The Term Commitments
shall expire concurrently with the making of the Term Loans on the Effective
Date.
2.1.3 L/C Commitment. (a) The Issuing Banks will issue standby letters
--------------
of credit, in each case containing such terms and conditions as are permitted by
this Agreement and are reasonably satisfactory to the applicable Issuing Bank
(each, a "Letter of Credit" and, together with the Existing Letters of Credit,
----------------
the "Letters of Credit"), at the request of and for the account of the Company
-----------------
(or jointly for the account of the Company and any other Person) from time to
time before the date which is 30 days prior to the scheduled Revolving
Termination Date and (b) as more fully set forth in Section 2.3.5, each
-------------
Revolving Bank agrees to purchase a participation in each such Letter of Credit;
provided that the aggregate Stated Amount of all Letters of Credit shall not at
--------
any time exceed the lesser of (i) $5,000,000 and (ii) the excess, if any, of the
Revolving Commitment Amount over the sum of the aggregate principal amount of
all outstanding Revolving Loans and Swing Line Loans.
2.2 Loan Procedures.
---------------
2.2.1 Various Types of Loans. Each Revolving Loan shall be, and each Term
----------------------
Loan may be divided into tranches which are, either a Base Rate Loan or a
Eurodollar Loan (each a "type" of Loan), as the Company shall specify in the
----
related notice of borrowing or conversion pursuant to Section 2.2.2 or 2.2.3.
------------- -----
Eurodollar Loans having the same Interest Period are sometimes called a "Group"
-----
or collectively "Groups". Base Rate Loans and Eurodollar Loans may be
------
outstanding at the same time; provided that (i) not more than seven different
--------
Groups of Revolving Loans shall be outstanding at any one time, (ii) not more
than five different Groups of Term Loans shall be outstanding at any one time
and (iii) the aggregate principal amount of each Group of Eurodollar Loans shall
at all times be at least $1,000,000 and an integral multiple of $100,000
(provided that after the payment of the initial installment of principal of the
Term Loans, the Company may maintain one Group of Term Loans which is not an
integral multiple of $100,000). All borrowings, conversions and repayments of
Loans shall be effected so that each Revolving Bank will have a pro rata share
(according to its Revolving Percentage)
16
of all types and Groups of Revolving Loans and each Term Bank will have a pro
rata share (according to its Term Percentage) of all types and Groups of Term
Loans.
2.2.2 Borrowing Procedures. The Company shall give written notice pursuant
--------------------
to a Notice of Borrowing or telephonic notice (followed immediately by written
confirmation thereof pursuant to a Notice of Borrowing) to the Agent of each
proposed borrowing not later than (a) in the case of a Base Rate borrowing,
10:00 A.M., Chicago time, on the proposed date of such borrowing, and (b) in the
case of a Eurodollar borrowing, 10:00 A.M., Chicago time, at least three
Business Days prior to the proposed date of such borrowing. Each such notice
shall be effective upon receipt by the Agent, shall be irrevocable, and shall
specify the date, amount and type of borrowing and, in the case of a Eurodollar
borrowing, the initial Interest Period therefor. Promptly upon receipt of such
notice, the Agent shall advise each applicable Bank thereof. Not later than
1:00 p.m., Chicago time, on the date of a proposed borrowing, each applicable
Bank shall provide the Agent at the office specified by the Agent with
immediately available funds covering such Bank's Revolving Percentage or Term
Percentage, as applicable, of such borrowing and, so long as the Agent has not
received written notice that the conditions precedent set forth in Section 11
----------
with respect to such borrowing have not been satisfied (and does not have
knowledge of any default in the payment of any principal, interest or fees to be
paid to the Agent for the account of any Bank), the Agent shall pay over the
requested amount to the Company on the requested borrowing date. Each borrowing
shall be on a Business Day. Each Base Rate borrowing shall be in an aggregate
amount of at least $1,000,000 and an integral multiple of $100,000.
2.2.3 Conversion and Continuation Procedures. (a) Subject to Section 2.2.1,
-------------------------------------- -------------
the Company may, upon irrevocable written notice to the Agent in accordance with
clause (b) below:
----------
(i) elect, as of any Business Day, to convert any Loans (or any
part thereof in an aggregate amount not less than $1,000,000 or a
higher integral multiple of $100,000) into Loans of the other Type; or
(ii) elect, as of the last day of the applicable Interest
Period, to continue any Eurodollar Loans having Interest Periods
expiring on such day (or any part thereof in an aggregate amount not
less than $1,000,000 or a higher integral multiple of $100,000) for a
new Interest Period.
(b) The Company shall give written notice pursuant to a Notice of
Conversion/Continuation or telephonic notice (followed immediately by written
confirmation thereof pursuant to a Notice of Conversion/Continuation) to the
Agent of each proposed conversion or continuation not later than (i) in the case
of conversion into Base Rate Loans, 10:00 A.M., Chicago time, on the proposed
date of such conversion; and (ii) in the case of conversion into or continuation
of Eurodollar Loans, 10:00 A.M., Chicago time, at least three Business Days
prior to the proposed date of such conversion or continuation, specifying in
each case:
17
(i) the proposed date of conversion or continuation;
(ii) the aggregate amount of Loans to be converted or continued;
(iii) the Type of Loans resulting from the proposed conversion or
continuation;
(iv) whether the Loans to be converted or continued are
Revolving Loans or Term Loans; and
(v) in the case of conversion into, or continuation of,
Eurodollar Loans, the duration of the requested Interest Period
therefor.
(c) If upon the expiration of any Interest Period applicable to a
Group of Eurodollar Loans, the Company has failed to select timely a new
Interest Period to be applicable to such Eurodollar Loans, the Company shall be
deemed to have elected to convert such Eurodollar Loans into Base Rate Loans
effective on the last day of such Interest Period.
(d) The Agent will promptly notify each applicable Bank of its
receipt of a notice of conversion or continuation pursuant to this Section 2.2.3
-------------
or, if no timely notice is provided by the Company, of the details of any
automatic conversion.
(e) Any conversion of a Eurodollar Loan on a day other than the last
day of an Interest Period therefor shall be subject to Section 8.4.
-----------
2.3 Letter of Credit Procedures.
---------------------------
2.3.1 L/C Applications. The Company shall give notice to the Agent and the
----------------
applicable Issuing Bank of the proposed issuance of each Letter of Credit on a
Business Day which is at least three Business Days (or such lesser number of
days as the Agent and such Issuing Bank shall agree in any particular instance)
prior to the proposed date of issuance of such Letter of Credit. Each such
notice shall be accompanied by an L/C Application, duly executed by the Company
(together with any Subsidiary for the account of which the related Letter of
Credit is to be issued) and in all respects satisfactory to the Agent and the
applicable Issuing Bank, together with such other documentation as the Agent or
such Issuing Bank may request in support thereof, it being understood that each
L/C Application shall specify, among other things, the date on which the
proposed Letter of Credit is to be issued, the expiration date of such Letter of
Credit (which shall not be later than the scheduled Revolving Termination Date)
and whether such Letter of Credit is to be transferable in whole or in part. So
long as the applicable Issuing Bank has not received written notice that the
conditions precedent set forth in Section 11 with respect to the issuance of
----------
such Letter of Credit have not been satisfied, such Issuing Bank shall issue
such Letter of Credit on the requested issuance date. Each Issuing Bank shall
promptly advise the Agent of the issuance of each Letter of Credit by such
Issuing Bank and of any
18
amendment thereto, extension thereof or event or circumstance changing the
amount available for drawing thereunder.
2.3.2 Participation in Letters of Credit. Concurrently with the issuance of
----------------------------------
each Letter of Credit (and with respect to each Existing Letter of Credit, on
the Effective Date), the applicable Issuing Bank shall be deemed to have sold
and transferred to each other Revolving Bank, and each other Revolving Bank
shall be deemed irrevocably and unconditionally to have purchased and received
from such Issuing Bank, without recourse or warranty, an undivided interest and
participation, to the extent of such other Revolving Bank's Revolving
Percentage, in such Letter of Credit and the Company's reimbursement obligations
with respect thereto. For the purposes of this Agreement, the unparticipated
portion of each Letter of Credit shall be deemed to be the applicable Issuing
Bank's "participation" therein. Each Issuing Bank hereby agrees, upon request
of the Agent or any Revolving Bank, to deliver to such Revolving Bank a list of
all outstanding Letters of Credit issued by such Issuing Bank, together with
such information related thereto as such Revolving Bank may reasonably request.
2.3.3 Reimbursement Obligations. The Company hereby unconditionally and
-------------------------
irrevocably agrees to reimburse the applicable Issuing Bank for each payment or
disbursement made by such Issuing Bank under any Letter of Credit honoring any
demand for payment made by the beneficiary thereunder, in each case on the date
that such payment or disbursement is made. Any amount not reimbursed on the
date of such payment or disbursement shall bear interest from the date of such
payment or disbursement to the date that such Issuing Bank is reimbursed by the
Company therefor, payable on demand, at a rate per annum equal to the Base Rate
from time to time in effect plus the Base Rate Margin from time to time in
----
effect plus, beginning on the three Business Day after receipt of notice from
----
the Issuing Bank of such payment or disbursement, 2%. The applicable Issuing
Bank shall notify the Company and the Agent whenever any demand for payment is
made under any Letter of Credit by the beneficiary thereunder; provided,
--------
however, that the failure of such Issuing Bank to so notify the Company shall
-------
not affect the rights of such Issuing Bank or the Banks in any manner
whatsoever.
2.3.4 Limitation on Obligations of Issuing Banks. In determining whether to
------------------------------------------
pay under any Letter of Credit, no Issuing Bank shall have any obligation to the
Company or any Bank other than to confirm that any documents required to be
delivered under such Letter of Credit appear to have been delivered and appear
to comply on their face with the requirements of such Letter of Credit. Any
action taken or omitted to be taken by an Issuing Bank under or in connection
with any Letter of Credit, if taken or omitted in the absence of gross
negligence and willful misconduct, shall not impose upon such Issuing Bank any
liability to the Company or any Bank and shall not reduce or impair the
Company's reimbursement obligations set forth in Section 2.3.3 or the
-------------
obligations of the Revolving Banks pursuant to Section 2.3.5.
-------------
2.3.5 Funding by Revolving Banks to Issuing Banks. If an Issuing Bank makes
-------------------------------------------
any payment or disbursement under any Letter of Credit and the Company has not
reimbursed such Issuing Bank in
19
full for such payment or disbursement by 11:00 A.M., Chicago time, on the date
of such payment or disbursement, or if any reimbursement received by such
Issuing Bank from the Company is or must be returned or rescinded upon or during
any bankruptcy or reorganization of the Company or otherwise, each other
Revolving Bank shall be obligated to pay to the Agent for the account of such
Issuing Bank, in full or partial payment of the purchase price of its
participation in such Letter of Credit, its pro rata share (according to its
Revolving Percentage) of such payment or disbursement (but no such payment shall
diminish the obligations of the Company under Section 2.3.3), and upon notice
-------------
from the applicable Issuing Bank, the Agent shall promptly notify each other
Revolving Bank thereof. Each other Revolving Bank irrevocably and
unconditionally agrees to so pay to the Agent in immediately available funds for
the applicable Issuing Bank's account the amount of such other Revolving Bank's
Revolving Percentage of such payment or disbursement. If and to the extent any
Revolving Bank shall not have made such amount available to the Agent by 2:00
P.M., Chicago time, on the Business Day on which such Revolving Bank receives
notice from the Agent of such payment or disbursement (it being understood that
any such notice received after noon, Chicago time, on any Business Day shall be
deemed to have been received on the next following Business Day), such Revolving
Bank agrees to pay interest on such amount to the Agent for the applicable
Issuing Bank's account forthwith on demand for each day from the date such
amount was to have been delivered to the Agent to the date such amount is paid,
at a rate per annum equal to (a) for the first three days after demand, the
Federal Funds Rate from time to time in effect and (b) thereafter, the Base Rate
from time to time in effect. Any Revolving Bank's failure to make available to
the Agent its Revolving Percentage of any such payment or disbursement shall not
relieve any other Revolving Bank of its obligation hereunder to make available
to the Agent such other Revolving Bank's Revolving Percentage of such payment,
but no Revolving Bank shall be responsible for the failure of any other
Revolving Bank to make available to the Agent such other Revolving Bank's
Revolving Percentage of any such payment or disbursement.
2.4 Swing Line Loans.
----------------
2.4.1 Swing Line Loans. Subject to the terms and conditions of this
----------------
Agreement, the Swing Line Bank may from time to time, in its discretion, make
loans to the Company (collectively the "Swing Line Loans" and individually each
----------------
a "Swing Line Loan") in accordance with this Section 2.4 in an aggregate amount
--------------- -----------
not at any time exceeding $10,000,000; provided that the aggregate outstanding
--------
principal amount of all Revolving Loans and Swing Line Loans plus the aggregate
Stated Amount of all Letters of Credit shall not at any time exceed the
Revolving Commitment Amount. Amounts borrowed under this Section 2.4 may be
-----------
borrowed, repaid and (subject to the agreement of the Swing Line Bank)
reborrowed until the Revolving Termination Date.
2.4.2 Swing Line Loan Procedures. The Company shall give written or
--------------------------
telephonic notice to the Agent (which shall promptly inform the Swing Line Bank)
of each proposed Swing Line Loan not later than 12:00 noon, Chicago time, on the
proposed date of such Swing Line Loan. Each such notice shall be effective upon
receipt by the Agent and shall specify the date and amount of such Swing Line
Loan, which shall be not less than $100,000 or a higher integral multiple
thereof. So long as the Swing
20
Line Bank has not received written notice that the conditions precedent set
forth in Section 11 with respect to the making of such Swing Line Loan have not
----------
been satisfied, the Swing Line Bank may make the requested Swing Line Loan. If
the Swing Line Bank agrees to make the requested Swing Line Loan, the Swing Line
Bank shall pay over the requested amount to the Company on the requested
borrowing date. Concurrently with the making of any Swing Line Loan, the Swing
Line Bank shall be deemed to have sold and transferred to each other Revolving
Bank, and each other Revolving Bank shall be deemed to have purchased and
received from the Swing Line Bank, an undivided interest and participation to
the extent of such other Revolving Bank's Revolving Percentage in such Swing
Line Loan (but such participation shall remain unfunded until required to be
funded pursuant to Section 2.4.3).
-------------
2.4.3 Refunding of, or Funding of Participations in, Swing Line Loans. The
---------------------------------------------------------------
Swing Line Bank may at any time, in its sole discretion, on behalf of the
Company (which hereby irrevocably authorizes the Swing Line Bank to act on its
behalf) deliver a notice to the Agent requesting that each Revolving Bank
(including the Swing Line Bank in its individual capacity) make a Revolving Loan
(which shall be a Base Rate Loan) in such Revolving Bank's Revolving Percentage
of the aggregate amount of Swing Line Loans outstanding on such date for the
purpose of repaying all Swing Line Loans (and, upon receipt of the proceeds of
such Revolving Loans, the Agent shall apply such proceeds to repay Swing Line
Loans); provided that if the conditions precedent to a borrowing of Revolving
--------
Loans are not then satisfied or for any other reason the Revolving Banks may not
then make Revolving Loans, then instead of making Revolving Loans each Revolving
Bank (other than the Swing Line Bank) shall become immediately obligated to fund
its participation in all outstanding Swing Line Loans and shall pay to the Agent
for the account of the Swing Line Bank an amount equal to such Revolving Bank's
Revolving Percentage of such Swing Line Loans. If and to the extent any
Revolving Bank shall not have made such amount available to the Agent by 2:00
P.M., Chicago time, on the Business Day on which such Revolving Bank receives
notice from the Agent of its obligation to fund its participation in Swing Line
Loans (it being understood that any such notice received after 12:00 noon,
Chicago time, on any Business Day shall be deemed to have been received on the
next following Business Day), such Revolving Bank agrees to pay interest on such
amount to the Agent for the Swing Line Bank's account forthwith on demand for
each day from the date such amount was to have been delivered to the Agent to
the date such amount is paid, at a rate per annum equal to (a) for the first
three days after demand, the Federal Funds Rate from time to time in effect and
(b) thereafter, the Base Rate from time to time in effect. Any Revolving Bank's
failure to make available to the Agent its Revolving Percentage of the amount of
all outstanding Swing Line Loans shall not relieve any other Revolving Bank of
its obligation hereunder to make available to the Agent such other Revolving
Bank's Revolving Percentage of such amount, but no Revolving Bank shall be
responsible for the failure of any other Revolving Bank to make available to the
Agent such other Revolving Bank's Revolving Percentage of any such amount.
2.4.4 Repayment of Participations. Upon (and only upon) receipt by the
---------------------------
Agent for the account of the Swing Line Bank of immediately available funds from
or on behalf of the Company (a) in reimbursement of any Swing Line Loan with
respect to which a Revolving Bank has paid the Agent for
21
the account of the Swing Line Bank the amount of such Revolving Bank's
participation therein or (b) in payment of any interest on a Swing Line Loan,
the Agent will pay to such Revolving Bank its pro rata share (according to its
Revolving Percentage) thereof (and the Swing Line Bank shall receive the amount
otherwise payable to any Revolving Bank which did not so pay the Agent the
amount of such Revolving Bank's participation in such Swing Line Loan).
2.4.5 Participation Obligations Unconditional. (a) Each Revolving Bank's
---------------------------------------
obligation to make available to the Agent for the account of the Swing Line Bank
the amount of its participation interest in all Swing Line Loans as provided in
Section 2.4.3 shall be absolute and unconditional and shall not be affected by
-------------
any circumstance, including (i) any set-off, counterclaim, recoupment, defense
or other right which such Revolving Bank may have against the Swing Line Bank or
any other Person, (ii) the occurrence or continuance of an Event of Default or
Unmatured Event of Default, (iii) any adverse change in the condition (financial
or otherwise) of the Company or any Subsidiary, (iv) any termination of the
Revolving Commitments or (v) any other circumstance, happening or event
whatsoever.
(b) Notwithstanding the provisions of clause (a) above, no Revolving
----------
Bank shall be required to purchase a participation interest in any Swing Line
Loan if, prior to the making by the Swing Line Bank of such Swing Line Loan, the
Swing Line Bank received written notice specifying that one or more of the
conditions precedent to the making of such Swing Line Loan were not satisfied
and, in fact, such conditions precedent were not satisfied at the time of the
making of such Swing Line Loan.
2.5 Commitments Several. The failure of any Bank to make a requested Loan
-------------------
on any date shall not relieve any other Bank of its obligation (if any) to make
a Loan on such date, but no Bank shall be responsible for the failure of any
other Bank to make any Loan to be made by such other Bank.
2.6 Certain Conditions. Notwithstanding any other provision of this
------------------
Agreement, no Bank shall have an obligation to make any Loan, or to permit the
continuation of or any conversion into any Eurodollar Loan, and no Issuing Bank
shall have any obligation to issue any Letter of Credit, if an Event of Default
or Unmatured Event of Default exists.
SECTION 3 NOTES EVIDENCING LOANS.
3.1 Notes.
-----
3.1.1 Revolving Notes. The Revolving Loans of each Revolving Bank shall be
---------------
evidenced by a promissory note (each a "Revolving Note") substantially in the
--------------
form set forth in Exhibit A-1, with appropriate insertions, payable to the order
-----------
of such Revolving Bank in an amount equal to such Revolving Bank's Revolving
Percentage of the Revolving Commitment Amount or, if less, in the aggregate
unpaid principal amount of such Bank's Revolving Loans.
22
3.1.2 Swing Line Note. The Swing Line Loans of the Swing Line Bank shall be
---------------
evidenced by a promissory note (the "Swing Line Note") substantially in the form
---------------
set forth in Exhibit A-2, with appropriate insertions, payable to the order of
-----------
the Swing Line Bank in an amount equal to $10,000,000 or, if less, in the
aggregate unpaid principal amount of the Swing Line Loans.
3.1.3 Term Notes. The Term Loan of such Term Bank shall be evidenced by a
----------
promissory note (each a "Term Note") substantially in the form set forth in
---------
Exhibit A-3, with appropriate insertions, payable to the order of such Term Bank
-----------
in principal installments equal to such Bank's Term Percentage of the aggregate
principal amount of the installments of the Term Loans as set forth on Schedule
--------
3.1.3.
-----
3.2 Recordkeeping. Each Bank shall record in its records, or at its
-------------
option in the case of a Revolving Bank and the Swing Line Bank, on the schedule
attached to its Revolving Note or Swing Line Note, the date and amount of each
applicable Loan made by such Bank, each repayment or conversion thereof and, in
the case of each applicable Eurodollar Loan, the dates on which each Interest
Period for such Loan shall begin and end. The aggregate unpaid principal amount
so recorded shall be rebuttable presumptive evidence of the principal amount
owing and unpaid on the applicable Note. The failure to so record any such
amount or any error in so recording any such amount shall not, however, limit or
otherwise affect the obligations of the Company hereunder or under any Note to
repay the principal amount of the Loans evidenced by such Note together with all
interest accruing thereon.
SECTION 4 INTEREST.
4.1 Interest Rates. The Company promises to pay interest on the unpaid
--------------
principal amount of each Loan for the period commencing on the date of such Loan
until such Loan is paid in full as follows:
(a) in the case of any Revolving Loan, (i) at all times such Loan is a
Base Rate Loan, at a rate per annum equal to the sum of the Base Rate from
time to time in effect plus the Base Rate Margin from time to time in
effect; and (ii) at all times such Loan is a Eurodollar Loan, at a rate per
annum equal to the sum of the Eurodollar Rate (Reserve Adjusted) applicable
to each Interest Period for such Loan plus the Eurodollar Margin from time
to time in effect;
(b) in the case of any Term Loan, (i) at all times such Loan is a Base
Rate Loan, at a rate per annum equal to the sum of the Base Rate from time
to time in effect plus 1%; and (ii) at all times such Loan is a Eurodollar
Loan, at a rate per annum equal to the sum of the Eurodollar Rate (Reserve
Adjusted) applicable to each Interest Period for such Loan plus 3.5%; and
23
(c) in the case of a Swing Line Loan, at a rate per annum separately
agreed to by the Company and the Swing Line Bank from time to time
(provided that if at any time the Revolving Banks are obligated to fund
participations in Swing Line Loans pursuant to Section 2.4.3, all of such
-------------
Swing Line Loans shall bear interest, from the date the obligation to fund
such participations first arises to the date such Swing Line Loans are paid
in full, at a rate per annum equal to the sum of the Base Rate from time to
time in effect plus the Base Rate Margin from time to time in effect);
provided, however, that at any time an Event of Default exists, the per annum
-------- -------
interest rate applicable to each Loan shall be increased by 2% (200 basis points
per annum).
4.2 Interest Payment Dates. Accrued interest on each Base Rate Loan and
----------------------
Swing Line Loan shall be payable in arrears on the last Business Day of each
calendar month and at maturity. Accrued interest on each Eurodollar Loan shall
be payable on the last day of each Interest Period relating to such Loan (and,
in the case of a Eurodollar Loan with a six-month Interest Period, on the three-
month anniversary of the first day of such Interest Period) and at maturity.
After maturity, accrued interest on all Loans shall be payable on demand.
4.3 Setting and Notice of IBOR Rates. The applicable IBOR Rate for each
--------------------------------
Interest Period shall be determined by the Agent, and notice thereof shall be
given by the Agent promptly to the Company and each applicable Bank. Each
determination of the applicable IBOR Rate by the Agent shall be conclusive and
binding upon the parties hereto, in the absence of demonstrable error. The
Agent shall, upon written request of the Company or any applicable Bank, deliver
to the Company or such Bank a statement showing the computations used by the
Agent in determining any applicable IBOR Rate hereunder.
4.4 Computation of Interest. All determinations of interest for Base Rate
-----------------------
Loans and Swing Line Loans when the Base Rate is determined by the Reference
Rate shall be made on the basis of a year of 365 or 366 days, as the case may
be, and the actual number of days elapsed. All other computations of interest
shall be computed for the actual number of days elapsed on the basis of a year
of 360 days. The applicable interest rate for each Base Rate Loan (and each
Swing Line Loan, if applicable) shall change simultaneously with each change in
the Base Rate.
SECTION 5 FEES.
5.1 Non-Use Fee. The Company agrees to pay to the Agent for the account
-----------
of each Revolving Bank a non-use fee, for the period from the Effective Date to
the Revolving Termination Date, at the rate per annum in effect from time to
time pursuant to Schedule 1.1 of the daily average of the unused amount of such
------------
Revolving Bank's Revolving Percentage of the Revolving Commitment Amount. For
purposes of calculating usage under this Section, the Revolving Commitment
Amount shall be deemed used to the extent of the aggregate principal amount of
all outstanding Revolving Loans
24
plus the undrawn amount of all Letters of Credit. Such non-use fee shall be
payable in arrears on the last Business Day of each calendar quarter and on the
Revolving Termination Date for any period then ending for which such non-use fee
shall not have theretofore been paid. The non-use fee shall be computed for the
actual number of days elapsed on the basis of a year of 360 days.
5.2 Letter of Credit Fees. (a) The Company agrees to pay to the Agent
---------------------
for the account of the Revolving Banks pro rata according to their respective
Revolving Percentages a letter of credit fee for each Letter of Credit in an
amount equal to the rate per annum in effect from time to time pursuant to
Schedule 1.1 of the undrawn amount of such Letter of Credit (computed for the
------------
actual number of days elapsed on the basis of a year of 360 days); provided that
--------
the rate applicable to each Letter of Credit shall be increased by 2% (200 basis
points per annum) at any time that an Event of Default exists. Such letter of
credit fee shall be payable in arrears on the last Business Day of each calendar
quarter and on the Revolving Termination Date (or such later date on which such
Letter of Credit expires or is terminated) for the period from the date of the
issuance of each Letter of Credit to the date such payment is due (or, if
earlier, the date on which such Letter of Credit expired or was terminated).
(b) In addition, with respect to each Letter of Credit, the Company agrees
to pay to the applicable Issuing Bank, for its own account, (i) such fees and
expenses as such Issuing Bank customarily requires in connection with the
issuance, negotiation, processing and/or administration of letters of credit in
similar situations and (ii) a letter of credit fee in the amount separately
agreed to by the Company and such Issuing Bank.
5.3 Ticking Fee. The Company agrees to pay to the Agent for the account
-----------
of each Bank a ticking fee equal to the Specified Percentage (as defined below)
of such Bank's New Commitment (as defined below) during the period (if any) from
the 30th day after the Signing Date to the earlier of the Effective Date and the
Cancellation Date. Such ticking fee shall be payable in arrears on the earlier
of the Effective Date and the Cancellation Date (and, if neither of such dates
has previously occurred, such fee also shall be payable on the 60th day after
the Signing Date).
For purposes of this Section 5.3, "Specified Percentage" means 0.25% during
----------- --------------------
the period from the 30th day after the Signing Date to the date which is 60 days
after the Signing Date and 0.5% thereafter; and "New Commitment" means, with
--------------
respect to any Bank, the excess (if any) of the amount of such Bank's Commitment
hereunder over the amount (if any) of such Bank's "Commitment" under the
Existing Agreement.
5.4 Arrangement and Agent's Fees. The Company agrees to pay to the
----------------------------
Arranger and the Agent such arrangement and agent's fees as are mutually agreed
to from time to time by the Company, the Arranger and the Agent.
5.5 Closing and Cancellation Fees. On the Effective Date, the Company
-----------------------------
shall pay to the Agent for the account of each Bank a closing fee in the amount
previously agreed with such Bank. If
25
the Effective Date does not occur, then on the Cancellation Date the Company
shall pay to the Agent for the account of each Bank a cancellation fee equal to
50% of the amount that would have been payable to such Bank as a closing fee if
the Effective Date had occurred.
SECTION 6 INCREASE, REDUCTION OR TERMINATION OF THE COMMITMENTS;
PREPAYMENTS.
6.1 Changes in Commitment Amounts.
-----------------------------
6.1.1 Reduction or Termination of the Commitments. (a) The Company may from
-------------------------------------------
time to time on at least five Business Days' prior written notice received by
the Agent (which shall promptly advise each Revolving Bank thereof) permanently
reduce the Revolving Commitment Amount to an amount not less than the Total
Revolving Outstandings. Any such reduction shall be in an amount not less than
$5,000,000 or a higher integral multiple of $1,000,000. The Company may at any
time on like notice terminate the Revolving Commitments upon payment in full of
all Revolving Loans and Swing Line Loans and all other obligations of the
Company hereunder payable to the Revolving Lenders or the Swing Line Lender and
cash collateralization in full, pursuant to documentation in form and substance
reasonably satisfactory to the Issuing Banks, of all obligations arising with
respect to the Letters of Credit. All reductions of the Revolving Commitment
Amount shall reduce the Revolving Commitments pro rata among the Revolving Banks
according to their respective Revolving Percentages.
(b) The Company may, at any time prior to the Effective Date, on at least
five Business Days' prior written notice received by the Agent (which shall
promptly advise each Term Bank thereof) terminate the Term Commitments.
6.1.2 Optional Increase in Revolving Commitment Amount. The Company may,
------------------------------------------------
from time to time on or prior to the Effective Date, by means of a letter to the
Agent substantially in the form of Exhibit K, request that the Term Commitment
---------
Amount be increased by adding one or more commercial banks or other Persons as
Term Banks hereunder with a Term Commitment in an amount agreed to by any such
commercial bank or other Person; provided that (i) no commercial bank or other
--------
Person shall be added as a Term Bank without the written consent of the Agent
(which shall not be unreasonably withheld) and (ii) in no event shall the Term
Commitment Amount exceed $80,000,000 without the written consent of all Banks.
Any increase in the Term Commitment Amount pursuant to this Section 6.1.2 shall
-------------
be effective three Business Days after the date on which the Agent has received
and accepted an assumption letter in the form of Annex 1 to Exhibit K. The
---------
Agent shall promptly notify the Company and the Banks of any increase in the
Term Commitment Amount pursuant to this Section 6.1.2 and of the Term Commitment
-------------
and Term Percentage of each Term Bank after giving effect thereto.
26
6.2 Voluntary Prepayments. The Company may from time to time prepay Loans
---------------------
in whole or in part, provided that (a) the Company shall give the Agent (which
--------
shall promptly advise each applicable Bank) notice thereof not later than 10:00
A.M. (Chicago time) on the day of such prepayment (which shall be a Business
Day) specifying the Loans to be prepaid and the date and amount of prepayment,
(b) each partial prepayment shall be in a principal amount of at least $500,000
and an integral multiple of $100,000 (or, in the case of a prepayment of Term
Loans, such other amount in excess of $500,000 as will cause the aggregate
principal amount of all outstanding Term Loans to be an integral multiple of
$100,000), or such lesser amount as may be necessary to prepay in full all
outstanding Revolving Loans or Term Loans, as the case may be, (c) any
prepayment of a Eurodollar Loan on a day other than the last day of an Interest
Period therefor shall be subject to Section 8.4, (d) if any prepayment shall
-----------
result in the aggregate principal amount of a Group of Eurodollar Loans being
less than $1,000,000, such Eurodollar Loans shall be automatically converted
into Base Rate Loans and (e) any prepayment of Term Loans shall be applied to
the unpaid installments thereof in the inverse order of the maturity of such
installments.
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.
7.1 Making of Payments. All payments of principal of or interest on the
------------------
Notes, and of all fees, shall be made by the Company to the Agent in immediately
available funds at the office specified by the Agent not later than noon,
Chicago time, on the date due; and funds received after that hour shall be
deemed to have been received by the Agent on the next following Business Day.
The Agent shall promptly remit to each Bank its share of all such payments
received in collected funds by the Agent for the account of such Bank. All
payments under Section 8.1 shall be made by the Company directly to the Bank
-----------
entitled thereto.
7.2 Application of Certain Payments. Each payment of principal shall be
-------------------------------
applied to such Loans as the Company shall direct by notice to be received by
the Agent on or before the date of such payment or, in the absence of such
notice, as the Agent shall determine in its discretion. Concurrently with each
remittance to any Bank of its share of any such payment, the Agent shall advise
such Bank as to the application of such payment.
7.3 Due Date Extension. If any payment of principal or interest with
------------------
respect to any of the Notes, or of fees, falls due on a day which is not a
Business Day, then such due date shall be extended to the immediately following
Business Day (unless, in the case of a Eurodollar Loan, such immediately
following Business Day is the first Business Day of a calendar month, in which
case such date shall be the immediately preceding Business Day) and, in the case
of principal, additional interest shall accrue and be payable for the period of
any such extension.
7.4 Setoff. The Company agrees that the Agent and each Bank have all
------
rights of set-off and bankers' lien provided by applicable law, and in addition
thereto, the Company agrees that at any time any Event of Default exists, the
Agent and each Bank may apply to the payment of any obligations
27
of the Company hereunder any and all balances, credits, deposits, accounts or
moneys of the Company then or thereafter with the Agent or such Bank.
7.5 Sharing of Payments, Etc. If, other than as expressly provided
------------------------
elsewhere herein, any Bank shall obtain on account of the Loans made by it or
its participations in Swing Line Loans or Letters of Credit any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) in excess of its ratable share of such payment (determined in
accordance with the provisions of this Agreement), such Bank shall immediately
(a) notify the Agent of such fact and (b) purchase from the other Banks such
participations in the Loans made by such other Banks (and/or the participations
in Swing Line Loans or Letters of Credit held by such other Banks) as shall be
necessary to cause such purchasing Bank to share the excess payment pro rata
--- ----
with each other Bank; provided that if all or any portion of such excess payment
--------
is thereafter recovered from the purchasing Bank, such purchase shall (to the
extent so recovered) be rescinded and each other Bank shall repay to the
purchasing Bank the purchase price paid therefor, together with an amount equal
to such paying Bank's ratable share (according to the proportion of (i) the
amount of such paying Bank's required repayment to the purchasing Bank to (ii)
the total amount so recovered from the purchasing Bank) of any interest or other
amount paid or payable by the purchasing Bank in respect of the total amount so
recovered.
7.6 Taxes. All payments of principal of, and interest on, the Loans and
-----
all other amounts payable hereunder shall be made free and clear of and without
deduction for any present or future income, excise, stamp or franchise taxes and
other taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing authority, but excluding franchise taxes and
taxes imposed on or measured by any Bank's net income or receipts (all non-
excluded items being called "Taxes"). If any withholding or deduction from any
-----
payment to be made by the Company hereunder is required in respect of any Taxes
pursuant to any applicable law, rule or regulation, then the Company will:
(a) pay directly to the relevant authority the full amount required
to be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and
(c) pay to the Agent for the account of the Banks such additional
amount or amounts as is necessary to ensure that the net amount actually
received by each Bank will equal the full amount such Bank would have
received had no such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against the Agent or any Bank with
respect to any payment received by the Agent or such Bank hereunder, the Agent
or such Bank may pay such Taxes and the Company will promptly pay such
additional amounts (including any penalty, interest and expense)
28
as is necessary in order that the net amount received by such Person after the
payment of such Taxes (including any Taxes on such additional amount) shall
equal the amount such Person would have received had such Taxes not been
asserted.
If the Company fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the Agent, for the account of the respective
Banks, the required receipts or other required documentary evidence, the Company
shall indemnify the Banks for any incremental Taxes, interest or penalties that
may become payable by any Bank as a result of any such failure. For purposes of
this Section 7.6, a distribution hereunder by the Agent or any Bank to or for
-----------
the account of any Bank shall be deemed a payment by the Company.
Upon the request from time to time of the Company or the Agent, each Bank
that is organized under the laws of a jurisdiction other than the United States
shall execute and deliver to the Company and the Agent one or more (as the
Company or the Agent may reasonably request) United States Internal Revenue
Service Forms 4224 or Forms 1001 or such other forms or documents, appropriately
completed, as may be applicable to establish the extent, if any, to which a
payment to such Bank is exempt from withholding or deduction of Taxes.
The obligations of the Company under this Section 7.6 are subject to the
-----------
limitation set out in Section 14.9.1.
--------------
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR LOANS.
8.1 Increased Costs. (a) If, after the date hereof, the adoption of any
---------------
applicable law, rule or regulation, 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 Bank (or any Eurodollar Office of such Bank) with
any request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency
(A) shall subject any Bank (or any Eurodollar Office of such Bank) to
any tax, duty or other charge with respect to its Eurodollar Loans, its
Note or its obligation to make Eurodollar Loans, or shall change the basis
of taxation of payments to any Bank of the principal of or interest on its
Eurodollar Loans or any other amounts due under this Agreement in respect
of its Eurodollar Loans or its obligation to make Eurodollar Loans (except
for changes in the rate of tax on the overall net income of such Bank or
its Eurodollar Office imposed by the jurisdiction in which such Bank's
principal executive office or Eurodollar Office is located); or
(B) shall impose, modify or deem applicable any reserve (including any
reserve imposed by the FRB, but excluding any reserve included in the
29
determination of interest rates pursuant to Section 4), special deposit or
---------
similar requirement against assets of, deposits with or for the account of,
or credit extended by any Bank (or any Eurodollar Office of such Bank); or
(C) shall impose on any Bank (or its Eurodollar Office) any other
condition affecting its Eurodollar Loans, its Note or its obligation to
make Eurodollar Loans;
and the result of any of the foregoing is to increase the cost to (or in the
case of Regulation D of the FRB, to impose a cost on) such Bank (or any
Eurodollar Office of such Bank) of making or maintaining any Eurodollar Loan, or
to reduce the amount of any sum received or receivable by such Bank (or its
Eurodollar Office) under this Agreement or under its Note with respect to any
Eurodollar Loan, then within 10 days after demand by such Bank (which demand
shall be accompanied by a statement setting forth the basis for such demand and
a calculation of the amount thereof in reasonable detail, a copy of which shall
be furnished to the Agent), the Company shall pay directly to such Bank such
additional amount as will compensate such Bank for such increased cost or such
reduction.
(b) If any Bank shall reasonably determine that the adoption or phase-in 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
Person 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 controlling Person's capital as a consequence of
such Bank's obligations hereunder or under any Letter of Credit to a level below
that which such Bank or such controlling Person could have achieved but for such
adoption, change or compliance (taking into consideration such Bank's or such
controlling Person's policies with respect to capital adequacy) by an amount
deemed by such Bank or such controlling Person to be material, then from time to
time, within 10 days after demand by such Bank (which demand shall be
accompanied by a statement setting forth the basis for such demand and a
calculation of the amount thereof in reasonable detail, a copy of which shall be
furnished to the Agent), the Company shall pay to such Bank such additional
amount or amounts as will compensate such Bank or such controlling Person for
such reduction.
8.2 Basis for Determining Interest Rate Inadequate or Unfair. If with
--------------------------------------------------------
respect to any Interest Period:
(a) deposits in Dollars (in the applicable amounts) are not being
offered to the Agent in the interbank eurodollar market for such Interest
Period, or the Agent otherwise reasonably determines (which determination,
if made in good faith, shall be binding and conclusive on the Company) that
by reason of circumstances affecting the interbank eurodollar market
adequate and reasonable means do not exist for ascertaining the applicable
IBOR Rate; or
30
(b) Banks having an aggregate Revolving Percentage or Term Percentage,
as applicable, of 40% or more advise the Agent that the Eurodollar Rate
(Reserve Adjusted) as determined by the Agent will not adequately and
fairly reflect the cost to such Banks of maintaining or funding their Loans
for such Interest Period (taking into account any amount to which such
Banks may be entitled under Section 8.1) or that the making or funding of
-----------
Eurodollar Loans has become impracticable as a result of an event occurring
after the date of this Agreement which in the opinion of such Banks
materially affects such Loans;
then the Agent shall promptly notify the other parties thereof and, so long as
----
such circumstances shall continue, (i) no Bank (or, in the case of clause (b)
----------
above, no Revolving Bank or Term Bank, as the case may be) shall be under any
obligation to make Loans as or convert Loans into Eurodollar Loans and (ii) on
the last day of the current Interest Period for each Eurodollar Loan (or, in the
case of clause (b) above, each Eurodollar Loan of the Revolving Banks or the
----------
Term Banks, as the case may be), such Eurodollar Loan shall, unless then repaid
in full, automatically convert to a Base Rate Loan.
8.3 Changes in Law Rendering Eurodollar Loans Unlawful. In the event that
--------------------------------------------------
any change in (including the adoption of any new) applicable laws or
regulations, or any change in the interpretation of applicable laws or
regulations by any governmental or other regulatory body charged with the
administration thereof, should make it (or in the good faith judgment of any
Bank cause a substantial question as to whether it is) unlawful for any Bank to
make, maintain or fund Eurodollar Loans, then such Bank shall promptly notify
the Company and the Agent and, so long as such circumstances shall continue, (a)
such Bank shall have no obligation to make or convert into Eurodollar Loans (but
shall make Base Rate Loans concurrently with the making of or conversion into
Eurodollar Loans by the Revolving Banks and/or Term Banks, as applicable, which
are not so affected, in each case in an amount equal to such Bank's Revolving
Percentage and/or Term Percentage, as applicable, of all Eurodollar Loans which
would be made or converted into at such time in the absence of such
circumstances) and (b) on the last day of the current Interest Period for each
Eurodollar Loan of such Bank (or, in any event, on such earlier date as may be
required by the relevant law, regulation or interpretation), such Eurodollar
Loan shall, unless then repaid in full, automatically convert to a Base Rate
Loan. Each Base Rate Loan made by a Bank which, but for the circumstances
described in the foregoing sentence, would be a Eurodollar Loan (an "Affected
Loan") shall remain outstanding for the same period as the Group of Eurodollar
Loans of which such Affected Loan would be a part absent such circumstances.
8.4 Funding Losses. The Company hereby agrees that upon demand by any
--------------
Bank (which demand shall be accompanied by a statement setting forth the basis
for the amount being claimed, a copy of which shall be furnished to the Agent),
the Company will indemnify such Bank against any net loss or expense which such
Bank may sustain or incur (including any net loss or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by such
Bank to fund or maintain any Eurodollar Loan), as reasonably determined by such
Bank, as a result of (a) any payment, prepayment or conversion of any Eurodollar
Loan of such Bank on a date other than the last day of an
31
Interest Period for such Loan (including any conversion pursuant to Section 8.3)
-----------
or (b) any failure of the Company to borrow or convert any Loan on a date
specified therefor in a notice of borrowing or conversion pursuant to this
Agreement. For this purpose, all notices to the Agent pursuant to this Agreement
shall be deemed to be irrevocable.
8.5 Right of Banks to Fund through Other Offices. Each Bank may, if it so
--------------------------------------------
elects, fulfill its commitment as to any Eurodollar Loan by causing a foreign
branch or affiliate of such Bank to make such Loan, provided that in such event
--------
for the purposes of this Agreement such Loan shall be deemed to have been made
by such Bank and the obligation of the Company to repay such Loan shall
nevertheless be to such Bank and shall be deemed held by it, to the extent of
such Loan, for the account of such branch or affiliate.
8.6 Discretion of Banks as to Manner of Funding. Notwithstanding any
-------------------------------------------
provision of this Agreement to the contrary, each Bank shall be entitled to fund
and maintain its funding of all or any part of its Loans in any manner it sees
fit, it being understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if such Bank had actually funded and
maintained each Eurodollar Loan during each Interest Period for such Loan
through the purchase of deposits having a maturity corresponding to such
Interest Period and bearing an interest rate equal to the IBOR Rate for such
Interest Period.
8.7 Mitigation of Circumstances; Replacement of Affected Bank. (a) Each
---------------------------------------------------------
Bank shall promptly notify the Company and the Agent of any event of which it
has knowledge which will result in, and will use reasonable commercial efforts
available to it (and not, in such Bank's good faith judgment, otherwise
disadvantageous to such Bank) to mitigate or avoid, (i) any obligation by the
Company to pay any amount pursuant to Section 7.6 or 8.1 or (ii) the occurrence
----------- ---
of any circumstances of the nature described in Section 8.2 or 8.3 (and, if any
----------- ---
Bank has given notice of any such event described in clause (i) or (ii) above
---------- ----
and thereafter such event ceases to exist, such Bank shall promptly so notify
the Company and the Agent). Without limiting the foregoing, each Bank will
designate a different funding office if such designation will avoid (or reduce
the cost to the Company of) any event described in clause (i) or (ii) of the
---------- ----
preceding sentence and such designation will not, in such Bank's sole judgment,
be otherwise disadvantageous to such Bank.
(b) At any time any Bank is an Affected Bank, the Company may replace such
Affected Bank as a party to this Agreement with one or more other bank(s) or
financial institution(s) reasonably satisfactory to the Agent (and upon notice
from the Company such Affected Bank shall assign pursuant to an Assignment
Agreement, and without recourse or warranty, its Commitment, its Loans, its
Notes, its participation in Letters of Credit and Swing Line Loans, if any, and
all of its other rights and obligations hereunder to such replacement bank(s) or
other financial institution(s) for a purchase price equal to the sum of the
principal amount of the Loans so assigned, all accrued and unpaid interest
thereon, its ratable share (if any) of all accrued and unpaid non-use fees and
Letter of Credit fees, any amounts payable under Section 8.4 as a result of such
-----------
Bank receiving payment of any Eurodollar Loan
32
prior to the end of an Interest Period therefor and all other obligations owed
to such Affected Bank hereunder).
8.8 Conclusiveness of Statements; Survival of Provisions. Determinations
----------------------------------------------------
and statements of any Bank pursuant to Section 8.1, 8.2, 8.3 or 8.4 shall be
----------- --- --- ---
conclusive absent demonstrable error. Banks may use reasonable averaging and
attribution methods in determining compensation under Sections 8.1 and 8.4, and
------------ ---
the provisions of such Sections shall survive repayment of the Loans,
cancellation of the Notes, cancellation or expiration of the Letters of Credit
and any termination of this Agreement.
SECTION 9 WARRANTIES.
To induce the Agent and the Banks to enter into this Agreement and to
induce the Banks to make Loans and the Issuing Banks to issue Letters of Credit
hereunder, the Company warrants to the Agent and the Banks that:
9.1 Organization, etc. The Company is a corporation duly organized,
------------------
validly existing and in good standing under the laws of the State of Delaware;
each Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation; and the Company and
each Subsidiary is duly qualified to do business in each jurisdiction where the
nature of its business makes such qualification necessary (except in those
instances in which the failure to be qualified or in good standing does not have
a Material Adverse Effect) and has full power and authority to own its property
and conduct its business as presently conducted by it.
9.2 Authorization; No Conflict. The execution and delivery by the Company
--------------------------
of this Agreement and each other Loan Document to which it is a party, the
borrowings hereunder, the execution and delivery by each Guarantor of each Loan
Document to which it is a party and the performance by each of the Company and
each Guarantor of its obligations under each Loan Document to which it is a
party are within the corporate powers of the Company and each Guarantor, have
been duly authorized by all necessary corporate action on the part of the
Company and each Guarantor (including any necessary shareholder action), have
received all necessary governmental approval (if any shall be required), and do
not and will not (a) violate any provision of law or any order, decree or
judgment of any court or other government agency which is binding on the Company
or any Guarantor, (b) contravene or conflict with, or result in a breach of, any
provision of the Certificate of Incorporation, By-Laws or other organizational
documents of the Company or any Guarantor or of any agreement, indenture,
instrument or other document which is binding on the Company, any Guarantor or
any other Subsidiary or (c) result in, or require, the creation or imposition of
any Lien on any property of the Company, any Guarantor or any other Subsidiary
(other than Liens arising under the Loan Documents).
33
9.3 Validity and Binding Nature. Each of this Agreement and each other
---------------------------
Loan Document to which the Company is a party is the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms; and each Loan Document to which any Guarantor is a party is, or upon
the execution and delivery thereof by such Guarantor will be, the legal, valid
and binding obligation of such Guarantor, enforceable against such Guarantor in
accordance with its terms.
9.4 Financial Condition. The audited consolidated financial statements of
-------------------
the Company and its Subsidiaries for Fiscal Year 1998, and the unaudited
consolidated financial statements of the Company and its Subsidiaries for the
Fiscal Quarter ending March 31, 1999, copies of which have been furnished to
each Bank:
(i) were prepared in accordance with GAAP consistently applied
throughout the periods covered thereby, except as otherwise expressly noted
therein (subject, in the case of the unaudited financial statements, to the
absence of footnotes and to customary year-end audit adjustments); and
(ii fairly present in all material respects the financial
condition of the Company and its Subsidiaries as of the dates thereof and
the results of operations for the periods covered thereby.
9.5 No Material Adverse Change. As of the Effective Date, there has been
--------------------------
no material adverse change in the financial condition, operations, assets,
business, properties or prospects of the Company and its Subsidiaries taken as a
whole since the date of the audited financial statements referred to in Section
-------
9.4; and since the Effective Date there has been no material adverse change in
---
the financial condition, operations, assets, business, properties or prospects
of the Company and its Subsidiaries taken as a whole.
9.6 Litigation and Contingent Liabilities. No litigation (including
-------------------------------------
derivative actions), arbitration proceeding, labor controversy or governmental
investigation or proceeding is pending or, to the Company's knowledge,
threatened against the Company or any Subsidiary which might reasonably be
expected to have a Material Adverse Effect, except as set forth in Schedule 9.6.
------------
Other than any liability incident to such litigation or proceedings, neither the
Company nor any Subsidiary has any material contingent liabilities not listed in
such Schedule 9.6 or disclosed in any financial statement delivered pursuant to
------------
Section 10.1.1 or 10.1.2.
-------------- ------
9.7 Ownership of Properties; Liens. Each of the Company and each
------------------------------
Subsidiary owns good and marketable title to all of its properties and assets,
real and personal, tangible and intangible, of any nature whatsoever (including
patents, trademarks, trade names, service marks and copyrights), free and clear
of all Liens, charges and material claims (including material infringement
claims with respect to patents, trademarks, copyrights and the like) except as
permitted pursuant to Section 10.8.
------------
34
9.8 Subsidiaries. As of the Signing Date, the Company has no Subsidiaries
------------
except those listed in Schedule 9.8.
------------
9.9 Pension and Welfare Plans. (a) During the twelve-consecutive-month
-------------------------
period prior to the date of the execution and delivery of this Agreement or the
making of any Loan hereunder, (i) no steps have been taken to terminate any
Pension Plan and (ii) no contribution failure has occurred with respect to any
Pension Plan sufficient to give rise to a lien under Section 302(f) of ERISA.
No condition exists or event or transaction has occurred with respect to any
Pension Plan which could result in the incurrence by the Company of any material
liability, fine or penalty. The Company has no contingent liability with
respect to any post-retirement benefit under a Welfare Plan, other than
liability for continuation coverage described in Part 6 of Subtitle B of Title I
of ERISA.
(b) All contributions (if any) have been made to any Multiemployer Pension
Plan that are required to be made by the Company or any other member of the
Controlled Group under the terms of the plan or of any collective bargaining
agreement or by applicable law; neither the Company nor any member of the
Controlled Group has withdrawn or partially withdrawn from any Multiemployer
Pension Plan, incurred any withdrawal liability with respect to any such plan,
received notice of any claim or demand for withdrawal liability or partial
withdrawal liability from any such plan, and no condition has occurred which, if
continued, might result in a withdrawal or partial withdrawal from any such
plan; and neither the Company nor any member of the Controlled Group has
received any notice that any Multiemployer Pension Plan is in reorganization,
that increased contributions may be required to avoid a reduction in plan
benefits or the imposition of any excise tax, that any such plan is or has been
funded at a rate less than that required under Section 412 of the Code, that any
such plan is or may be terminated, or that any such plan is or may become
insolvent.
9.10 Investment Company Act. Neither the Company nor any Subsidiary is an
----------------------
"investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940.
9.11 Public Utility Holding Company Act. Neither the Company nor any
----------------------------------
Subsidiary 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.
9.12 Regulation U. The Company is not engaged principally, or as one of
------------
its important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
9.13 Taxes. Each of the Company and each Subsidiary has filed all tax
-----
returns and reports required by law to have been filed by it and has paid all
taxes and governmental charges thereby shown to be owing, except any such taxes
or charges which are being diligently contested in good faith by
35
appropriate proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books.
9.14 Solvency, etc. On the Effective Date (or, in the case of any Person
--------------
which becomes a Guarantor after the Effective Date, on the date such Person
becomes a Guarantor), and immediately prior to and after giving effect to the
issuance of each Letter of Credit and each borrowing hereunder and the use of
the proceeds thereof, (a) each of the Company's and each Guarantor's assets will
exceed its liabilities and (b) each of the Company and each Guarantor will be
solvent, will be able to pay its debts as they mature, will own property with
fair saleable value greater than the amount required to pay its debts and will
have capital sufficient to carry on its business as then constituted.
9.15 Environmental Matters.
---------------------
(a) No Violations. Except as set forth on Schedule 9.15, neither the
------------- -------- ----
Company nor any Subsidiary, nor any operator of the Company's or any
Subsidiary's properties, is in violation, or alleged violation, of any judgment,
decree, order, law, permit, license, rule or regulation pertaining to
environmental matters, including those arising under the Resource Conservation
and Recovery Act ("RCRA"), the Comprehensive Environmental Response,
----
Compensation and Liability Act of 1980 ("CERCLA"), the Superfund Amendments and
------
Reauthorization Act of 1986 or any other Environmental Law which (i) in any
single case, requires expenditures in any three-year period of $1,000,000 or
more by the Company and its Subsidiaries in penalties and/or for investigative,
removal or remedial actions or (ii) individually or in the aggregate otherwise
might reasonably be expected to have a Material Adverse Effect.
(b) Notices. Except as set forth on Schedule 9.15, neither the
------- -------------
Company nor any Subsidiary has received notice from any third party, including
any Federal, state or local governmental authority: (a) that any one of them
has been identified by the U.S. Environmental Protection Agency as a potentially
responsible party under CERCLA with respect to a site listed on the National
Priorities List, 40 C.F.R. Part ▇▇▇ ▇▇▇▇▇▇▇▇ ▇; (b) that any hazardous waste, as
defined by 42 U.S.C. (S)6903(5), any hazardous substance as defined by 42 U.S.C.
(S)9601(14), any pollutant or contaminant as defined by 42 U.S.C. (S)9601(33) or
any toxic substance, oil or hazardous material or other chemical or substance
regulated by any Environmental Law, excluding household hazardous waste (all of
the foregoing, "Hazardous Substances"), which any one of them has generated,
--------------------
transported or disposed of has been found at any site at which a Federal, state
or local agency or other third party has conducted a remedial investigation,
removal or other response action pursuant to any Environmental Law; (c) that the
Company or any Subsidiary must conduct a remedial investigation, removal,
response action or other activity pursuant to any Environmental Law; or (d) of
any Environmental Claim.
(c) Handling of Hazardous Substances. Except as set forth on Schedule
-------------------------------- --------
9.15, (i) no portion of any real property or other assets owned, leased or
----
operated by the Company or any Subsidiary has been used for the handling,
processing, storage or disposal of Hazardous Substances
36
except in accordance in all material respects with applicable Environmental
Laws; and no underground tank or other underground storage receptacle for
Hazardous Substances is located on such properties; (ii) in the course of any
activities conducted by the Company, any Subsidiary or the operators of any real
property owned, leased or operated by the Company or any Subsidiary, no
Hazardous Substances have been generated or are being used on such properties
except in accordance in all material respects with applicable Environmental
Laws; (iii) there have been no Releases or threatened Releases of Hazardous
Substances on, upon, into or from any real property or other assets owned,
leased or operated by the Company or any Subsidiary, which Releases singly or in
the aggregate might reasonably be expected to have a material adverse effect on
the value of such real property or assets; (iv) to the Company's actual
knowledge, there have been no Releases on, upon, from or into any real property
in the vicinity of any real property or other assets owned, leased or operated
by the Company or any Subsidiary which, through soil or groundwater
contamination, may have come to be located on, and which might reasonably be
expected to have a material adverse effect on the value of, any real property or
other assets owned, leased or operated by the Company or any Subsidiary; and (v)
any Hazardous Substances generated by the Company and its Subsidiaries have been
transported offsite only by properly licensed carriers and delivered only to
treatment or disposal facilities maintaining valid permits as required under
applicable Environmental Laws, which transporters and facilities have been and
are, to the best of the Company's knowledge, operating in compliance with such
permits and applicable Environmental Laws.
(d) Investigations. Except as set forth on Schedule 9.15, the Company
-------------- -------------
and its Subsidiaries have taken all reasonable steps to investigate the past and
present condition and usage of any real property owned, leased or operated by
the Company and its Subsidiaries and the operations conducted by the Company and
its Subsidiaries with regard to environmental matters.
9.16 Year 2000 Problem. The Company and its Subsidiaries have reviewed the
-----------------
areas within their business and operations which could be adversely affected by,
and have developed or are developing a program to address on a timely basis, the
"Year 2000 Problem" (that is, the risk that computer applications used by the
Company and its Subsidiaries may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999). Based on such review and program, the Company reasonably
believes that the "Year 2000 Problem" will not have a Material Adverse Effect.
9.17 Copyrights, Patents, Trademarks and Licenses, etc. The Company and
-------------------------------------------------
its Subsidiaries own or are licensed or otherwise have the right to use all of
the patents, trademarks, service marks, trade names, copyrights, contractual
franchises, authorizations and other rights that are reasonably necessary for
the operation of their respective businesses, without conflict with the rights
of any other Person. No slogan or other advertising device, product, process,
method, substance, part or other material now employed, or now contemplated to
be employed, by the Company or any Subsidiary infringes upon any rights held by
any other Person. No claim or litigation regarding any of the foregoing is
pending or, to the knowledge of the Company, threatened, and no patent,
invention, device,
37
application, principle or any statute, law, rule, regulation,
standard or code is pending or, to the knowledge of the Company, proposed,
which, in either case, could reasonably be expected to have a Material Adverse
Effect.
9.18 Transactions with Affiliates. Neither the Company nor any Subsidiary
----------------------------
has entered into or participated in any transaction, agreement or contract with
any of its Affiliates (other than the Company or a Subsidiary) which is on terms
which are less favorable than are obtainable from any Person which is not one of
its Affiliates.
9.19 Information. All information heretofore or contemporaneously
-----------
herewith furnished in writing by the Company or any Subsidiary to any Bank for
purposes of or in connection with this Agreement and the transactions
contemplated hereby is, and all written information hereafter furnished by or on
behalf of the Company or any Subsidiary to any Bank pursuant hereto or in
connection herewith will be, true and accurate in every material respect on the
date as of which such information is dated or certified, and none of such
information is or will be incomplete by omitting to state any material fact
necessary to make such information not misleading in light of the circumstances
under which made (it being recognized by the Agent and the Banks that (a) any
projections and forecasts provided by the Company are based on good faith
estimates and assumptions believed by the Company to be reasonable as of the
date of the applicable projections or assumptions and that actual results during
the period or periods covered by any such projections and forecasts may differ
from projected or forecasted results and (b) any information provided by the
Company or any Subsidiary with respect to any Person or assets acquired or to be
acquired by the Company or any Subsidiary shall, for all periods prior to the
date of such acquisition, be limited to the knowledge of the Company or the
acquiring Subsidiary after reasonable inquiry).
SECTION 10 COVENANTS.
Until the expiration or termination of the Commitments and thereafter until
all obligations of the Company hereunder and under the other Loan Documents are
paid in full and all Letters of Credit have been terminated, the Company agrees
that, unless at any time the Required Banks shall otherwise expressly consent in
writing, it will:
10.1 Reports, Certificates and Other Information. Furnish to the Agent and
-------------------------------------------
each Bank:
10.11 Audit Report. Promptly when available and in any event within 90
------------
days after the close of each Fiscal Year: (a) a copy of the annual audit report
of the Company and its Subsidiaries for such Fiscal Year, including therein
consolidated balance sheets of the Company and its Subsidiaries as of the end of
such Fiscal Year and consolidated statements of earnings and cash flow of the
Company and its Subsidiaries for such Fiscal Year certified without
qualification by independent auditors of recognized standing selected by the
Company and reasonably acceptable to the Required Banks, together with a written
statement from such accountants to the effect that in making the examination
necessary for the
38
signing of such annual audit report by such accountants, nothing came to their
attention that caused them to believe that the Company was not in compliance
with any provision of Section 10.6, 10.7 or 10.9 of this Agreement insofar as
such provision relates to accounting matters or, if something has come to their
attention that caused them to believe that the Company was not in compliance
with any such provision, describing such non-compliance in reasonable detail (it
being understood that any such audit is not directed primarily toward obtaining
knowledge of such non-compliance); and (b) consolidating balance sheets of the
Company and its Subsidiaries as of the end of such Fiscal Year and a
consolidating statement of earnings for the Company and its Subsidiaries for
such Fiscal Year, certified by the Chief Financial Officer, the Vice President,
Finance, Controller or Treasurer of the Company.
10.1.2 Quarterly Reports. Promptly when available and in any event within
-----------------
45 days after the end of each Fiscal Quarter (except the last Fiscal Quarter) of
each Fiscal Year, consolidated and consolidating balance sheets of the Company
and its Subsidiaries as of the end of such Fiscal Quarter, together with
consolidated and consolidating statements of earnings and a consolidated
statement of cash flows for such Fiscal Quarter and for the period beginning
with the first day of such Fiscal Year and ending on the last day of such Fiscal
Quarter, certified by the Chief Financial Officer, the Vice President, Finance,
Controller or Treasurer of the Company.
10.1.3 Monthly Reports. Promptly when available and in any event
---------------
within 30 after the end of each of the first two months of each Fiscal Quarter,
balance sheets of the Company and its Subsidiaries as of the end of such month,
together with statements of earnings for such month and for the period beginning
with the first day of the Fiscal Year and ending on the last day of such month,
certified by the Chief Financial Officer, the Vice President, Finance,
Controller or Treasurer of the Company.
10.1.4 Compliance Certificates. Contemporaneously with the furnishing of
-----------------------
a copy of each annual audit report pursuant to Section 10.1.1 and of each set of
--------------
quarterly statements pursuant to Section 10.1.2, a duly completed compliance
--------------
certificate in the form of Exhibit B, with appropriate insertions, dated the
---------
date of such annual report or such quarterly statements and signed by the Chief
Financial Officer, the Vice President, Finance, Controller or Treasurer of the
Company, containing a computation of each of the financial ratios and
restrictions set forth in Section 10.6 and to the effect that such officer has
------------
not become aware of any Event of Default or Unmatured Event of Default that has
occurred and is continuing or, if there is any such event, describing it and the
steps, if any, being taken to cure it.
10.1.5 Reports to SEC and to Shareholders. Promptly upon the filing or
----------------------------------
sending thereof, copies of all regular, periodic or special reports of the
Company or any Subsidiary filed with the SEC (excluding exhibits thereto,
provided that the Company shall promptly deliver any such exhibit to the Agent
or any Bank upon request therefor); copies of all registration statements of the
Company or any Subsidiary filed with the SEC (other than on Form S-8); and
copies of all proxy statements or other
39
communications made to security holders generally concerning material
developments in the business of the Company or any Subsidiary.
10.1.6 Notice of Default, Litigation and ERISA Matters. Promptly upon
-----------------------------------------------
becoming aware of any of the following, written notice describing the same and
the steps being taken by the Company or the Subsidiary affected thereby with
respect thereto:
(a) the occurrence of an Event of Default or an Unmatured Event of
Default;
(b) any litigation, arbitration or governmental investigation or
proceeding not previously disclosed by the Company to the Banks which has
been instituted or, to the knowledge of the Company, is threatened against
the Company or any Subsidiary or to which any of the properties of any
thereof is subject which, if adversely determined, might reasonably be
expected to have a Material Adverse Effect;
(c) the institution of any steps by any member of the Controlled Group
or any other Person to terminate any Pension Plan, or the failure of any
member of the Controlled Group to make a required contribution to any
Pension Plan (if such failure is sufficient to give rise to a lien under
Section 302(f) of ERISA) or to any Multiemployer Pension Plan, or the
taking of any action with respect to a Pension Plan which could result in
the requirement that the Company furnish a bond or other security to the
PBGC or such Pension Plan, or the occurrence of any event with respect to
any Pension Plan or Multiemployer Pension Plan which could result in the
incurrence by any member of the Controlled Group of any material liability,
fine or penalty (including any claim or demand for withdrawal liability or
partial withdrawal from any Multiemployer Pension Plan), or any material
increase in the contingent liability of the Company with respect to any
post-retirement Welfare Plan benefit, or any notice that any Multiemployer
Pension Plan is in reorganization, that increased contributions may be
required to avoid a reduction in plan benefits or the imposition of an
excise tax, that any such plan is or has been funded at a rate less than
that required under Section 412 of the Code, that any such plan is or may
be terminated, or that any such plan is or may become insolvent;
(d) any cancellation (unless concurrently replaced by substantially
equivalent insurance from a similarly or better rated insurer) or material
change in any insurance maintained by the Company or any Subsidiary;
(e) any event (including (i) any violation of any Environmental Law or
the assertion of any Environmental Claim or (ii) the enactment or
effectiveness of any law, rule or regulation) which might reasonably be
expected to have a Material Adverse Effect; or
(f) any material setoff, claims, withholdings or other defenses to
which any of the Collateral, or the Banks' rights with respect to the
Collateral, are subject.
40
10.1.7 Subsidiaries. Promptly upon any change in the list of its
------------
Subsidiaries, a written report of such change.
10.1.8 Management Reports. Promptly upon the request of the Agent or any
------------------
Bank, copies of all detailed financial and management reports submitted to the
Company by independent auditors in connection with each annual or interim audit
made by such auditors of the books of the Company.
10.1.9 Projections. As soon as practicable and in any event within 90 days
-----------
after the commencement of each Fiscal Year, financial projections for the
Company and its Subsidiaries for such Fiscal Year prepared in a manner
consistent with those projections delivered by the Company to the Banks prior to
the Signing Date or otherwise in a manner reasonably satisfactory to the Agent.
10.1.10 Contracts. As soon as practicable after becoming aware of such
---------
event and in any event within 30 days of such event, written notice of any
termination by a customer of a material contract with a Subsidiary (with
materiality being measured at the Subsidiary level).
10.1.11 Fleet Audit Reports. From time to time as requested by the
-------------------
Agent, a written report by appraisers acceptable to the Agent of an audit and
appraisal of the Equipment of the Company and its Subsidiaries; provided that,
--------
so long as no Event of Default or Unmatured Event of Default exists, no more
than two such reports shall be requested in any calendar year.
10.1.12 Other Information. From time to time such other information
-----------------
concerning the Company and its Subsidiaries as any Bank or the Agent may
reasonably request.
10.2 Books, Records and Inspections. Keep, and cause each Subsidiary to
------------------------------
keep, its books and records in accordance with sound business practices
sufficient to allow the preparation of financial statements in accordance with
GAAP; permit, and cause each Subsidiary to permit, any Bank or the Agent or any
representative thereof to inspect the properties and operations of the Company
and of such Subsidiary; and permit, and cause each Subsidiary to permit, at any
reasonable time and with reasonable notice (or at any time without notice if an
Event of Default exists), any Bank or the Agent or any representative thereof to
visit any or all of its offices, to discuss its financial matters with its
officers and its independent auditors (and the Company hereby authorizes such
independent auditors to discuss such financial matters with any Bank or the
Agent or any representative thereof, provided that so long as no Event of
Default exists, a representative of the Company shall be present at any such
discussions), and to examine (and, at the expense of the Company or the
applicable Subsidiary, photocopy extracts from) any of its books or other
corporate records.
10.3 Insurance. Maintain, and cause each Subsidiary to maintain, with
---------
responsible insurance companies, such insurance as may be required by any law or
governmental regulation or court decree or order applicable to it and such other
insurance, to such extent and against such hazards and liabilities, as is
customarily maintained by companies similarly situated and that is acceptable to
the Agent; and,
41
concurrently with the delivery of the Company's annual audit report for each
Fiscal Year pursuant to Section 10.1.1 and from time to time upon request of any
------
Bank, furnish to the Agent or such Bank a certificate setting forth in
reasonable detail the nature and extent of all insurance maintained by the
Company and its Subsidiaries.
10.4 Compliance with Laws; Payment of Taxes and Liabilities. (a) Comply,
------------------------------------------------------
and cause each Subsidiary to comply, in all material respects with all
applicable laws (including Environmental Laws), rules, regulations, decrees,
orders, judgments, licenses and permits; and (b) pay, and cause each Subsidiary
to pay, prior to delinquency, all taxes and other governmental charges against
it or any of its property, as well as claims of any kind which, if unpaid, might
become a Lien on any of its property; provided, however, that the foregoing
-------- -------
shall not require the Company or any Subsidiary to pay any such tax or charge so
long as it shall contest the validity thereof in good faith by appropriate
proceedings and shall set aside on its books adequate reserves with respect
thereto in accordance with GAAP.
10.5 Maintenance of Existence, etc. Maintain and preserve, and (subject to
------------------------------
Section 10.10) cause each Subsidiary to maintain and preserve, (a) its existence
-------------
and good standing in the jurisdiction of its incorporation (except in the case
of the voluntary dissolution (not under any bankruptcy or insolvency law) of a
Subsidiary which would not reasonably be expected to have a Material Adverse
Effect) and (b) its qualification and good standing as a foreign corporation in
each jurisdiction where the nature of its business makes such qualification
necessary (except in those instances in which the failure to be qualified or in
good standing does not have a Material Adverse Effect).
10.6 Financial Covenants.
-------------------
10.6.1 Minimum Consolidated Net Income. Not permit its Consolidated Net
-------------------------------
Income as of the last day of any Fiscal Quarter to be less than zero.
10.6.2 Funded Debt to Capitalization Ratio. Not permit the Funded Debt to
-----------------------------------
Capitalization Ratio as of the last day of any Fiscal Quarter to exceed 0.55 to
1.0.
10.6.3 Funded Debt to EBITDA Ratio. Not permit the Funded Debt to EBITDA
---------------------------
Ratio as of the last day of any Fiscal Quarter to exceed 4.0 to 1.0.
10.6.4 Capital Expenditures. The Company will not permit the aggregate
--------------------
amount of all Capital Expenditures made by the Company and its Subsidiaries in
any Fiscal Year to exceed 1.75 times the Adjusted Consolidated Depreciation of
the Company and its Subsidiaries for such Fiscal Year. For purposes of the
foregoing, "Adjusted Consolidated Depreciation" means, for any Fiscal Year, the
consolidated depreciation of the Company and its Subsidiaries for such Fiscal
Year adjusted to give pro forma effect to all acquisitions completed in such
Fiscal Year as if such acquisitions had been completed on the first day of such
Fiscal Year.
42
10.6.5 EBITR to Adjusted Interest Expense plus Rental Expense Ratio. Not
------------------------------------------------------------
permit the ratio of EBITR to Adjusted Interest Expense plus Rental Expense to be
less than 2.0 to 1.0 as of the last day of any Fiscal Quarter.
10.6.6 Senior Funded Debt to Tangible Assets Ratio. Not permit the ratio of
-------------------------------------------
Senior Funded Debt to Tangible Assets to exceed at any time the applicable ratio
set forth below:
Senior Funded Debt to
Period Tangible Assets Ratio
------ ----------------------
Effective Date through 6/29/00 1.50 to 1.0
6/30/00 through 12/30/01 1.35 to 1.0
12/31/01 and thereafter 1.25 to 1.0.
10.6.7 Senior Funded Debt to EBITDA Ratio. Not permit the Senior Funded
----------------------------------
Debt to EBITDA Ratio to exceed at any time the applicable ratio set forth below:
Senior Funded Debt
Period to EBITDA Ratio
------ --------------------
Effective Date through 6/29/00 3.00 to 1.0
6/30/00 and thereafter 2.75 to 1.0.
10.7 Limitations on Debt. Not, and not permit any Subsidiary to, create,
-------------------
incur, assume or suffer to exist any Debt, except:
(a) obligations in respect of the Loans, the L/C Applications and the
Letters of Credit;
(b) unsecured Debt of the Company or any Subsidiary which represents all or
part of the purchase price payable in connection with a transaction
permitted by Section 10.10(c); provided that the aggregate principal amount
---------------- --------
of all such unsecured Debt shall not at any time exceed $2,500,000;
(c) Debt secured by Liens permitted by subsection 10.8(c) or (d), and
------------------ ---
refinancings of any such Debt so long as the terms applicable to such
refinanced Debt are no less favorable to the Company or the applicable
Subsidiary than the terms in effect immediately prior to such refinancing,
provided that the aggregate amount of all such Debt at any time outstanding
--------
shall not exceed (i) $10,000,000 in the case of all Debt described in
subsections 10.8(c) and clauses (i), (ii) and (iii) of subsection 10.8(d)
------------------- ----------------- ----- ------------------
and (ii) $10,000,000 in the case of all Debt described in clause (iv) of
---- -----------
subsection 10.8(d);
------------------
43
(d) Debt of Subsidiaries owed to the Company;
(e) unsecured Debt of the Company to Subsidiaries;
(f) Subordinated Debt;
(g) other Debt outstanding on the date hereof and listed in Schedule 10.7;
-------------
(h) guarantees of lease obligations of independent carriers in connection
with leases of equipment by such carriers, provided that (c) each
--------
independent carrier agrees to subcontract the applicable equipment to the
Company or a Subsidiary for the balance of the applicable lease term and
(y) the aggregate principal amount so guaranteed by the Company and its
Subsidiaries (without duplication) shall not at any time exceed
$10,000,000); and
(i) Suretyship Liabilities of the Company in respect of obligations of
Subsidiaries permitted hereunder.
10.8 Liens. Not, and not permit any Subsidiary to, create or permit to
-----
exist any Lien on any of its real or personal properties, assets or rights of
whatsoever nature (whether now owned or hereafter acquired), except:
(a) Liens for taxes or other governmental charges not at the time
delinquent or thereafter payable without penalty or being contested in good
faith by appropriate proceedings and, in each case, for which it maintains
adequate reserves;
(b) Liens arising in the ordinary course of business (such as (i) Liens of
carriers, warehousemen, mechanics and materialmen and other similar Liens
imposed by law and (ii) Liens incurred in connection with worker's
compensation, unemployment compensation and other types of social security
(excluding Liens arising under ERISA) or in connection with surety bonds,
bids, performance bonds and similar obligations) for sums not overdue or
being contested in good faith by appropriate proceedings and not involving
any deposits or advances or borrowed money or the deferred purchase price
of property or services, and, in each case, for which it maintains adequate
reserves;
(c) Liens identified in Schedule 10.8;
-------------
(d) subject to the limitations set forth in subsection 10.7(c), (i) Liens
------------------
arising in connection with Capital Leases (and attaching only to the
property being leased), (ii) Liens existing on property at the time of the
acquisition thereof (or the acquisition of the owner of such property) by
the Company or any Subsidiary (and not created in contemplation of such
acquisition), (iii) Liens that constitute purchase money security interests
on any tangible property securing Debt
44
incurred for the purpose of financing all or any part of the cost of
acquiring such property, provided that any such Lien attaches to such
--------
property within 60 days of the acquisition thereof and such Lien attaches
solely to the property so acquired, and (iv) Liens on vehicles existing at
the time the Company or a Subsidiary acquires such vehicles, or acquires
the owner of such vehicles, pursuant to an acquisition described in clause
------
(c) of Section 10.10, provided that, except to the extent such Liens are
- -------------
permitted by clause (i), (ii) or (iii) of this subsection (d), each such
--------------- --- --------------
Lien shall be released not later than 90 days after such acquisition;
(e) attachments, appeal bonds, judgments and other similar Liens, for sums
not exceeding $1,000,000 arising in connection with court proceedings,
provided the execution or other enforcement of such Liens is effectively
stayed and the claims secured thereby are being actively contested in good
faith and by appropriate proceedings;
(f) easements, rights of way, restrictions, minor defects or irregularities
in title and other similar Liens not interfering in any material respect
with the ordinary conduct of the business of the Company or any Subsidiary;
and
(g) Liens in favor of the Agent arising under the Loan Documents.
10.9 Restricted Payments. Not, and not permit any Subsidiary to, (a)
-------------------
declare or pay any dividends on any of its capital stock (other than stock
dividends), (b) purchase or redeem any such stock or any warrants, units,
options or other rights in respect of such stock, (c) make any other
distribution to shareholders, (d) prepay, purchase, defease or redeem any
Subordinated Debt, (e) make any payment on or in respect of the Charterhouse
Subordinated Notes (other than payments made in the form of additional
Charterhouse Subordinated Notes) or (f) set aside funds for any of the
foregoing; provided that (i) any Subsidiary may declare and pay dividends to the
--------
Company or to any other wholly-owned Subsidiary; (ii) the Company may convert
Charterhouse Subordinated Notes into common stock of the Company in accordance
with the terms of such Charterhouse Subordinated Notes; and (iii) the Company
may purchase common stock of the Company in open-market transactions so long as
(A) the Company's intention at the time of any such purchase is to use such
shares within six months as part of the consideration for an acquisition by the
Company or a Subsidiary; (B) no Event of Default or Unmatured Event of Default
exists or would result from such purchase; (C) immediately after giving effect
to such purchase, the Company will be in pro forma compliance with the Senior
Funded Debt to EBITDA Ratio (calculated using (I) the amount of Senior Debt that
will be outstanding after giving effect to such purchase and (II) pro forma
EBITDA for the Computation Period ending on the last day of the most recent
Fiscal Quarter as of which the Company has delivered financial statements
pursuant to Section 10.1.1 or 10.1.2 assuming that each acquisition described in
-------------- ------
clause (c) of Section 10.10 completed after the end of such Computation Period
---------- -------------
had been completed on the last day of such Computation Period); (D) immediately
after giving effect to such purchase the Funded Debt to Capitalization Ratio
will not exceed 0.55 to 1; and (E) after giving effect to such purchase, (x) the
number of Purchased Common Shares (excluding Distributed Shares) shall not
45
exceed the remainder of 1,000,000 shares minus all Unused Shares; and (y) the
aggregate purchase price for all Purchased Common Shares (excluding Distributed
Shares) shall not exceed the remainder of $10,000,000 minus the purchase price
of all Unused Shares.
10.10 Mergers, Consolidations, Sales. Not, and not permit any Subsidiary
------------------------------
to, be a party to any merger or consolidation, or purchase or otherwise acquire
all or substantially all of the assets or any stock of any class of, or any
partnership or joint venture interest in, any other Person, or sell, transfer,
convey or lease all or any substantial part of its assets, or sell or assign
with or without recourse any receivables, except for (a) any such merger or
consolidation, sale, transfer, conveyance, lease or assignment of or by any
wholly-owned Subsidiary into the Company or into, with or to any other wholly-
owned Subsidiary; (b) any such purchase or other acquisition by the Company or
any wholly-owned Subsidiary of the assets or stock of any wholly-owned
Subsidiary; (c) any such purchase or other acquisition by the Company or any
wholly-owned Subsidiary of the assets or stock of any other Person where (1)
such assets (in the case of an asset purchase) are for use, or such Person (in
the case of a stock purchase) is engaged, solely in providing towing services
(including voluntary repossession services) and/or vehicle transport; (2)
immediately before or after giving effect to such purchase or acquisition, no
Event of Default or Unmatured Event of Default shall have occurred and be
continuing; (3) either (i) (x) the aggregate consideration to be paid by the
Company and its Subsidiaries (including any Debt assumed or issued in connection
therewith, the amount thereof to be calculated in accordance with GAAP) in
connection with such purchase or other acquisition (or any series of related
acquisitions) is not greater than $30,000,000 and (y) the aggregate
consideration to be paid in Purchased Common Shares (including any Unused
Shares) and/or cash by the Company and its Subsidiaries in connection with such
purchase or acquisition (or any series of related acquisitions) is not greater
than $15,000,000, or (ii) the Required Lenders have consented to such purchase
or acquisition; (4) the Company is in pro forma compliance with all the
--- -----
financial ratios and restrictions set forth in Section 10.6; and (5) such Person
------------
(or its board of directors or similar body) has approved such acquisition or
other purchase; (d) the Waggoners Acquisition; (e) the Centurion Acquisition;
and (f) sales and dispositions of assets (including the stock of Subsidiaries)
so long as the net book value of all assets sold or otherwise disposed of in any
Fiscal Year does not exceed 5% of the aggregate net book value of all assets of
the Company and its Subsidiaries.
10.11 Modification of Organizational Documents. Not permit the Certificate
----------------------------------------
of Incorporation, By-Laws or other organizational documents of the Company or
any Subsidiary to be amended or modified in any way which might reasonably be
expected to materially adversely affect the interests of the Banks.
10.12 Use of Proceeds. Use the proceeds of the Loans solely to repay
---------------
obligations under the Existing Agreement, to finance the Company's working
capital, for acquisitions permitted by Section 10.10, for Capital Expenditures
-------------
and for other general corporate purposes; and, except for purchases of the
Company's common stock to the extent permitted by Section 10.9, not use or
------------
permit any proceeds
46
of any Loan to be used, either directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of "purchasing or carrying" any Margin Stock.
10.13 Further Assurances. Take, and cause each Subsidiary to take, such
------------------
actions as are necessary, or as the Agent or the Required Banks may reasonably
request, from time to time (including the execution and delivery of guaranties,
security agreements, pledge agreements, financing statements and other
documents, the filing or recording of any of the foregoing, and the delivery of
stock certificates and other collateral with respect to which perfection is
obtained by possession) to ensure that (i) the obligations of the Company
hereunder and under the other Loan Documents are secured by substantially all of
the assets of the Company and guaranteed by all of the Subsidiaries (including,
promptly upon the acquisition or creation thereof, any Subsidiary acquired or
created after the date hereof, but excluding any Foreign Subsidiary if a
guaranty by such Foreign Subsidiary would result in material adverse tax
consequences) by execution of a counterpart of the Guaranty and (ii) the
obligations of each Guarantor under the Guaranty are secured by substantially
all of the assets of such Guarantor; provided that (a) neither the Company nor
--------
any Subsidiary shall be required to pledge more than 65% of the stock of any of
its Foreign Subsidiaries if material adverse tax consequences would result from
a pledge of all of such stock and (b) the Company shall not be obligated to
pledge any common stock of the Company owned by the Company. Notwithstanding
the foregoing, if the Supermajority Banks in their sole discretion consent in
writing (and such consent has not been rescinded in writing by the Required
Banks acting in their sole discretion), then neither the Company nor any
Subsidiary shall be required to cause the security interest and lien of the
Agent on any vehicle owned by the Company or such Subsidiary to be noted on the
certificate of title for such vehicle.
10.14 Transactions with Affiliates. Not, and not permit any Subsidiary to,
----------------------------
enter into, or cause, suffer or permit to exist any transaction, arrangement or
contract with any of its Affiliates (other than the Company and its
Subsidiaries) which is on terms which are less favorable than are obtainable
from any Person which is not one of its Affiliates.
10.15 Employee Benefit Plans. Maintain, and cause each Subsidiary to
----------------------
maintain, each Pension Plan in substantial compliance with all applicable
requirements of law and regulations.
10.16 Environmental Matters. (a) If any material Release or Disposal of
---------------------
Hazardous Substances shall occur or shall have occurred on any real property or
any other assets owned, leased or operated by the Company or any Subsidiary, the
Company shall, or shall cause the applicable Subsidiary to, cause the prompt
containment and removal of such Hazardous Substances and the remediation of such
real property or other assets as necessary to comply in all material respects
with all Environmental Laws and to preserve the value of such real property or
other assets. Without limiting the generality of the foregoing, the Company
shall, and shall cause each Subsidiary to, comply in a reasonable and cost-
effective manner with any valid Federal or state judicial or administrative
order requiring the performance at any real property owned, leased or operated)
of the Company or any Subsidiary of activities in response to the Release or
threatened Release of a Hazardous Substance
47
except for the period of time that the Company or such Subsidiary is diligently
and in good faith contesting such order.
(b) To the extent that the transportation of "hazardous waste" as
defined by RCRA is permitted by this Agreement, the Company shall, and shall
cause its Subsidiaries to, dispose of such hazardous waste only at licensed
disposal facilities operating, to the best of the Company's or such Subsidiary's
knowledge after reasonable inquiry, in compliance with Environmental Laws.
10.17 Unconditional Purchase Obligations. Not, and not permit any
----------------------------------
Subsidiary to, enter into or be a party to any contract for the purchase of
materials, supplies or other property or services, if such contract requires
that payment be made by it regardless of whether or not delivery is ever made of
such materials, supplies or other property or services; provided that the
foregoing shall not prohibit the Company or any Subsidiary from entering into
options for the purchase of particular assets or businesses.
10.18 Inconsistent Agreements. Not, and not permit any Subsidiary to, enter
-----------------------
into any agreement containing any provision which (a) would be violated or
breached by any borrowing by the Company hereunder or by the performance by the
Company or any Subsidiary of any of its obligations hereunder or under any other
Loan Document or (b) would prohibit the Company or any Subsidiary from granting
to the Agent, for the benefit of the Banks, a Lien on any of its assets.
10.19 Business Activities. Not, and not permit any Subsidiary to, engage in
-------------------
any line of business other than the towing service and vehicle transport
businesses and businesses which are reasonably related thereto.
10.20 Advances and Other Investments. Not, and not permit any Subsidiary
------------------------------
to, make, incur, assume or suffer to exist any Investment in any other Person,
except (without duplication) the following:
(a) equity Investments existing on the Signing Date in wholly-owned
Subsidiaries identified in Schedule 9.8;
------------
(b) equity Investments in Subsidiaries acquired after the Signing Date in
transactions permitted as acquisitions of stock or assets pursuant to
Section 10.10;
-------------
(c) in the ordinary course of business, contributions by the Company to
the capital of any of its Subsidiaries, or by any such Subsidiary to the
capital of any of its Subsidiaries;
(d) in the ordinary course of business, Investments by the Company in any
Subsidiary or by any of the Subsidiaries in the Company, by way of
intercompany loans, advances or guaranties, all to the extent permitted by
Section 10.7;
------------
48
(e) Suretyship Liabilities permitted by Section 10.7;
------------
(f) good faith deposits made in connection with prospective acquisitions
of stock or assets permitted by Section 10.10;
-------------
(g) loans to officers and employees not exceeding (i) $250,000 in the
aggregate to any single individual or (ii) $500,000 in the aggregate for
all such individuals;
(h) Cash Equivalent Investments;
(i) bank deposits in the ordinary course of business; provided that the
--------
aggregate amount of all such deposits (excluding amounts in payroll
accounts or for accounts payable, in each case to the extent that checks
have been issued to third parties) which are maintained with any bank other
than the Agent shall not at any time exceed (x) in the case of such
deposits with any single bank, $100,000 for three consecutive Business Days
and (y) in the case of all such deposits, $2,500,000 for three consecutive
Business Days; and
(j) notes received by the Company or any Subsidiary as consideration for
any asset sale permitted by Section 10.10; provided that the aggregate
------------- --------
principal amount of all such notes shall not at any time exceed $1,000,000;
provided, however, that no Investment otherwise permitted by clause (b), (c),
-------- ------- ---------- ---
(d), (e), (f), (g) or (j) shall be permitted to be made if, immediately before
--- --- --- --- ---
or after giving effect thereto, any Event of Default or Unmatured Event of
Default shall have occurred and be continuing.
10.21 Maintenance of Property. The Company shall, and shall cause each
-----------------------
Subsidiary to, maintain and preserve all its property which is used or useful in
its business in good working order and condition, ordinary wear and tear
excepted.
10.22 Performance of Obligations. The Company shall, and shall cause each
--------------------------
Subsidiary to, pay and discharge as the same shall become due and payable, all
their respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges or levies
upon it or its properties or assets; and
(b) all lawful claims which, if unpaid, would by law become a Lien upon its
property; unless, in each case, the same are being contested in good faith
by appropriate proceedings and adequate reserves in accordance with GAAP
are being maintained by the Company or such Subsidiary.
49
10.23 Leases. Enter into, and cause each Subsidiary to enter into, leases
------
acceptable to the Agent with respect to any real property used by the Company or
any Subsidiary in the conduct of its business.
10.24 Assignability of Contracts. The Company shall, and shall cause each
--------------------------
Subsidiary to, ensure that any contracts acquired as a result of an acquisition
permitted by Section 10.10 shall be properly assigned to the Company or such
-------------
Subsidiary.
10.25 Limitation on Foreign Assets and Margin Stock. Not permit the
---------------------------------------------
aggregate amount of all tangible assets of the Company and its Subsidiaries
located outside the United States to exceed $10,000,000; and not permit Margin
Stock (including any common stock of the Company held by the Company) to
constitute more than 25% of the value of the assets of the Company.
10.26 Financial Information re: Certain Acquisitions. Not complete the
----------------------------------------------
Waggoners Acquisition or the Centurion Acquisition unless (i) such acquisition
will be completed substantially on the terms set forth in the Confidential
Offering Memorandum dated May 1999 (the "Offering Memorandum"), a copy of which
-------------------
was delivered to each Bank (and, in any event, for an aggregate purchase price
and a cash purchase price not in excess of 110% of the respective amounts
specified therefor in the Offering Memorandum); (ii) the Company shall have
delivered to the Agent and each Bank audited consolidated financial statements
for the applicable entity to be acquired, together with a certificate to the
effect that the information contained in such financial statements does not
materially differ from the information for the applicable entity used in
preparing the historical and pro forma financial information set forth in the
Offering Memorandum; (iii) all applicable waiting periods with respect to such
acquisition have expired without any action being taken by any governmental or
regulatory authority which restrains, prevents or imposes material adverse
conditions on the completion of such acquisition; and (iv) the Company has
delivered to the Agent environmental reports or summaries from environmental
consultants or engineers of recognized national standing confirming that there
are no material environmental problems at any property owned or operated by the
entity to be acquired or any Subsidiary thereof and that, to the knowledge of
such consultants or engineers, there are no material Environmental Claims
against such entity or any such Subsidiary.
SECTION 11 EFFECTIVENESS; CONDITIONS OF LENDING, ETC.
The obligation of each Bank to make its Loans and of any Issuing Bank to
issue Letters of Credit is subject to the following conditions precedent:
11.1 Initial Credit Extensions. The obligation of each Bank to make its
-------------------------
initial Loan and of any Issuing Bank to issue any Letter of Credit, whichever
first occurs, is, in addition to the conditions precedent specified in Section
-------
11.2, subject to the conditions precedent (and the date on which all such
----
conditions precedent have been satisfied or waived in writing by the Banks is
called the "Effective Date") that the Effective Date shall occur on or before
--------------
September 11, 1999; (b) the Company shall have completed (or shall concurrently
complete) the Centurion Acquisition or the Waggoners
50
Acquisition; (c) the Agent shall have received all amounts which are then due
and payable pursuant to Section 5 and (to the extent billed) Section 14.6; and
(d) the Agent shall have received all of the following, each duly executed and
dated the Effective Date (or such other date as shall be satisfactory to the
Agent), in form and substance satisfactory to the Agent, and each (except for
the Notes and the FRB Forms described in Section 11.1.9, of which only the
originals shall be signed) in sufficient number of signed counterparts to
provide one for each Bank:
11.1.1 Notes. The Notes.
-----
11.1.2 Resolutions. Certified copies of resolutions of the Board of
-----------
Directors of the Company authorizing or ratifying the execution, delivery and
performance by the Company of this Agreement, the Notes and the other Loan
Documents to which the Company is a party; and certified copies of resolutions
of the Board of Directors of each Subsidiary (if any) which is to execute and
deliver any document pursuant to Section 11.1.5, 11.1.6 or 11.1.7 authorizing or
-------------- ------ ------
ratifying the execution, delivery and performance by such Subsidiary of each
Loan Document to which such Subsidiary is a party.
11.1.3 Consents, etc. Certified copies of all documents evidencing any
--------------
necessary corporate action, consents and governmental approvals (if any)
required for the execution, delivery and performance by the Company and each
Subsidiary of the documents referred to in this Section 11.
----------
11.1.4 Incumbency and Signature Certificates. A certificate of the
-------------------------------------
Secretary or an Assistant Secretary of the Company and each Subsidiary of the
Company as of the Effective Date certifying the names of the officer or officers
of such entity authorized to sign the Loan Documents to which such entity is a
party, together with a sample of the true signature of each such officer (it
being understood that the Agent and each Bank may conclusively rely on each such
certificate until formally advised by a like certificate of any changes
therein).
11.1.5 Guaranty. Counterparts to the Guaranty executed by each Subsidiary
--------
(if any) as of the Effective Date which has not previously executed a
counterpart thereof.
11.1.6 Security Agreement and Amendment. (a) Counterparts to the Security
--------------------------------
Agreement executed by each Subsidiary (if any) as of the Effective Date which
has not previously executed a counterpart thereof, together with evidence,
satisfactory to the Agent, that all filings necessary to perfect the Agent's
Lien on any collateral granted under the Security Agreement have been duly made
and are in full force and effect, and (b) the Amendment to the Security
Agreement substantially in the form of Exhibit M executed by the Company and
---------
each Subsidiary.
11.1.7 Pledge Agreements. With respect to any Subsidiary that as of the
-----------------
Effective Date has one or more Subsidiaries, a Subsidiary Pledge Agreement, in
each case together with all stock certificates, stock powers and other items
required to be delivered in connection with the Company Pledge Agreement or the
Subsidiary Pledge Agreement and not previously delivered.
51
11.1.8 Confirmation. The Confirmation executed by the Company and each
------------
Subsidiary.
11.1.9 FRB Forms. For each Bank, a Form FR U-1 or other appropriate form
---------
required by the FRB.
11.1.11 Opinions of Counsels for the Company and the Guarantors. The opinion
-------------------------------------------------------
of ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, transaction counsel to the Company and the
Guarantors, and the opinions of such local counsel to the Guarantors as the
Agent or any Bank may reasonably request.
11.1.11 Other. Such other documents as the Agent or any Bank may reasonably
-----
request.
11.2 Conditions. The obligation (a) of each Bank to make each Loan and
----------
(b) of each Issuing Bank to issue each Letter of Credit is subject to the
following further conditions precedent that:
11.2.1 Compliance with Warranties, No Default, etc. Both before and after
--------------------------------------------
giving effect to any borrowing and the issuance of any Letter of Credit (but, if
any Event of Default of the nature referred to in Section 12.1.2 shall have
--------------
occurred with respect to any other Debt, without giving effect to the
application, directly or indirectly, of the proceeds thereof) the following
statements shall be true and correct:
(a) the representations and warranties of the Company and the
Guarantors set forth in this Agreement (excluding Section 9.6) and the
-----------
other Loan Documents shall be true and correct in all material respects
with the same effect as if then made (except to the extent stated to relate
to an earlier date, in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date);
(b) except as disclosed by the Company to the Agent and the Banks
pursuant to Section 9.6,
-----------
(i) no litigation (including derivative actions), arbitration
proceeding, labor controversy or governmental investigation or
proceeding shall be pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries which might
reasonably be expected to have a Material Adverse Effect or which
purports to affect the legality, validity or enforceability of this
Agreement, the Notes or any other Loan Document; and
(ii) no development shall have occurred in any litigation
(including derivative actions), arbitration proceeding, labor
controversy or governmental investigation or proceeding disclosed
pursuant to Section 9.6 which might reasonably be expected to have a
-----------
Material Adverse Effect; and
52
(c) no Event of Default or Unmatured Event of Default shall have then
occurred and be continuing, and neither the Company nor any of its
Subsidiaries shall be in violation of any law or governmental regulation or
court order or decree where such violation or violations singly or in the
aggregate might reasonably be expected to have a Material Adverse Effect;
and
(d) there shall have been no change in the operations, financial
condition or prospects of the Company and its Subsidiaries or in the market
for syndicated loans that might reasonably be expected to have a Material
Adverse Effect.
11.2.2 Confirmatory Certificate. If requested by the Agent or any Bank, the
------------------------
Agent shall have received (in sufficient counterparts to provide one to each
Bank) a certificate dated the date of such requested Loan or Letter of Credit
and signed by a duly authorized representative of the Company as to the matters
set out in Section 11.2.1 (it being understood that each request by the Company
--------------
for the making of a Loan or the issuance of a Letter of Credit shall be deemed
to constitute a warranty by the Company that the conditions precedent set forth
in Section 11.2.1 will be satisfied at the time of the making of such Loan or
--------------
the issuance of such Letter of Credit), together with such other documents as
the Agent or any Bank may reasonably request in support thereof.
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT.
12.1 Events of Default. Each of the following shall constitute an Event
-----------------
of Default under this Agreement:
12.1.1 Non-Payment of the Loans, etc. Default in the payment when due of
-----------------------------
the principal of any Loan; or default, and continuance thereof for five days, in
the payment when due of any interest, fee, reimbursement obligation with respect
to any Letter of Credit or other amount payable by the Company hereunder or
under any other Loan Document.
12.1.2 Non-Payment of Other Debt. Any default shall occur under the terms
-------------------------
applicable to any Debt of the Company or any Subsidiary in an aggregate amount
(for all such Debt so affected) exceeding $500,000 and such default shall (a)
consist of the failure to pay such Debt when due (subject to any applicable
grace period), whether by acceleration or otherwise, or (b) accelerate the
maturity of such Debt or permit the holder or holders thereof, or any trustee or
agent for such holder or holders, to cause such Debt to become due and payable
prior to its expressed maturity.
12.1.3 Other Material Obligations. Default in the payment when due, or in
--------------------------
the performance or observance of, any material obligation of, or condition
agreed to by, the Company or any Subsidiary with respect to any material
purchase or lease of goods or services where such default, singly or in the
aggregate with other such defaults might reasonably be expected to have a
Material Adverse Effect (except only to the extent that the existence of any
such default is being contested by the Company or such Subsidiary in good faith
and by appropriate proceedings and appropriate reserves have been made in
respect of such default).
53
12.1.4 Bankruptcy, Insolvency, etc. The Company or any Subsidiary becomes
----------------------------
insolvent or generally fails to pay, or admits in writing its inability or
refusal to pay, debts as they become due; or the Company or any Subsidiary
applies for, consents to, or acquiesces in the appointment of a trustee,
receiver or other custodian for the Company or such Subsidiary or any property
thereof, or makes a general assignment for the benefit of creditors; or, in the
absence of such application, consent or acquiescence, a trustee, receiver or
other custodian is appointed for the Company or any Subsidiary or for a
substantial part of the property of any thereof and is not discharged within 60
days; or any bankruptcy, reorganization, debt arrangement, or other case or
proceeding under any bankruptcy or insolvency law, or any dissolution or
liquidation proceeding (except the voluntary dissolution, not under any
bankruptcy or insolvency law, of a Subsidiary), is commenced in respect of the
Company or any Subsidiary, and if such case or proceeding is not commenced by
the Company or such Subsidiary, it is consented to or acquiesced in by the
Company or such Subsidiary, or remains for 60 days undismissed; or the Company
or any Subsidiary takes any corporate action to authorize, or in furtherance of,
any of the foregoing.
12.1.5 Non-Compliance with Provisions of This Agreement. (a) Failure by the
------------------------------------------------
Company to comply with or to perform any covenant set forth in Sections 10.6
-------------
through 10.11, 10.14 or 10.17 through 10.20; or (b) failure by the Company to
----- ----- ----- -----
comply with or to perform any other provision of this Agreement (and not
constituting an Event of Default under any of the other provisions of this
Section 12) and continuance of such failure described in this clause (b) for 30
---------- ----------
days (or, in the case of Section 10.13, five Business Days) after notice thereof
-------------
to the Company from the Agent or any Bank.
12.1.6 Warranties. Any warranty made by the Company herein is breached or
----------
is false or misleading in any material respect, or any schedule, certificate,
financial statement, report, notice or other writing furnished by the Company to
the Agent or any Bank in connection herewith is false or misleading in any
material respect on the date as of which the facts therein set forth are stated
or certified.
12.1.7 Pension Plans. (i) Institution of any steps by the Company or any
-------------
other Person to terminate a Pension Plan if as a result of such termination the
Company could be required to make a contribution to such Pension Plan, or could
incur a liability or obligation to such Pension Plan, in excess of $1,000,000;
(ii) a contribution failure occurs with respect to any Pension Plan sufficient
to give rise to a Lien under section 302(f) of ERISA; or (iii) there shall occur
any withdrawal or partial withdrawal from a Multiemployer Pension Plan and the
withdrawal liability (without unaccrued interest) to Multiemployer Pension Plans
as a result of such withdrawal (including any outstanding withdrawal liability
that the Company and the Controlled Group have incurred on the date of such
withdrawal) exceeds $1,000,000.
12.1.8 Judgments. Final judgments which exceed an aggregate of $1,000,000
---------
shall be rendered against the Company, or any Subsidiary and shall not have been
paid, discharged or vacated or had execution thereof stayed pending appeal
within 30 days after entry or filing of such judgments.
54
12.1.9 Invalidity of Guaranty, etc. The Guaranty shall cease to be in
---------------------------
full force and effect with respect to any Guarantor, any Guarantor shall fail
(subject to any applicable grace period) to comply with or to perform any
applicable provision of the Guaranty, or any Guarantor (or any Person by,
through or on behalf of such Guarantor) shall contest in any manner the
validity, binding nature or enforceability of the Guaranty with respect to such
Guarantor.
12.1.10 Invalidity of Collateral Documents, etc. Any Collateral Document
----------------------------------------
shall cease to be in full force and effect with respect to the Company or any
Guarantor, the Company or any Guarantor shall fail (subject to any applicable
grace period) to comply with or to perform any applicable provision of any
Collateral Document to which such entity is a party, or the Company or any
Guarantor (or any Person by, through or on behalf of the Company or such
Guarantor) shall contest in any manner the validity, binding nature or
enforceability of any Collateral Document.
12.1.11 Change in Control. (a) Any Person or group of Persons (within the
-----------------
meaning of Section 13 or 14 of the Securities Exchange Act of 1934, but
excluding the executive managers of the Company as of the Signing Date) shall
acquire beneficial ownership (within the meaning of Rule 13d-3 promulgated under
such Act) of 30% or more of the outstanding shares of common stock of the
Company; (b) during any 24-month period, individuals who at the beginning of
such period constituted the Company's Board of Directors (together with any new
directors whose election by the Company's Board of Directors or whose nomination
for election by the Company's shareholders was approved by a vote of at least
two-thirds of the directors who either were directors at beginning of such
period or whose election or nomination was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the Company; or (c)
any "Change of Control" shall occur under and as defined in the Purchase
Agreement for the Charterhouse Subordinated Notes.
12.2 Effect of Event of Default. If any Event of Default described in
--------------------------
Section 12.1.4 shall occur, the Commitments (if they have not theretofore
--------------
terminated) shall immediately terminate and the Notes and all other obligations
hereunder shall become immediately due and payable and the Company shall become
immediately obligated to deliver to the Agent cash collateral in an amount equal
to the outstanding face amount of all Letters of Credit, all without
presentment, demand, protest or notice of any kind; and, if any other Event of
Default shall occur and be continuing, the Agent (upon written request of the
Required Banks) shall declare the Commitments (if they have not theretofore
terminated) to be terminated and/or declare all Notes and all other obligations
hereunder to be due and payable and/or demand that the Company immediately
deliver to the Agent cash collateral in amount equal to the outstanding face
amount of all Letters of Credit, whereupon the Commitments (if they have not
theretofore terminated) shall immediately terminate and/or all Notes and all
other obligations hereunder shall become immediately due and payable and/or the
Company shall immediately become obligated to deliver to the Agent cash
collateral in an amount equal to the face amount of all Letters of Credit, all
without presentment, demand, protest or notice of any kind. The Agent shall
promptly advise the Company of any such declaration, but failure to do so shall
not impair the effect of such declaration. Notwithstanding the foregoing, the
effect as an Event of Default of any event described in Section
--------
55
12.1.1 or Section 12.1.4 may be waived by the written concurrence of all of the
Banks, and the effect as an Event of Default of any other event described in
this Section 12 may be waived by the written concurrence of the Required Banks.
Any cash collateral delivered hereunder shall be held by the Agent (without
liability for interest thereon) and applied to obligations arising in connection
with any drawing under a Letter of Credit. After the expiration or termination
of all Letters of Credit, such cash collateral shall be applied by the Agent to
any remaining obligations hereunder and any excess shall be delivered to the
Company or as a court of competent jurisdiction may elect.
SECTION 13 THE AGENT.
13.1 Appointment and Authorization. (a) Each Bank hereby irrevocably
-----------------------------
(subject to Section 13.9) appoints, designates and authorizes the Agent to take
------------
such action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent.
(b) Each Issuing Bank shall act on behalf of the Revolving Banks with
respect to any Letters of Credit issued by it and the documents associated
therewith. Each Issuing Bank shall have all of the benefits and immunities (i)
provided to the Agent in this Section 13 with respect to any acts taken or
----------
omissions suffered by such Issuing Bank in connection with Letters of Credit
issued by it or proposed to be issued by it and the applications and agreements
for letters of credit pertaining to such Letters of Credit as fully as if the
term "Agent", as used in this Section 13, included such Issuing Bank with
----------
respect to such acts or omissions and (ii) as additionally provided in this
Agreement with respect to the Issuing Banks.
(c) The Swing Line Bank shall have all of the benefits and immunities (i)
provided to the Agent in this Section 13 with respect to any acts taken or
----------
omissions suffered by the Swing Line Bank in connection with Swing Line Loans
made or proposed to be made by it as fully as if the term "Agent", as used in
this Section 13, included the Swing Line Bank with respect to such acts or
----------
omissions and (ii) as additionally provided in this Agreement with respect to
the Swing Line Bank.
13.2 Delegation of Duties. The Agent may execute any of its duties under
--------------------
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
56
13.3 Liability of Agent. None of the Agent-Related Persons shall (i) be
------------------
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Banks for any recital,
statement, representation or warranty made by the Company or any Subsidiary or
Affiliate of the Company, or any officer thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Company or any other party to
any Loan Document to perform its obligations hereunder or thereunder. No Agent-
Related Person 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 any other Loan Document, or to inspect
the properties, books or records of the Company or any of the Company's
Subsidiaries or Affiliates.
13.4 Reliance by Agent. The Agent shall be entitled to rely, and
-----------------
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to the Company), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Banks as it deems appropriate
and, if it so requests, confirmation from the Banks of their obligation to
indemnify the Agent 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
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Required Banks and such request and any action taken
or failure to act pursuant thereto shall be binding upon all of the Banks.
13.5 Notice of Default. The Agent shall not be deemed to have
-----------------
knowledge or notice of the occurrence of any Event of Default or Unmatured Event
of Default except with respect to defaults in the payment of principal, interest
and fees required to be paid to the Agent for the account of the Banks, unless
the Agent shall have received written notice from a Bank or the Company
referring to this Agreement, describing such Event of Default or Unmatured Event
of Default and stating that such notice is a "notice of default". The Agent will
notify the Banks of its receipt of any such notice. The Agent shall take such
action with respect to such Event of Default or Unmatured Event of Default as
may be requested by the Required Banks in accordance with Section 12; provided,
however, that unless and until the Agent has received any such request, the
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Event of Default or Unmatured Event of
Default as it shall deem advisable or in the best interest of the Banks.
57
13.6 Credit Decision. Each Bank acknowledges that none of the Agent-
---------------
Related Persons has made any representation or warranty to it, and that no act
by the Agent hereafter taken, including any review of the affairs of the Company
and its Subsidiaries, shall be deemed to constitute any representation or
warranty by any Agent-Related Person to any Bank. Each Bank represents to the
Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Company and its Subsidiaries, and all applicable bank regulatory laws relating
to the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Company hereunder. Each Bank also
represents that it will, independently and without reliance upon any Agent-
Related Person and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigations as it deems necessary to inform
itself as to the business, prospects, operations, property, financial and other
condition and creditworthiness of the Company. Except for notices, reports and
other documents expressly herein required to be furnished to the Banks by the
Agent, the Agent shall not have any duty or responsibility to provide any Bank
with any credit or other information concerning the business, prospects,
operations, property, financial or other condition or creditworthiness of the
Company which may come into the possession of any of the Agent-Related Persons.
13.7 Indemnification. Whether or not the transactions contemplated
---------------
hereby are consummated, the Banks shall indemnify upon demand the Agent-Related
Persons (to the extent not reimbursed by or on behalf of the Company and without
limiting the obligation of the Company to do so), pro rata (according to their
respective Total Percentages), from and against any and all Indemnified
Liabilities; provided that no Bank shall be liable for any payment to the Agent-
Related Person of any portion of the Indemnified Liabilities resulting solely
from such Person's gross negligence or willful misconduct. Without limitation of
the foregoing, each Bank shall reimburse the Agent upon demand for its ratable
share (according to its Total Percentage) of any costs or out-of-pocket expenses
(including reasonable fees of attorneys for the Agent (including the allocable
costs of internal legal services and all disbursements of internal counsel))
incurred by the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that the Agent
is not reimbursed for such expenses by or on behalf of the Company. The
undertaking in this Section shall survive repayment of the Loans, cancellation
of the Notes, any foreclosure under, or any modification, release or discharge
of, any or all of the Collateral Documents, any termination of this Agreement
and the resignation or replacement of the Agent.
For the purposes of this Section 13.7, "Indemnified Liabilities" shall
------------ -----------------------
mean: any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses and disbursements (including
reasonable fees of attorneys for the Agent (including the allocable costs of
internal legal services and all disbursements of internal counsel)) of any kind
or nature whatsoever which
58
may at any time (including at any time following repayment of the Loan and the
termination, resignation or replacement of the Agent or the replacement of any
Bank) be imposed on, incurred by or asserted against any Agent-Related Person in
any way relating to or arising out of this Agreement or any document
contemplated by or referred to herein, or the transactions contemplated hereby,
or any action taken or omitted by any such Person under or in connection with
any of the foregoing, including with respect to any investigation, litigation or
proceeding (including (a) any case, action or proceeding before any court or
other governmental authority relating to bankruptcy, reorganization, insolvency,
liquidation, receivership, dissolution, winding-up or relief of debtors, or (b)
any general assignment for the benefit of creditors, composition, marshalling of
assets for creditors, or other, similar arrangement in respect of its creditors
generally or any substantial portion of its creditors; undertaken under U.S.
Federal, state or foreign law, including the Bankruptcy Code, and including any
appellate proceeding) related to or arising out of this Agreement or the
Commitments or the use of the proceeds thereof, whether or not any Agent-Related
Person, any Bank or any of their respective officers, directors, employees,
counsel, agents or attorneys-in-fact is a party thereto.
13.8 Agent in Individual Capacity. BofA and its Affiliates may make
----------------------------
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though BofA were not the Agent, the Issuing Bank
or the Swing Line Bank hereunder and without notice to or consent of the Banks.
The Banks acknowledge that, pursuant to such activities, BofA or its Affiliates
may receive information regarding the Company or its Affiliates (including
information that may be subject to confidentiality obligations in favor of the
Company or such Subsidiary) and acknowledge that the Agent shall be under no
obligation to provide such information to them. With respect to their Loans,
BofA and its Affiliates shall have the same rights and powers under this
Agreement as any other Bank and may exercise the same as though BofA were not
the Agent, the Issuing Bank and the Swing Line Bank, and the terms "Bank" and
"Banks" include BofA and its Affiliates, to the extent applicable, in their
individual capacities.
13.9 Successor Agent. The Agent may, and at the request of the Required
---------------
Banks shall, resign as Agent upon 30 days' notice to the Banks. If the Agent
resigns under this Agreement, the Required Banks shall, with (so long as no
Event of Default exists) the consent of the Company (which shall not be
unreasonably withheld or delayed), appoint from among the Banks a successor
agent for the Banks. If no successor agent is appointed prior to the effective
date of the resignation of the Agent, the Agent may appoint, after consulting
with the Banks and the Company, a successor agent from among the Banks. Upon
the acceptance of its appointment as successor agent hereunder, such successor
agent shall succeed to all the rights, powers and duties of the retiring Agent
and the term "Agent" shall mean such successor agent, and the retiring Agent's
appointment, powers and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Section 13 and
----------
Sections 14.6 and 14.13 shall inure to its benefit as to any actions taken or
------------- -----
omitted to be taken by it while it was Agent under this Agreement. If no
successor agent has accepted appointment as Agent by the date which is 30 days
following a retiring Agent's notice of resignation, the
59
retiring Agent's resignation shall nevertheless thereupon become effective and
the Banks shall perform all of the duties of the Agent hereunder until such
time, if any, as the Required Banks appoint a successor agent as provided for
above. Notwithstanding the foregoing, however, BofA may not be removed as the
Agent at the request of the Required Banks unless BofA shall also simultaneously
be replaced as an "Issuing Bank" and the "Swing Line Bank" hereunder pursuant to
documentation in form and substance reasonably satisfactory to BofA.
13.10 Withholding Tax.
---------------
(a) If any Bank is a "foreign corporation, partnership or trust"
within the meaning of the Code and such Bank claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code,
such Bank agrees to deliver to the Agent:
(i) if such Bank claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, properly completed
Internal Revenue Service ("IRS") Forms 1001 and W-8 before the payment
---
of any interest in the first calendar year and before the payment of
any interest in each third succeeding calendar year during which
interest may be paid under this Agreement;
(ii) if such Bank claims that interest paid under this Agreement
is exempt from United States withholding tax because it is effectively
connected with a United States trade or business of such Bank, two
properly completed and executed copies of IRS Form 4224 before the
payment of any interest is due in the first taxable year of such Bank
and in each succeeding taxable year of such Bank during which interest
may be paid under this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required under the Code
or other laws of the United States as a condition to exemption from,
or reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Agent of any change in
circumstances which would modify or render invalid any claimed
exemption or reduction.
(b) If any Bank claims exemption from, or reduction of, withholding
tax under a United States tax treaty by providing IRS Form 1001 and such
Bank sells, assigns, grants a participation in, or otherwise transfers all
or part of the obligations of the Company to such Bank, such Bank agrees to
notify the Agent of the percentage amount in which it is no longer the
beneficial owner of such obligations of the Company hereunder. To the
extent of such percentage amount, the Agent will treat such Bank's IRS Form
1001 as no longer valid.
60
(c) If any Bank claiming exemption from United States withholding tax
by filing IRS Form 4224 with the Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the obligations of
the Company to such Bank hereunder, such Bank agrees to undertake sole
responsibility for complying with the withholding tax requirements imposed
by Sections 1441 and 1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such
Bank an amount equivalent to the applicable withholding tax after taking
into account such reduction. If the forms or other documentation required
by subsection (a) of this Section are not delivered to the Agent, then the
--------------
Agent may withhold from any interest payment to such Bank not providing
such forms or other documentation an amount equivalent to the applicable
withholding tax.
(e) If the IRS or any other governmental authority of the United
States or any other jurisdiction asserts a claim that the Agent did not
properly withhold tax from amounts paid to or for the account of any Bank
(because the appropriate form was not delivered or was not properly
executed, or because such Bank failed to notify the Agent of a change in
circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Bank shall
indemnify the Agent fully for all amounts paid, directly or indirectly, by
the Agent as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to
the Agent under this Section, together with all costs and expenses
(including reasonable fees of attorneys for the Agent (including the
allocable costs of internal legal services and all disbursements of
internal counsel)). The obligation of the Banks under this subsection
shall survive the repayment of the Loans, cancellation of the Notes, any
termination of this Agreement and the resignation or replacement of the
Agent.
13.11 Collateral Matters. (a) The Banks irrevocably authorize the Agent,
------------------
at its option and in its discretion, (i) to release any Lien granted to or held
by the Agent under any Collateral Document (A) upon termination of the
Commitments and payment in full of all Loans and all other obligations of the
Company hereunder and the expiration or termination of all Letters of Credit;
(B) on property sold or to be sold or disposed of as part of or in connection
with any disposition permitted hereunder; (C) on any property of a Person which
is released from its obligations under the Guaranty pursuant to clause (b) below
----------
or (D) subject to Section 14.1, if approved, authorized or ratified in writing
------------
by the Required Banks; and (ii) to subordinate its interest in any Collateral to
the holder of any Lien permitted by clause (d)(i) or (d)(iii) of Section 10.8;
------ ------ -------- ------------
and (iii) to execute and deliver UCC releases and/or subordinations with respect
to any property in which neither the Company nor any Subsidiary has any interest
(other than an interest as lessor of such property under an operating lease).
61
(b) The Banks irrevocably authorize the Agent, at its option and in its
discretion, to release any Guarantor from its obligations under the Guaranty if
such Guarantor ceases to be a Subsidiary of the Company as a result of a
transaction permitted hereunder.
(c) Upon request by the Agent at any time, the Banks will confirm in
writing the Agent's authority to release particular types or items of
Collateral, or to release a Guarantor, pursuant to this Section 13.11 (it being
-------------
understood that the Agent is not required to obtain any such confirmation).
13.12 Funding Reliance. (a) Unless the Agent receives notice from a
----------------
Bank by 1:00 p.m., Chicago time, on the day of a proposed borrowing that such
Bank will not make available to the Agent an amount equal to its Revolving
Percentage or Term Percentage, as applicable, of such borrowing, the Agent may
assume that such Bank has made such amount available to the Agent and, in
reliance upon such assumption, make a corresponding amount available to the
Company. If and to the extent such Bank has not made such amount available to
the Agent, such Bank and the Company jointly and severally agree to repay such
amount to the Agent forthwith on demand, together with interest thereon at the
interest rate applicable to Loans comprising such borrowing or, in the case of
any Bank which repays such amount within three Business Days, the Federal Funds
Rate (together with such other compensatory amounts as may be required to be
paid by such Bank to the Agent pursuant to the Rules for Interbank Compensation
of the Council on International Banking or the Clearinghouse Compensation
Committee, as applicable, as in effect from time to time). Nothing set forth in
this clause (a) shall relieve any Bank of any obligation it may have to make any
Loan hereunder.
(b) Unless the Agent receives notice from the Company prior to the due date
for any payment hereunder that the Company does not intend to make such payment,
the Agent may assume that the Company has made such payment and, in reliance
upon such assumption, make available to each applicable Bank its share of such
payment. If and to the extent that the Company has not made any such payment to
the Agent, each Bank which received a share of such payment shall repay such
share (or the relevant portion thereof) to the Agent forthwith on demand,
together with interest thereon at the Base Rate (or, in the case of any Bank
which repays such amount within three Business Days, the Federal Funds Rate).
Nothing set forth in this clause (b) shall relieve the Company of any obligation
----------
it may have to make any payment hereunder.
13.13 Other Agents. No Bank identified on the facing page or the
------------
signature pages of this Agreement as the "Documentation Agent" or "Syndication
Agent" shall have any right, power, obligation, liability, responsibility or
duty under this Agreement other than those applicable to all Banks as such.
Without limiting the foregoing, no Bank so identified as the "Documentation
Agent" or "Syndication Agent" shall have or be deemed to have any fiduciary
relationship with any Bank. Each Bank acknowledges that it has not relied, and
will not rely, on any Bank so identified in deciding to enter into this
Agreement or in taking or not taking action hereunder.
SECTION 14 GENERAL.
62
14.1 Waiver; Amendments. No delay on the part of the Agent or any Bank
------------------
in the exercise of any right, power or remedy shall operate as a waiver thereof,
nor shall any single or partial exercise by any of them of any right, power or
remedy preclude other or further exercise thereof, or the exercise of any other
right, power or remedy. No amendment, modification or waiver of, or consent
with respect to, any provision of this Agreement or the Notes shall in any event
be effective unless the same shall be in writing and signed and delivered by
Banks having an aggregate Total Percentage of not less than the aggregate Total
Percentage expressly designated herein with respect thereto or, in the absence
of such designation as to any provision of this Agreement or the Notes, by the
Required Banks, and then any such amendment, modification, waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given. No amendment, modification, waiver or consent shall change the
Revolving Percentage (except as provided in Section 6.1.2) or Term Percentage of
-------------
any Bank without the consent of such Bank. No amendment, modification, waiver
or consent shall (i) extend or increase the amount of the Revolving Commitments
(except as provided in Section 6.1.2) or the Term Commitments, (ii) extend the
-------------
date for payment of any principal of or interest on any Loan or any fee payable
hereunder, (iii) reduce the principal amount of any Loan, the rate of interest
thereon or any fee payable hereunder, (iv) release the Guaranty (other than with
respect to a Guarantor which ceases to be a Subsidiary as a result of a
transaction permitted hereunder) or all or any substantial part of the
collateral granted under the Collateral Documents or (v) reduce the aggregate
Total Percentage required to effect an amendment, modification, waiver or
consent without, in each case, the consent of all Banks (provided that (a) the
scheduled Revolving Termination Date may be extended solely with the consent of
all Revolving Banks and (b) the amount of the Revolving Commitments may be
increased with the consent of all Revolving Banks and the consent of Term Banks
having Term Percentages of more than 50%). No provisions of Section 13 or other
----------
provision of this Agreement affecting the Agent in its capacity as such shall be
amended, modified or waived without the consent of the Agent. No provision of
this Agreement relating to the rights or duties of an Issuing Bank in its
capacity as such shall be amended, modified or waived without the consent of
such Issuing Bank. No provision of this Agreement relating to the rights or
duties of a Swing Line Bank in its capacity as such shall be amended, modified
or waived without the consent of such Swing Line Bank.
14.2 Confirmations. The Company and each holder of a Note agree from
-------------
time to time, upon written request received by it from the other, to confirm to
the other in writing (with a copy of each such confirmation to the Agent) the
aggregate unpaid principal amount of the Loans then outstanding under such Note.
14.3 Notices. Except as otherwise provided in Section 2.2, all notices
------- -----------
hereunder shall be in writing (including facsimile transmission) and shall be
sent to the applicable party at its address shown on Schedule 14.3 or at such
-------------
other address as such party may, by written notice received by the other
parties, have designated as its address for such purpose. Notices sent by
facsimile transmission shall be deemed to have been given when sent; notices
sent by mail shall be deemed to have been given three Business Days after the
date when sent by registered or certified mail, postage prepaid; and notices
sent by hand delivery or overnight courier service shall be deemed to have been
given when received. For purposes of Sections 2.2 and 2.4, the Agent and the
------------ ---
Swing Line Bank shall be entitled to rely on
63
telephonic instructions from any person that the Agent or the Swing Line Bank in
good faith believes is an authorized officer or employee of the Company, and the
Company shall hold the Agent, the Swing Line Bank and each Bank harmless from
any loss, cost or expense resulting from any such reliance.
14.4 Computations. Where the character or amount of any asset or
------------
liability or item of income or expense is required to be determined, or any
consolidation or other accounting computation is required to be made, for the
purpose of this Agreement, such determination or calculation shall, to the
extent applicable and except as otherwise specified in this Agreement, be made
in accordance with GAAP, consistently applied; provided that if the Company
notifies the Agent that the Company wishes to amend any covenant in Section 10
to eliminate or to take into account the effect of any change in GAAP on the
operation of such covenant (or if the Agent notifies the Company that the
Required Banks wish to amend Section 10 for such purpose), then the Company's
compliance with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner satisfactory to
the Company and the Required Banks.
14.5 Regulation U. Each Bank represents that it in good faith is not
------------
relying, either directly or indirectly, upon any Margin Stock as collateral
security for the extension or maintenance by it of any credit provided for in
this Agreement.
14.6 Costs, Expenses and Taxes. The Company agrees to pay on demand all
-------------------------
reasonable out-of-pocket costs and expenses of Agent-Related Persons (including
the reasonable accounting fees, appraisal fees and fees and charges of counsel
for the Agent-Related Persons and of local counsel, if any, who may be retained
by said counsel) in connection with the preparation, execution, delivery and
administration of this Agreement, the other Loan Documents and all other
documents provided for herein or delivered or to be delivered hereunder or in
connection herewith (including any amendments, supplements or waivers to any
Loan Documents), and all reasonable out-of-pocket costs and expenses (including
reasonable accounting fees, appraisal fees and attorneys' fees, court costs and
other legal expenses and allocated costs of staff counsel) incurred by the
Agent-Related Persons and each Bank after an Event of Default in connection with
the enforcement of this Agreement, the other Loan Documents or any such other
documents. Each Bank agrees to reimburse the Agent for such Bank's pro rata
share (based on its respective Total Percentage) of any such costs and expenses
of the Agent not paid by the Company. In addition, the Company agrees to pay,
and to save the Agent and the Banks harmless from all liability for, (a) any
stamp or other taxes (excluding income taxes and franchise taxes based on net
income) which may be payable in connection with the execution and delivery of
this Agreement, the borrowings hereunder, the issuance of the Notes or the
execution and delivery of any other Loan Document or any other document provided
for herein or delivered or to be delivered hereunder or in connection herewith
and (b) any fees of the Company's auditors in connection with any reasonable
exercise by the Agent and the Banks of their rights pursuant to Section 10.2.
------------
All obligations provided for in this Section 14.6 shall survive repayment of the
------------
Loans, cancellation of the Notes and any termination of this Agreement.
64
14.7 Subsidiary References. The provisions of this Agreement relating to
---------------------
Subsidiaries shall apply only during such times as the Company has one or more
Subsidiaries.
14.8 Captions. Section captions used in this Agreement are for
--------
convenience only and shall not affect the construction of this Agreement.
14.9 Assignments; Participations.
---------------------------
14.9.1. Assignments. Any Bank may, with the prior written consents of the
-----------
Company (provided that no written consent of the Company shall be required if an
Unmatured Event of Default or Event of Default has occurred and is continuing)
and the Agent (which consents shall not be unreasonably delayed or withheld), at
any time assign and delegate to one or more commercial banks or other Persons
(any Person to whom such an assignment and delegation is to be made being herein
called an "Assignee"), all or any fraction of such Bank's Loans and Commitments;
--------
provided that (a) any assignment of a Revolving Commitment (or, after
--------
termination of the Revolving Commitments, of Revolving Loans) shall be of a
constant, and not a varying, percentage of all of the assigning Bank's rights
and obligations in respect of its Revolving Commitment, Revolving Loans and
participations in Letters of Credit and Swing Line Loans and shall be in a
minimum aggregate amount equal to the lesser of (i) the assigning Bank's
remaining Revolving Commitment (or, if the Revolving Commitments have
terminated, remaining Revolving Loans and participations in Letters of Credit
and Swing Line Loans) and (ii) $5,000,000 (provided that any Bank may assign a
lesser amount to an Assignee between the Signing Date and the Effective Date);
(b) any assignment of a Term Commitment (or, after the termination of the Term
Commitments, any Term Loan) shall be in a minimum aggregate amount equal to the
lesser of (i) the assigning Bank's remaining Term Commitment (or if the Term
Commitments have terminated, Term Loan) and (ii) $2,000,000, (c) no assignment
and delegation may be made to any Person if, at the time of such assignment and
delegation, the Company would be obligated to pay any greater amount under
Section 7.6 or Section 8 to the Assignee than the Company is then obligated to
----------- ---------
pay to the assigning Bank under such Sections (and if any assignment is made in
violation of the foregoing, the Company will not be required to pay the
incremental amounts); and (d) the Company and the Agent shall be entitled to
continue to deal solely and directly with such Bank in connection with the
interests so assigned and delegated to an Assignee until the date when all of
the following conditions shall have been met:
(x) five Business Days (or such lesser period of time as the Agent
and the assigning Bank shall agree) shall have passed after written notice
of such assignment and delegation, together with payment instructions,
addresses and related information with respect to such Assignee, shall have
been given to the Company and the Agent by such assigning Bank and the
Assignee,
(y) the assigning Bank and the Assignee shall have executed and
delivered to the Company and the Agent an assignment agreement
substantially in the form of Exhibit G (an
65
"Assignment Agreement"), together with any documents required to be
--------------------
delivered thereunder, which Assignment Agreement shall have been accepted
by the Agent, and
(z) the assigning Bank or the Assignee shall have paid the Agent a
processing fee of $3,500.
From and after the date on which the conditions described above have been met,
(x) such Assignee shall be deemed automatically to have become a party hereto
and, to the extent that rights and obligations hereunder have been assigned and
delegated to such Assignee pursuant to such Assignment Agreement, shall have the
rights and obligations of a Bank hereunder, and (y) the assigning Bank, to the
extent that rights and obligations hereunder have been assigned and delegated by
it pursuant to such Assignment Agreement, shall be released from its obligations
hereunder. Within five Business Days after effectiveness of any assignment and
delegation, the Company shall execute and deliver to the Agent (for delivery to
the Assignee and the Assignor, as applicable) one or more new Notes in the
appropriate amounts dated the effective date of such assignment (and the
assigning Bank shall ▇▇▇▇ any predecessor Notes "exchanged" and deliver such
Notes to the Company). The Company designates the Agent as its agent for
maintaining a book entry record of ownership identifying the Banks and the
amount of the respective Loans and Notes which they own. The foregoing
provisions are intended to comply with the registration requirements in Treasury
Regulation Section 5f.103-1 so that the Loans and Notes are considered to be in
"registered form" pursuant to such regulation. Such book entry records shall be
conclusive and binding, absent manifest error, regarding ownership of the Loans
and the Notes. Any attempted assignment and delegation not made in accordance
with this Section 14.9.1 shall be null and void.
--------------
Notwithstanding the foregoing provisions of this Section 14.9.1 or any
--------------
other provision of this Agreement, (i) any Bank may at any time assign all or
any portion of its Loans and its Notes to a Federal Reserve Bank and (ii) any
Bank that is a fund that invests in bank loans may assign all or any portion of
its Loans and Notes to any holders of obligations owed, or securities issued, by
such fund as security for such obligations or securities, or to any trustee for,
or any other representative of, such holders (but no such assignment shall
release any Bank from any of its obligations hereunder).
14.9.2. Participations. Any Bank may at any time sell to one or more
--------------
commercial banks or other Persons participating interests in any Loan owing to
such Bank, any Note held by such Bank, any Commitment of such Bank, the direct
or participation interest of such Bank in any Letter of Credit or any other
interest of such Bank hereunder (any Person purchasing any such participating
interest being herein called a "Participant"); provided that any Bank selling
----------- --------
any such participating interest shall give notice thereof to the Company. In
the event of a sale by a Bank of a participating interest to a Participant, (x)
such Bank shall remain the holder of its Notes for all purposes of this
Agreement, (y) the Company and the Agent shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and obligations
hereunder and (z) all amounts payable by the Company shall be determined as if
such Bank had not sold such participation and shall be paid directly to such
Bank. No Participant (other than a Participant which (i) is an affiliate of the
participating Bank and (ii) holds a 100% participation in the interests of such
Bank hereunder) shall have any direct or indirect voting
66
rights hereunder except with respect to any of the events (excluding the events
described in clause (v) thereof) described in the third to last sentence of
Section 14.1. Each Bank agrees to incorporate the requirements of the preceding
sentence into each participation agreement which such Bank enters into with any
Participant. The Company agrees that if amounts outstanding under this Agreement
and the Notes are due and payable (as a result of acceleration or otherwise),
each Participant shall be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement, any Note and with
respect to any Letter of Credit to the same extent as if the amount of its
participating interest were owing directly to it as a Bank under this Agreement
or such Note; provided that such right of setoff shall be subject to the
obligation of each Participant to share with the Banks, and the Banks agree to
share with each Participant, as provided in Section 7.5. The Company also agrees
that each Participant shall be entitled to the benefits of Section 7.6 and
Section 8 as if it were a Bank (provided that no Participant shall receive any
greater compensation pursuant to Section 7.6 or Section 8 than would have been
paid to the participating Bank if no participation had been sold). Each Bank
which sells one or more participations will maintain a book entry record of
ownership identifying the Participant(s) and the amount of the participation(s)
owned by such Participant(s). Such book entry record of ownership shall be
maintained by such Bank as agent for the Company and the Agent. This provision
is intended to comply with the registration requirements in Treasury Regulation
Section 5f.103-1 so that the Loans and Notes are considered to be in "registered
form" pursuant to such regulation. Such book entry records shall be conclusive
and binding, absent manifest error, regarding the ownership of such
participations.
14.10 Governing Law. This Agreement and each Note shall be a contract
-------------
made under and governed by the internal laws of the State of Illinois. Whenever
possible each provision of this Agreement shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement. All obligations of the Company and rights of the Agent and the Banks
expressed herein or in any other Loan Document shall be in addition to and not
in limitation of those provided by applicable law.
14.11 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement. When
counterparts executed by all of the parties hereto shall have been lodged with
the Agent (or, in the case of any Bank as to which an executed counterpart shall
not have been so lodged, the Agent shall have received confirmation from such
Bank of execution of a counterpart hereof by such Bank), the Agent shall notify
the Company and each Bank that the Signing Date has occurred..
14.12 Successors and Assigns. This Agreement shall be binding upon the
----------------------
Company, the Banks and the Agent and their respective successors and assigns,
and shall inure to the benefit of the Company, the Banks and the Agent and the
successors and assigns of the Banks and the Agent.
14.13 Indemnification by the Company.
------------------------------
67
(a) In consideration of the execution and delivery of this Agreement by the
Agent and the Banks and the agreement to extend the Commitments provided
hereunder, the Company hereby agrees to indemnify, exonerate and hold the Agent,
each Bank and each of the officers, directors, employees, Affiliates and agents
of the Agent and each Bank (each a "Bank Party") free and harmless from and
----------
against any and all actions, causes of action, suits, losses, liabilities,
damages and expenses, including reasonable attorneys' fees and charges and
allocated costs of staff counsel (collectively, for purposes of this Section
-------
14.13, called the "Indemnified Liabilities"), incurred by the Bank Parties or
----- -----------------------
any of them as a result of, or arising out of, or relating to (i) any tender
offer, merger, purchase of stock, purchase of assets or other similar
transaction financed or proposed to be financed in whole or in part, directly or
indirectly, with the proceeds of any of the Loans, (ii) the use, handling,
release, emission, discharge, transportation, storage, treatment or disposal of
any hazardous substance at any property owned or leased by the Company or any
Subsidiary, (iii) any violation of any Environmental Laws with respect to
conditions at any property owned or leased by the Company or any Subsidiary or
the operations conducted thereon, (iv) the investigation, cleanup or remediation
of offsite locations at which the Company or any Subsidiary or their respective
predecessors are alleged to have directly or indirectly disposed of hazardous
substances or (v) the execution, delivery, performance or enforcement of this
Agreement or any other Loan Document by any of the Bank Parties, except for any
such Indemnified Liabilities arising on account of any such Bank Party's gross
negligence or willful misconduct. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Company hereby agrees to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law. Nothing set
forth above shall be construed to relieve any Bank Party from any obligation it
may have under this Agreement.
(b) All obligations provided for in this Section 14.13 shall survive
-------------
repayment of the Loans, cancellation of the Notes, any foreclosure under, or
any modification, release or discharge of any or all of the Collateral Documents
and any termination of this Agreement.
14.14 Forum Selection and Consent to Jurisdiction. ANY LITIGATION BASED
-------------------------------------------
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS
OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
-------- -------
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE AGENT'S OPTION,
IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION
OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS
SET FORTH ABOVE. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR
WITHOUT THE STATE OF ILLINOIS. THE COMPANY HEREBY EXPRESSLY AND
68
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE
69
COMPANY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT
OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR
TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF
OR ITS PROPERTY, THE COMPANY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT
OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
14. Waiver of Jury Trial. EACH OF THE COMPANY, THE AGENT AND EACH BANK
--------------------
HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN
DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING
FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING,
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.
Delivered at Chicago, Illinois, as of the day and year first above written.
UNITED ROAD SERVICES, INC.
________________________________
By _____________________________
Title __________________________
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
________________________________
By _____________________________
Title __________________________
BANK OF AMERICA NATIONAL TRUST AND
SAVING ASSOCIATION, as Issuing Bank, Swing
Line Bank and a Bank
________________________________
By _____________________________
Title __________________________
BANKBOSTON, N.A., as Syndication Agent and a
Bank
By:____________________________________
Name:__________________________________
Title:___________________________________
CIBC INC., as
Documentation Agent and a Bank
By:____________________________________
Name:__________________________________
Title:___________________________________
THE CHASE MANHATTAN BANK, as a Bank
By:____________________________________
Name:__________________________________
Title:___________________________________
COMERICA BANK, as a Bank
By:____________________________________
Name:__________________________________
Title:___________________________________
CYPRESSTREE INSTITUTIONAL FUND, LLC, as
a Bank
By: CYPRESSTREE INVESTMENT
MANAGEMENT COMPANY, INC., its
Managing Member
By:____________________________________
Name:__________________________________
Title:___________________________________
72
▇▇▇▇▇▇ FINANCIAL, INC., as a Bank
By:____________________________________
Name:__________________________________
Title:___________________________________
KZH CYPRESSTREE-1 LLC, as a Bank
By:____________________________________
Name:__________________________________
Title:___________________________________
MICHIGAN NATIONAL BANK, as a Bank
By:____________________________________
Name:__________________________________
Title:___________________________________
NATIONSBANK, N.A., as a Bank
By:____________________________________
Name:__________________________________
Title:___________________________________
NORTH AMERICAN SENIOR FLOATING RATE
FUND, as a Bank
By: CYPRESSTREE INVESTMENT
MANAGEMENT COMPANY, INC., as Portfolio
Manager
By:____________________________________
Name:__________________________________
Title:___________________________________
SRF TRADING, INC., as a Bank
73
By:____________________________________
Name:__________________________________
Title:___________________________________
UNION BANK OF CALIFORNIA, N.A., as a Bank
By:____________________________________
Name:__________________________________
Title:___________________________________
74
▇▇▇▇▇▇▇▇ BANK, N.A., as a Bank
By:____________________________________
Name:__________________________________
Title:___________________________________
75