EXECUTION COPY
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$175,000,000
THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of
December 20, 2001
among
LANDSTAR SYSTEM HOLDINGS, INC.
LANDSTAR SYSTEM, INC.
The Subsidiaries of the
Borrower Signatories Hereto
The Several Lenders
from Time to Time Parties Hereto
FIRST UNION NATIONAL BANK,
FLEET NATIONAL BANK,
and
SUNTRUST BANK,
as Co-Syndication Agents
and
JPMORGAN CHASE BANK,
as Administrative Agent
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
as Sole Lead Arranger and Book Manager
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[▇▇ ▇▇▇▇▇▇ LOGO]
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TABLE OF CONTENTS
PAGE
SECTION I. DEFINITIONS......................................................................... 1
1.1. Defined Terms.................................................................... 1
1.2. Other Definitional Provisions.................................................... 16
SECTION II. AMOUNT AND TERMS OF COMMITMENTS.................................................... 17
2.1. Revolving Credit Commitments..................................................... 17
2.2. Procedure for Revolving Credit Borrowing......................................... 17
2.3. Commitment Fee................................................................... 18
2.4. Optional Termination or Reduction of Commitments................................. 19
2.5. Swing Line Commitments........................................................... 19
2.6. Conversion and Continuation Options.............................................. 20
2.7. Minimum Amounts and Maximum Number of Tranches................................... 21
2.8. Interest Rates and Payment Dates................................................. 21
2.9. Computation of Interest and Fees................................................. 21
2.10. Inability to Determine Interest Rate............................................ 22
2.11. Pro Rata Treatment and Payments................................................. 22
2.12. Illegality...................................................................... 23
2.13. Requirements of Law............................................................. 24
2.14. Taxes........................................................................... 26
2.15. Indemnity....................................................................... 28
2.16. Certain Exclusions.............................................................. 28
2.17. Replacement of Lender........................................................... 29
SECTION III. LETTERS OF CREDIT................................................................. 29
3.1. L/C Commitment................................................................... 29
3.2. Procedure for Issuance of Letters of Credit...................................... 30
3.3. Fees, Commissions and Other Charges.............................................. 30
3.4. L/C Participations............................................................... 30
3.5. Reimbursement Obligation......................................................... 31
3.6. Obligations Absolute............................................................. 32
3.7. Letter of Credit Payments........................................................ 32
3.8. Application...................................................................... 32
SECTION IV. REPRESENTATIONS AND WARRANTIES..................................................... 33
4.1. Financial Condition.............................................................. 33
4.2. No Change........................................................................ 33
4.3. Corporate Existence; Compliance with Law......................................... 33
4.4. Corporate Power; Authorization; Enforceable Obligations.......................... 34
4.5. No Legal Bar..................................................................... 34
4.6. No Material Litigation........................................................... 34
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4.7. No Default....................................................................... 35
4.8. Ownership of Property; Liens..................................................... 35
4.9. Intellectual Property............................................................ 35
4.10. No Burdensome Restrictions...................................................... 35
4.11. Taxes........................................................................... 35
4.12. Federal Regulations............................................................. 35
4.13. ERISA........................................................................... 36
4.14. Investment Company Act; Other Regulations....................................... 36
4.15. Subsidiaries.................................................................... 36
4.16. Purpose of Loans................................................................ 36
4.17. Environmental Matters........................................................... 36
SECTION V. CONDITIONS PRECEDENT................................................................ 38
5.1. Conditions to Effectiveness...................................................... 38
5.2. Conditions to Each Extension of Credit........................................... 40
SECTION VI. AFFIRMATIVE COVENANTS.............................................................. 40
6.1. Financial Statements............................................................. 41
6.2. Certificates; Other Information.................................................. 41
6.3. Payment of Obligations........................................................... 42
6.4. Conduct of Business and Maintenance of Existence................................. 42
6.5. Maintenance of Property; Insurance............................................... 42
6.6. Inspection of Property; Books and Records; Discussions........................... 43
6.7. Notices.......................................................................... 43
6.8. Environmental Laws............................................................... 43
6.9. Additional Subsidiaries.......................................................... 44
SECTION VII. NEGATIVE COVENANTS................................................................ 44
7.1. Financial Condition Covenants.................................................... 44
7.2. Limitation on Indebtedness....................................................... 45
7.3. Limitation on Liens.............................................................. 47
7.4. Limitation on Guarantee Obligations.............................................. 49
7.5. Limitation on Fundamental Changes................................................ 50
7.6. Limitation on Sale of Assets..................................................... 50
7.7. Limitation on Leases............................................................. 51
7.8. Limitation on Dividends.......................................................... 51
7.9. Limitation on Capital Expenditures............................................... 52
7.10. Limitation on Investments, Loans and Advances................................... 53
7.11. Limitation on Optional Payments and Modifications of Debt Instruments........... 55
7.12. Limitation on Transactions with Affiliates...................................... 55
7.13. Limitation on Sales and Leasebacks.............................................. 55
7.14. Limitation on Changes in Fiscal Year............................................ 55
7.15. Limitation on Negative Pledge Clauses........................................... 55
7.16. Limitation on Lines of Business................................................. 56
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7.17. Limitation on Formation of Subsidiaries......................................... 56
7.18. Limitation on Non-Guarantor Subsidiaries........................................ 57
SECTION VIII. EVENTS OF DEFAULT................................................................ 57
SECTION IX. THE ADMINISTRATIVE AGENT........................................................... 60
9.1. Appointment...................................................................... 60
9.2. Delegation of Duties............................................................. 60
9.3. Exculpatory Provisions........................................................... 60
9.4. Reliance by Administrative Agent................................................. 61
9.5. Notice of Default................................................................ 61
9.6. Non-Reliance on Administrative Agent and Other Lenders........................... 61
9.7. Indemnification.................................................................. 62
9.8. Administrative Agent in Its Individual Capacity.................................. 62
9.9. Successor Administrative Agent................................................... 62
SECTION X. MISCELLANEOUS....................................................................... 63
10.1. Amendments and Waivers.......................................................... 63
10.2. Notices......................................................................... 63
10.3. No Waiver; Cumulative Remedies.................................................. 64
10.4. Survival of Representations and Warranties...................................... 64
10.5. Payment of Expenses and Taxes................................................... 64
10.6. Successors and Assigns; Participations and Assignments.......................... 65
10.7. Adjustments; Set-off............................................................ 67
10.8. Counterparts.................................................................... 68
10.9. Severability.................................................................... 68
10.10. Integration.................................................................... 68
10.11. GOVERNING LAW.................................................................. 68
10.12. Submission To Jurisdiction..................................................... 69
10.13. Waivers........................................................................ 69
10.14. Acknowledgements............................................................... 69
10.15. WAIVERS OF JURY TRIAL.......................................................... 70
10.16. Confidentiality................................................................ 70
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SCHEDULES
Schedule 1.1(a) Commitments
Schedule 1.1(b) Subsidiary Guarantors
Schedule 1.1(c) Pricing Grid
Schedule 4.15 Subsidiaries
Schedule 7.2 Existing Indebtedness
Schedule 7.3 Existing Liens
Schedule 7.4 Existing Guarantee Obligations
EXHIBITS
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Swing Line Note
Exhibit C-1 Form of Third Amended and Restated Parent Guarantee
Exhibit C-2 Form of Third Amended and Restated Subsidiaries Guarantee
Exhibit C-3 Form of L/C Guarantee
Exhibit D Form of Borrowing Certificate
Exhibit E-1 Form of Opinion of Debevoise & ▇▇▇▇▇▇▇▇
Exhibit E-2 Form of Opinion of Borrower Counsel
Exhibit E-3 Form of Opinion of ▇▇▇▇▇▇ and Calder
Exhibit F Form of Assignment and Acceptance
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THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
December __, 2001, among Landstar System Holdings, Inc., a Delaware corporation
(the "Borrower"), Landstar System, Inc., a Delaware corporation (the "Parent"),
the Subsidiaries of the Borrower which are signatories hereto, the several banks
and other financial institutions from time to time parties to this Agreement
(such banks and other financial institutions other than the Exiting Lenders (as
defined below), the "Lenders"), First Union National Bank, as co-syndication
agent, Fleet National Bank, as co-syndication agent, Suntrust Bank, North
Florida, N.A., as co-syndication agent and JPMorgan Chase Bank ("JPMorgan Chase
Bank"), as administrative agent for the Lenders hereunder (in such capacity, the
"Administrative Agent").
W I T N E S S E T H :
WHEREAS, the Borrower, the Parent, certain lenders (the
"Existing Lenders") and the Administrative Agent are parties to the Second
Amended and Restated Credit Agreement, dated as of October 10, 1997, as amended
(the "Existing Credit Agreement"); and
WHEREAS, the Borrower, the Administrative Agent, the Existing
Lenders that will have commitments hereunder (the "Continuing Lenders"), the
Existing Lenders that will not have commitments hereunder (the "Exiting
Lenders") and certain additional lenders signatories hereto (the "New Lenders")
desire that the Existing Credit Agreement be amended and restated in its
entirety, and that the New Lenders become the Lenders parties thereto, all upon
the terms and subject to the conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto hereby agree that,
effective upon the Closing Date, the Existing Credit Agreement shall be amended
and restated to read in its entirety as follows:
SECTION I. DEFINITIONS
1.1. Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Base CD Rate in effect on
such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall mean
the rate of interest per annum publicly announced from time to time by
JPMorgan Chase Bank as its prime rate in effect at its principal office
in New York City (the Prime Rate not being intended to be the lowest
rate of interest charged by JPMorgan Chase Bank in connection with
extensions of credit to debtors); "Base CD Rate" shall mean the sum of
(a) the product of (i) the Three-Month Secondary CD Rate and (ii) a
fraction, the numerator of which is one and the denominator of which is
one minus the C/D Reserve Percentage and (b) the C/D Assessment Rate;
"Three-Month Secondary CD Rate" shall mean, for any day, the secondary
market rate for three-month certificates of deposit reported as being
in effect on such day (or, if such day shall not be a Business Day, the
next preceding Business Day) by the Board of Governors of the Federal
Reserve System (the "Board") through the public information telephone
line of the Federal Reserve Bank of New York
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(which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the
week following such day), or, if such rate shall not be so reported on
such day or such next preceding Business Day, the average of the
secondary market quotations for three-month certificates of deposit of
major money center banks in New York City received at approximately
10:00 A.M., New York City time, on such day (or, if such day shall not
be a Business Day, on the next preceding Business Day) by the
Administrative Agent from three New York City negotiable certificate of
deposit dealers of recognized standing selected by it; and "Federal
Funds Effective Rate" shall mean, for any day, the weighted average of
the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published
on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for the day of such
transactions received by the Administrative Agent from three federal
funds brokers of recognized standing selected by it. If for any reason
the Administrative Agent shall have determined (which determination
shall be conclusive absent manifest error) that it is unable to
ascertain the Base CD Rate or the Federal Funds Effective Rate, or
both, for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance with
the terms thereof, the ABR shall be determined without regard to clause
(b) or (c), or both, of the first sentence of this definition, as
appropriate, until the circumstances giving rise to such inability no
longer exist. Any change in the ABR due to a change in the Prime Rate,
the Three-Month Secondary CD Rate or the Federal Funds Effective Rate
shall be effective as of the opening of business on the effective day
of such change in the Prime Rate, the Three-Month Secondary CD Rate or
the Federal Funds Effective Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to which is
based upon the ABR.
"Account Receivable Indebtedness": any obligation secured by
account receivables received in the ordinary course of business
(including, without limitation, any such obligations that may not be
reflected in financial statements).
"Administrative Agent": as defined in the preamble hereto.
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For
purposes of this definition, "control" of a Person means the power,
directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors
of such Person or (b) direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.
"Agreement": this Third Amended and Restated Credit Agreement,
as amended, supplemented or otherwise modified from time to time.
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"Applicable Margin": for each Type of Loan on any date during
any fiscal quarter of the Parent, the rate per annum for such Type of
Loan set forth in Schedule 1.1(c) for the Leverage Ratio as of the end
of the preceding fiscal quarter of the Parent.
"Application": an application, in such form as the Issuing
Lender may specify from time to time, requesting the Issuing Lender to
open a Letter of Credit.
"Asset Sale": any sale or other disposition or series of
related sales or other dispositions by the Borrower or any of its
Subsidiaries of any asset or assets of the Borrower or such Subsidiary.
"Assignee": as defined in subsection 10.6(c).
"Available Revolving Credit Commitment": as to any Lender at
any time, an amount equal to the excess, if any, of (a) the amount of
such Lender's Revolving Credit Commitment over (b) the then Outstanding
Revolving Extensions of Credit of such Lender.
"Borrower": as defined in the preamble hereto.
"Borrowing Date": any Business Day specified in a notice
pursuant to subsection 2.2 or 2.5 as a date on which the Borrower
requests the Lenders to make Loans hereunder.
"Business": as defined in subsection 4.17.
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or
required by law to close.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants or options to
purchase any of the foregoing.
"Cash Equivalents": (a) securities with maturities of one year
or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof; (b)
certificates of deposit, time deposits, eurodollar time deposits,
overnight bank deposits, bankers' acceptances and repurchase agreements
having maturities of one year or less from the date of acquisition
issued by any Lender or by any commercial bank organized under the laws
of the United States of America or any state thereof having combined
capital and surplus of not less than $100,000,000; (c) commercial paper
of an issuer rated at least A-1 by Standard & Poor's Corporation or P-1
by ▇▇▇▇▇'▇ Investors Service, Inc., or carrying an equivalent rating by
a nationally recognized rating agency, if both of the two named rating
agencies cease publishing ratings of investments, and, in either case,
maturing within six months from the date of acquisition; (d) commercial
paper of any Lender or an affiliate of any Lender rated at least A-2 by
Standard & Poor's Corporation or P-2 by ▇▇▇▇▇'▇ Investors Service,
Inc., or carrying an equivalent rating by a nationally recognized
rating agency, if both of the
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two named rating agencies cease publishing ratings of investments, and,
in either case, maturing within six months from the date of
acquisition; (e) shares of money market mutual funds that invest solely
in instruments described in the foregoing clauses (a) through (d) and
that are rated AA or better by Standard & Poor's Corporation or Aa2 by
▇▇▇▇▇'▇ Investors Service, Inc.; and (f) marketable direct general
obligations issued by any state, county or municipality, or any agency
or instrumentality of any thereof, with maturities of one year or less
from the date of acquisition and that are rated AA- or better by
Standard & Poor's Corporation or Aa3 by ▇▇▇▇▇'▇ Investors Service, Inc.
"C/D Assessment Rate": for any day as applied to any ABR Loan,
the net annual assessment rate (rounded upward to the nearest 1/100th
of 1%) determined by JPMorgan Chase Bank to be payable on such day to
the Federal Deposit Insurance Corporation or any successor ("FDIC") for
FDIC's insuring time deposits made in Dollars at offices of JPMorgan
Chase Bank in the United States.
"C/D Reserve Percentage": for any day as applied to any ABR
Loan, that percentage (expressed as a decimal) which is in effect on
such day, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) (the "Board"), for determining the
maximum reserve requirement for a Depositary Institution (as defined in
Regulation D of the Board) in respect of new non-personal time deposits
in Dollars having a maturity of 30 days or more.
"Closing Date": the date on which the conditions precedent set
forth in subsection 5.1 shall be satisfied, provided that such date is
no later than December 20, 2001.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Commitment Fee Rate": on any date during any fiscal quarter
of the Parent, the rate per annum set forth in Schedule 1.1(c) under
the column heading "Commitment Fee" opposite the row heading describing
the Leverage Ratio as of the end of the preceding fiscal quarter of the
Parent.
"Commodity Price Protection Agreement": any futures agreement
or commodity price protection agreement or other commodity hedge
arrangement entered into in the ordinary course of business by the
Borrower or any of its Subsidiaries in order to protect them against
fluctuations in fuel prices.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrower and which is treated as a single employer under
Section 414 of the Code.
"Consolidated Current Assets": at a particular date, all
amounts which would, in conformity with GAAP, be included under current
assets on a consolidated balance sheet of the Parent and its
Subsidiaries as at such date.
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"Consolidated Current Liabilities": at a particular date, all
amounts which would, in conformity with GAAP, be included under current
liabilities on a consolidated balance sheet of the Parent and its
Subsidiaries as at such date, but in any event including the amounts of
(a) all Indebtedness of any such Person payable on demand or, at the
option of the Person to whom such Indebtedness is owed, not more than
twelve months after such date, (b) any payments in respect of any
Indebtedness of any such Person (whether installment, serial maturity
or sinking fund payments or otherwise) required to be made not more
than twelve months after such date and (c) all reserves in respect of
liabilities or Indebtedness payable on demand or, at the option of the
Person to whom such Indebtedness is owed, not more than twelve months
after such date, the validity of which is contested at such date.
"Consolidated EBITDA": for any period, with respect to any
Person, Consolidated Net Income of such Person for such period plus,
without duplication and to the extent reflected as a charge in the
statement of such Consolidated Net Income for such period, the sum of
(i) total income tax expense, (ii) interest expense, amortization or
writeoff of debt discount and debt issuance costs and commissions,
discounts and other fees and charges associated with Indebtedness
(including the Loans), (iii) depreciation and amortization expense,
(iv) amortization of intangibles (including, but not limited to,
goodwill) and organization costs, (v) any extraordinary or
non-recurring, non-cash expenses and charges, (vi) any non-cash loss
associated with the sale or write-down of assets not in the ordinary
course and (vii) any extraordinary expenses or losses (including,
whether or not otherwise includable as a separate item in the statement
of such Consolidated Net Income for such period, losses on sales of
assets outside of the ordinary course of business) and minus any
extraordinary or non-recurring income or gains (including, whether or
not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, gains on the sales of assets
outside of the ordinary course of business).
"Consolidated Interest Expense": for any fiscal period of the
Parent, the consolidated amount of interest expense of the Parent and
its Subsidiaries determined in accordance with GAAP (but excluding for
purposes of calculating the amount of such interest expense for any
such fiscal period the effect of any interest income for such fiscal
period) including, without limitation, the interest component of
payments made under Financing Leases and net of costs of or obligations
arising under any Interest Rate Protection Agreements.
"Consolidated Lease Expense": for any period, the aggregate
rental expenses of the Parent and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP, payable in respect of such
period under leases (other than Financing Leases) for real and/or
personal property (net of income from subleases thereof), provided that
for the purposes of subsection 7.7, "Consolidated Lease Expense" shall
not include payments to independent contractors based on a percentage
of revenue generated or on miles driven in connection with hauling
freight using tractors and/or trailing equipment provided by such
independent contractors.
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"Consolidated Long-Term Indebtedness": consolidated
Indebtedness of the Parent or any of its Subsidiaries for borrowed
money maturing more than twelve months after the incurrence thereof,
including, without limitation, (i) obligations under Financing Leases,
(ii) current maturities of any such Indebtedness and (iii) the Loans.
"Consolidated Net Income": for any period, the consolidated
net income (or loss) of the Parent and its Subsidiaries, determined on
a consolidated basis in accordance with GAAP; provided that there shall
be excluded the income (or deficit) of any other Person (other than a
Subsidiary) in which the Parent or any of its Subsidiaries has an
ownership interest, except to the extent that any such income is
actually received by the Parent or such Subsidiary in the form of
dividends or similar distributions.
"Consolidated Net Worth": at any date, an amount equal to (x)
Consolidated Total Assets as at such date minus (y) Consolidated Total
Liabilities as at such date.
"Consolidated Total Assets": at any date, the amount, computed
in accordance with GAAP, of the total assets of the Parent and its
consolidated Subsidiaries as at such date.
"Consolidated Total Liabilities": at any date, the amount,
computed in accordance with GAAP, of the total liabilities of the
Parent and its consolidated Subsidiaries as at such date.
"Continuing Lenders": as defined the recitals hereto.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any
of its property is bound.
"Coverage Ratio": as defined in subsection 7.1(c).
"Default": any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Environmental Laws": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority
or other Requirements of Law (including common law) regulating,
relating to or imposing liability or standards of conduct concerning
protection of the environment, as now or may at any time hereafter be
in effect.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of
7
reserve requirements in effect on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves under
any regulations of the Board of Governors of the Federal Reserve System
or other Governmental Authority having jurisdiction with respect
thereto) dealing with reserve requirements prescribed for eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of such Board) maintained by a member bank of the Federal
Reserve System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
determined on the basis of the rate for deposits in Dollars for a
period equal to such Interest Period commencing on the first day of
such Interest Period appearing on Page 3750 of the Telerate screen as
of 11:00 A.M., London time, two Business Days prior to the beginning of
such Interest Period. In the event that such rate does not appear on
Page 3750 of the Telerate screen (or otherwise on such screen), the
"Eurodollar Base Rate" shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates
as may be selected by the Administrative Agent or, in the absence of
such availability, by reference to the rate at which the Administrative
Agent is offered Dollar deposits at or about 11:00 A.M., New York City
time, two Business Days prior to the beginning of such Interest Period
in the interbank eurodollar market where its eurodollar and foreign
currency and exchange operations are then being conducted for delivery
on the first day of such Interest Period for the number of days
comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Existing Credit Agreement": as defined in the recitals
hereto.
"Exiting Lenders": as defined in the recitals hereto.
"Financing Lease": any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the
lessee.
"GAAP": generally accepted accounting principles in the United
States of America in effect from time to time; provided that for
purposes of determining compliance with the covenants set forth in
subsection 7.1 and 7.9, "GAAP" means such
8
generally accepted accounting principles as utilized in preparing the
audited financial statements delivered pursuant to the first sentence
of subsection 4.1.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations (the "primary obligations") of
any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation
of the guaranteeing person, whether or not contingent, (i) to purchase
any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the
purchase or payment of any such primary obligation or (2) to maintain
working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments
for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be
deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person
may be liable are not stated or determinable, in which case the amount
of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as
determined by the Borrower in good faith.
"Guarantees": the collective reference to the Parent
Guarantee, the Subsidiaries Guarantee and the L/C Guarantee.
"Guarantor": any Person delivering a Guarantee pursuant to
this Agreement.
"Hazardous Materials": any hazardous materials, hazardous
wastes, hazardous constituents, hazardous or toxic substances,
petroleum products (including crude oil or any fraction thereof),
defined or regulated as such in or under any Environmental Law.
"Implied Interest Rate": with respect to any lease, the
interest rate implicit in the lease as defined in Financial Accounting
Standard Board Statement of Standards Number 13.
9
"Indebtedness": of any Person (the "Debtor") at any date,
without duplication, (a) all indebtedness of such Person for borrowed
money or for the deferred purchase price of property or services (other
than current trade liabilities, accrued compensation and other
liabilities, costs or fees incurred in the ordinary course of business
and payable in accordance with customary practices), (b) any other
indebtedness of such Person which is evidenced by a note, bond,
debenture or similar instrument, (c) all obligations of such Person
under Financing Leases, (d) all obligations of such Person in respect
of acceptances issued or created for the account of such Person, (e)
all liabilities of any other Person or Persons secured by any Lien on
any property owned by the Debtor even though the Debtor has not assumed
or otherwise become liable for the payment thereof, and (f) all Account
Receivable Indebtedness of such Person.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Insurance Subsidiary": a wholly owned corporate Subsidiary of
the Borrower organized under the insurance laws of the Cayman Islands
for the purpose of engaging in the business of (X) providing insurance
or reinsurance to (a) the Borrower, its Subsidiaries and/or independent
contractors doing business with the Borrower and/or any of its
Subsidiaries and/or (b) any other Persons principally engaged in
trucking or a similar business, including independent contractors who
do not do business with the Borrower and/or any of its Subsidiaries,
and (Y) providing other reinsurance to third parties.
"Interest Payment Date": (a) as to any ABR Loan, the last day
of each March, June, September and December to occur while such Loan is
outstanding, (b) as to any Eurodollar Loan having an Interest Period of
three months or less, the last day of such Interest Period, and (c) as
to any Eurodollar Loan having an Interest Period longer than three
months, each day which is three months, or a whole multiple thereof,
after the first day of such Interest Period and the last day of such
Interest Period.
"Interest Period": with respect to any Eurodollar Loan:
(i) initially, the period commencing on the borrowing
or conversion date, as the case may be, with respect to such
Eurodollar Loan and ending one, two, three, six or, if
available, twelve months thereafter, as selected by the
Borrower in its notice of borrowing or notice of conversion,
as the case may be, given with respect thereto; and
(ii) thereafter, each period commencing on the last
day of the next preceding Interest Period applicable to such
Eurodollar Loan and ending one, two, three, six or, if
available, twelve months thereafter, as selected by the
Borrower by irrevocable notice to the Administrative Agent not
less than three Business Days prior to the last day of the
then current Interest Period with respect thereto;
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provided that, all of the foregoing provisions relating to Interest
Periods are subject to the following:
(1) if any Interest Period pertaining to a Eurodollar
Loan would otherwise end on a day that is not a Business Day,
such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately
preceding Business Day;
(2) any Interest Period that would otherwise extend
beyond the Termination Date shall end on the Termination Date,
as the case may be; and
(3) any Interest Period pertaining to a Eurodollar
Loan that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month.
"Interest Rate Protection Agreement": any interest rate cap
agreement or interest rate swap agreement or other interest rate hedge
arrangement entered into by the Borrower or any Subsidiary in order to
protect the Borrower or such Subsidiary, as the case may be, against
fluctuations in interest rates in respect of any obligations.
"Investment Grade": a rating of BBB or higher from Standard &
Poor's Corporation and Baa or higher from ▇▇▇▇▇'▇ Investors Service,
Inc.
"Issuing Lender": JPMorgan Chase Bank, in its capacity as
issuer of any Letter of Credit.
"JPMorgan Chase Bank": as defined in the preamble hereto.
"L/C Commitment": $50,000,000.
"L/C Fee Payment Date": the last day of each March, June,
September and December.
"L/C Fee Rate": on any date of determination for any Letter of
Credit, the rate per annum equal to the Applicable Margin for
Eurodollar Loans in effect on such date multiplied by the average daily
aggregate amount available to be drawn under such Letter of Credit
during the period for which such determination is made.
"L/C Guarantee": the Guarantee to be executed and delivered by
the Parent, substantially in the form of Exhibit C-3, as the same may
be amended, supplemented or otherwise modified from time to time.
"L/C Obligations": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit and (b) the aggregate amount of drawings
under Letters of Credit which have not then been reimbursed pursuant to
subsection 3.5.
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"L/C Participants": the collective reference to all the
Lenders other than the Issuing Lender.
"Lender Affiliate": (a) with respect to any Lender, (i) an
Affiliate of such Lender or (ii) any entity (whether a corporation,
partnership, trust or otherwise) that is engaged in making, purchasing,
holding or otherwise investing in bank loans and similar extensions of
credit in the ordinary course of its business and is administered or
managed by a Lender or an Affiliate of such Lender and (b) with respect
to any Lender that is a fund which invests in bank loans and similar
extensions of credit, any other fund that invests in bank loans and
similar extensions of credit and is managed by the same investment
advisor as such Lender or by an Affiliate of such investment advisor.
"Lenders": as defined in the preamble hereto.
"Letters of Credit": as defined in subsection 3.1(a).
"Leverage Ratio": as defined in subsection 7.1(b).
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any Financing Lease having substantially the
same economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this
Agreement.
"Loan Documents": this Agreement, the Notes, if any, the
Applications and the Guarantees.
"Loan Parties": the Parent, the Borrower and each Subsidiary
of the Borrower which is a party to a Loan Document.
"Material Adverse Effect": a material adverse effect on (a)
the business, operations, property or condition (financial or
otherwise) of the Parent and its Subsidiaries taken as a whole or (b)
the validity or enforceability of this Agreement or any of the other
Loan Documents or the rights or remedies of the Administrative Agent or
the Lenders hereunder or thereunder.
"Material Environmental Amount": an amount payable by the
Borrower and/or its Subsidiaries for remedial costs, compliance costs,
compensatory damages, punitive damages, fines, penalties or any
combination thereof, which, after deducting the portion thereof, if
any, that is covered by insurance (with respect to which coverage the
Lenders shall have been provided evidence of such coverage), is equal
to at least $10,000,000.
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"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Law,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"New Lenders": as defined in the recitals hereto.
"Non-Excluded Taxes": as defined in subsection 2.14.
"Notes": the collective reference to any promissory note
evidencing Loans substantially in the form of Exhibits A and B.
"Offshore Joint Venture": a corporation, partnership or other
joint venture company (which is a Subsidiary Guarantor) formed under
the laws of a jurisdiction other than the United States or any
political subdivision thereof by the Insurance Subsidiary and either
the Parent or the Borrower (which shall be the owners of all the
Capital Stock thereof) for the sole purpose of making, and which shall
be permitted to make, Permitted Insurance Company Investments.
"Operator Financing Program": a program pursuant to which
financing shall be provided to independent contractors doing business
with the Borrower and its Subsidiaries to enable them to purchase
tractors, trailers and related transportation equipment expected to be
used in connection with the business of the Borrower and its
subsidiaries; pursuant to such program (i) the Borrower may, from time
to time, make investments, loans and/or advances to the Operator
Financing Subsidiary or another entity formed for the purpose of such
program (the "Financing Vehicle"), (ii) the Financing Vehicle may, from
time to time, make loans to such independent contractors to finance
such tractors, trailers, and related transportation equipment secured
by Liens thereon, (iii) the Financing Vehicle may, from time to time
sell such loans (and assign such Liens), without recourse to the
Financing Vehicle, to one or more other Person or Persons (other than
the Parent or any of its Subsidiaries, except to the extent the
purchase of such loan would constitute a Permitted Insurance Company
Investment) and (iv) the Borrower, Parent and/or any of its
Subsidiaries may, from time to time, enter into Guarantee Obligations
with respect to all or some portion of such loans so sold.
"Operator Financing Subsidiary": Landstar Contractor
Financing, Inc. or any other direct or indirect wholly owned Subsidiary
formed for the sole purpose of constituting a Financing Vehicle (as
such term is defined in the definition of Operator Financing Program)
and which shall engage in no business or activities other than those
related to the Operator Financing Program.
"Outstanding Permitted Line of Credit Indebtedness": at any
time, the aggregate principal amount of Indebtedness described in
subsection 7.2(o) outstanding at such time.
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"Outstanding Revolving Extensions of Credit": as to any Lender
at any time, an amount equal to the sum of (a) the aggregate principal
amount of all Revolving Credit Loans made by such Lender then
outstanding, (b) such Lender's Revolving Credit Percentage of the L/C
Obligations then outstanding and (c) such Lender's Revolving Credit
Percentage of the Swing Line Loans then outstanding.
"Parent": as defined in the preamble hereto.
"Parent Guarantee": the Third Amended and Restated Guarantee
to be executed and delivered by the Parent, substantially in the form
of Exhibit C-1, as the same may be amended, supplemented or otherwise
modified from time to time.
"Participant": as defined in subsection 10.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Percentage": as to any Lender at any time, the percentage
which such Lender's Revolving Credit Percentage then constitutes of the
aggregate Revolving Credit Percentages.
"Percentage-Based Leases": those tractor, trailer and related
equipment leases where rent is based on a percentage of the revenues
derived from such equipment.
"Permitted Acquisition": any acquisition described in
subsection 7.10(g) which satisfies all of the terms and conditions set
forth therein.
"Permitted Insurance Company Investments": any investments (i)
in Cash Equivalents, (ii) in preferred equity securities of any
corporation provided that (A) at the time any such investment is made,
such investment is rated either (x) one, two or three by the Securities
Valuation Office of the National Association of Insurance Commissioners
or (y) Investment Grade and (B) immediately after giving effect to any
such investment, the aggregate amount or all investments made in
reliance on this clause (ii) shall not exceed 10% of the Insurance
Subsidiary's and the Offshore Joint Venture's combined total assets,
(iii) constituting loans and advances to the Borrower or any of its
Subsidiaries, (iv) constituting the acquisition of loans made by the
Operator Financing Subsidiary in an aggregate amount not to exceed at
any time 25% of the Insurance Subsidiary's total assets, (v) in
tractors, trailers and other fixed assets used in the operations of the
Borrower and its Subsidiaries provided that the Insurance Subsidiary
leases such assets to one or more of the Borrower's Subsidiaries and
(vi) in obligations which, at the time the investment in question is
made, are rated either (X) one, two or three by the Securities
Valuation Office of the National Association of Insurance Commissioners
or (Y) Investment Grade.
"Permitted Specified Additional Debt": unsecured Indebtedness
issued by the Borrower which is payable with interest and fees at rates
consistent with those prevailing in the relevant market at the time of
issuance (as determined in good faith by the Borrower) (i) no part of
the principal of which is scheduled to be paid (whether by way of
14
mandatory sinking fund, mandatory redemption, mandatory prepayment or
otherwise) prior to February 5, 2005 and (ii) the other terms and
conditions of which, taken as a whole, including, without limitation,
the covenants, default provisions and representations and warranties,
are not more restrictive than the terms and conditions of this
Agreement (as determined in good faith by the Borrower).
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Registration Statement": the Borrower's Registration
Statement on Form S-1 (Registration No. 33-57174) as filed with the
Securities and Exchange Commission on January 19, 1993 and as amended
from time to time.
"Reference Lender": JPMorgan Chase Bank.
"Refunded Swing Line Loans": as defined in subsection 2.5(b).
"Register": as defined in subsection 10.6(d).
"Regulation U": Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"Reimbursement Obligation": the obligation of the Borrower or
the applicable Subsidiary Guarantor to reimburse the Issuing Lender
pursuant to subsection 3.5 for amounts drawn under Letters of Credit.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day
notice period is waived under subsections .13, .14, .16, .18, .19 or
.20 of PBGC Reg. Section 2615.
"Required Lenders": at any time, Lenders the Percentages of
which aggregate at least 51%.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to and binding upon such Person or
any of its property or to which such Person or any of its property is
subject.
15
"Responsible Officer": the Chief Executive Officer, the
President or any Vice President of the Borrower or, with respect to
financial matters, the Chief Financial Officer or the Controller of the
Borrower.
"Revolving Credit Commitment": as to any Lender, the
obligation of such Lender to make Revolving Credit Loans (including
Revolving Credit Loans in connection with subsection 2.5(b)) to and/or
issue or participate in Letters of Credit issued on behalf of the
Borrower hereunder in an aggregate principal amount at any one time
outstanding not to exceed the amount set forth under the heading
"Revolving Credit Commitment" opposite such Lender's name on Schedule
1.1(a), as such amount may be reduced from time to time in accordance
with the provisions of this Agreement.
"Revolving Credit Commitment Period": the period from and
including the Closing Date to but not including the Termination Date
then in effect or such earlier date on which the Revolving Credit
Commitments shall terminate as provided herein.
"Revolving Credit Loans": as defined in subsection 2.1(a).
"Revolving Credit Percentage": as to any Lender at any time,
the percentage which such Lender's Revolving Credit Commitment then
constitutes of the aggregate Revolving Credit Commitments (or, at any
time after the Revolving Credit Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such
Lender's Revolving Credit Loans then outstanding constitutes of the
aggregate principal amount of the Revolving Credit Loans then
outstanding).
"Short Term Leases": leases (other than Financing Leases and
Percentage-Based Leases) to which the Parent or any of its Subsidiaries
is a party for tractors, trailers and related equipment expiring twelve
months or less after the date thereof.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Subsidiaries Guarantee": the Third Amended and Restated
Guarantee to be executed and delivered by each Subsidiary Guarantor,
substantially in the form of Exhibit C-2, as the same may be amended,
supplemented or otherwise modified from time to time.
"Subsidiary Guarantors": the Subsidiaries of the Borrower
listed on Schedule 1.1(b) hereto, the Insurance Subsidiary, the
Offshore Joint Venture and each other Subsidiary which shall become a
party to the Subsidiaries Guarantee subsequent to the Closing Date
excluding, in all cases, the Operator Financing Subsidiary.
"Subsidiary": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more
16
intermediaries, or both, by such Person. Unless otherwise qualified,
all references to a "Subsidiary" or to "Subsidiaries" in this Agreement
shall refer to a Subsidiary or Subsidiaries of the Borrower.
"Swing Line Loan": as defined in subsection 2.5(a).
"Termination Date": January 5, 2005.
"Total Capitalization": the sum of Consolidated Long-Term
Indebtedness of the Parent and its Subsidiaries and shareholders'
equity of the Parent.
"Tranche": the collective reference to Eurodollar Loans the
then current Interest Periods with respect to all of which begin on the
same date and end on the same later date (whether or not such Loans
shall originally have been made on the same day); Tranches may be
identified as "Eurodollar Tranches".
"Tranche A Revolving Credit Loans": as to any Existing Lender,
the Tranche A Revolving Credit Loans made by such Existing Lender under
the Existing Credit Agreement.
"Tranche B Revolving Credit Loans": as to any Existing Lender,
the Tranche B Revolving Credit Loans made by such Existing Lender under
the Existing Credit Agreement.
"Transferee": as defined in subsection 10.6(f).
"Type": as to any Loan, its nature as an ABR Loan or a
Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended or superseded from time
to time.
1.2. Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto, accounting
terms relating to the Borrower and its Subsidiaries not defined in subsection
1.1 and accounting terms partly defined in subsection 1.1, to the extent not
defined, shall have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
17
(d) The word "including" when used in this Agreement means
including, without limitation.
(e) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION II. AMOUNT AND TERMS OF COMMITMENTS
2.1. Revolving Credit Commitments. (a) Subject to the terms
and conditions hereof, each Lender severally agrees to make revolving credit
loans ("Revolving Credit Loans") to the Borrower from time to time during the
Revolving Credit Commitment Period in an aggregate principal amount at any one
time outstanding, when added to (i) such Lender's Revolving Credit Percentage of
the then outstanding L/C Obligations and (ii) the aggregate unpaid principal
amount at such time of all Swing Line Loans outstanding multiplied by such
Lender's Revolving Credit Percentage (net of the portion, if any, of the
proceeds of such Revolving Credit Loans that are applied at the time they are
made to repay such Swing Line Loans) not to exceed the amount of such Lender's
Revolving Credit Commitment. During the Revolving Credit Commitment Period the
Borrower may use the Revolving Credit Commitments by borrowing, prepaying the
Revolving Credit Loans in whole or in part, and reborrowing, all in accordance
with the terms and conditions hereof.
(b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) ABR Loans or (iii) a combination thereof, as determined
by the Borrower and notified to the Administrative Agent in accordance with
subsections 2.2 and 2.6, provided that no Revolving Credit Loan shall be made as
a Eurodollar Loan after the day that is one month prior to the Termination Date.
2.2. Procedure for Revolving Credit Borrowing. (a) The
Borrower may borrow under the Revolving Credit Commitments during the Revolving
Credit Commitment Period on any Business Day, provided that the Borrower shall
give the Administrative Agent irrevocable notice (which notice must be received
by the Administrative Agent prior to 12:30 P.M., New York City time, (a) three
Business Days prior to the requested Borrowing Date, if all or any part of the
requested Revolving Credit Loans are to be initially Eurodollar Loans or (b) one
Business Day prior to the requested Borrowing Date, otherwise), specifying (i)
the amount to be borrowed, (ii) the requested Borrowing Date, (iii) whether the
borrowing is to be of Eurodollar Loans, ABR Loans or a combination thereof and
(iv) if the borrowing is to be entirely or partly of Eurodollar Loans, the
respective amounts of each such Type of Loan and the respective lengths of the
initial Interest Periods therefor. Each borrowing under the Revolving Credit
Commitments shall be in an amount equal to (x) in the case of ABR Loans,
$1,000,000 or a whole multiple of $100,000 in excess thereof (or, if the then
Available Revolving Credit Commitments are less than $1,000,000, such lesser
amount) and (y) in the case of Eurodollar Loans, $1,500,000 or a whole multiple
of $100,000 in excess thereof. Upon receipt of any such notice from the
Borrower, the Administrative Agent shall promptly notify each Lender thereof.
Each Lender will make the amount of its pro rata share of each borrowing
available to the Administrative Agent for the account of the Borrower at the
office of the Administrative Agent specified in subsection 10.2 prior to 1:00
P.M., New York City time, on the Borrowing Date
18
requested by the Borrower in funds immediately available to the Administrative
Agent. Such borrowing will then be made available to the Borrower by the
Administrative Agent crediting the account of the Borrower on the books of such
office with the aggregate of the amounts made available to the Administrative
Agent by the Lenders and in like funds as received by the Administrative Agent.
(b) In the case of borrowings on the Closing Date, the
Borrower shall give to the Administrative Agent notice as provided in subsection
2.2(a) above with respect to the aggregate principal amount of Revolving Credit
Loans that it wishes to have outstanding on the Closing Date. If any Lender's
Revolving Credit Percentage of the Revolving Credit Loans to be so outstanding
on the Closing Date exceeds the aggregate amount of Tranche A Revolving Credit
Loans and Tranche B Revolving Credit Loans, if any, made by such Lender
outstanding under the Existing Credit Agreement on the Closing Date before
giving effect to this Agreement, such Lender shall make the amount of such
excess available, as a Revolving Credit Loan, in immediately available funds to
the Administrative Agent prior to 10:00 A.M. on the Closing Date at such office
of the Administrative Agent. If any Lender's Revolving Credit Percentage of the
Revolving Credit Loans to be so outstanding on the Closing Date is less than the
aggregate amount of Tranche A Revolving Credit Loans and Tranche B Revolving
Credit Loans made by such Lender outstanding under the Existing Credit Agreement
on the Closing Date before giving effect to this Agreement, or if any Exiting
Bank shall have Tranche A Revolving Credit Loans or Tranche B Revolving Credit
Loans made by it outstanding under the Existing Credit Agreement on the Closing
Date before giving effect to this Agreement, the Administrative Agent shall, on
the Closing Date, make funds in the amount of such difference or, in the case of
each such Exiting Bank, in the amount of such outstanding loans, available to
such Lender or Exiting Lender, as the case may be, on the Closing Date to the
extent such funds are made available to the Administrative Agent pursuant to the
immediately foregoing sentence, and the Borrower shall concurrently pay to such
Lender any interest, fees and other amounts due under the Existing Credit
Agreement with respect to the loans outstanding under the Existing Credit
Agreement and repaid on the Closing Date (including, without limitation, amounts
due under subsection 2.15 of the Existing Credit Agreement). If the aggregate
amount of Revolving Credit Loans to be outstanding on the Closing Date exceeds
the aggregate amount of Tranche A Revolving Credit Loans and Tranche B Revolving
Credit Loans outstanding under the Existing Credit Agreement on the Closing Date
before giving effect to this Agreement, the Administrative Agent will make
proceeds of such Revolving Credit Loans in the amount of such excess available
to the Borrower on the Closing Date by crediting the account of the Borrower at
the office of the Administrative Agent specified in subsection 10.2.
2.3. Commitment Fee. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee for the
period from and including the first day of the Revolving Credit Commitment
Period to the Termination Date, computed at the Commitment Fee Rate on the
average daily amount of the Available Revolving Credit Commitment of such Lender
during the period for which payment is made, payable quarterly in arrears on the
last day of each March, June, September and December and on the Termination Date
or such earlier date as the Revolving Credit Commitments shall terminate as
provided herein, commencing on the first of such dates to occur after the date
hereof.
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2.4. Optional Termination or Reduction of Commitments. The
Borrower shall have the right, upon not less than three Business Days' notice to
the Administrative Agent, to terminate the Revolving Credit Commitments or, from
time to time, to reduce the amount of the Revolving Credit Commitments, provided
that (a) no such termination or reduction of the Revolving Credit Commitments
shall be permitted if, after giving effect thereto and to any prepayments of the
Revolving Credit Loans and the Swing Line Loans made on the effective date
thereof, the Available Revolving Credit Commitment would be less than zero. Any
such reduction shall be in an amount equal to $1,000,000 or a whole multiple
thereof and shall reduce permanently the Revolving Credit Commitments then in
effect.
2.5. Swing Line Commitments. (a) Subject to the terms and
conditions hereof and provided no Default or Event of Default shall have
occurred and be continuing, JPMorgan Chase Bank agrees to make swing line loans
(individually, a "Swing Line Loan"; collectively, the "Swing Line Loans")
available to the Borrower from time to time during the Revolving Credit
Commitment Period in an aggregate principal amount at any one time outstanding
not to exceed $5,000,000, provided that JPMorgan Chase Bank shall have no
obligation to and shall not issue any Swing Line Loan if, after giving effect to
such issuance, the Available Revolving Credit Commitment with respect to any
Lender would be less than zero. Amounts borrowed by the Borrower under this
subsection 2.5 may be repaid and, through but excluding the Termination Date,
reborrowed. All Swing Line Loans shall be made as ABR Loans and shall not be
entitled to be converted into Eurodollar Loans. Each borrowing of Swing Line
Loans shall be in an amount equal to $100,000 or a whole multiple of $100,000 in
excess thereof. The Borrower shall give JPMorgan Chase Bank irrevocable notice
(which notice must be received by JPMorgan Chase Bank prior to 12:00 Noon, New
York City time) on the requested Borrowing Date specifying the amount of the
requested Swing Line Loan. The proceeds of each Swing Line Loan will be made
available by JPMorgan Chase Bank to the Borrower at the office of JPMorgan Chase
Bank specified in subsection 10.2 by crediting the account of the Borrower at
such office with such proceeds.
(b) JPMorgan Chase Bank at any time in its sole and absolute
discretion, may, and on each Monday (or if such day is not a Business Day, the
next Business Day) shall, on behalf of the Borrower (which hereby irrevocably
directs JPMorgan Chase Bank to act on its behalf) request prior to 12:00 Noon
(New York City time) each Lender, including JPMorgan Chase Bank, to make a
Revolving Credit Loan in an amount equal to such Lender's Revolving Credit
Percentage of the amount of the Swing Line Loans (the "Refunded Swing Line
Loans") outstanding on the date such notice is given. Unless any of the events
described in paragraph (f) of Section 8 shall have occurred (in which event the
procedures of paragraph (d) of this subsection 2.5 shall apply) each Lender
shall make the proceeds of its Revolving Credit Loan available to JPMorgan Chase
Bank for the account of JPMorgan Chase Bank at the office of JPMorgan Chase Bank
specified in subsection 10.2 prior to 2:00 P.M. (New York City time) in funds
immediately available on the date such notice is given. The proceeds of such
Revolving Credit Loans shall be immediately applied to repay the Refunded Swing
Line Loans. Each Revolving Credit Loan made pursuant to this subsection 2.5(b)
shall be an ABR Loan.
(c) If prior to the making of a Revolving Credit Loan pursuant
to paragraph (b) of this subsection 2.5 one of the events described in paragraph
(f) of Section 8 shall have occurred, each Lender will on the date such
Revolving Credit Loan was to have been made,
20
purchase an undivided participating interest in the Refunded Swing Line Loan in
an amount equal to its Revolving Credit Percentage of such Refunded Swing Line
Loan. Each Lender will immediately transfer to JPMorgan Chase Bank, in
immediately available funds, the amount of its participation and upon receipt
thereof JPMorgan Chase Bank will deliver to such Lender a Swing Line Loan
participation certificate dated the date of receipt of such funds and in such
amount.
(d) Whenever, at any time after JPMorgan Chase Bank has
received from any Lender such Lender's participating interest in a Refunded
Swing Line Loan, JPMorgan Chase Bank receives any payment on account thereof,
JPMorgan Chase Bank will distribute to such Lender its participating interest in
such amount (appropriately adjusted in the case of interest payments, to reflect
the period of time during which such Lender's participating interest was
outstanding and funded); provided, however, that in the event that such payment
received by JPMorgan Chase Bank is required to be returned, such Lender will
return to JPMorgan Chase Bank any portion thereof previously distributed by
JPMorgan Chase Bank to it.
(e) Each Lender's obligation to purchase participating
interests pursuant to this subsection 2.5 shall be absolute and unconditional
and shall not be affected by any circumstance, including, without limitation,
(i) any set-off, counterclaim, recoupment, defense or other right which such
Lender or the Borrower may have against JPMorgan Chase Bank, the Borrower or
anyone else for any reason whatsoever; (ii) the occurrence or continuance of an
Event of Default; (iii) any adverse change in the condition (financial or
otherwise) of the Borrower; (iv) any breach of this Agreement by the Borrower or
any other Lender; or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
2.6. Conversion and Continuation Options. (a) The Borrower may
elect from time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto (or on any other
day if the conversion referred to herein is accompanied by all amounts payable
by the Borrower pursuant to subsection 2.15). The Borrower may elect from time
to time to convert Revolving Credit Loans that are ABR Loans to Eurodollar Loans
by giving the Administrative Agent at least three Business Days' prior
irrevocable notice of such election. Any such notice of conversion to Eurodollar
Loans shall specify the length of the initial Interest Period or Interest
Periods therefor. Upon receipt of any such notice the Administrative Agent shall
promptly notify each Lender thereof. All or any part of outstanding Eurodollar
Loans and ABR Loans may be converted as provided herein, provided that (i) no
Loan may be converted into a Eurodollar Loan when any Event of Default has
occurred and is continuing and the Administrative Agent has or the Required
Lenders have determined that such a conversion is not appropriate, (ii) no Loan
may be converted into a Eurodollar Loan after the date that is one month prior
to the Termination Date and (iii) no Swing Line Loan may be converted into a
Eurodollar Loan.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in subsection 1.1,
of the length of the next Interest Period to be applicable to such
21
Loans, provided that no Eurodollar Loan may be continued as such (i) when any
Event of Default has occurred and is continuing and the Administrative Agent has
or the Required Lenders have determined that such a continuation is not
appropriate or (ii) after the date that is one month prior to the Termination
Date and provided, further, that if the Borrower shall fail to give any required
notice as described above in this paragraph or if such continuation is not
permitted pursuant to the preceding proviso such Loans shall be automatically
converted to ABR Loans on the last day of such then expiring Interest Period.
2.7. Minimum Amounts and Maximum Number of Tranches. All
borrowings, conversions and continuations of Loans hereunder and all selections
of Interest Periods hereunder shall be in such amounts and be made pursuant to
such elections so that, after giving effect thereto, (a) the aggregate principal
amount of the Loans comprising each Eurodollar Tranche shall be equal to
$1,500,000 or a whole multiple of $100,000 in excess thereof and (b) there shall
be no more than ten Eurodollar Tranches in existence at any time.
2.8. Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum
equal to the ABR plus the Applicable Margin.
(c) If all or a portion of (i) the principal amount of any
Loan, (ii) any interest payable thereon or (iii) any commitment fee or other
amount payable hereunder shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear interest
at a rate per annum which is (x) in the case of overdue principal, the rate that
would otherwise be applicable thereto pursuant to the foregoing provisions of
this subsection plus 2% per annum or (y) in the case of overdue interest,
commitment fee or other amount, the rate described in paragraph (b) of this
subsection plus 2% per annum, in each case from the date of such non-payment
until such amount is paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c) of this
subsection shall be payable from time to time on demand.
2.9. Computation of Interest and Fees. (a) Commitment fees,
letter of credit commissions and, whenever it is calculated on the basis of the
ABR, interest shall be calculated on the basis of a 365- (or 366-, as the case
may be) day year for the actual days elapsed; and, otherwise, interest shall be
calculated on the basis of a 360-day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Borrower and the
Lenders of each determination of a Eurodollar Rate. Any change in the interest
rate on a Loan resulting from a change in the ABR, the Eurocurrency Reserve
Requirements, the C/D Assessment Rate or the C/D Reserve Percentage shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the Lenders of the effective date and the amount of each such
change in interest rate.
22
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to subsection 2.9(a) or (c).
(c) If the Reference Lender shall for any reason no longer
have a Revolving Credit Commitment or any Loans, the Reference Lender shall
thereupon cease to be the Reference Lender, and the Administrative Agent (after
consultation with the Borrower and the Lenders) shall, by notice to the Borrower
and the Lenders, designate another Lender as the Reference Lender.
(d) The Reference Lender shall use its best efforts to furnish
quotations of rates to the Administrative Agent as contemplated hereby.
2.10. Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that,
by reason of any changes arising on or after the date hereof affecting
the interbank eurodollar market, adequate and reasonable means do not
exist for ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Required Lenders that, by reason of any changes arising on or after
the date hereof affecting the interbank eurodollar market, the
Eurodollar Rate determined or to be determined for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof
confirmed in writing to the Borrower and the Lenders as soon as practicable
thereafter, and in any case at least one Business Day prior to the first day of
such Interest Period. If such notice is given (x) any Eurodollar Loans requested
to be made on the first day of such Interest Period shall be made as ABR Loans,
(y) any Loans that were to have been converted on the first day of such Interest
Period to Eurodollar Loans shall be converted to or continued as ABR Loans and
(z) any outstanding Eurodollar Loans shall be converted, on the first day of
such Interest Period, to ABR Loans. Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans shall be made or continued as
such, nor shall the Borrower have the right to convert Loans to Eurodollar
Loans.
2.11. Pro Rata Treatment and Payments. (a) Each borrowing of
Revolving Credit Loans by the Borrower from the Lenders hereunder (other than
Swing Line Loans) and each payment by the Borrower on account of any commitment
fee in respect of the Revolving Credit Commitments hereunder shall be made pro
rata according to the respective Revolving Credit Percentages of the Lenders.
Each payment (including each prepayment) by the Borrower on account of principal
of the Revolving Credit Loans shall be made first to the repayment of Swing Line
Loans before any payment may be made on account of the principal of the
Revolving Credit Loans. Subject to the immediately foregoing sentence, each
payment (including each prepayment) by the Borrower
23
on account of the principal of and interest on the Revolving Credit Loans shall
be made pro rata according to the respective outstanding principal amounts of
the Revolving Credit Loans then held by the Lenders. All payments (including
prepayments) to be made by the Borrower hereunder, whether on account of
principal, interest, fees or otherwise, shall be made without set off or
counterclaim and shall be made prior to 1:00 P.M., New York City time, on the
due date thereof to the Administrative Agent, for the account of the Lenders, at
the Administrative Agent's office specified in subsection 10.2, in Dollars and
in immediately available funds. The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received. If any
payment hereunder (other than payments on the Eurodollar Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day, and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension. If any payment on a Eurodollar Loan becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day unless the result of such extension would be to extend
such payment into another calendar month, in which event such payment shall be
made on the immediately preceding Business Day.
(b) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its Percentage of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this subsection shall be conclusive in the
absence of manifest error. If such Lender's Revolving Credit Percentage of such
borrowing is not made available to the Administrative Agent by such Lender
within three Business Days of such Borrowing Date, the Administrative Agent
shall also be entitled to recover such amount with interest thereon at the rate
per annum applicable to ABR Loans hereunder, on demand, from the Borrower.
Nothing contained in this subsection 2.11(b) shall relieve any Lender that has
failed to make available its Revolving Credit Commitment Percentage of any
borrowing hereunder from its obligation to do so in accordance with the terms
hereof.
2.12. Illegality. Notwithstanding any other provision herein,
if the adoption of or any change in any Requirement of Law (other than the
certificate of incorporation, by-laws or other organizational or governing
documents with respect to any Lender) or in the interpretation or application
thereof occurring after the date hereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) such
Lender shall forthwith give telephonic or telecopy notice of such circumstances,
confirmed in writing, to the Borrower (which notice shall be withdrawn by such
Lender when such Lender shall reasonably
24
determine that it shall no longer be illegal for such Lender to make or maintain
Eurodollar Loans or to convert ABR Loans to Eurodollar Loans), (b) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert ABR Loans to Eurodollar Loans shall
forthwith be cancelled and, until such time as it shall no longer be unlawful
for such Lender to make or maintain Eurodollar Loans, such Lender shall then
have a commitment only to make an ABR Loan when a Eurodollar Loan is requested
and (c) such Lender's Loans then outstanding as Eurodollar Loans, if any, shall
be converted automatically to ABR Loans on the respective last days of the then
current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to subsection 2.15.
2.13. Requirements of Law. (a) If the adoption of or any
change in any Requirement of Law (other than the certificate of incorporation,
by-laws or other organizational or governing documents with respect to any
Lender) or in the interpretation or application thereof occurring after the date
on which any Lender becomes a Lender or compliance by any Lender with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority, in each case, made subsequent to the date
hereof:
(i) shall subject such Lender to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
Application or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes as defined in subsection 2.14 (including
Non-Excluded Taxes imposed solely by reason of any failure of such
Lender to comply with its obligations under subsection 2.14(b) or
2.14(c)) and changes in respect of taxes on or measured by the overall
net income of such Lender or any applicable lending office, branch or
affiliate thereof (or changes in any franchise, capital, or net worth
taxes or similar taxes imposed in lieu of such net income taxes)
imposed by a jurisdiction as a result of a present or former connection
between such jurisdiction, any political subdivision or any taxing
authority thereof or therein, and such Lender, or any applicable
lending office, branch or affiliate thereof (other than a connection
arising solely from such Lender having executed, delivered or performed
its obligations, or received payment under or enforced, this Agreement
or any other Loan Document));
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other condition
(excluding the imposition of any tax);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount
25
receivable hereunder in respect thereof, then, in any such case, upon notice to
the Borrower from such Lender through the Administrative Agent in accordance
herewith, the Borrower shall promptly pay such Lender, upon its demand, any
additional amounts necessary to compensate such Lender for such increased cost
or reduced amount receivable with respect to such Eurodollar Loans or Letters of
Credit, provided that, in any such case, the Borrower may elect to convert
Eurodollar Loans made by such Lender hereunder to ABR Loans by giving the
Administrative Agent at least two Business Days' notice of such election, in
which case such Borrower shall promptly pay to such Lender, upon demand, without
duplication, amounts theretofore required to be paid to such Lender pursuant to
this subsection 2.13(a) and such amounts, if any, as may be required pursuant to
subsection 2.15. If any Lender becomes entitled to claim any additional amounts
pursuant to this subsection, it shall promptly give notice to the Borrower,
through the Administrative Agent certifying that (x) one of the events described
in this paragraph (a) has occurred and the nature of such event, (y) the
increased cost or reduced amount resulting from such event and (z) the
additional amounts demanded by such Lender and a reasonably detailed explanation
of the calculation thereof. A certificate as to any additional amounts payable
pursuant to this subsection submitted by such Lender, through the Administrative
Agent, to the Borrower shall be conclusive in the absence of manifest error.
This covenant shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority, in each case, made subsequent to the date hereof (or, in the case of
any Lender that becomes a Lender subsequent to the date hereof, subsequent to
the date on which such Lender becomes a Lender) does or shall have the effect of
reducing the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such change or compliance (taking into consideration such
Lender's or such corporation's policies with respect to capital adequacy) by an
amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor certifying that (x) one of the events
described in this paragraph (b) has occurred and the nature of such event (in
reasonable detail), (y) the reduced rate of return on such Lender's or such
corporation's capital resulting from such event and (z) the additional amounts
demanded by such Lender and a reasonably detailed explanation of the calculation
thereof, the Borrower shall pay to such Lender such additional amount or amounts
as will compensate such Lender for such reduction.
(c) Each Lender which becomes entitled to claim any amounts
pursuant to this subsection 2.13 agrees, upon the request of the Borrower, to
use its best efforts to take steps reasonably available to it and acceptable to
the Borrower, including designating an alternative lending office or booking the
affected Loan through another branch or affiliate, if by doing so any such
additional amounts will be avoided or materially reduced, provided that taking
such steps results in no additional costs to such Lender (other than costs that
are paid by the Borrower) and is not otherwise materially disadvantageous to
such Lender, in such Lender's sole discretion determined in good faith.
26
2.14. Taxes. (a) All payments made by the Borrower under this
Agreement (or by any Guarantor under any Guarantee) shall be made free and clear
of, and without deduction or withholding for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding any such items
imposed on the Administrative Agent or any Lender as a result of a present or
former connection between the Administrative Agent, such Lender, or any
applicable lending office, branch or affiliate thereof, and the jurisdiction of
the Governmental Authority imposing such tax or any political subdivision or
taxing authority thereof or therein (other than any such connection arising
solely from the Administrative Agent or such Lender having executed, delivered
or performed its obligations or received a payment under, or enforced, this
Agreement or any other Loan Document) ("Non-Excluded Taxes"). If any
Non-Excluded Taxes are required to be withheld from any amounts payable to the
Administrative Agent or any Lender hereunder or under any other Loan Document,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement, provided, however, that the Borrower shall be entitled, to the extent
required by law, to deduct and withhold any Non-Excluded Taxes and shall not be
required to increase any such amounts payable to any Lender if such Lender or,
to the extent that the Lender has transferred a Participation to any
Participant, such Participant, fails to comply with the requirements of
paragraph (b) of this subsection. Whenever any Non-Excluded Taxes are payable by
the Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for its own account or for the account of such Lender, as
the case may be, a certified copy of an original official receipt received by
the Borrower showing payment thereof. If the Borrower fails to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Administrative Agent and
the Lenders for any incremental taxes, interest or penalties that may become
payable by the Administrative Agent or any Lender as a result of any such
failure, except in the case in which such failure of the Borrower is due to a
Lender's failure to fully comply with requirements set forth in paragraph (b) of
this subsection. The agreements in this subsection shall survive the termination
of this Agreement and the payment of the Loans and all other amounts payable
hereunder.
(b) (i) Each Lender that is incorporated under the laws of the
United States of America or a state thereof hereby confirms that it is so
incorporated;
(ii) Each Lender that is not incorporated under the laws
of the United States of America or a state thereof shall:
(A) on or before the first day upon which a payment is
made hereunder to such Lender, deliver to the Borrower and the
Administrative Agent two duly completed copies of United
States Internal Revenue Service Form W-8BEN or W-8ECI, or
successor applicable form, as the case may be;
(B) deliver to the Borrower and the Administrative Agent
two further copies of any such form or certification on or
before the date that any such form,
27
certification or statement expires or becomes obsolete and
after the occurrence of any event requiring a change in the
most recent form previously delivered by it to the Borrower;
and
(C) obtain such extensions of time for filing and
complete such forms, certifications or statements as may
reasonably be requested by the Borrower or the Administrative
Agent;
unless in any such case any change in treaty, law or regulation, or the
application or interpretation thereof, has occurred after the date on which such
Person became a Lender hereunder which renders all such forms inapplicable or
which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower and the
Administrative Agent. Each time such Lender is required to deliver a form,
certificate or statement under this clause (ii), such Lender shall certify on
such Form W-8BEN or W-8ECI, as the case may be, or successor applicable form,
and as may otherwise be required under applicable law, that (A) it is entitled
to receive payments under this Agreement or any other Loan Document without
deduction or withholding of any United States federal income taxes and (B) it is
entitled to an exemption from United States backup withholding tax.
(iii) Each Person that shall become a Lender or a
Participant pursuant to subsection 10.6 shall, upon the effectiveness of the
related transfer, be required to provide all of the forms, certifications and
statements required pursuant to this paragraph (b), provided that in the case of
a Participant the obligations of such Participant pursuant to this subsection
shall be determined as if such Participant were a Lender except that such
Participant shall furnish all such required forms, certifications and statements
to the Lender from which the related participation shall have been purchased.
(c) Upon the request, and at the expense, of the Borrower,
each Lender to which the Borrower is required to pay any additional amount
pursuant to subsection 2.13(a)(i) or 2.14, and any Participant in respect of
whose participation such payment is required, shall take reasonable steps to (i)
afford the Borrower the opportunity to contest, and (ii) cooperate with the
Borrower in contesting, the imposition of any Non-Excluded Tax giving rise to
such requirement to pay. Each Lender to which the Borrower is required to pay
any additional amount pursuant to subsection 2.13(a)(i) or 2.14 agrees, upon the
request of the Borrower, to use its best efforts to take steps reasonably
available to it and acceptable to the Borrower, including designating an
alternative lending office or booking the affected Loan through another branch
or an affiliate, if by doing so any such additional amounts will be avoided or
materially reduced, provided that taking such steps results in no additional
costs to such Lender (other than costs that are paid by the Borrower) and is not
otherwise materially disadvantageous to such Lender, in such Lender's sole
discretion determined in good faith.
(d) If, under subsection 2.14(b), a Lender or Participant
fails to timely provide, or provides an incorrect, form, certificate or
statement (or fails to timely provide a correct form, certificate or statement
after the existing form, certificate or statement expires, becomes obsolete, or
is rendered incorrect by the occurrence of any event) and, as a result thereof,
the Borrower fails to withhold or deduct tax, such Lender or Participant shall
indemnify the Borrower against any liability arising from such failure in excess
of the amount the Borrower
28
would have been required to pay such Lender or Participant as an additional
amount pursuant to this Agreement had such form, certificate or statement been
correct or duly or timely provided, as the case may be.
(e) If a Lender or the Administrative Agent receives a refund
attributable to taxes for which the Borrower has made additional payments under
subsection 2.13(a)(i) or 2.14, which refund in the sole, good faith judgment of
such Lender or Administrative Agent is allocable to such payments, the
Administrative Agent or such Lender, as the case may be, shall timely pay such
refund (together with any interest thereto received from the relevant taxing
authority) to the Borrower, net of all reasonable out-of-pocket expenses of such
Lender or Administrative Agent; provided, however, that the Borrower shall
promptly return such refund (free of all Non-Excluded Taxes) to the
Administrative Agent or the relevant Lender, as the case may be, upon receipt of
written notice that such refund is required to be repaid to the relevant taxing
authority.
2.15. Indemnity. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment of Eurodollar
Loans or a conversion of Eurodollar Loans to ABR Loans on a day which is not the
last day of an Interest Period with respect thereto. Such indemnification may
include, in the case of any event described in clause (a) or (c) of the next
preceding sentence, an amount equal to the excess, if any, of (i) the amount of
interest which would have accrued on the amount so prepaid, or not so borrowed,
converted or continued, for the period from the date of such prepayment or of
such failure to borrow, convert or continue to the last day of such Interest
Period (or, in the case of a failure to borrow, convert or continue, the
Interest Period that would have commenced on the date of such failure) in each
case at the applicable rate of interest for such Loans provided for herein
(excluding, however, the Applicable Margin included therein, if any) over (ii)
the amount of interest (as reasonably determined by such Lender) which would
have accrued to such Lender on such amount by placing such amount on deposit for
a comparable period with leading banks in the interbank eurodollar market. If
any Lender becomes entitled to claim any amounts under the indemnity contained
in this subsection 2.15, it shall provide prompt notice thereof to the Borrower,
through the Administrative Agent, stating (X) that one or more of the events
described in clause (a), (b), or (c) has occurred and describing in reasonable
detail the nature of such event or events, (Y) as to the amount of the loss or
expense sustained or incurred by such Lender as a consequence thereof and (Z) as
to the amount for which such Lender seeks indemnification hereunder and a
reasonably detailed explanation of the calculation thereof. This covenant shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
2.16. Certain Exclusions. (a) If a Lender changes its
applicable lending office (unless required to do so by a Governmental Authority
or other regulatory authority) and the effect of that change, as of the date of
the change, is to cause the Borrower to become obligated
29
to pay any additional amount under subsection 2.13 or 2.14, the Borrower shall
not be obligated to pay such additional amount.
(b) If, as a result of an assignment pursuant to subsection
10.6(c), the Borrower would, immediately upon the effectiveness of such
assignment, be obligated to pay an additional amount under subsection 2.13 or
2.14, the Borrower shall not be obligated to pay such additional amount.
(c) For purposes of subsections 2.13 and 2.14, the entry into
force and implementation of any treaty between the United States and another
country that has been signed as of the date hereof but has not yet been ratified
shall not be treated as a change in treaty, law, regulation or application or
interpretation thereof.
2.17. Replacement of Lender. If the Borrower becomes obligated
to pay additional amounts described in subsections 2.13 or 2.14 as a result of
any condition described in such subsections and payment of such amount is
demanded by any Lender, then the Borrower may, on ten Business Days' prior
written notice to the Administrative Agent and such Lender, cause such Lender to
(and such Lender shall) assign pursuant to subsection 10.6(c) all of its rights
and obligations under this Agreement to a Lender or other entity selected by the
Borrower and acceptable to the Administrative Agent for a purchase price equal
to the outstanding principal amount of such Lender's Loans and all accrued
interest and fees and other amounts then due to such Lender hereunder, together
with all losses and expenses of the types referred to in subsection 2.15 payable
with respect thereto.
SECTION III. LETTERS OF CREDIT
3.1. L/C Commitment. (a) Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agreements of the other Lenders
set forth in subsection 3.4(a), agrees to issue standby and commercial letters
of credit ("Letters of Credit") for the account of the Borrower or any
Subsidiary Guarantor on any Business Day during the Revolving Credit Commitment
Period in such form as may be approved from time to time by the Issuing Lender;
provided that the Issuing Lender shall have no obligation to and shall not issue
any Letter of Credit if, after giving effect to such issuance, (i) the L/C
Obligations would exceed the L/C Commitment or (ii) the Available Revolving
Credit Commitment with respect to any Lender would be less than zero. Each
Letter of Credit shall (i) be denominated in Dollars and shall be a standby or
commercial letter of credit issued to support obligations of the Borrower or the
respective Subsidiary Guarantor and its respective Subsidiaries, contingent or
otherwise, arising in the ordinary course of business and (ii) expire no later
than the Termination Date.
(b) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of
New York.
(c) The Issuing Lender shall not at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict with, or
cause the Issuing Lender or any L/C Participant to exceed any limits imposed by,
any applicable Requirement of Law.
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3.2. Procedure for Issuance of Letters of Credit. The Borrower
or any Subsidiary Guarantor may from time to time request that the Issuing
Lender issue a Letter of Credit by delivering to the Issuing Lender at its
address for notices specified herein an Application therefor, completed to the
reasonable satisfaction of the Issuing Lender, and such other certificates,
documents and other papers and information as the Issuing Lender may reasonably
request. Upon receipt of any Application, the Issuing Lender will process such
Application and the certificates, documents and other papers and information
delivered to it in connection therewith in accordance with its customary
procedures and shall promptly issue the Letter of Credit requested thereby (but
in no event shall the Issuing Lender be required to issue any Letter of Credit
earlier than three Business Days after its receipt of the Application therefor
and all such other certificates, documents and other papers and information
relating thereto) by issuing the original of such Letter of Credit to the
beneficiary thereof or as otherwise may be agreed by the Issuing Lender and the
Borrower or the respective Subsidiary Guarantor. The Issuing Lender shall
furnish a copy of such Letter of Credit to the Borrower or to the respective
Subsidiary Guarantor promptly following the issuance thereof, and shall notify
the Lenders of the issuance thereof.
3.3. Fees, Commissions and Other Charges.
(a) The Borrower or the respective Subsidiary Guarantor shall
pay (i) to the Administrative Agent, for the account of the Issuing Lender and
the L/C Participants, a letter of credit commission with respect to each Letter
of Credit, computed for the period from the Closing Date (in the case of the
first such payment) or the date on which the last such payment was due (in all
other cases) to the date upon which such payment is due hereunder at the L/C Fee
Rate, payable to the Issuing Lender and the L/C Participants to be shared
ratably among them in accordance with their respective Revolving Credit
Commitment Percentages and (ii) to the Issuing Lender, a letter of credit
commission with respect to each Letter of Credit, computed for the period from
the Closing Date (in the case of the first such payment) or the date on which
the last such payment was due (in all other cases) to the date upon which such
payment is due hereunder at the rate of 1/8% per annum of the average daily
aggregate amount available to be drawn under such Letter of Credit during the
period for which such fee is calculated, payable to the Issuing Lender. Such
commissions shall be payable in arrears on each L/C Fee Payment Date and shall
be nonrefundable.
(b) In addition to the foregoing fees and commissions, the
Borrower or the respective Subsidiary Guarantor shall pay or reimburse the
Issuing Lender for such normal and customary costs and expenses as are incurred
or charged by the Issuing Lender in issuing, effecting payment under, amending
or otherwise administering any Letter of Credit.
(c) The Administrative Agent shall, promptly following its
receipt thereof, distribute to the Issuing Lender and the L/C Participants all
fees and commissions received by the Administrative Agent for their respective
accounts pursuant to this subsection.
3.4. L/C Participations. (a) The Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce the
Issuing Lender to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the Issuing Lender, on the terms and conditions hereinafter stated, for such
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L/C Participant's own account and risk an undivided interest equal to such L/C
Participant's Revolving Credit Commitment Percentage in the Issuing Lender's
obligations and rights under each Letter of Credit issued hereunder and the
amount of each draft paid by the Issuing Lender thereunder. Each L/C Participant
unconditionally and irrevocably agrees with the Issuing Lender that, if a draft
is paid under any Letter of Credit for which the Issuing Lender is not
reimbursed in full by the Borrower or the respective Subsidiary Guarantor in
accordance with the terms of this Agreement, such L/C Participant shall pay to
the Issuing Lender upon demand at the Issuing Lender's address for notices
specified herein an amount equal to such L/C Participant's Revolving Credit
Commitment Percentage of the amount of such draft, or any part thereof, which is
not so reimbursed. Any demand pursuant to the preceding sentence received after
2:00 P.M. New York City time on any Business Day shall be deemed to have been
received on the next succeeding Business Day.
(b) If any amount required to be paid by any L/C Participant
to the Issuing Lender pursuant to subsection 3.4(a) in respect of any
unreimbursed portion of any payment made by the Issuing Lender under any Letter
of Credit is paid to the Issuing Lender within three Business Days after the
date such payment is due, such L/C Participant shall pay to the Issuing Lender
on demand an amount equal to the product of (i) such amount, times (ii) the
daily average Federal funds rate, as quoted by the Issuing Lender, during the
period from and including the date such payment is required to the date on which
such payment is immediately available to the Issuing Lender, times (iii) a
fraction the numerator of which is the number of days that elapse during such
period and the denominator of which is 360. If any such amount required to be
paid by any L/C Participant pursuant to subsection 3.4(a) is not in fact made
available to the Issuing Lender by such L/C Participant within three Business
Days after the date such payment is due, the Issuing Lender shall be entitled to
recover from such L/C Participant, on demand, such amount with interest thereon
calculated from such due date at the rate per annum applicable to ABR Loans
hereunder. A certificate of the Issuing Lender submitted to any L/C Participant
with respect to any amounts owing under this subsection shall be conclusive in
the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made
payment under any Letter of Credit and has received from any L/C Participant its
pro rata share of such payment in accordance with subsection 3.4(a), the Issuing
Lender receives any payment related to such Letter of Credit (whether directly
from the Borrower or the respective Subsidiary Guarantor or otherwise, including
proceeds of collateral applied thereto by the Issuing Lender), or any payment of
interest on account thereof, the Issuing Lender will as soon as practicable
distribute to such L/C Participant its pro rata share thereof; provided,
however, that in the event that any such payment received by the Issuing Lender
shall be required to be returned by the Issuing Lender, such L/C Participant
shall return to the Issuing Lender the portion thereof previously distributed by
the Issuing Lender to it.
3.5. Reimbursement Obligation. The Borrower or the respective
Subsidiary Guarantor agrees to reimburse the Issuing Lender on each date on
which the Issuing Lender notifies the Borrower or the respective Subsidiary
Guarantor of the date and amount of a draft presented under any Letter of Credit
and paid by the Issuing Lender for the amount of (a) such draft so paid and (b)
any taxes, fees, charges or other costs or expenses reasonably incurred by the
Issuing Lender in connection with any payment made by the Issuing Lender under,
or with
32
respect to, such Letter of Credit. Each such payment shall be made to the
Issuing Lender at its address for notices specified herein in lawful money of
the United States of America and in immediately available funds. Interest shall
be payable on any and all amounts remaining unpaid by the Borrower or the
respective Subsidiary Guarantor under this subsection from the date such amounts
become payable (whether at stated maturity, by acceleration or otherwise) until
payment in full at the rate which would be payable on any outstanding ABR Loans
which were then overdue.
3.6. Obligations Absolute. The Borrower's or the respective
Subsidiary Guarantor's obligations under this Section 3 shall be absolute and
unconditional under any and all circumstances and irrespective of any set-off,
counterclaim or defense to payment which the Borrower or the respective
Subsidiary Guarantor may have or have had against the Issuing Lender or any
beneficiary of a Letter of Credit. The Borrower or the respective Subsidiary
Guarantor also agrees with the Issuing Lender that the Issuing Lender shall not
be responsible for, and the Borrower's or the respective Subsidiary Guarantor's
Reimbursement Obligations under subsection 3.5 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower or the
respective Subsidiary Guarantor and any beneficiary of any Letter of Credit or
any other party to which such Letter of Credit may be transferred or any claims
whatsoever of the Borrower or the respective Subsidiary Guarantor against any
beneficiary of such Letter of Credit or any such transferee provided that this
paragraph shall not relieve the Issuing Lender of any liability resulting from
the gross negligence or willful misconduct of the Issuing Lender, or otherwise
affect any defenses or other right that the Borrower may have as a result of any
such gross negligence or willful misconduct. The Issuing Lender shall not be
liable for any error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in connection with
any Letter of Credit, except for errors or omissions caused by the Issuing
Lender's gross negligence or willful misconduct. The Borrower or the respective
Subsidiary Guarantor agrees that any action taken or omitted by the Issuing
Lender under or in connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence of willful misconduct and
in accordance with the standards or care specified in the Uniform Commercial
Code of the State of New York, shall be binding on the Borrower or on the
respective Subsidiary Guarantor and shall not result in any liability of the
Issuing Lender to the Borrower or the respective Subsidiary Guarantor.
3.7. Letter of Credit Payments. If any draft shall be
presented for payment under any Letter of Credit, the Issuing Lender shall
promptly notify the Borrower or the respective Subsidiary Guarantor of the date
and amount thereof. The responsibility of the Issuing Lender to the Borrower or
the respective Subsidiary Guarantor in connection with any draft presented for
payment under any Letter of Credit shall, in addition to any payment obligation
expressly provided for in such Letter of Credit, be limited to determining that
the documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are in conformity with such Letter of Credit.
3.8. Application. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Agreement, the provisions of this Agreement shall apply.
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SECTION IV. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter
into this Agreement and to make the Loans and issue or participate in the
Letters of Credit, the Borrower hereby represents and warrants to the
Administrative Agent and each Lender that:
4.1. Financial Condition. The consolidated balance sheet of
the Parent and its consolidated Subsidiaries as at December 30, 2000 and the
related consolidated statements of income and of cash flows for the fiscal year
ended on such date, reported on by KPMG L.L.P. copies of which have heretofore
been furnished to each Lender, present fairly the consolidated financial
condition of the Parent and its consolidated Subsidiaries as at such date, and
the consolidated results of their operations and their consolidated cash flows
for the fiscal year then ended. All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by such
accountants and as disclosed therein). The unaudited consolidated balance sheet
of the Parent and its consolidated Subsidiaries as at September 30, 2001 and the
related unaudited consolidated statements of income and of cash flows for the
quarter ended on such date, certified by a Responsible Officer, copies of which
have heretofore been furnished to each Lender, have been prepared in accordance
with GAAP (except as permitted by Form 10-Q under the Securities and Exchange
Act of 1934, as amended) applied consistently throughout the periods involved,
and present fairly the consolidated financial condition of the Parent and its
consolidated Subsidiaries as at such date, and the consolidated results of their
operations and their consolidated cash flows for the quarter then ended (subject
to normal year-end audit adjustments). Neither the Parent nor any of its
consolidated Subsidiaries had, at September 30, 2001, any material Guarantee
Obligation, contingent liability or liability for taxes, or any long-term lease
or unusual forward or long-term commitment, including, without limitation, any
interest rate or foreign currency swap or exchange transaction, which is not
reflected in the foregoing statements or in the notes thereto. During the period
from September 30, 2001 to and including the date hereof there has been no sale,
transfer or other disposition by the Parent or any of its consolidated
Subsidiaries of any material part of its business or property and no purchase or
other acquisition of any business or property (including any capital stock of
any other Person) material in relation to the consolidated financial condition
of the Parent and its consolidated Subsidiaries at September 30, 2001.
4.2. No Change. Since September 30, 2001 (a) there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect and (b) except as permitted by subsection 7.8 or
subsection 7.8 of the Existing Credit Agreement, no dividends or other
distributions have been declared, paid or made upon the Capital Stock of the
Borrower or the Parent nor has any of the Capital Stock of the Borrower or the
Parent been redeemed, retired, purchased or otherwise acquired for value by the
Borrower or any of its Subsidiaries.
4.3. Corporate Existence; Compliance with Law. Each of the
Parent and its Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization under the name
(as of the date hereof) set forth in its respective signature line hereto, (b)
has the corporate power and authority to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is
currently
34
engaged, (c) is duly qualified as a foreign corporation and in good standing
under the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification, except
where the failure to so qualify, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect and (d) is in
compliance with all Requirements of Law except to the extent that the failure to
comply therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
4.4. Corporate Power; Authorization; Enforceable Obligations.
Each Loan Party has the corporate power and authority to make, deliver and
perform the Loan Documents to which it is a party and, in the case of the
Borrower, to borrow hereunder and has taken all corporate action necessary to be
taken by it to authorize the execution, delivery and performance of the Loan
Documents to which it is a party and in the case of the Borrower, to authorize
the borrowings on the terms and conditions of this Agreement, the Applications
and the other Loan Documents. No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental Authority or any
other Person is required to be made or obtained by the Borrower or any other
Loan Party in connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of this Agreement or any other
Loan Documents except (a) consents and filings which will have been obtained or
made and will be in full force and effect on the Closing Date and (b) such
consents and filings which, individually or in the aggregate, if not obtained,
could not reasonably be expected to have a material adverse effect on the
performance, validity or enforceability of this Agreement or any other Loan
Document. This Agreement has been, and, as of the Closing Date, each other Loan
Document will be, duly executed and delivered on behalf of each Loan Party
thereto. This Agreement constitutes, and each other Loan Document when executed
and delivered will constitute, a legal, valid and binding obligation of each
Loan Party thereto, enforceable against such Loan Party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
4.5. No Legal Bar. The execution, delivery and performance of
the Loan Documents, the borrowings hereunder and the use of the proceeds thereof
will not violate any Requirement of Law or Contractual Obligation of the Parent
or of any of its Subsidiaries and will not result in, or require, the creation
or imposition of any Lien on any of its or their respective properties or
revenues pursuant to any such Requirement of Law or Contractual Obligation (it
being understood that the use of the proceeds of the borrowings to provide a
portion of the funds necessary to purchase any asset with respect to which the
remainder of the purchase price is financed by Indebtedness permitted under
subsections 7.2(c), 7.2(e) or 7.2(r) that is secured by a Lien on such asset
permitted by subsections 7.3(g) or 7.3(h) does not constitute the use of the
proceeds of a borrowing resulting in the creation or imposition of any Lien for
purposes of this subsection).
4.6. No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against the Parent or any of
its Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to any of the Loan Documents or any of
35
the transactions contemplated hereby or thereby, or (b) which could reasonably
be expected to have a Material Adverse Effect.
4.7. No Default. Neither the Parent nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
4.8. Ownership of Property; Liens. Each of the Parent and its
Subsidiaries has good record and marketable title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold interest in, all its other property, and none of such property is
subject to any Lien except as permitted by subsection 7.3.
4.9. Intellectual Property. The Parent and each of its
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted except for those the failure to own or license
which could not reasonably be expected to have a Material Adverse Effect (the
"Intellectual Property"). No claim has been asserted and is pending by any
Person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property, nor does the
Borrower know of any valid basis for any such claim except for any such claim
which could not reasonably be expected to have a Material Adverse Effect. The
use of such Intellectual Property by the Parent and its Subsidiaries does not
infringe on the rights of any Person, except for such claims and infringements
that, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.
4.10. No Burdensome Restrictions. No Requirement of Law or
Contractual Obligation of the Parent or any of its Subsidiaries could reasonably
be expected to have a Material Adverse Effect.
4.11. Taxes. Each of the Parent and its Subsidiaries has filed
or caused to be filed all Federal and other material tax returns which, to the
knowledge of the Parent or the Borrower, are required to be filed and has paid
all taxes shown to be due and payable on said returns or on any assessments (of
which notice has been received by it) made against it or any of its property and
all other material taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than any the amount or validity of
which are currently being contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with GAAP have been provided on the
books of the Parent or its Subsidiaries, as the case may be); no material tax
Lien has been filed, and, to the knowledge of the Parent or the Borrower, no
claim is being asserted, with respect to any such tax, fee or other charge.
4.12. Federal Regulations. No part of the proceeds of any
Loans will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U of the Board
of Governors of the Federal Reserve System as now and from time to time
hereafter in effect or for any purpose which violates the provisions of the
regulations of such Board of Governors.
36
4.13. ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Single Employer Plan, and, to the knowledge of the Borrower, each
Multiemployer Plan, has complied in all material respects with the applicable
provisions of ERISA and the Code. No termination of a Single Employer Plan has
occurred other than a standard termination pursuant to Section 4041(b) of ERISA,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits. Neither the Borrower nor any Commonly Controlled Entity
would become subject to any liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made, which (in the aggregate with the
liabilities which have been incurred with respect to all such withdrawals which
have previously occurred) would exceed $10,000,000. No such Multiemployer Plan
is in Reorganization or Insolvent. Neither the Borrower nor any Commonly
Controlled Entity has or could have any obligation to contribute to, or any
liability with respect to, any Plan, program or arrangement providing for
post-retirement welfare benefits, except as may be required pursuant to Section
4980B of the Code or Section 601 of ERISA.
4.14. Investment Company Act; Other Regulations. The Borrower
is not an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
The Borrower is not subject to regulation under any Federal or State statute or
regulation which limits its ability to incur Indebtedness.
4.15. Subsidiaries. The Subsidiaries listed on Schedule 4.15
hereto constitute all the Subsidiaries of the Borrower and the Parent at the
date hereof.
4.16. Purpose of Loans. The proceeds of the Revolving Credit
Loans shall be used by the Borrower to repay indebtedness outstanding under the
Existing Credit Agreement and to provide funding for the general corporate
purposes of the Borrower and the Subsidiary Guarantors, including working
capital.
4.17. Environmental Matters. To the knowledge of the Borrower,
each of the representations and warranties set forth in paragraphs (a) through
(f) of this subsection is true and correct, except to the extent that such
failures to be so true and correct were disclosed in the Registration Statement:
(a) The facilities and properties owned, leased or operated by
the Parent or any of its Subsidiaries (the "Properties") do not contain, and
have not previously contained, any Materials of Environmental Concern in amounts
or concentrations which (i) constitute or constituted a violation of, or (ii)
could reasonably be expected to give rise to liability under, any Environmental
Law except in either case insofar as such violation or liability, or any
aggregation thereof, is not reasonably likely to result in the payment of a
Material Environmental Amount.
37
(b) The Properties and all operations at the Properties are in
compliance, and have in the last 5 years been in compliance, in all material
respects with all applicable Environmental Laws, and there is no contamination
at, under or about the Properties or violation of any Environmental Law with
respect to the Properties or the business operated by the Parent or any of its
Subsidiaries (the "Business") which could reasonably be expected to materially
interfere with the continued operation of, or materially impair the fair
saleable value of, the Properties taken as a whole.
(c) Neither the Parent nor any of its Subsidiaries has
received any notice of violation, alleged violation, non-compliance, liability
or potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the Business, nor
does the Parent or the Borrower have knowledge or reason to believe that any
such notice will be received or is being threatened except insofar as such
notice or threatened notice, or any aggregation thereof, does not involve a
matter or matters that is or are reasonably likely to result in the payment of a
Material Environmental Amount.
(d) Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of, or in a manner
or to a location which could reasonably be expected to give rise to liability
under, any Environmental Law, nor have any Materials of Environmental Concern
been generated, treated, stored or disposed of at, on or under any of the
Properties in violation of, or in a manner that could reasonably be expected to
give rise to liability under, any applicable Environmental Law except insofar as
any such violation or liability referred to in this paragraph, or any
aggregation thereof, is not reasonably likely to result in the payment of a
Material Environmental Amount.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Parent or the Borrower,
threatened, under any Environmental Law to which the Parent or any of its
Subsidiaries is or will be named as a party with respect to the Properties or
the Business, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with respect to
the Properties or the Business except insofar as such proceeding, action,
decree, order or other requirement, or any aggregation thereof, is not
reasonably likely to result in the payment of a Material Environmental Amount.
(f) There has been no release or threat of release of
Materials of Environmental Concern at or from the Properties, or arising from or
related to the operations of the Parent or any of its Subsidiaries in connection
with the Properties or otherwise in connection with the Business, in violation
of or in amounts or in a manner that could reasonably be expected to give rise
to liability under Environmental Laws except insofar as any such violation or
liability referred to in this paragraph, or any aggregation thereof, is not
reasonably likely to result in the payment of a Material Environmental Amount.
38
SECTION V. CONDITIONS PRECEDENT
5.1. Conditions to Effectiveness. The amendment and
restatement of the Existing Credit Agreement provided for herein shall become
effective on the date upon which the following conditions precedent shall have
been satisfied:
(a) Loan Documents. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly
authorized officer of the Borrower and the Parent, with a counterpart
for each Lender, and (ii) each of the Guarantees, each executed and
delivered by a duly authorized officer of the parties thereto, with a
counterpart or a conformed copy for each Lender.
(b) Borrowing Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of the
Borrower, dated the Closing Date, substantially in the form of Exhibit
D, with appropriate insertions and attachments, reasonably satisfactory
in form and substance to the Administrative Agent, executed by the
President or any Vice President and the Secretary or any Assistant
Secretary of the Borrower.
(c) Corporate Proceedings of the Borrower. The Administrative
Agent shall have received, with a counterpart for each Lender, a copy
of the resolutions, in form and substance reasonably satisfactory to
the Administrative Agent, of the Board of Directors of the Borrower
authorizing (i) the execution, delivery and performance of this
Agreement and the other Loan Documents to which it is a party and (ii)
the borrowings contemplated hereunder, certified by the Secretary or an
Assistant Secretary of the Borrower as of the Closing Date, which
certificate shall be in form and substance reasonably satisfactory to
the Administrative Agent and shall state that the resolutions thereby
certified have not been amended, modified, revoked or rescinded.
(d) Borrower Incumbency Certificate. The Administrative Agent
shall have received, with a counterpart for each Lender, a certificate
of the Borrower, dated the Closing Date, as to the incumbency and
signature of the officers of the Borrower executing any Loan Document
reasonably satisfactory in form and substance to the Administrative
Agent, executed by the President or any Vice President and the
Secretary or any Assistant Secretary of the Borrower.
(e) Corporate Proceedings of the Parent. The Administrative
Agent shall have received, with a copy for each Lender, a copy of the
resolutions, in form and substance reasonably satisfactory to the
Administrative Agent, of the Board of Directors of the Parent
authorizing the execution, delivery and performance of this Agreement
and the other Loan Documents to which the Parent is a party, certified
by the Secretary or an Assistant Secretary of the Parent as of the
Closing Date, which certificate shall be in form and substance
reasonably satisfactory to the Administrative Agent and shall state
that the resolutions thereby certified have not been amended, modified,
revoked or rescinded.
(f) Parent Incumbency Certificate. The Administrative Agent
shall have received, with a counterpart for each Lender, a certificate
of the Parent, dated the Closing
39
Date, as to the incumbency and signature of the officers of the Parent
executing this Agreement and any other Loan Document reasonably
satisfactory in form and substance to the Administrative Agent,
executed by the President or any Vice President and the Secretary or
any Assistant Secretary of the Parent.
(g) Corporate Proceedings of Subsidiaries. The Administrative
Agent shall have received, with a copy for each Lender, a copy of the
resolutions, in form and substance reasonably satisfactory to the
Administrative Agent, of the Board of Directors of each Subsidiary of
the Borrower which is a party to a Loan Document authorizing the
execution, delivery and performance of the Loan Documents to which it
is a party, certified by the Secretary or an Assistant Secretary of
each such Subsidiary as of the Closing Date, which certificate shall be
in form and substance reasonably satisfactory to the Administrative
Agent and shall state that the resolutions thereby certified have not
been amended, modified, revoked or rescinded.
(h) Subsidiary Incumbency Certificates. The Administrative
Agent shall have received, with a counterpart for each Lender, a
certificate of each Subsidiary of the Borrower which is a Loan Party,
dated the Closing Date, as to the incumbency and signature of the
officers of such Subsidiaries executing any Loan Document, reasonably
satisfactory in form and substance to the Administrative Agent,
executed by the President or any Vice President and the Secretary or
any Assistant Secretary of each such Subsidiary.
(i) Corporate Documents. The Administrative Agent shall have
received, with a counterpart for each Lender, true and complete copies
of the certificate of incorporation and by-laws of each Loan Party,
certified as of the Closing Date as complete and correct copies thereof
by the Secretary or an Assistant Secretary of such Loan Party.
(j) Fees. The Administrative Agent shall have received the
fees to be received on the Closing Date as separately agreed between
the Administrative Agent and the Borrower.
(k) Legal Opinions. The Administrative Agent shall have
received, with a counterpart for each Lender, the following executed
legal opinions:
(i) the executed legal opinion of Debevoise &
▇▇▇▇▇▇▇▇, New York counsel to the Borrower and the other Loan
Parties, substantially in the form of Exhibit E-1;
(ii) the executed legal opinion of ▇▇▇▇▇▇ ▇▇▇▇,
general counsel of the Borrower, substantially in the form of
Exhibit E-2; and
(iii) the executed legal opinion of ▇▇▇▇▇▇ and
Calder, Cayman Islands counsel to the Borrower and the other
Loan Parties, substantially in the form of Exhibit E-3.
40
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent
may reasonably require.
(l) Insurance. The Administrative Agent shall have received
evidence reasonably satisfactory to it as to the adequacy of the
insurance program of the Loan Parties and that each Loan Party has
obtained the insurance coverage required by subsection 6.5 hereof.
(m) Labor Matters. The Administrative Agent shall have
received evidence reasonably satisfactory to it that (i) no strikes or
other labor disputes are pending or, to the knowledge of the Parent or
the Borrower, threatened against the Parent, the Borrower or any of its
Subsidiaries, (ii) neither the Parent, the Borrower nor any of its
Subsidiaries are in violation of the Fair Labor Standards Act or any
other applicable Requirement of Law dealing with labor or employment
matters (including, without limitation, employee benefits) that
(individually or in the aggregate) could reasonably be expected to have
a Material Adverse Effect.
(n) Existing Credit Agreement. The loans outstanding under the
Existing Credit Agreement on the Closing Date prior to giving effect to
this Agreement shall have been repaid in accordance with the procedures
set forth in subsection 2.3(b) and (c), and all interest, fees and
other amounts payable under the Existing Credit Agreement (including,
without limitation, amounts due under subsection 2.15 of the Existing
Credit Agreement) shall have been paid.
5.2. Conditions to Each Extension of Credit. The agreement of
each Lender to make any extension of credit requested to be made by it on any
date (including, without limitation, its initial extensions of credit) is
subject to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by the Loan Parties in or pursuant
to the Loan Documents shall be true and correct in all material
respects on and as of such date as if made on and as of such date (or,
if stated to relate to an earlier date, as of such earlier date).
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
Loans requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
subsection 5.2 have been satisfied.
SECTION VI. AFFIRMATIVE COVENANTS
Each of the Parent and the Borrower hereby agrees that, so
long as the Revolving Credit Commitments remain in effect, any Letter of Credit
remains outstanding or any Loan or any other amount is owing to any Lender or
the Administrative Agent hereunder, the Parent and
41
the Borrower shall and, in the case of the agreements set forth in subsections
6.3, 6.4, 6.5, 6.6 and 6.8, shall cause each of the Borrower's Subsidiaries to:
6.1. Financial Statements. Furnish to each Lender:
(a) as soon as available, but in any event within 90 days (or
in the case of consolidating statements, 100 days) after the end of
each fiscal year of the Parent, a copy of the consolidated balance
sheet and consolidating balance sheet information of the Parent and its
consolidated Subsidiaries as at the end of such year, the related
consolidated statements of income and changes in Shareholders Equity
and of cash flows for such year and the related consolidating
statements of income and of cash flows information for such year,
setting forth in each case in comparative form the figures for the
previous year, reported on, in the case of the consolidated financial
statements, without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit, by
KPMG L.L.P. or other independent certified public accountants of
nationally recognized standing; and
(b) as soon as available, but in any event not later than 45
days (or in the case of consolidating statements, 50 days) after the
end of each of the first three quarterly periods of each fiscal year of
the Parent, a copy of the unaudited consolidated balance sheet and
consolidating balance sheet information of the Parent and its
consolidated Subsidiaries as at the end of such quarter, the related
unaudited consolidated statements of income and changes in Shareholders
Equity and of cash flows of the Parent and its consolidated
Subsidiaries for such quarter and the related consolidating statements
of income and of cash flows information for such year and the portion
of the fiscal year through the end of such quarter, setting forth in
each case in comparative form the figures for the previous year,
certified by a Responsible Officer as being fairly stated in all
material respects (subject to normal year-end audit adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
(except, in the case of the financial statements referred to in subparagraph
(b), such financial statements need not contain footnotes) applied consistently
throughout the periods reflected therein and with prior periods (except as
approved by such accountants or officer, as the case may be, and disclosed
therein).
6.2. Certificates; Other Information. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in subsections 6.1(a) and 6.1(b), a certificate of a
Responsible Officer stating that, to the best of such Officer's
knowledge, each of the Parent and the Borrower during such period has
observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in this Agreement and the other
Loan Documents to which it is a party to be observed, performed or
satisfied by it, and that such Officer has obtained no knowledge of any
Default or Event of Default except as specified in such certificate,
and setting forth in reasonable detail computations of compliance with
the provisions of subsection 7.1 (including, without limitation, any
reconciliation of such financial
42
statements with generally accepted accounting principles as utilized in
preparing the audited financial statements delivered pursuant to the
first sentence of subsection 4.1);
(b) within five days after the same are sent, copies of all
financial statements and reports which the Parent or the Borrower sends
to its stockholders, and within five days after the same are filed,
copies of all financial statements and reports which the Parent or the
Borrower may make to, or file with, the Securities and Exchange
Commission or any successor or analogous Governmental Authority; and
(c) promptly, such additional financial and other information
as the Administrative Agent may from time to time reasonably request.
6.3. Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Parent or its Subsidiaries, as the case may be.
6.4. Conduct of Business and Maintenance of Existence.
Continue to engage in business of the same general type as now conducted by it
(except that the Insurance Subsidiary shall be permitted to engage in the
business of providing (X) insurance and reinsurance to (a) the Borrower, its
Subsidiaries and/or independent contractors doing business with the Borrower
and/or any of its Subsidiaries and/or (b) any other Persons principally engaged
in trucking or a similar business, including independent contractors who do not
do business with the Borrower and/or any of its Subsidiaries, and (Y) providing
other reinsurance to third parties) and preserve, renew and keep in full force
and effect its corporate existence and take all reasonable action to maintain
all rights, privileges and franchises necessary or desirable in the normal
conduct of its business except as otherwise permitted pursuant to subsection
7.5; comply with all Contractual Obligations and Requirements of Law except to
the extent that failure to comply therewith could not, in the aggregate, be
reasonably expected to have a Material Adverse Effect.
6.5. Maintenance of Property; Insurance. Keep all property
useful and necessary in its business in good working order and condition;
maintain with financially sound and reputable insurance companies insurance on
all its property in at least such amounts (not less than $35,000,000 per
occurrence in the case of comprehensive general liability and automobile
liability) and against at least such risks (but including in any event public
liability) as are usually insured against in the same general area by companies
engaged in the same or a similar business, including, without limitation,
insurance covering comprehensive general liability, automobile liability,
workers' compensation claims and employer's liability, provided that the Parent,
the Borrower and any Subsidiary may self-insure against any risk required to be
insured pursuant to this subsection 6.5 in an aggregate amount of up to
$5,000,000 per occurrence and provided further that in the event that the Parent
or any of its Subsidiaries self-insures against any risks required to be insured
against pursuant to this subsection 6.5 in an aggregate amount in excess of
$5,000,000 per occurrence, such self-insurance shall be in amounts satisfactory
to the Administrative Agent; and furnish to each Lender, upon written request,
full information as to the insurance carried.
43
6.6. Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities; and permit
representatives of the Administrative Agent (acting on its own or at the request
of any Lender) to visit and inspect any of its properties and examine and make
abstracts from any of its books and records at any reasonable time and as often
as may reasonably be requested and to discuss the business, operations,
properties and financial and other condition of the Parent and its Subsidiaries
with officers and employees of the Parent and its Subsidiaries and with its
independent certified public accountants.
6.7. Notices. Promptly give notice to the Administrative Agent
and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any material
Contractual Obligation of the Parent or any of its Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time
between the Parent or any of its Subsidiaries and any Governmental
Authority, which in the case of clause (i) or (ii) immediately above,
if not cured or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Parent or any
of its Subsidiaries in which (i) the amount involved is $5,000,000 or
more and not covered by insurance or (ii) in which injunctive or
similar relief is sought;
(d) the following events, as soon as possible and in any event
within 30 days after the Parent or the Borrower knows or has reason to
know thereof: (i) the occurrence or expected occurrence of any
Reportable Event with respect to any Plan; a failure to make any
required contribution to a Plan which failure is sufficient to result
in the imposition of a Lien on any property of the Borrower pursuant to
Section 302(f) or ERISA or Section 412(n) of the Code, the creation of
any Lien in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action
by the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
terminating, Reorganization or Insolvency of, any Plan other than a
standard termination pursuant to Section 4041(b) of ERISA; and
(e) any development or event which could reasonably be
expected by the Parent or any of its Subsidiaries to have a Material
Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto.
6.8. Environmental Laws. (a) Comply with, and ensure
compliance by all tenants, subtenants, agents and subcontractors, if any, with,
all applicable Environmental Laws
44
and obtain and comply in all material respects with and maintain, and ensure
that all tenants, subtenants, agents and subcontractors obtain and comply in all
material respects with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws except to the extent that failure to do so could not be reasonably expected
to have a Material Adverse Effect.
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws except to the extent that the same are being contested in good faith by
appropriate proceedings and the pendency of such proceedings could not be
reasonably expected to have a Material Adverse Effect.
6.9. Additional Subsidiaries. Cause each Subsidiary (other
than any Subsidiary permitted pursuant to the first proviso to subsection 7.17)
created after the Closing Date and having assets equal to or greater than
$500,000 and each Subsidiary which acquires, after the Closing Date, assets
which, when aggregated with the assets of such Subsidiary prior to the Closing
Date, are equal to or greater than $500,000 to execute a joinder agreement
pursuant to which such Subsidiary becomes a party to the Subsidiaries Guarantee.
SECTION VII. NEGATIVE COVENANTS
Each of the Parent and the Borrower hereby agrees that, so
long as the Commitments remain in effect, any Letter of Credit remains
outstanding or any Loan or other amount is owing to any Lender or the
Administrative Agent hereunder, each of the Parent and the Borrower shall not,
and shall not permit any of its Subsidiaries (other than in the case of
subsection 7.8) to, directly or indirectly:
7.1. Financial Condition Covenants.
(a) Maintenance of Net Worth. Permit Consolidated Net Worth on
the last day of any fiscal quarter of the Parent to be less than
$80,000,000.
(b) Consolidated Long-Term Indebtedness and Lease Expense to
EBITDA and Lease Expense. Permit the ratio (the "Leverage Ratio") of
(i) the sum of (A) Consolidated Long-Term Indebtedness, (B) the present
value of the minimum aggregate rental payments of the Parent and its
Subsidiaries, determined on a consolidated basis in accordance with
GAAP, payable under leases (other than Financing Leases, Short Term
Leases and Percentage-Based Leases) for tractors, trailers and related
equipment entered into or assumed after the Closing Date, discounted at
the Implied Interest Rate and (C) then existing Guarantee Obligations
permitted by subsection 7.4(f), to (ii) the sum of (A) Consolidated
EBITDA for any period of four consecutive fiscal quarters of the
Borrower and (B) the aggregate rental payments of the Parent and its
Subsidiaries during such period, payable under leases (other than
Financing Leases, Short Term Leases and Percentage-Based Leases) for
tractors, trailers and related equipment entered into or assumed after
the Closing Date, on the last day of any such fiscal period of the
Borrower to be greater than 3.0 to 1.0.
45
(c) Interest Coverage. Permit, for any period ending after the
Closing Date of four consecutive fiscal quarters of the Parent, the
ratio (the "Coverage Ratio") of (i) the sum of Consolidated Net Income
for such period plus income taxes deducted in determining such
Consolidated Net Income plus Consolidated Interest Expense for such
period to (ii) Consolidated Interest Expense for such period to be less
than 4.0 to 1.0.
(d) Fixed Charge Coverage. Permit, for any period ending after
the Closing Date of four consecutive fiscal quarters of the Parent, the
ratio of (i) the sum of Consolidated EBITDA for such period, minus the
amount of expenditures during such period in respect of the purchase or
other acquisition of fixed or capital assets permitted pursuant to
subsection 7.9 that are not made with Indebtedness described in
subsection 7.2(c) to (ii) the sum of Consolidated Interest Expense for
such period, plus all principal installments due during such period
with respect to Financing Leases to be less than the 1.50 to 1.0.
7.2. Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness of the Parent and any of its Subsidiaries
under this Agreement and the other Loan Documents;
(b) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary Guarantor to the Borrower or any other Subsidiary;
(c) Indebtedness of the Borrower and any of its Subsidiaries
incurred to finance any acquisition of fixed or capital assets
permitted by subsection 7.9 or subsection 7.9 of the Existing Credit
Agreement (whether pursuant to a loan, a Financing Lease or otherwise);
provided that the principal amount of such Indebtedness does not exceed
the aggregate purchase price of such property at the time it was
acquired, and renewals, extensions and refinancings of such
Indebtedness, provided that the amount of such Indebtedness outstanding
at the time of such renewal, extension or refinancing is not increased;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 7.2 and renewals, extensions and refinancings thereof,
provided that the amount of such Indebtedness outstanding at the time
of such renewal, extension or refinancing is not increased;
(e) Indebtedness of a Person that becomes a Subsidiary of the
Borrower after the date hereof, Indebtedness secured by property or
assets acquired by any Subsidiary after the date hereof, Indebtedness
assumed in connection with acquisitions of assets permitted by
subsection 7.10(g) and any Indebtedness incurred to refinance any such
Indebtedness previously referred to in this paragraph, provided that
(i) such Indebtedness existed at the time such Person became a
Subsidiary or such property or assets were acquired, as the case may
be, and was not created in anticipation thereof or such Indebtedness is
created to refinance any such existing Indebtedness and does not
increase the outstanding principal amount thereof, (ii) any such
refinanced Indebtedness is payable
46
with interest and fees at rates consistent with those prevailing in the
relevant market at the time of issuance (as determined in good faith by
the Borrower), (iii) the other terms and conditions of any such
refinanced Indebtedness referred to in this paragraph, taken as a
whole, including, without limitation, the covenants, default provisions
and representations and warranties, are not more restrictive than the
terms and conditions of this Agreement (as determined in good faith by
the Borrower), provided that nothing in this clause shall be deemed to
prevent such Indebtedness from being secured by Liens permitted by
subsection 7.3(g), and (iv) immediately after giving effect to the
acquisition of such Person, property or assets or such refinancing, as
the case may be, no Default or Event of Default shall have occurred and
be continuing;
(f) Indebtedness of the Parent, the Borrower or any Subsidiary
under any Interest Rate Protection Agreement or any Commodity Price
Protection Agreement permitted pursuant to subsection 7.10;
(g) Indebtedness of the Parent to the Borrower or any of its
Subsidiaries incurred to purchase, repurchase, redeem or retire the
Parent's Capital Stock, which Indebtedness is incurred when no Default
or Event of Default has occurred and is continuing or would result
therefrom and such purchase, repurchase, redemption or retirement is
made in compliance with 7.8(i);
(h) so long as no Default or Event of Default shall have
occurred and be continuing, Indebtedness of the Parent to the Borrower
or any of its Subsidiaries incurred to cover reasonable and necessary
expenses incurred by the Parent in connection with registration, public
offerings and exchange listing of securities;
(i) Indebtedness of the Parent to the Borrower and its
Subsidiaries in an amount sufficient to pay tax liabilities of the
Parent which are paid in cash by the Parent to any taxing authority and
which are attributable to income, business, properties or activities
of, or distribution of earnings by, the Parent or its Subsidiaries;
provided that the Parent shall repay such Indebtedness upon receipt of
any refunds of such tax payments in an amount equal to such refunds;
(j) Indebtedness of the Parent to the Borrower and its
Subsidiaries (in addition to Indebtedness otherwise permitted by this
subsection 7.2) incurred to pay expenses in the ordinary course of
business in an aggregate amount not to exceed in any fiscal year, when
added to all dividends made by the Borrower pursuant to subsection
7.8(b) during such fiscal year, $250,000;
(k) Indebtedness of the Parent to the Borrower and its
Subsidiaries incurred to pay premiums to insurance companies for
directors' and officers' insurance with respect to the Parent;
(l) Indebtedness of the Parent to the Borrower and its
Subsidiaries incurred to pay for the printing and distribution of
financial reports of the Parent, proxy solicitations and other
communications with shareholders of the Parent and for filings with the
47
Securities and Exchange Commission and costs directly related to the
annual meeting of shareholders of the Parent;
(m) Indebtedness of the Parent to the Borrower and its
Subsidiaries incurred to pay directors' fees and expenses to directors
of the Parent;
(n) Indebtedness of the Parent to the Borrower and its
Subsidiaries incurred to pay fees owed by the Parent to its transfer
agent;
(o) Indebtedness of the Borrower under unsecured lines of
credit not extended pursuant to this Agreement and not exceeding
$25,000,000 in aggregate principal amount at any one time outstanding;
(p) Permitted Specified Additional Debt in an aggregate
principal amount, when added to the aggregate amount of all then
existing Guarantee Obligations permitted by subsection 7.4(f), not to
exceed $125,000,000 at any time outstanding;
(q) Indebtedness of the Parent to the Borrower and its
Subsidiaries (in addition to Indebtedness otherwise permitted by this
subsection 7.2) the proceeds of which are used to pay fees to the
Parent's independent auditors, tax advisors and outside attorneys in
the ordinary course of business;
(r) Indebtedness incurred to exercise purchase options under
leases (other than Financing Leases and Short Term Leases) for
tractors, trailers and related equipment which leases are assumed or
acquired subsequent to September 1, 1995 in connection with Permitted
Acquisitions, provided that (i) such Indebtedness is payable with
interest and fees at rates consistent with those prevailing in the
relevant market at the time of issuance (as determined in good faith by
the Borrower), (ii) the other terms and conditions of such
Indebtedness, taken as a whole, including, without limitation, the
covenants, default provisions and representations and warranties, are
not more restrictive than the terms and conditions of this Agreement
(as determined in good faith by the Borrower), provided that nothing in
this clause shall be deemed to prevent such Indebtedness from being
secured by Liens permitted by subsection 7.3(h), and (iii) immediately
after giving effect to the exercise of such purchase option, no Default
or Event of Default shall have occurred and be continuing;
(s) Indebtedness of the Operator Financing Subsidiary to the
Borrower in an aggregate principal amount not to exceed $10,000,000 at
any one time outstanding;
(t) Additional Indebtedness of the Parent or any of its
Subsidiaries not exceeding $10,000,000 in an aggregate principal amount
at any one time outstanding; and
(u) Account Receivable Indebtedness of the Parent or any of
its Subsidiaries not exceeding $50,000,000 in an aggregate principal
amount at any one time outstanding.
7.3. Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, except for:
48
(a) Liens for taxes which are not yet due or which are being
contested in good faith by appropriate proceedings or with respect to
which the failure to pay could not reasonably be expected to have a
Material Adverse Effect, provided that adequate reserves with respect
thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, supplier's, or other Liens arising in the ordinary course
of business which are not overdue for a period of more than 60 days or
which are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation and deposits securing liability to insurance carriers under
insurance or self-insurance arrangements;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or such Subsidiary;
(f) Liens in existence on the date hereof listed on Schedule
7.3, securing Indebtedness permitted by subsection 7.2(d), provided
that no such Lien is spread to cover any additional property after the
Closing Date and that the amount of Indebtedness secured thereby is not
increased;
(g) Liens securing Indebtedness of the Borrower and its
Subsidiaries permitted by subsection 7.2(c) incurred to finance or
refinance the acquisition of fixed or capital assets, provided that (i)
such Liens shall be created substantially simultaneously with the
acquisition or refinancing of such fixed or capital assets, (ii) such
Liens do not at any time encumber any property other than the property
financed or refinanced by such Indebtedness, (iii) the amount of
Indebtedness secured thereby is not increased and (iv) the principal
amount of Indebtedness secured by any such Lien shall at no time exceed
the aggregate purchase price of such property at the time it was
acquired;
(h) Liens securing Indebtedness permitted by subsections
7.2(e) and (r) on the property or assets of a corporation which becomes
a Subsidiary after the date hereof, on property or assets acquired by
any Subsidiary after the date hereof, on assets acquired as permitted
by subsection 7.10(g) and on assets previously the subject of leases
referred to in subsection 7.2(r), provided that (i) such Liens existed
at the time such corporation became a Subsidiary or such property or
assets were acquired, as the case may be, and were not created in
anticipation thereof or, as the case may be, are created at the time
such Indebtedness is assumed or created, (ii) no such Lien is spread to
cover any
49
additional property or assets, and (iii) the amount of Indebtedness
secured thereby is not increased;
(i) Liens of landlords or of mortgagees of landlords arising
solely by operation of law, on fixtures located on premises leased in
the ordinary course of business, provided that the rental payments
secured thereby are not yet due;
(j) Any attachment, judgment or similar Lien, unless the writ
or judgment or other process it secures shall not, within 60 days after
the entry thereof, have been discharged or execution thereof stayed
pending appeal, or shall not have been discharged within 60 days after
the expiration of any such stay;
(k) Liens on the property or assets of the Insurance
Subsidiary securing the payment of claims in the aggregate amount of
not more than $75,000,000;
(l) Liens securing Account Receivable Indebtedness of the
Borrower and its Subsidiaries permitted by subsection 7.2(u); provided
that such Liens attach only to the accounts receivable that are the
subject of such Indebtedness; and
(m) Liens securing Permitted Specified Additional Debt or
Outstanding Permitted Line of Credit Indebtedness, as the case may be,
provided that Liens on the assets subject thereto are also created to
secure the obligations and liabilities of the Loan Parties hereunder
and under the other Loan Documents and that such Permitted Specified
Additional Debt or Outstanding Permitted Line of Credit Indebtedness is
secured equally and ratably herewith.
7.4. Limitation on Guarantee Obligations. Create, incur,
assume or suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the date hereof and
listed on Schedule 7.4;
(b) the Guarantees and Reimbursement Obligations;
(c) Guarantee Obligations entered into in the ordinary course
of business of any obligations (including Financing Leases and
operating leases) of the Borrower or any Subsidiary Guarantor;
(d) Guarantee Obligations of the Borrower and any of its
Subsidiaries of loans or advances to employees for moving, relocation,
travel and entertainment expenses, drawing accounts and similar
expenditures made in the ordinary course of business and in an
aggregate amount not exceeding, when added to loans and advances at any
time outstanding pursuant to subsection 7.10(c), $10,000,000
outstanding at such time;
(e) Guarantee Obligations in respect of Interest Rate
Protection Agreements and Commodities Price Protection Agreements to
the extent permitted pursuant to subsection 7.10;
50
(f) Guarantee Obligations of the Parent, the Borrower or any
Subsidiary of the Parent in respect of loans made pursuant to the
Operator Financing Program which are sold as described in clause (iii)
of the definition of such term, provided that such Guarantee
Obligations do not, in the aggregate, exceed $50,000,000 at any one
time outstanding;
(g) Guarantee Obligations of the Parent of the performance of
obligations of the Borrower or any of its Subsidiaries under
Contractual Obligations in existence at the time of any Permitted
Acquisition and not created in anticipation thereof under which the
Borrower or such Subsidiary becomes obligated as a result of such
Permitted Acquisition;
(h) Guarantee Obligations relating to obligations of any kind
of the Borrower, the Parent, or any of the Parent's Subsidiaries that
are not prohibited by this Agreement; and
(i) other Guarantee Obligations incurred after the date hereof
in an aggregate amount not to exceed $5,000,000 at any one time
outstanding.
7.5. Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation) or with or into any
one or more wholly owned Subsidiaries of the Borrower (provided that
the wholly owned Subsidiary or Subsidiaries shall be the continuing or
surviving corporation and provided, further, that if any of such
Subsidiaries is a Subsidiary Guarantor, the surviving corporation shall
be a Subsidiary Guarantor);
(b) any wholly owned Subsidiary may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or any other wholly owned
Subsidiary of the Borrower; and
(c) the Parent may be merged or consolidated with or into the
Borrower or the Borrower may be merged or consolidated with or into the
Parent (provided that if the Parent shall be the continuing or
surviving corporation, it shall have assumed all of the Borrower's
obligations hereunder pursuant to an agreement satisfactory in form and
substance to the Administrative Agent).
7.6. Limitation on Sale of Assets. Convey, sell, lease,
assign, transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person other than the
Borrower or any wholly owned Subsidiary, except:
51
(a) the sale or other disposition of obsolete or worn out
property in the ordinary course of business;
(b) the sale or other disposition of any property in the
ordinary course of business, provided that (other than inventory and
other than dispositions permitted by subsection 7.6(a), (d) or (f)) the
aggregate book value of all assets so sold or disposed of in any period
of twelve consecutive months shall not exceed 10% of consolidated total
assets of the Borrower and its Subsidiaries as at the beginning of such
twelve-month period;
(c) the sale of inventory in the ordinary course of business;
(d) the sale or discount without recourse of accounts
receivable which are overdue for more than 60 days arising in the
ordinary course of business in connection with the compromise or
collection thereof;
(e) as permitted by subsection 7.5(b);
(f) the sale, lease, assignment, transfer or other disposition
of accounts receivable in connection with any Accounts Receivable
Indebtedness permitted pursuant to subsection 7.2(u); and
(g) the sale (without recourse to the Operator Financing
Subsidiary) of loans made pursuant to the Operator Financing Program by
the Operator Financing Subsidiary to Persons other than the Parent and
its Subsidiaries or to the Insurance Subsidiary or the Offshore Joint
Venture to the extent (and only to the extent) such purchase by the
Insurance Subsidiary or the Offshore Joint Venture, as the case may be,
would constitute a Permitted Insurance Company Investment.
7.7. Limitation on Leases. Permit (a) Consolidated Lease
Expense (other than under leases for tractors, trailers and related equipment)
for any fiscal year of the Borrower to exceed $20,000,000 or (b) Consolidated
Lease Expense with respect to Short Term Leases in any fiscal year of the
Borrower to exceed $30,000,000.
7.8. Limitation on Dividends. Declare or pay any dividend
(other than dividends payable solely in common stock of the Borrower or the
Parent) on, or make any payment on account of, or set apart assets for a sinking
or other analogous fund for, the purchase, redemption, defeasance, retirement or
other acquisition of, any shares of any class of Capital Stock of the Borrower
or the Parent, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of the Parent, the Borrower or any Subsidiary
except that:
(a) the Borrower may pay cash dividends to the Parent in an
amount sufficient to pay tax liabilities of the Parent which are paid
in cash by the Parent to any taxing authority and which are
attributable to income, business, properties or activities of or
distribution of earnings by, the Parent or its Subsidiaries; provided
that the Parent shall contribute to the Borrower the amount of any
refunds of such tax payments upon receipt thereof;
52
(b) the Borrower may pay cash dividends to the Parent, in
addition to dividends otherwise permitted by this subsection 7.8, to
enable the Parent to pay expenses in the ordinary course of business in
an aggregate amount not to exceed in any fiscal year, when added to all
Indebtedness of the Parent incurred in such fiscal year pursuant to
subsection 7.2(j), $250,000;
(c) the Borrower may pay cash dividends to the Parent to
enable the Parent to pay premiums to insurance companies for directors'
and officers' insurance with respect to the Parent;
(d) the Borrower may pay cash dividends to the Parent to
enable the Parent to pay for the printing and distribution of financial
reports of the Parent, proxy solicitations and other communications
with shareholders of the Parent and for filings with the Securities and
Exchange Commission and costs directly related to the annual meeting of
shareholders of the Parent;
(e) the Borrower may pay cash dividends to the Parent to
enable the Parent to pay directors' fees and expenses to directors of
the Parent;
(f) the Borrower may pay cash dividends to the Parent to
enable the Parent to pay fees owed by the Parent to its transfer agent;
(g) the Borrower may pay cash dividends to the Parent to pay
fees to the Parent's independent auditors, tax advisors and outside
attorneys in the ordinary course of business;
(h) the Borrower may pay cash dividends to the Parent to pay
obligations of the Parent incurred under any Interest Rate Protection
Agreement or Commodity Price Protection Agreement permitted pursuant to
subsection 7.10(i); and
(i) so long as no Default or Event of Default shall have
occurred and be continuing or would result therefrom, the Borrower may
purchase, repurchase, redeem or retire any share of its Capital Stock
and/or pay cash dividends to the Parent, and the Parent may purchase,
repurchase, redeem or retire any share of its Capital Stock and/or pay
cash dividends to its shareholders.
7.9. Limitation on Capital Expenditures. Make or commit to
make (by way of the acquisition of securities of a Person or otherwise) any
expenditure in respect of the purchase or other acquisition of fixed or capital
assets (excluding (i) any such asset acquired in connection with normal
replacement and maintenance programs properly charged to current operations or
which are payable from the proceeds of insurance received by the Parent, the
Borrower or any Subsidiary, (ii) any such asset acquired in connection with a
Permitted Acquisition and (iii) any such asset constituting a tractor, trailer
or related item of transportation equipment acquired for the purpose of
reselling the same to an independent contractor doing business with the Borrower
and its Subsidiaries but only to the extent that the purchase price of such
tractor, trailer or related item of equipment, when added to the aggregate
purchase price of all such other tractors, trailers and related items of
equipment then owned by the Borrower and its Subsidiaries, does not exceed
$5,000,000), except for expenditures in the ordinary course of business not
exceeding, when
53
added to the value of all assets (determined in accordance with GAAP) rented
under leases (other than Financing Leases and Short Term Leases) for tractors,
trailers and related equipment entered into during any fiscal year of the
Parent, in the aggregate for the Parent and its Subsidiaries during any such
fiscal year, the amount of $60,000,000, provided, that, in the event that the
amount permitted pursuant to this subsection for any fiscal year exceeds the
actual amount of all capital expenditures for such fiscal year (whether
permitted by virtue of a carry-over pursuant to this proviso or otherwise), the
amount of such excess up to an amount not to exceed $5,000,000 may be carried
over for expenditure in that portion of the fiscal year immediately following
such fiscal year that follows delivery of the financial statements delivered
pursuant to subsection 6.1(a) with respect to such fiscal year.
7.10. Limitation on Investments, Loans and Advances. Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment in, any Person,
except:
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents, investments by the
Insurance Subsidiary in Permitted Insurance Company Investments and
investments by the Offshore Joint Venture in Permitted Insurance
Company Investments;
(c) loans and advances to employees of the Borrower or its
Subsidiaries for travel, entertainment and relocation expenses in the
ordinary course of business in an aggregate amount for the Borrower and
its Subsidiaries not to exceed, when added to Guarantee Obligations at
any time outstanding pursuant to subsection 7.4(d), $10,000,000
outstanding at such time;
(d) investments by the Parent in the Borrower or any
Subsidiary Guarantor, investments by the Borrower in any Subsidiary
Guarantor and investments by any Subsidiary in the Borrower or in any
Subsidiary Guarantor;
(e) advances in the ordinary course of business (excluding
those permitted by subsection 7.10(l)) to any independent contractor
performing services for it or for any of its agents not to exceed
$20,000,000 in the aggregate for the Parent and its Subsidiaries at any
time outstanding maturing not later than seven years after the
incurrence thereof;
(f) short term loans (excluding those permitted by subsection
7.10 (l)) and compensation advances to any independent contractor
performing services for it or for any of its agents made in the
ordinary course of business that do not exceed the projected revenues
to be paid to such independent contractor within two months of such
loans or advances, and in the case of loans, which mature not later
than two months after the making of such loans;
(g) any acquisition of all or a portion of the assets or
Capital Stock of any Person that constitutes a business engaged
primarily in the same business in which the Borrower and its
Subsidiaries are engaged on the date of this Agreement or a business
that is directly related thereto, provided that (i) the aggregate
purchase price paid by the
54
Borrower for any such acquisition (including the amount of any deferred
purchase price, and all amounts applied within one year of the
consummation of such acquisition to the refinancing of any Financing
Leases to which such assets or Person is subject on the date of the
consummation of such acquisition, other than Indebtedness so applied to
such refinancing) shall not exceed $75,000,000, it being understood
that a series of related transactions that are acquisitions of assets
or Capital Stock of the same Person or business shall constitute a
single acquisition for the purposes of this clause (i); (ii) neither
the Borrower nor any Subsidiary shall offer to purchase more than 10%
of the Capital Stock of such Person in connection with any such
acquisition unless such transaction has been approved by either all the
Lenders or a majority of the board of directors of such Person; and
(iii) the requirements of subsection 7.1 would be satisfied by the
Parent and its Subsidiaries on a pro forma combined basis as at the end
of the most recently ended fiscal quarter of the Parent for which
financial statements have been delivered pursuant to subsection 6.1 if
each such acquisition had been completed on or prior to the first day
of the four fiscal quarter period ended with such most recently ended
fiscal quarter (excluding in such pro forma calculation any
extraordinary or non-recurring items related to such acquisition).
(h) investments in notes and other securities received in the
settlement of overdue debts and accounts payable in the ordinary course
of business and for amounts which, individually or in the aggregate, do
not exceed $10,000,000 at any time outstanding;
(i) investments by the Borrower or any of its Subsidiaries in
Commodity Price Protection Agreements and Interest Rate Protection
Agreements; provided such investments in such Commodity Price
Protection Agreements are made solely for the purpose of hedging
purchase prices of fuel and not for speculation;
(j) investments of the Borrower or any Subsidiary in the
Parent that constitute Indebtedness of the Parent pursuant to
subsection 7.2(g)-(n) or (q).
(k) investments, loans and advances by the Borrower in an
amount not to exceed $10,000,000 in the aggregate in connection with
the formation of partnerships, limited liability companies, joint
ventures and other business organizations that do not constitute
Subsidiaries;
(l) investments, loans and/or advances by the Borrower in or
to the Financing Vehicle (as such term is defined in the definition of
Operator Financing Program) in an aggregate amount not to exceed
$10,000,000 at any one time outstanding, the proceeds of which shall be
used to make loans to independent contractors pursuant to the Operator
Financing Program, and, if the Financing Vehicle is the Operator
Financing Subsidiary, loans by such Subsidiary to independent
contractors pursuant to such Program;
(m) other investments not to exceed $5,000,000 at any one time
outstanding;
(n) loans to its employees for the purpose of exercising
employee stock options to purchase common stock of the Parent, which
loans may be non-recourse; and
55
(o) loans to its employees to purchase common stock of the
Parent, which loans may be non-recourse, provided all such loans may
not exceed $5,000,000 at any one time outstanding.
7.11. Limitation on Optional Payments and Modifications of
Debt Instruments. (a) Make any optional payment or prepayment on or redemption
of any Indebtedness (other than (i) the Loans, (ii) Indebtedness incurred
pursuant to subsection 7.2(c), (iii) Financing Leases that are refinanced with
Indebtedness incurred pursuant to subsection 7.2(c)), (iv) any Account
Receivable Indebtedness permitted pursuant to subsection 7.2(u) and (v)
Outstanding Permitted Line of Credit Indebtedness permitted pursuant to
subsection 7.2(o) or (b) amend, modify or change, or consent or agree to any
amendment, modification or change to any of the terms relating to the payment or
prepayment or principal of or interest on any such Indebtedness (other than any
such amendment, modification or change which would extend the maturity or reduce
the amount of any payment of principal thereof or which would reduce the rate or
extend the date for payment of interest thereon).
7.12. Limitation on Transactions with Affiliates. Enter into
any transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate (other
than the Parent, the Borrower or any Subsidiary) unless such transaction is (a)
otherwise permitted under this Agreement, (b) in the ordinary course of the
Parent's, the Borrower's or such Subsidiary's business and (c) upon fair and
reasonable terms no less favorable to the Parent, the Borrower or such
Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person which is not an Affiliate.
7.13. Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Borrower or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Borrower or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Borrower or such
Subsidiary except with respect to any such transactions which shall not have an
aggregate fair market value in excess of $10,000,000 in any fiscal year and
$15,000,000 in the aggregate; provided, however, that, in addition to the
foregoing the Borrower may enter into such an arrangement in respect of its
headquarters in Jacksonville, Florida for aggregate consideration of up to
$20,000,000.
7.14. Limitation on Changes in Fiscal Year. Permit the fiscal
year of the Borrower or the Parent to end on a day other than the last Saturday
in December.
7.15. Limitation on Negative Pledge Clauses. (a) enter into
with any Person any agreement which prohibits or limits the ability of the
Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, other than (A) this Agreement, (B) any such agreement with
respect to (i) any Account Receivable Indebtedness permitted pursuant to
subsection 7.2(u), (ii) any industrial revenue bonds, (iii) any purchase money
mortgages or (iv) any Financing Leases permitted by this Agreement (in which
cases, any prohibition or limitation shall be effective only against the assets
financed thereby) and (C) any such agreement in respect of Permitted Specified
Additional Debt or Outstanding Permitted Line of Credit
56
Indebtedness, as the case may be, but only to the extent that such Indebtedness
is permitted pursuant to subsection 7.2 and such agreements comply with
subsection 7.15(b); or
(b) enter into any agreement with respect to Permitted
Specified Additional Debt or Outstanding Permitted Line of Credit Indebtedness,
as the case may be, that prohibits or limits the ability of the Borrower or any
of its Subsidiaries to create, incur, assume or suffer to exist any Lien upon
any of its property, assets or revenues, whether now owned or hereafter
acquired, to secure the obligations of the Borrower to the Administrative Agent
or any Lender hereunder or under the other Loan Documents (including, without
limitation, any advances or extensions of credit made hereunder prior to or
subsequent to the creation of such Lien) or to secure any Loan Party's
obligations to the Administrative Agent or any Lender under any Loan Document to
which it is a party, provided that the Borrower may enter into any such
agreement which would permit any such Lien but only to the extent that the
Permitted Specified Additional Debt and/or Outstanding Permitted Line of Credit
Indebtedness, as the case may be, will be equally and ratably secured with any
and all other obligations which are secured in connection with the creation of
such Lien.
7.16. Limitation on Lines of Business. Enter into any
business, either directly or through any Subsidiary, except for those businesses
in which the Borrower and its Subsidiaries are engaged on the date of this
Agreement or which are directly related thereto (including purchasing and
selling of tractors, trailers and related transportation equipment, operating
the Operator Financing Program, warehousing, logistics, brokerage, freight
forwarding, common carriage, contract carriage, dispatching, transportation
out-sourcing services, intermodal business, surface expedited business,
consulting on transportation matters, and truck stops operated primarily to
service vehicles operated by or for the Borrower and its Subsidiaries), provided
that, subject to the other provisions of this Agreement, the foregoing shall not
prohibit the Borrower or any Subsidiary from entering into the partnership or
joint venture permitted pursuant to subsection 7.10(k); provided, further, that
the Insurance Subsidiary shall be permitted to engage in the business of (X)
providing insurance and reinsurance to (a) the Borrower, its Subsidiaries and/or
independent contractors doing business with the Borrower and/or any of its
Subsidiaries and/or (b) any other Persons principally engaged in trucking or a
similar business, including independent contractors who do not do business with
the Borrower and/or any of its Subsidiaries, and (Y) providing other reinsurance
to third parties, provided that, in the case of insurance for independent
contractors, the premiums charged by the Insurance Subsidiary in connection
therewith are consistent in all material respects with those prevailing in the
industry for similar risks (based on the good faith judgment of the Insurance
Subsidiary) and provided, further, that of the total insurance premiums received
by the Insurance Subsidiary during any period of four consecutive fiscal
quarters (inclusive of any reinsurance premiums), (A) no more than one-third of
such total premiums may derive from insurance or reinsurance provided by the
Insurance Subsidiary in reliance on clause (X)(b) above, (B) no more than
one-third of such total premiums may derive from reinsurance provided by the
Insurance Subsidiary in reliance on clause (Y) above and (C) no more than
one-half of such total premiums may derive from the sum of the premiums
described in clauses (A) and (B) above.
7.17. Limitation on Formation of Subsidiaries. Form any
Subsidiary on or after the Closing Date under the laws of any jurisdiction other
than any state of the United States of America; provided that the Borrower shall
be permitted to form Subsidiaries under the laws of
57
Mexico or Canada if the aggregate assets of all such Subsidiaries do not at any
time exceed an amount equal to $5,000,000; provided, further, that the Borrower
shall be permitted to form the Insurance Subsidiary and the Offshore Joint
Venture.
7.18. Limitation on Non-Guarantor Subsidiaries. Permit at any
time Subsidiaries (other than the Operator Financing Subsidiary) that are not
parties to the Subsidiaries Guarantee to have assets equal to more than
$10,000,000 in the aggregate.
SECTION VIII. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan
or the Borrower or any Subsidiary Guarantor shall fail to pay any
Reimbursement Obligation when due in accordance with the terms thereof
or hereof; or the Borrower shall fail to pay any interest on any Loan,
or the Borrower or the relevant Subsidiary Guarantor shall fail to pay
any other amount payable hereunder, within five days after any such
interest or other amount becomes due in accordance with the terms
thereof or hereof; or
(b) Any representation or warranty made or deemed made by the
Borrower or any other Loan Party herein or in any other Loan Document
or which is contained in any certificate, document or financial or
other statement furnished by it at any time under or in connection with
this Agreement or any such other Loan Document shall prove to have been
incorrect in any material respect on or as of the date made or deemed
made; or
(c) The Borrower or any other Loan Party shall default in the
observance or performance of any agreement contained in subsection 6.9
or Section 7 of this Agreement, Section 11 of the Parent Guarantee (to
the extent such Section incorporates by reference the covenants
contained in subsection 6.9 or Section 7 hereof), Section 11 of the
Subsidiary Guarantee (to the extent such Section incorporates by
reference the covenants contained in subsection 6.9 or Section 7
hereof) or Section 11 of the L/C Guarantee (to the extent such Section
incorporates by reference the covenants contained in subsection 6.9 or
Section 7 hereof); or
(d) The Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in
paragraphs (a) through (c) of this Section), and such default shall
continue unremedied for a period of 30 days; or
(e) The Parent, the Borrower or any of its Subsidiaries shall
(i) default in any payment of principal of or interest of any
Indebtedness (other than the Loans) or in the payment of any Guarantee
Obligation, the aggregate principal amount of which exceeds $5,000,000,
beyond the period of grace (not to exceed 30 days), if any, provided in
the instrument or agreement under which such Indebtedness or Guarantee
Obligation was created; or (ii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or Guarantee Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
shall
58
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Guarantee
Obligation (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity
or such Guarantee Obligation to become payable; or
(f) (i) The Parent, the Borrower or any of its Subsidiaries
shall commence any case, proceeding or other action (A) under any
existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any
substantial part of its assets, or the Parent, the Borrower or any of
its Subsidiaries shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the Parent, the
Borrower or any of its Subsidiaries any case, proceeding or other
action of a nature referred to in clause (i) above which (A) results in
the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a
period of 60 days; or (iii) there shall be commenced against the
Parent, the Borrower or any of its Subsidiaries any case, proceeding or
other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its
assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending
appeal within 60 days from the entry thereof; or (iv) the Parent, the
Borrower or any of its Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or
(iii) above; or (v) the Parent, the Borrower or any of its Subsidiaries
shall generally not, or shall be unable to, or shall admit in writing
its inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of the Borrower or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is reasonably likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA,
(v) the Borrower or any Commonly Controlled Entity shall incur, or is
reasonably likely to incur, any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other similar event or condition shall
occur or exist with respect to a Plan; and in each case in clauses (i)
through (vi) above, such event or condition, together with all other
such events or conditions, if any, would reasonably be expected to
subject the Borrower, or any
59
Commonly Controlled Entity to any tax, penalty or other liabilities in
an aggregate amount in excess of $10,000,000; or
(h) One or more judgments or decrees shall be entered against
the Parent, the Borrower or any of its Subsidiaries involving in the
aggregate a liability (not paid or fully covered by insurance) of
$10,000,000 or more, and all such judgments or decrees shall not have
been vacated, discharged, stayed or bonded pending appeal within 60
days from the entry thereof; or
(i) Any Guarantee shall cease, for any reason, to be in full
force and effect or any Guarantor shall so assert in writing; or
(j) (i) The Parent shall cease to own, free and clear of any
Liens, 100% of the Capital Stock of the Borrower or (ii) any Person or
"group" (within the meaning of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended) (A) shall have acquired beneficial
ownership of 25% or more of any outstanding class of Capital Stock
having ordinary voting power in the election of directors of the Parent
or (B) shall obtain the power (whether or not exercised) to elect a
majority of the Parent's directors or (iii) the Board of Directors of
the Parent shall not consist of a majority of Continuing Directors; as
used in this paragraph "Continuing Directors" shall mean the directors
of the Parent on the Closing Date and each other director, if such
other director's nomination for election to the Board of Directors of
the Parent is recommended by a majority of the then Continuing
Directors;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including, without limitation, all
amounts of L/C Obligations, which shall be applied as set forth in the next
succeeding paragraph, whether or not the beneficiaries of the then outstanding
Letters of Credit shall have presented the documents required thereunder) shall
immediately become due and payable, and (B) if such event is any other Event of
Default, either or both of the following actions may be taken: (i) with the
consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower declare the Commitments to be terminated forthwith, whereupon the
Commitments shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including,
without limitation, all amounts of L/C Obligations, which shall be applied as
set forth in the next succeeding paragraph, whether or not the beneficiaries of
the then outstanding Letters of Credit shall have presented the documents
required thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable.
With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to the preceding paragraph, the Borrower shall at such time deposit in
a cash collateral account opened by the Administrative
60
Agent an amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit. Amounts held in such cash collateral account shall be applied
by the Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrower hereunder and under the other Loan Documents shall have been paid
in full, the balance, if any, in such cash collateral account shall be returned
to the Borrower.
Except as expressly provided above in this Section,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived.
SECTION IX. THE ADMINISTRATIVE AGENT
9.1. Appointment. Each Lender hereby irrevocably designates
and appoints JPMorgan Chase Bank as the Administrative Agent of such Lender
under this Agreement and the other Loan Documents, and each such Lender
irrevocably authorizes JPMorgan Chase Bank, as the Administrative Agent for such
Lender, to take such action on its behalf under the provisions of this Agreement
and the other Loan Documents and to exercise such powers and perform such duties
as are expressly delegated to the Administrative Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Administrative Agent shall not have any duties
or responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, 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
Administrative Agent.
9.2. Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement and the other Loan Documents by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.
9.3. Exculpatory Provisions. Neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrower or
any officer thereof contained in this Agreement or any other Loan Document or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of the Borrower to perform its obligations hereunder
or thereunder. The Administrative Agent shall not be under any obligation to any
Lender to ascertain or to
61
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 Borrower.
9.4. Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order 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, without limitation, counsel to the
Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative 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 Lenders as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Loans.
9.5. Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
9.6. Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates
has made any representations or warranties to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
the Borrower, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and made its own decision to make
its Loans hereunder and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon the Administrative Agent
or any other Lender, and based on such documents and
62
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 investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrower. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent hereunder, the Administrative Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of the Borrower which
may come into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
9.7. Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to their respective Percentages in effect on the date on which
indemnification is sought under this subsection (or, if indemnification is
sought after the date upon which the Revolving Credit Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with their Percentages immediately prior to such date), from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (whether before or after the payment of the Loans) be imposed on, incurred
by or asserted against the Administrative Agent in any way relating to or
arising out of this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Administrative
Agent's gross negligence or willful misconduct. The agreements in this
subsection shall survive the payment of the Loans and all other amounts payable
hereunder.
9.8. Administrative Agent in Its Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower as though the
Administrative Agent were not the Administrative Agent hereunder and under the
other Loan Documents. With respect to its Loans made or renewed by it and with
respect to any Letter of Credit issued or participated in by it, the
Administrative Agent shall have the same rights and powers under this Agreement
and the other Loan Documents as any Lender and may exercise the same as though
it were not the Administrative Agent, and the terms "Lender" and "Lenders" shall
include the Administrative Agent in its individual capacity.
9.9. Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon 30 days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders, agreeing to become a successor agent, a
successor agent for the Lenders, which successor agent shall be approved by the
Borrower, whereupon such successor agent shall succeed to the rights, powers and
duties of the Administrative Agent, and the term "Administrative Agent" shall
mean such
63
successor agent effective upon such appointment and approval, and the former
Administrative Agent's rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. After any retiring Administrative Agent's resignation as
Administrative Agent, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents.
SECTION X. MISCELLANEOUS
10.1. Amendments and Waivers. Neither this Agreement, any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection. The Required Lenders may, or, with the written consent of the
Required Lenders (receipt of which has been confirmed in writing by the
Administrative Agent to the Borrower), the Administrative Agent may, from time
to time, (a) enter into with the Loan Parties written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights or obligations of the Lenders or of the Borrower hereunder or
thereunder or (b) waive, on such terms and conditions as the Required Lenders or
the Administrative Agent, as the case may be, may specify in such instrument,
any of the requirements of this Agreement or the other Loan Documents or any
Default or Event of Default and its consequences; provided, however, that no
such waiver and no such amendment, supplement or modification shall (i) reduce
the amount or extend the scheduled date of maturity of any Loan or of any
installment thereof, or reduce the stated rate of any interest or fee payable
hereunder or extend the scheduled date of any payment thereof or increase the
amount or extend the expiration date of any Lender's Commitment, in each case
without the consent of each Lender affected thereby, (ii) amend, modify or waive
any provision of this subsection or reduce the percentage specified in the
definition of Required Lenders, or consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement and the other
Loan Documents or release all or substantially all of the Collateral, in each
case without the written consent of all the Lenders, (iii) amend, modify or
waive any provision of Section 9 without the written consent of the then
Administrative Agent or (iv) amend, modify or waive any provision of Section 3
without the written consent of the then Issuing Lender. Any such waiver and any
such amendment, supplement or modification shall apply equally to each of the
Lenders and shall be binding upon the Borrower, the Lenders, the Administrative
Agent and all future holders of the Loans. In the case of any waiver, the
Borrower, the Lenders and the Administrative Agent shall be restored to their
former position and rights hereunder and any other Loan Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
10.2. Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or three days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, or, in the case of delivery by a nationally-recognized overnight
courier, when
64
received, addressed as follows in the case of the Borrower, the Parent and the
Administrative Agent, and as set forth in Schedule 1.1(a) in the case of the
other parties hereto, or to such other address as may be hereafter notified by
the respective parties hereto and any future holders of the Loans:
The Borrower: Landstar System Holdings, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Parent: Landstar System, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent: JPMorgan Chase Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: JPMorgan Chase Bank
Administrative Agent Services Corporation
One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to subsection 2.2, 2.4, 2.6, 2.11 or 3.2 shall not be
effective until received.
10.3. No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
10.4. Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.
10.5. Payment of Expenses and Taxes. The Borrower agrees (a)
to pay or reimburse the Administrative Agent for all its reasonable
out-of-pocket costs and expenses
65
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent, (b) to pay or reimburse
each Lender and the Administrative Agent for all its reasonable costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, the reasonable fees and disbursements
of counsel to the Administrative Agent and to the several Lenders (but excluding
any transfer or similar taxes arising solely from the event of an assignment by
a Lender under subsection 10.6(c)), (c) to pay, indemnify, and hold each Lender
and the Administrative Agent harmless from, any and all recording and filing
fees and any and all liabilities with respect to, or resulting from any delay in
paying, stamp, excise and other similar taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the other Loan Documents and any such other
documents (but excluding any such taxes arising solely from the event of an
assignment by a Lender under subsection 10.6(c)), and (d) to pay, indemnify, and
hold each Lender and the Administrative Agent harmless from and against any and
all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Loan Documents and any such other
documents, including, without limitation, any of the foregoing relating to the
violation of, noncompliance with or liability under, any Environmental Law
applicable to the operations of the Borrower or any of its Subsidiaries (all the
foregoing in this clause (d), collectively, the "indemnified liabilities"),
provided, that the Borrower shall have no obligation hereunder to the
Administrative Agent or any Lender with respect to indemnified liabilities
arising from (i) the gross negligence or willful misconduct of the
Administrative Agent or any Lender or (ii) legal proceedings commenced against
the Administrative Agent or any Lender by any security holder or creditor
thereof arising out of and based upon rights afforded any such security holder
or creditor solely in its capacity as such. Notwithstanding the foregoing,
except as provided in clause (c) above, the Borrower shall have no obligation
under this subsection 10.5 to the Administrative Agent or any Lender with
respect to any tax, levy, impost, duty, charge, fee, deduction or withholding
imposed, levied, collected, withheld or assessed by any Governmental Authority.
The agreements in this subsection shall survive repayment of the Loans and all
other amounts payable hereunder.
10.6. Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of each of the
Loan Parties, the Lenders, the Administrative Agent, all future holders of the
Loans and their respective successors and assigns, except that no Loan Party may
assign or transfer (other than in connection with a merger, liquidation or
consolidation permitted by subsection 7.5) any of its rights or obligations
under this Agreement without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to one
or more banks or other entities ("Participants") participating interests in any
Loan owing to such Lender any
66
Commitment of such Lender or any other interest of such Lender hereunder and
under the other Loan Documents, provided, that the amount of the Commitment sold
to such Participant pursuant to such participation (determined as of the date of
the Assignment and Assumption with respect to such participation) shall not be
less than $2,500,000. In the event of any such sale by a Lender of a
participating interest to a Participant, such Lender's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such Lender
shall remain the holder of any such Loan (and any Note evidencing such Loan) for
all purposes under this Agreement and the other Loan Documents, the Borrower and
the Administrative Agent shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement and the other Loan Documents and such Participant shall have no right
to approve any amendment or waiver of any provision of any Loan Document, or to
consent to any departure by any Loan Party therefrom, except to the extent that
such amendment, waiver or consent would extend the maturity of or reduce the
principal of, or interest on, the Loans or any fees payable hereunder, in each
case to the extent subject to such participation. The Borrower agrees that if
amounts outstanding under this Agreement and the Loans are due or unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement, provided that, in
purchasing such participating interest, such Participant shall be deemed to have
agreed to share with the Lenders the proceeds thereof as provided in subsection
10.7(a) as fully as if it were a Lender hereunder. The Borrower also agrees that
each Participant shall be entitled to the benefits of subsections 2.13 and 2.14
with respect to its participation in the Commitments and the Loans outstanding
from time to time as if it was a Lender; provided that, in the case of
subsection 2.14, such Participant shall have complied with the requirements of
said subsection and provided, further, that the Borrower shall not be required
to pay, in respect of the amount of the participation transferred by such
transferor Lender to such Participant, any greater amount pursuant to any such
subsections than the Borrower would have been required to pay in respect of the
amount of the Loans subject to such participation had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time and from
time to time assign to any Lender or any affiliate thereof or any Lender
Affiliate, or, with the consent of the Borrower and the Administrative Agent
(which shall not be unreasonably withheld), to an additional bank or financial
institutions (an "Assignee") all or any part of its rights and obligations under
this Agreement and the other Loan Documents pursuant to an Assignment and
Acceptance, substantially in the form of Exhibit F, executed by such Assignee,
such assigning Lender (and, in the case of an Assignee that is not then a Lender
or an affiliate thereof, by the Borrower and Administrative Agent) and delivered
to the Administrative Agent for its acceptance and recording in the Register,
provided, that the amount of the Revolving Credit Commitment of the assigning
Lender assigned pursuant to such assignment (determined as of the date of the
Assignment and Assumption with respect to such assignment) shall not be less
than $2,500,000. Upon such execution, delivery, acceptance and recording, from
and after the effective date determined pursuant to such Assignment and
Acceptance, (x) the Assignee thereunder shall be a party hereto and, to the
extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder with a Commitment as set forth therein, and
(y) the assigning
67
Lender thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such assigning
Lender shall cease to be a party hereto and shall have no further rights except
as set forth in the Assignment and Acceptance).
(d) The Administrative Agent shall maintain at its address
referred to in subsection 10.2 a copy of each Assignment and Acceptance
delivered to it and a register (the "Register") for the recordation of the names
and addresses of the Lenders and the Commitment of, and principal amount of the
Loans owing to, and Notes, if any, evidencing such Loans held by, each Lender
from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Administrative Agent and the
Lenders may treat each Person whose name is recorded in the Register as the
owner of the Loan recorded therein for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an Assignee (and, in the case of an Assignee that is
not then a Lender or an affiliate thereof, by the Administrative Agent) together
with payment to the Administrative Agent of a registration and processing fee of
$3,500, the Administrative Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such acceptance
and recordation to the Lenders and the Borrower. On or prior to such effective
date, the Borrower, at its own expense, shall, upon receipt of a written request
from the Assignee, execute and deliver to the Administrative Agent (in exchange
for the Note of the assigning Lender) a new Note to the order of such Assignee
in an amount equal to the Commitment assumed by it pursuant to such Assignment
and Acceptance and, if the assigning Lender has retained a Commitment hereunder
and so requests it, a new Note to the order of the assigning Lender in an amount
equal to the Commitment retained by it hereunder. Such new Notes shall be dated
the Closing Date and shall otherwise be in the form of the Note replaced
thereby.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee
(subject to the provisions of subsection 10.16 hereof) any and all financial
information in such Lender's possession concerning the Borrower and its
Affiliates which has been delivered to such Lender by or on behalf of the
Borrower pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of the Borrower in connection with such Lender's credit
evaluation of the Borrower and its Affiliates prior to becoming a party to this
Agreement.
(g) Nothing herein shall prohibit any Lender from pledging or
assigning any Note, together with its rights hereunder, to any Federal Reserve
Bank in accordance with applicable law.
10.7. Adjustments; Set-off. (a) If any Lender (a "Benefitted
Lender") shall at any time receive any payment of all or part of its Loans or
the Reimbursement Obligations owing to it, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or
68
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in subsection 8(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Loans or the Reimbursement Obligations owing to it, or
interest thereon, such Benefitted Lender shall purchase for cash from the other
Lenders a participating interest in such portion of each such other Lender's
Loan or the Reimbursement Obligations owing to it, or shall provide such other
Lenders with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such Benefitted Lender to share the excess payment
or benefits of such collateral or proceeds ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder or under any other Loan Document and the expiration of any
applicable period of grace provided for herein or in any other Loan Document
(whether at the stated maturity, by acceleration or otherwise) to set-off and
appropriate and apply against such amount any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch or agency thereof to or for the credit or the
account of the Borrower. Each Lender agrees promptly to notify the Borrower and
the Administrative Agent after any such set-off and application made by such
Lender, provided that the failure to give such notice shall not affect the
validity of such set-off and application.
10.8. Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
10.9. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10. Integration. This Agreement and the other Loan
Documents represent the agreement of the Loan Parties, the Parent, the
Administrative Agent and the Lenders with respect to the subject matter hereof,
and there are no promises, undertakings, representations or warranties by the
Loan Parties, Administrative Agent or any Lender relative to subject matter
hereof not expressly set forth or referred to herein or in the other Loan
Documents.
10.11. GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT
69
AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
10.12. Submission To Jurisdiction. Each of the Administrative
Agent, Lenders and Loan Parties hereby irrevocably and unconditionally submits
for itself and its property in any legal action or proceeding relating to this
Agreement and the other Loan Documents to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof.
10.13. Waivers. Each of the Loan Parties hereby irrevocably
and unconditionally
(a) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(b) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to any Loan Party, Administrative Agent or Lender, as
applicable, at its address set forth in subsection 10.2 or at such
other address of which the Administrative Agent, Lender or Loan Party
shall have been notified pursuant thereto;
(c) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to ▇▇▇ in any other jurisdiction; and
(d) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this subsection any special, exemplary, punitive or
consequential damages.
10.14. Acknowledgements. Each Loan Party hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to any Loan Party arising out of or
in connection with this Agreement or any of the other Loan Documents,
and the relationship between Administrative Agent and Lenders, on one
hand, and the Borrower and the Parent, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among any Loan Party and the
Lenders.
70
10.15. WAIVERS OF JURY TRIAL. THE LOAN PARTIES, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR THE NOTES OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.16. Confidentiality. Each Lender and the Administrative
Agent agrees to take normal and reasonable precautions to maintain the
confidentiality of information designated in writing as confidential and
provided to it by the Parent, the Borrower or any Subsidiary in connection with
this Agreement or any other Loan Document; provided, however, that any Lender
may disclose such information (a) at the request of any regulatory authority or
in connection with an examination of such Lender by any such authority, (b)
pursuant to subpoena or other court process, (c) when required to do so in
accordance with the provisions of any applicable law, (d) at the discretion of
any other Governmental Authority, (e) to such Lender's Affiliates and
independent auditors and other professional advisors or (f) to any Transferee or
potential Transferee; provided that such Transferee agrees to comply with the
provisions of this subsection 10.16.
71
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
State of New York ) LANDSTAR SYSTEM HOLDINGS, INC.
) s.s.:
County of New York )
By:_______________________
Sworn before me this Title
___day of __________, 2001
________________________ LANDSTAR SYSTEM, INC.
Notary Public
By:_______________________
Title:
WITNESSETH:
1. _______________________
2. _______________________
72
JPMORGAN CHASE BANK,
as Administrative Agent and as a
Lender
By:_________________________________
Title:
73
FIRST UNION NATIONAL BANK,
as Co-Syndication Agent and as a
Lender
By:_________________________________
Title:
74
FLEET NATIONAL BANK,
as Co-Syndication Agent and as a
Lender
By:_________________________________
Title:
75
SUNTRUST BANK,
as Co-Syndication Agent and as a
Lender
By:_________________________________
Title:
▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, N.A.
By:_________________________________
Title:
▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
By:_________________________________
Title:
78
PB CAPITAL CORPORATION
By:_________________________________
Title:
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ) LANDSTAR ACQUISITION CORPORATION
) s.s.:
County of New York ) LANDSTAR CAPACITY SERVICES, INC.
Sworn before me this LANDSTAR CARRIER SERVICES, INC. (f.k.a
___day of ________, 2001 Landstar Expedited, Inc.)
-----------------------
Notary Public LANDSTAR CORPORATE SERVICES, INC.
WITNESSETH LANDSTAR EXPRESS AMERICA, INC.
1. ______________________ LANDSTAR GEMINI, INC. (f.k.a. Gemini
Transportation Services, Inc.)
2. ______________________
LANDSTAR INWAY, INC. (f.k.a. Independent
Freightway, Inc.)
LANDSTAR ▇▇▇▇▇, INC. (f.k.a. ▇▇▇▇▇
Nationwide, Inc.)
LANDSTAR LOGISTICS, INC. (f.k.a. Landstar
Transportation Services, Inc.)
LANDSTAR RANGER, INC. (f.k.a. Ranger
Transportation, Inc.)
LANDSTAR T.L.C., INC.
RISK MANAGEMENT CLAIM SERVICES, INC.
SIGNATURE INSURANCE COMPANY
SIGNATURE TECHNOLOGY SERVICES, INC.
By _________________________________
Title:
SCHEDULE 1.1(a) TO
CREDIT AGREEMENT
COMMITMENTS
NAME AND ADDRESS OF LENDER REVOLVING CREDIT COMMITMENT
-------------------------- ---------------------------
JPMorgan Chase Bank $30,000,000
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
First Union National Bank $30,000,000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ FL/0074
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Fleet National Bank $30,000,000
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
SunTrust Bank, North Florida, N.A. $30,000,000
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Bank of America, N.A. $25,000,000
IL1-231-09-36
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The Bank of New York $15,000,000
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
2
NAME AND ADDRESS OF LENDER REVOLVING CREDIT COMMITMENT
-------------------------- ---------------------------
PB Capital Corporation $15,000,000
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE 1.1(b)
SUBSIDIARY GUARANTORS
Landstar Acquisition Corporation
Landstar Capacity Services, Inc.
Landstar Carrier Services, Inc. (f.k.a. Landstar Expedited, Inc.)
Landstar Corporate Services, Inc.
Landstar Express America, Inc.
Landstar Gemini, Inc. (f.k.a. Gemini Transportation Services, Inc.)
Landstar Inway, Inc. (f.k.a. Independent Freightway, Inc.)
Landstar ▇▇▇▇▇, Inc. (f.k.a. ▇▇▇▇▇ Nationwide, Inc.)
Landstar Logistics, Inc. (f.k.a. Landstar Transportation Services, Inc.)
Landstar Ranger, Inc. (f.k.a. Ranger Transportation, Inc.)
Landstar T.L.C., Inc.
Risk Management Claim Services, Inc.
Signature Insurance Company
Signature Technology Services, Inc.
SCHEDULE 1.1(c) TO
CREDIT AGREEMENT
PRICING GRID (IN BPS)
LEVERAGE RATIO* ABR MARGIN LIBOR MARGIN** COMMITMENT FEE
--------------- ---------- -------------- --------------
Greater than 2.25 to 1.............................. 0 150.0 30.0
Less than or equal to 2.25 to 1 but greater than 1.25
to 1........................................... 0 100.0 25.0
Less than or equal to 1.25 to 1..................... 0 87.5 25.0
--------
* As defined in subsection 7.1(b) of the Credit Agreement.
** Plus 12.5 bps if the total aggregate Outstanding Revolving Extensions of
Credit exceeds 50% of the total aggregate Revolving Credit Commitments.
SCHEDULE 4.15
SUBSIDIARIES
Jurisdiction of
Direct Subsidiaries of Parent Incorporation
----------------------------- -------------
Landstar System Holdings, Inc. Delaware
Jurisdiction of
Direct Subsidiaries of Borrower Incorporation
------------------------------- -------------
Landstar Acquisition Corporation (f.k.a. Landstar ▇▇▇▇▇, Inc.) Alabama
Landstar Capacity Services, Inc. Delaware
Landstar Carrier Services, Inc. (f.k.a. Landstar Expedited, Inc.) Delaware
Landstar Contractor Financing, Inc. Delaware
Landstar Express America, Inc. North Carolina
Landstar Inway, Inc. (f.k.a. Independent Freightway, Inc.) Delaware
Landstar ▇▇▇▇▇, Inc. (f.k.a. ▇▇▇▇▇ Nationwide, Inc.) Delaware
Landstar Logistics, Inc. (f.k.a. Landstar Transportation Services, Inc.) Delaware
Landstar Ranger, Inc. (f.k.a. Ranger Transportation, Inc.) Delaware
Risk Management Claim Services, Inc. Kentucky
Signature Insurance Company Cayman Islands
Signature Technology Services, Inc. Delaware
SCHEDULE 4.15 (cont'd)
Indirect Jurisdiction of
Subsidiaries of Borrower Incorporation
------------------------ -------------
Landstar Corporate Services, Inc. Delaware
Landstar Gemini, Inc. (f.k.a. Gemini Transportation Services, Inc.) Delaware
Landstar T.L.C., Inc. Delaware
SCHEDULE 7.2
EXISTING INDEBTEDNESS
Indebtedness of Landstar System, Inc.:
--------------------------------------
Indebtedness of Landstar System, Inc. to Landstar System Holdings, Inc. not
exceeding $2,000,000.
Indebtedness of Landstar System Holdings, Inc.:
-----------------------------------------------
Indebtedness under the Existing Credit Agreement.
SCHEDULE 7.3
EXISTING LIENS
None.
SCHEDULE 7.4
EXISTING GUARANTEE OBLIGATIONS
None.
EXHIBIT A TO
CREDIT AGREEMENT
FORM OF REVOLVING CREDIT NOTE
$_______ New York, New York
December __, 2001
FOR VALUE RECEIVED, LANDSTAR SYSTEM HOLDINGS, INC., a Delaware
corporation (the "Borrower"), promises to pay to the order of _____________ (the
"Lender") on the Termination Date, at the office of JPMorgan Chase Bank, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in lawful money of the United States of
America and in immediately available funds, the principal amount of the lesser
of (a) ________ DOLLARS ($ _____) and (b) the aggregate unpaid principal amount
of all Revolving Credit Loans made by the Lender to the Borrower. The Borrower
further agrees to pay interest at said office, in like money, from the date
hereof on the unpaid principal amount hereof at the rates and on the dates
specified in subsection 2.8 of the Third Amended and Restated Credit Agreement,
dated as of December __, 2001, among the Borrower, Landstar System, Inc., the
Subsidiaries of the Borrower signatories thereto, the Lender, the several other
banks and other financial institutions from time to time parties thereto and
JPMorgan Chase Bank, as administrative agent (as the same may from time to time
be amended, modified or supplemented, the "Credit Amendment"; terms defined
therein being used herein as so defined).
This Note is one of the Revolving Credit Notes referred to in the
Credit Agreement, is entitled to the benefits thereof and is subject to optional
prepayment in whole or in part as provided therein.
The holder of this Note is authorized to record the date, amount and
Type of each Revolving Credit Loan made by the Lender to the Borrower pursuant
to subsection 2.1(a) of the Credit Agreement, each continuation thereof, each
conversion of all or a portion thereof to another Type, the date and amount of
each payment or prepayment of principal thereof, and the length of each Interest
Period with respect thereto, on the schedule annexed hereto and made a part
hereof, and any such recordation or any such information recorded on such
Lender's internal books and records and then attached to this Note in the form
of the schedule attached hereto shall constitute prima facie evidence of the
accuracy of the information so recorded, provided that the failure of the Lender
to make such recordation (or any error in such recordation) shall not affect the
obligations of the Borrower hereunder or under the Credit Agreement.
Payment and performance of this Note is guaranteed as set forth in
the Subsidiaries Guarantee and the Parent Guarantee.
Upon the occurrence of any one or more of the Events of Default
specified in the Credit Agreement, all amounts then remaining unpaid on this
Note shall become, or may be declared to be, immediately due and payable all as
provided therein.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
2
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
LANDSTAR SYSTEM HOLDINGS, INC.
By:
---------------------------
Name:
Title:
SCHEDULE A
To Note
LOANS, CONVERSIONS AND PAYMENTS
WITH RESPECT TO ABR LOANS
Amount of ABR Amount of ABR Unpaid
Loans Made or Loans Paid Principal
Converted from or Converted into Balance of Notation
Date Eurodollar Loans Eurodollar Loans ABR Loans Made By
---------------- ---------------- ---------------- --------- -------
SCHEDULE B
To Note
LOANS, CONVERSIONS AND PAYMENTS
WITH RESPECT TO EURODOLLAR LOANS
Interest
Amount of Period and Amount of Unpaid
Eurodollar Eurodollar Eurodollar Principal
Loans Made Rate with Loans Paid Balance of
or Converted Respect or Converted Eurodollar Notation
Date from ABR Loans Thereto into ABR Loans Loans Made By
---- -------------- -------- -------------- ---------- -------
EXHIBIT B TO
CREDIT AGREEMENT
FORM OF SWING LINE NOTE
$5,000,000 New York, New York
December __, 2001
FOR VALUE RECEIVED, LANDSTAR SYSTEM HOLDINGS, INC., a Delaware
corporation (the "Borrower"), promises to pay to the order of JPMORGAN CHASE
BANK (the "Lender") on the Termination Date, at its offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in lawful money of the United States of America and in
immediately available funds, the principal amount of the lesser of (a) FIVE
MILLION DOLLARS ($5,000,000) and (b) the aggregate unpaid principal amount of
all Swing Line Loans made by the Lender to the Borrower. The Borrower further
agrees to pay interest at said office, in like money, from the date hereof on
the unpaid principal amount hereof at the rates and on the dates specified in
subsection 2.8 of the Third Amended and Restated Credit Agreement, dated as of
December __, 2001, among the Borrower, Landstar System, Inc., the Subsidiaries
of the Borrower signatories thereto, the Lender, the several other banks and
other financial institutions from time to time parties thereto and JPMorgan
Chase Bank, as administrative agent (as the same may from time to time be
amended, modified or supplemented, the "Credit Amendment"; terms defined therein
being used herein as so defined).
This Note is the Swing Line Note referred to in the Credit
Agreement, is entitled to the benefits thereof and is subject to optional
prepayment in whole or in part as provided therein.
The holder of this Note is authorized to record the date and amount
of each Swing Line Loan made by the Lender to the Borrower pursuant to
subsection 2.5 of the Credit Agreement and the date and amount of each payment
or prepayment of principal thereof, on the schedule annexed hereto and made a
part hereof, and any such recordation or any such information recorded on such
Lender's internal books and records and then attached to this Note in the form
of the schedule attached hereto shall constitute prima facie evidence of the
accuracy of the information so recorded, provided that the failure of the Lender
to make such recordation (or any error in such recordation) shall not affect the
obligations of the Borrower hereunder or under the Credit Agreement.
Payment and performance of this Note is guaranteed as set forth in
the Subsidiaries Guarantee and the Parent Guarantee.
Upon the occurrence of any one or more of the Events of Default
specified in the Credit Agreement, all amounts then remaining unpaid on this
Note shall become, or may be declared to be, immediately due and payable all as
provided therein.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
2
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
LANDSTAR SYSTEM HOLDINGS, INC.
By:
----------------------------
Name:
Title:
SCHEDULE A
To Note
LOANS AND PAYMENTS
Unpaid Principal
Amount of Amount of Swing Balance of Notation
Date Swing Line Loans Line Loans Paid Swing Line Loans Made By
---- ---------------- --------------- ---------------- -------
EXHIBIT C-1 TO
CREDIT AGREEMENT
FORM OF THIRD AMENDED AND RESTATED PARENT GUARANTEE
THIRD AMENDED AND RESTATED PARENT GUARANTEE, dated as of December
__, 2001, by LANDSTAR SYSTEM, INC., a Delaware corporation (the "Guarantor"), in
favor of JPMORGAN CHASE BANK, as administrative agent (in such capacity, the
"Administrative Agent") for the Lenders (the "Lenders") that are parties to the
Credit Agreement described below.
WITNESSETH:
WHEREAS, Landstar System Holdings, Inc., a Delaware corporation (the
"Borrower"), is party to the Second Amended and Restated Credit Agreement, dated
as of October 10, 1997, with Landstar System, Inc., the Administrative Agent and
the lenders parties thereto (as amended, the "Existing Credit Agreement");
WHEREAS, the Existing Credit Agreement is being amended and restated
pursuant to the Third Amended and Restated Credit Agreement, dated as of
December __, 2001, among the Borrower, the Guarantor, the Subsidiaries of the
Borrower signatories thereto, the Lenders and the Administrative Agent (the
"Credit Agreement");
WHEREAS, in connection with the Existing Credit Agreement, the
Guarantor previously executed and delivered to the Administrative Agent the
Second Amended and Restated Parent Guarantee, dated as of October 10, 1997 (the
"Existing Parent Guarantee");
WHEREAS, the Guarantor owns directly all of the issued and
outstanding stock of the Borrower and expects to derive substantial benefits
from the Credit Agreement;
WHEREAS, in connection with the Credit Agreement, the Guarantor, the
Administrative Agent and the beneficiaries of the Existing Parent Guarantee wish
to amend and restate the Existing Parent Guarantee as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises, the Guarantor and
the Administrative Agent, with the consent of and for the ratable benefit of the
Lenders, hereby agree that, effective as of the Closing Date, the Existing
Parent Guarantee is hereby restated in its entirety as follows:
1. Defined Terms. As used in this Guarantee, terms defined in the
Credit Agreement are used herein as therein defined, and the following terms
shall have the following meanings:
"Guarantee" shall mean this Third Amended and Restated Parent
Guarantee, as amended, supplemented or otherwise modified from time to
time.
2
"Obligations" shall mean the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of
the Loans and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) the
Loans and all other obligations and liabilities of the Borrower to the
Administrative Agent or the Lenders, whether direct or indirect, absolute
or contingent, due or to become due, now existing or hereafter incurred,
which may arise under, out of, or in connection with, the Credit
Agreement, the Letters of Credit, the Applications, any Interest Rate
Protection Agreements entered into with any Lender in respect of the
Loans, the other Loan Documents or any other document made, delivered or
given in connection therewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including,
without limitation, all reasonable fees and disbursements of counsel to
the Administrative Agent or any Lender that are required to be paid by the
Borrower pursuant to the terms of the Credit Agreement) or otherwise.
2. Guarantee. (a) The Guarantor hereby unconditionally and
irrevocably, guarantees to the Administrative Agent and the Lenders and their
respective successors, indorsees, transferees and assigns, the prompt and
complete payment by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations, and the Guarantor further agrees
to pay any and all expenses (including, without limitation, all reasonable fees
and disbursements of counsel) which may be paid or incurred by the
Administrative Agent or any Lender in enforcing, or obtaining advice of counsel
in respect of, any rights with respect to, or collecting, any or all of the
Obligations and/or enforcing any rights with respect to, or collecting against,
the Guarantor under this Guarantee. This Guarantee shall remain in full force
and effect until the Obligations are paid in full and the Revolving Credit
Commitments are terminated, notwithstanding that from time to time prior thereto
the Borrower may be free from any Obligations.
(b) No payment or payments made by the Borrower, the Guarantor or
any other Person or received or collected by the Administrative Agent or any
Lender from the Borrower, the Guarantor or any other Person by virtue of any
action or proceeding or any set-off or appropriation or application at any time
or from time to time in reduction of or in payment of the Obligations shall be
deemed to modify, reduce, release or otherwise affect the liability of the
Guarantor hereunder which shall, notwithstanding any such payment or payments
other than payments made by the Guarantor in respect of the Obligations or
payments received or collected from the Guarantor in respect of the Obligations,
remain liable for the Obligations until the Obligations are paid in full and the
Revolving Credit Commitments are terminated.
(c) The Guarantor agrees that whenever, at any time, or from time to
time, it shall make any payment to the Administrative Agent or any Lender on
account of its liability hereunder, it will notify the Administrative Agent in
writing that such payment is made under this Guarantee for such purpose.
3. Right of Set-off. Upon the occurrence of any Event of Default
specified in the Credit Agreement, the Guarantor hereby irrevocably authorizes
each Lender at any time and from time to time without notice to the Guarantor,
any such notice being expressly waived by the Guarantor, to set off and
appropriate and apply any and all deposits (general or special, time or
3
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender to or for the credit or the account of the Guarantor, or
any part thereof in such amounts as such Lender may elect, against and on
account of the obligations and liabilities of the Guarantor to such Lender
hereunder and claims of every nature and description of such Lender against the
Guarantor, in any currency, whether arising hereunder, under the Credit
Agreement, the other Loan Documents or otherwise, as such Lender may elect,
whether or not the Administrative Agent or any Lender has made any demand for
payment and although such obligations, liabilities and claims may be contingent
or unmatured. Each Lender agrees to notify the Guarantor promptly of any such
set-off and the application made by such Lender, provided that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of each Lender under this paragraph are in addition to other rights
and remedies (including, without limitation, other rights of set-off) which such
Lender may have.
4. No Subrogation, Contribution, Reimbursement or Indemnity.
Notwithstanding anything to the contrary in this Guarantee, the Guarantor hereby
irrevocably waives all rights which may have arisen in connection with this
Guarantee to be subrogated to any of the rights (whether contractual, under the
Bankruptcy Code, including Section 509 thereof, under common law or otherwise)
of the Administrative Agent or any Lender against the Company or against the
Administrative Agent or any Lender for the payment of the Obligations. The
Guarantor hereby further irrevocably waives all contractual, common law,
statutory or other rights of reimbursement, contribution, exoneration or
indemnity (or any similar right) from or against the Borrower or any other
Person which may have arisen in connection with this Guarantee. So long as the
Obligations remain outstanding, if any amount shall be paid by or on behalf of
the Borrower to the Guarantor on account of any of the rights waived in this
paragraph, such amount shall be held by the Guarantor in trust, segregated from
other funds of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Administrative Agent in the exact form received
by the Guarantor (duly indorsed by the Guarantor to the Administrative Agent, if
required), to be applied against the Obligations, whether matured or unmatured,
in such order as the Administrative Agent may determine. The provisions of this
paragraph shall survive the term of this Guarantee and the payment in full of
the Obligations and the termination of the Revolving Credit Commitments.
5. Amendments, etc. with respect to the Obligations; Waiver of
Rights. The Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against the Guarantor and without notice to or
further assent by the Guarantor, any demand for payment of any of the
Obligations made by the Administrative Agent or any Lender may be rescinded by
such party and any of the Obligations continued, and the Obligations, or the
liability of any other party upon or for any part thereof, or any guarantee
therefor or right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Administrative Agent or any
Lender and the Credit Agreement, the other Loan Documents or other guarantee or
document in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent and/or any Lender
may deem advisable from time to time, and any guarantee or right of offset at
any time held by the Administrative Agent or any Lender for the payment of the
Obligations may be sold, exchanged,
4
waived, surrendered or released. Neither the Agent nor any Lender shall have any
obligation to protect, secure, perfect or insure any Lien at any time held as
security for the Obligations or for this Guarantee or any property subject
thereto. When making any demand hereunder against the Guarantor, the
Administrative Agent or any Lender may, but shall be under no obligation to,
make a similar demand on the Borrower or any guarantor, and any failure by the
Administrative Agent or any Lender to make any such demand or to collect any
payments from the Borrower or such other guarantor or any release of the
Borrower or such other guarantor shall not relieve the Guarantor, and shall not
impair or affect the rights and remedies, express or implied, or as a matter of
law, of the Administrative Agent or any Lender against the Guarantor. For the
purposes hereof "demand" shall include the commencement and continuance of any
legal proceedings.
6. Guarantee Absolute and Unconditional. The Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Administrative Agent or
any Lender upon this Guarantee or acceptance of this Guarantee, the Obligations,
and any of them, shall conclusively be deemed to have been created, contracted
or incurred, or renewed, extended, amended or waived, in reliance upon this
Guarantee; and all dealings between the Borrower or the Guarantor and the
Administrative Agent or any Lender shall likewise be conclusively presumed to
have been had or consummated in reliance upon this Guarantee. The Guarantor
waives diligence, presentment, protest, demand for payment and notice of default
or nonpayment to or upon the Borrower or the Guarantor with respect to the
Obligations. The Guarantor understands and agrees that this Guarantee shall be
construed as a continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity, regularity or enforceability of the Credit
Agreement, any other Loan Document, any of the Obligations or any collateral
security therefor or guarantee or right of offset with respect thereto at any
time or from time to time held by the Administrative Agent or any Lender (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Borrower against the Administrative Agent or any Lender, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the Borrower
or the Guarantor) which constitutes, or might be construed to constitute, an
equitable or legal discharge of the Borrower for the Obligations, or of the
Guarantor under this Guarantee, in bankruptcy or in any other instance. When
pursuing its rights and remedies hereunder against the Guarantor, the
Administrative Agent and any Lender may, but shall be under no obligation to,
pursue such rights and remedies as it may have against the Borrower or any other
Person or against any collateral security or guarantee for the Obligations or
any right of offset with respect thereto, and any failure by the Administrative
Agent or any Lender to pursue such other rights or remedies or to collect any
payments from the Borrower or any such other Person or to realize upon any such
guarantee or to exercise any such right of offset, or any release of the
Borrower or any such other Person or any such collateral security, guarantee or
right of offset, shall not relieve the Guarantor of any liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Administrative Agent or any Lender against
the Guarantor. This Guarantee shall remain in full force and effect and be
binding in accordance with and to the extent of its terms upon the Guarantor and
the successors and assigns thereof, and shall inure to the benefit of the
Administrative Agent and the Lenders, and their respective successors,
indorsees, transferees and assigns, until all the Obligations and the
obligations of the Guarantor under this Guarantee shall have been satisfied by
payment in full
5
and the Revolving Credit Commitments shall be terminated, notwithstanding that
from time to time during the term of the Credit Agreement the Borrower may be
free from any Obligations.
7. Reinstatement. This Guarantee shall continue to be effective, or
be reinstated, as the case may be, if at any time payment, or any part thereof,
of any of the Obligations is rescinded or must otherwise be restored or returned
by the Administrative Agent or any Lender upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Borrower or the Guarantor, or
upon or as a result of the appointment of a receiver, intervenor or conservator
of, or trustee or similar officer for, the Borrower or the Guarantor or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
8. Payments. The Guarantor hereby guarantees that payments hereunder
will be paid to the Administrative Agent without set-off or counterclaim in U.S.
Dollars at the office of the Administrative Agent located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇.
9. Representations and Warranties. The Guarantor hereby represents
and warrants that the representations and warranties set forth in Section 4 of
the Credit Agreement as they relate to the Guarantor, each of which is hereby
incorporated herein by reference, are true and correct, and the Administrative
Agent and each Lender shall be entitled to rely on each of them as if they were
fully set forth herein, provided that each reference in each such representation
and warranty to the Borrower's knowledge shall, for the purposes of this
paragraph, be deemed to be a reference to the Guarantor's knowledge.
The Guarantor agrees that the foregoing representations and
warranties shall be deemed to have been made by the Guarantor on the date of
each borrowing by the Borrower, and on the date of issuance of each Letter of
Credit, under the Credit Agreement on and as of such date of borrowing or
issuance as though made hereunder on and as of such date (or, if stated to
relate to an earlier date, as of such earlier date).
10. Covenants. The Guarantor hereby agrees that, from and after the
Closing Date and so long as the Revolving Credit Commitments remain in effect,
any Loan or Letter of Credit remains outstanding and unpaid or any other amount
is owing to any Lender or the Administrative Agent under the Credit Agreement or
any other Loan Document, the Guarantor shall take, or shall refrain from taking,
as the case may be, all actions that are necessary to be taken or not taken so
that no violation of any provision, covenant or agreement contained in Section 6
or 7 of the Credit Agreement, and so that no Default or Event of Default, is
caused by any act or failure to act of the Guarantor or any of its Subsidiaries.
11. Severability. Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
12. Paragraph Headings. The paragraph headings used in this
Guarantee are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
6
13. No Waiver; Cumulative Remedies. Neither the Administrative Agent
nor any Lender shall by any act (except by a written instrument pursuant to
paragraph 14 hereof), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default or in any breach of any of the terms and conditions hereof. No
failure to exercise, nor any delay in exercising, on the part of the
Administrative Agent or any Lender, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A waiver by the
Administrative Agent or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent or such Lender would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any rights or remedies provided by law.
14. Integration; Waivers and Amendments; Successors and Assigns;
Governing Law. This Guarantee and the other Loan Documents represent the
agreement of the Guarantor with respect to the subject matter hereof, and there
are no promises or representations by the Administrative Agent or any Lender
relative to the subject matter hereof not reflected herein or in the other Loan
Documents. None of the terms or provisions of this Guarantee may be waived,
amended or supplemented or otherwise modified except by a written instrument
executed by the Guarantor and the Administrative Agent, provided that any
provision of this Guarantee may be waived by the Administrative Agent and the
Lenders in a letter or agreement executed by the Administrative Agent or by
telex or facsimile transmission from the Administrative Agent. This Guarantee
shall be binding upon the successors and assigns of the Guarantor and shall
inure to the benefit of the Administrative Agent and the Lenders and their
respective successors and assigns. This Guarantee shall be governed by and be
construed and interpreted in accordance with the law of the State of New York.
15. Notices. All notices, requests and demands to or upon the
Guarantor or the Administrative Agent or any Lender to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when delivered by hand,
or, in the case of mail, 3 days after deposit in the postal system, first class
postage prepaid, or, in the case of telecopy notice, when received, addressed to
a party at the address set forth in the Credit Agreement, in the case of the
Administrative Agent or the Lenders or, in the case of the Guarantor, to the
following address:
Landstar System, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
16. Counterparts. This Guarantee may be executed by one or more of
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
7
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to
be duly executed and delivered by its duly authorized officer as of the day and
year first above written.
LANDSTAR SYSTEM, INC.
By:
------------------
Name:
Title:
EXHIBIT C-2 TO
CREDIT AGREEMENT
FORM OF THIRD AMENDED AND RESTATED SUBSIDIARIES GUARANTEE
THIRD AMENDED AND RESTATED SUBSIDIARIES GUARANTEE, dated as of
December __, 2001, by each of the corporations that are signatories hereto (the
"Subsidiary Guarantors") in favor of JPMORGAN CHASE BANK, as administrative
agent (in such capacity, the "Administrative Agent") for the Lenders (the
"Lenders") that are parties to the Credit Agreement described below.
WITNESSETH:
WHEREAS, Landstar System Holdings, Inc., a Delaware corporation (the
"Borrower"), is party to the Second Amended and Restated Credit Agreement, dated
as of October 10, 1997, with Landstar System, Inc., the Administrative Agent and
the lenders parties thereto (as amended, the "Existing Credit Agreement");
WHEREAS, the Existing Credit Agreement is being amended and restated
pursuant to the Third Amended and Restated Credit Agreement, dated as of
December __, 2001, among the Borrower, Landstar System, Inc., the Subsidiaries
of the Borrower signatories thereto, the Lenders and the Administrative Agent
(the "Credit Agreement");
WHEREAS, in connection with the Existing Credit Agreement, the
subsidiaries of the Borrower previously executed and delivered to the
Administrative Agent the Second Amended and Restated Subsidiaries Guarantee,
dated as of October 10, 1997 (the "Existing Subsidiaries Guarantee");
WHEREAS, the Borrower owns directly or indirectly all of the issued
and outstanding stock of each Subsidiary Guarantor;
WHEREAS, the Borrower and the Subsidiary Guarantors are engaged in
related businesses, and each Subsidiary Guarantor will derive substantial direct
and indirect benefit from the making of the Extensions of Credit; and
WHEREAS, in connection with the Credit Agreement, the Subsidiary
Guarantors, the Administrative Agent and the beneficiaries of the Existing
Subsidiaries Guarantee wish to amend and restate the Existing Subsidiaries
Guarantee as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises, each Subsidiary
Guarantor and the Administrative Agent, with the consent of and for the ratable
benefit of the Lenders, hereby agree that, effective as of the Closing Date, the
Existing Subsidiaries Guarantee is hereby restated in its entirety as follows:
2
1. Defined Terms. As used in this Guarantee, terms defined in the
Credit Agreement are used herein as therein defined, and the following terms
shall have the following meanings:
"Guarantee" shall mean this Third Amended and Restated Subsidiaries
Guarantee, as amended, supplemented or otherwise modified from time to
time.
"Obligations" shall mean the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of
the Loans and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) the
Loans and all other obligations and liabilities of the Borrower to the
Administrative Agent or the Lenders, whether direct or indirect, absolute
or contingent, due or to become due, now existing or hereafter incurred,
which may arise under, out of, or in connection with, the Credit
Agreement, the Letters of Credit, the Applications, any Interest Rate
Protection Agreements entered into with any Lender in respect of the
Loans, the other Loan Documents or any other document made, delivered or
given in connection therewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including,
without limitation, all reasonable fees and disbursements of counsel to
the Administrative Agent or any Lender that are required to be paid by the
Borrower pursuant to the terms of the Credit Agreement) or otherwise.
2. Guarantee. (a) Subject to the provisions of paragraph (b), each
of the Subsidiary Guarantors hereby, jointly and severally, unconditionally and
irrevocably, guarantees to the Administrative Agent, for the ratable benefit of
the Lenders and their respective successors, indorsees, transferees and assigns,
the prompt and complete payment and performance by the Borrower when due
(whether at the stated maturity, by acceleration or otherwise) of the
Obligations.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Subsidiary Guarantor hereunder
and under the other Loan Documents shall in no event exceed the amount which can
be guaranteed by such Subsidiary Guarantor under applicable federal and state
laws relating to the insolvency of debtors.
(c) Each Subsidiary Guarantor further agrees to pay any and all
expenses (including, without limitation, all fees and disbursements of counsel)
which may be paid or incurred by the Administrative Agent or any Lender in
enforcing, or obtaining advice of counsel in respect of, any rights with respect
to, or collecting, any or all of the Obligations and/or enforcing any rights
with respect to, or collecting against, such Subsidiary Guarantor under this
Guarantee. This Guarantee shall remain in full force and effect until the
Obligations are paid in full and the Revolving Credit Commitments are
terminated, notwithstanding that from time to time prior thereto the Borrower
may be free from any Obligations.
3
(d) Each Subsidiary Guarantor agrees that the Obligations may at any
time and from time to time exceed the amount of the liability of such Subsidiary
Guarantor hereunder without impairing this Guarantee or affecting the rights and
remedies of the Administrative Agent or any Lender hereunder.
(e) No payment or payments made by the Borrower, any of the
Subsidiary Guarantors, any other guarantor or any other Person or received or
collected by the Administrative Agent or any Lender from the Borrower, any of
the Subsidiary Guarantors, any other guarantor or any other Person by virtue of
any action or proceeding or any set-off or appropriation or application at any
time or from time to time in reduction of or in payment of the Obligations shall
be deemed to modify, reduce, release or otherwise affect the liability of any
Subsidiary Guarantor hereunder which shall, notwithstanding any such payment or
payments other than payments made by such Subsidiary Guarantor in respect of the
Obligations or payments received or collected from such Subsidiary Guarantor in
respect of the Obligations, remain liable for the Obligations up to the maximum
liability of such Subsidiary Guarantor hereunder until the Obligations are paid
in full and the Revolving Credit Commitments are terminated.
(f) Each Subsidiary Guarantor agrees that whenever, at any time, or
from time to time, it shall make any payment to the Administrative Agent or any
Lender on account of its liability hereunder, it will notify the Administrative
Agent in writing that such payment is made under this Guarantee for such
purpose.
3. Right of Contribution. Each Subsidiary Guarantor hereby agrees
that to the extent that a Subsidiary Guarantor shall have paid more than its
proportionate share of any payment made hereunder, such Subsidiary Guarantor
shall be entitled to seek and receive contribution from and against any other
Subsidiary Guarantor hereunder who has not paid its proportionate share of such
payment. Each Subsidiary Guarantor's right of contribution shall be subject to
the terms and conditions of Paragraph 5 hereof. The provisions of this Paragraph
3 shall in no respect limit the obligations and liabilities of any Subsidiary
Guarantor to the Administrative Agent and the Lenders, and each Subsidiary
Guarantor shall remain liable to the Administrative Agent and the Lenders for
the full amount guaranteed by such Subsidiary Guarantor hereunder.
4. Right of Set-off. Upon the occurrence of any Event of Default
specified in the Credit Agreement, each Subsidiary Guarantor hereby irrevocably
authorizes each Lender at any time and from time to time without notice to such
Subsidiary Guarantor or any other Subsidiary Guarantor, any such notice being
expressly waived by each Subsidiary Guarantor, to set off and appropriate and
apply any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender to or for the
credit or the account of such Subsidiary Guarantor, or any part thereof in such
amounts as such Lender may elect, against and on account of the obligations and
liabilities of such Subsidiary Guarantor to such Lender hereunder and claims of
every nature and description of such Lender against such Subsidiary Guarantor,
in any currency, whether arising hereunder, under the Credit Agreement, the
other Loan Documents or otherwise, as such Lender may elect, whether or not the
Administrative Agent or any Lender has made any demand for payment and although
such obligations, liabilities and claims may be
4
contingent or unmatured. Each Lender agrees to notify such Subsidiary Guarantor
promptly of any such set-off and the application made by such Lender, provided
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Lender under this paragraph are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which such Lender may have.
5. No Subrogation. Notwithstanding any payment or payments made by
any of the Subsidiary Guarantors hereunder or any set-off or application of
funds of any of the Subsidiary Guarantors by any Lender, no Subsidiary Guarantor
shall be entitled to be subrogated to any of the rights of the Administrative
Agent or any Lender against the Borrower or any other Subsidiary Guarantor or
any guarantee or right of offset held by any Lender for the payment of the
Obligations, nor shall any Subsidiary Guarantor seek or be entitled to seek any
contribution or reimbursement from the Borrower or any other Subsidiary
Guarantor in respect of payments made by such Subsidiary Guarantor hereunder,
until all amounts owing to the Administrative Agent and the Lenders by the
Borrower on account of the Obligations are paid in full and the Revolving Credit
Commitments are terminated. If any amount shall be paid to any Subsidiary
Guarantor on account of such subrogation rights at any time when all of the
Obligations shall not have been paid in full, such amount shall be held by such
Subsidiary Guarantor in trust for the Administrative Agent and the Lenders,
segregated from other funds of such Subsidiary Guarantor, and shall, forthwith
upon receipt by such Subsidiary Guarantor, be turned over to the Administrative
Agent in the exact form received by such Subsidiary Guarantor (duly indorsed by
such Subsidiary Guarantor to the Administrative Agent, if required), to be
applied against the Obligations, whether matured or unmatured, in such order as
the Administrative Agent may determine.
6. Amendments, etc. with respect to the Obligations; Waiver of
Rights. Each Subsidiary Guarantor shall remain obligated hereunder
notwithstanding that, without any reservation of rights against any Subsidiary
Guarantor and without notice to or further assent by any Subsidiary Guarantor,
any demand for payment of any of the Obligations made by the Administrative
Agent or any Lender may be rescinded by such party and any of the Obligations
continued, and the Obligations, or the liability of any other party upon or for
any part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent or any Lender and the Credit
Agreement, the other Loan Documents, any other collateral security document or
other guarantee or document in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part, as the Administrative Agent
and/or any Lender may deem advisable from time to time, and any guarantee or
right of offset at any time held by the Administrative Agent or any Lender for
the payment of the Obligations may be sold, exchanged, waived, surrendered or
released. Neither the Agent nor any Lender shall have any obligation to protect,
secure, perfect or insure any Lien at any time held as security for the
Obligations or for this Guarantee or any property subject thereto. When making
any demand hereunder against any of the Subsidiary Guarantors, the
Administrative Agent or any Lender may, but shall be under no obligation to,
make a similar demand on the Borrower or any other Subsidiary Guarantor or
guarantor, and any failure by the Administrative Agent or any Lender to make any
such demand or to collect any payments from the Borrower or any such other
Subsidiary Guarantor or guarantor or any release of the Borrower or such other
Subsidiary Guarantor or guarantor shall
5
not relieve any of the Subsidiary Guarantors in respect of which a demand or
collection is not made or any of the Subsidiary Guarantors not so released of
their several obligations or liabilities hereunder, and shall not impair or
affect the rights and remedies, express or implied, or as a matter of law, of
the Administrative Agent or any Lender against any of the Subsidiary Guarantors.
For the purposes hereof "demand" shall include the commencement and continuance
of any legal proceedings.
7. Guarantee Absolute and Unconditional. Each Subsidiary Guarantor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Obligations and notice of or proof of reliance by the Administrative
Agent or any Lender upon this Guarantee or acceptance of this Guarantee, the
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon this Guarantee; and all dealings between the Borrower or any of the
Subsidiary Guarantors and the Administrative Agent or any Lender shall likewise
be conclusively presumed to have been had or consummated in reliance upon this
Guarantee. Each Subsidiary Guarantor waives diligence, presentment, protest,
demand for payment and notice of default or nonpayment to or upon the Borrower
or any of the Subsidiary Guarantors with respect to the Obligations. Each
Subsidiary Guarantor understands and agrees that this Guarantee shall be
construed as a continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity, regularity or enforceability of the Credit
Agreement, any other Loan Document, any of the Obligations or any guarantee or
right of offset with respect thereto at any time or from time to time held by
the Administrative Agent or any Lender (b) any defense, set-off or counterclaim
(other than a defense of payment or performance) which may at any time be
available to or be asserted by the Borrower against the Administrative Agent or
any Lender, or (c) any other circumstance whatsoever (with or without notice to
or knowledge of the Borrower or such Subsidiary Guarantor) which constitutes, or
might be construed to constitute, an equitable or legal discharge of the
Borrower for the Obligations, or of such Subsidiary Guarantor under this
Guarantee, in bankruptcy or in any other instance. When pursuing its rights and
remedies hereunder against any Subsidiary Guarantor, the Administrative Agent
and any Lender may, but shall be under no obligation to, pursue such rights and
remedies as it may have against the Borrower or any other Person or against any
guarantee for the Obligations or any right of offset with respect thereto, and
any failure by the Administrative Agent or any Lender to pursue such other
rights or remedies or to collect any payments from the Borrower or any such
other Person or to realize upon such guarantee or to exercise any such right of
offset, or any release of the Borrower or any such other Person or such
guarantee or right of offset, shall not relieve such Subsidiary Guarantor of any
liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the Administrative
Agent or any Lender against such Subsidiary Guarantor. This Guarantee shall
remain in full force and effect and be binding in accordance with and to the
extent of its terms upon each Subsidiary Guarantor and the successors and
assigns thereof, and shall inure to the benefit of the Administrative Agent and
the Lenders, and their respective successors, indorsees, transferees and
assigns, until all the Obligations and the obligations of each Subsidiary
Guarantor under this Guarantee shall have been satisfied by payment in full and
the Revolving Credit Commitments shall be terminated, notwithstanding that from
time to time during the term of the Credit Agreement the Borrower may be free
from any Obligations.
6
8. Reinstatement. This Guarantee shall continue to be effective, or
be reinstated, as the case may be, if at any time payment, or any part thereof,
of any of the Obligations is rescinded or must otherwise be restored or returned
by the Administrative Agent or any Lender upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Borrower or any Subsidiary
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the Borrower or any
Subsidiary Guarantor or any substantial part of its property, or otherwise, all
as though such payments had not been made.
9. Payments. Each Subsidiary Guarantor hereby guarantees that
payments hereunder will be paid to the Administrative Agent without set-off or
counterclaim in U.S. Dollars at the office of the Administrative Agent located
at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇.
10. Representations and Warranties. Each Subsidiary Guarantor hereby
represents and warrants that the representations and warranties set forth in
Section 4 of the Credit Agreement as they relate to such Subsidiary Guarantor,
each of which is hereby incorporated herein by reference, are true and correct,
and the Administrative Agent and each Lender shall be entitled to rely on each
of them as if they were fully set forth herein, provided that each reference in
each such representation and warranty to the Borrower's knowledge shall, for the
purposes of this paragraph, be deemed to be a reference to such Subsidiary
Guarantor's knowledge.
Each Subsidiary Guarantor agrees that the foregoing representations
and warranties shall be deemed to have been made by such Subsidiary Guarantor on
the date of each borrowing by the Borrower, and on the date of issuance of each
Letter of Credit, under the Credit Agreement on and as of such date of borrowing
or issuance as though made hereunder on and as of such date (or, if stated to
relate to an earlier date, as of such earlier date).
11. Covenants. Each Subsidiary Guarantor hereby agrees that, from
and after the Closing Date and so long as the Revolving Credit Commitments
remain in effect, any Loan or Letter of Credit remains outstanding and unpaid or
any other amount is owing to any Lender or the Administrative Agent under the
Credit Agreement or any other Loan Document, such Subsidiary Guarantor shall
take, or shall refrain from taking, as the case may be, all actions that are
necessary to be taken or not taken so that no violation of any provision,
covenant or agreement contained in Section 6 or 7 of the Credit Agreement, and
so that no Default or Event of Default, is caused by any act or failure to act
of such Subsidiary Guarantor or any of its Subsidiaries.
12. Severability. Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
13. Paragraph Headings. The paragraph headings used in this
Guarantee are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
7
14. No Waiver; Cumulative Remedies. Neither the Administrative Agent
nor any Lender shall by any act (except by a written instrument pursuant to
paragraph 15 hereof), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any Default or
Event of Default or in any breach of any of the terms and conditions hereof. No
failure to exercise, nor any delay in exercising, on the part of the
Administrative Agent or any Lender, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A waiver by the
Administrative Agent or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent or such Lender would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any rights or remedies provided by law.
15. Integration; Waivers and Amendments; Successors and Assigns;
Governing Law. This Guarantee and the other Loan Documents represent the
agreement of each Subsidiary Guarantor with respect to the subject matter
hereof, and there are no promises or representations by the Administrative Agent
or any Lender relative to the subject matter hereof not reflected herein or in
the other Loan Documents. None of the terms or provisions of this Guarantee may
be waived, amended or supplemented or otherwise modified except by a written
instrument executed by each Subsidiary Guarantor and the Administrative Agent,
provided that any provision of this Guarantee may be waived by the
Administrative Agent and the Lenders in a letter or agreement executed by the
Administrative Agent or by telex or facsimile transmission from the
Administrative Agent. This Guarantee shall be binding upon the successors and
assigns of each Subsidiary Guarantor and shall inure to the benefit of the
Administrative Agent and the Lenders and their respective successors and
assigns. This Guarantee shall be governed by and be construed and interpreted in
accordance with the law of the State of New York.
16. Notices. All notices, requests and demands to or upon the
Subsidiary Guarantors or the Administrative Agent or any Lender to be effective
shall be in writing (including by telecopy), and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made when delivered
by hand, or, in the case of mail, 3 days after deposit in the postal system,
first class postage prepaid, or, in the case of telecopy notice, when received,
addressed to a party at the address set forth in the Credit Agreement or
Schedule I hereto, as the case may be.
17. Counterparts. This Guarantee may be executed by one or more of
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
8
IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee to be duly executed and delivered by its duly authorized officer as of
the day and year first above written.
LANDSTAR ACQUISITION CORPORATION
LANDSTAR CAPACITY SERVICES, INC.
LANDSTAR CARRIER SERVICES, INC. (f.k.a.
Landstar Expedited, Inc.)
LANDSTAR CORPORATE SERVICES, INC.
LANDSTAR EXPRESS AMERICA, INC.
LANDSTAR GEMINI, INC. (f.k.a. Gemini
Transportation Services, Inc.)
LANDSTAR INWAY, INC. (f.k.a. Independent
Freightway, Inc.)
LANDSTAR ▇▇▇▇▇, INC. (f.k.a. ▇▇▇▇▇
Nationwide, Inc.)
LANDSTAR LOGISTICS, INC. (f.k.a. Landstar
Transportation Service, Inc.)
LANDSTAR RANGER, INC. (f.k.a. Ranger
Transportation, Inc.)
LANDSTAR T.L.C., INC.
RISK MANAGEMENT CLAIM SERVICES, INC.
SIGNATURE INSURANCE COMPANY
SIGNATURE TECHNOLOGY SERVICES, INC.
By:
---------------------------------------
Name:
Title:
EXHIBIT A TO
SUBSIDIARIES GUARANTEE
SUBSIDIARIES GUARANTEE SUPPLEMENT
Reference is made to the Third Amended and Restated Subsidiaries
Guarantee, dated as of December __, 2001 (as amended, supplemented or otherwise
modified from time to time, the "Subsidiaries Guarantee"; terms defined therein
being used herein as therein defined), made by the parties thereto in favor of
JPMorgan Chase Bank, as administrative agent (in such capacity, the
"Administrative Agent") for the lenders (the "Lenders") parties to the Third
Amended and Restated Credit Agreement, dated as of December __, 2001, among
Landstar System Holdings, Inc., Landstar System, Inc., the Subsidiaries of the
Borrower signatories thereto, the Lenders and the Administrative Agent.
The undersigned hereby acknowledges that it has received and
reviewed a copy of the Subsidiaries Guarantee, and hereby agrees, effective as
of the date hereof:
(a) to join the Subsidiaries Guarantee as a Subsidiary Guarantor
party thereto;
(b) to be bound by all covenants, agreements and acknowledgements
attributable to a Subsidiary Guarantor in the Subsidiaries Guarantee;
(c) to perform all obligations required of it as a Subsidiaries
Guarantor by the Subsidiaries Guarantee; and
(d) that the undersigned shall be deemed to be a Subsidiary
Guarantor under the Credit Agreement and that Schedule 1.1(b) of the Credit
Agreement is hereby supplemented by adding at the end thereof, under the heading
"Subsidiary Guarantor", the name "[NAME OF NEW SUBSIDIARY]" and under the
heading "Jurisdiction of Incorporation", the word "[STATE OF INCORPORATION]".
The undersigned hereby represents and warrants that the
representations and warranties with respect to it contained in, or made or
deemed made by it in, Section 10 of the Subsidiaries Guarantee are true and
correct on the date hereof.
THIS SUBSIDIARIES GUARANTEE SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
2
IN WITNESS WHEREOF, the undersigned has caused this Subsidiaries
Guarantee Supplement to be duly executed and delivered in New York, New York by
its proper and duly authorized officer as of this __ day of _______, ____.
[NAME OF NEW SUBSIDIARY]
By:
____________________________________-
Name:
Title:
Date: ___________, _____
3
ACCEPTED AND AGREED:
LANDSTAR ACQUISITION CORPORATION
LANDSTAR CAPACITY SERVICES, INC.
LANDSTAR CARRIER SERVICES, INC. (f.k.a.
Landstar Expedited, Inc.)
LANDSTAR CORPORATE SERVICES, INC.
LANDSTAR EXPRESS AMERICA, INC.
LANDSTAR GEMINI, INC. (f.k.a. Gemini
Transportation Services, Inc.)
LANDSTAR INWAY, INC. (f.k.a. Independent
Freightway, Inc.)
LANDSTAR ▇▇▇▇▇, INC. (f.k.a. ▇▇▇▇▇
Nationwide, Inc.)
LANDSTAR LOGISTICS, INC. (f.k.a. Landstar
Transportation Service, Inc.)
LANDSTAR RANGER, INC. (f.k.a. Ranger
Transportation, Inc.)
LANDSTAR T.L.C., INC.
RISK MANAGEMENT CLAIM SERVICES, INC.
SIGNATURE INSURANCE COMPANY
SIGNATURE TECHNOLOGY SERVICES, INC.
By:
---------------------------------------
Name:
Title:
EXHIBIT C-3 TO
CREDIT AGREEMENT
FORM OF L/C GUARANTEE
L/C GUARANTEE, dated as of December __, 2001, by LANDSTAR SYSTEM,
INC., a Delaware corporation (the "Guarantor"), in favor of JPMORGAN CHASE BANK,
as administrative agent (in such capacity, the "Administrative Agent") for the
Lenders (the "Lenders") that are parties to the Credit Agreement described
below.
WITNESSETH:
WHEREAS, the Subsidiary Guarantors (as listed on Schedule I hereto)
are parties to the Second Amended and Restated Credit Agreement, dated as of
October 10, 1997, with Landstar System Holdings, Inc., the Guarantor, the
Administrative Agent and the lenders parties thereto (the "Existing Credit
Agreement");
WHEREAS, the Existing Credit Agreement is being amended and restated
pursuant to the Third Amended and Restated Credit Agreement, dated as of
December __, 2001, among Landstar System Holdings, Inc., the Guarantor, the
Subsidiaries of the Borrower signatories thereto, the Lenders and the
Administrative Agent (the "Credit Agreement");
WHEREAS, the Guarantor owns directly or indirectly all of the issued
and outstanding stock of each Subsidiary Guarantor and expects to derive
substantial benefits from the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective loans to the Borrower under the
Credit Agreement, the Guarantor hereby agrees with the Administrative Agent, for
the for the ratable benefit of the Lenders, as follows:
1. Defined Terms. As used in this Guarantee, terms defined in the
Credit Agreement are used herein as therein defined, and the following terms
shall have the following meanings:
"Guarantee" shall mean this L/C Guarantee, as amended, supplemented
or otherwise modified from time to time.
"Obligations" shall mean the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of
the Loans and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency,
2
reorganization or like proceeding, relating to the respective Subsidiary
Guarantor, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Loans and all other
obligations and liabilities of the respective Subsidiary Guarantor to the
Administrative Agent or the Lenders, whether direct or indirect, absolute
or contingent, due or to become due, now existing or hereafter incurred,
which may arise under, out of, or in connection with, the Credit
Agreement, the Letters of Credit, the Applications entered into with the
Issuing Lender in respect of the Loans, the other Loan Documents or any
other document made, delivered or given in connection therewith, whether
on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses (including, without limitation, all
reasonable fees and disbursements of counsel to the Administrative Agent,
the Issuing Lender or any L/C Participant that are required to be paid by
the Respective Subsidiary Guarantor pursuant to the terms of the Credit
Agreement) or otherwise.
2. Guarantee. (a) The Guarantor hereby unconditionally and
irrevocably, guarantees to the Administrative Agent, the Issuing Lender and the
L/C Participants and their respective successors, indorsees, transferees and
assigns, the prompt and complete payment by the respective Subsidiary Guarantor
when due (whether at the stated maturity, by acceleration or otherwise) of the
Obligations, and the Guarantor further agrees to pay any and all expenses
(including, without limitation, all reasonable fees and disbursements of
counsel) which may be paid or incurred by the Administrative Agent, the Issuing
Lender or any L/C Participant in enforcing, or obtaining advice of counsel in
respect of, any rights with respect to, or collecting, any or all of the
Obligations and/or enforcing any rights with respect to, or collecting against,
the Guarantor under this Guarantee. This Guarantee shall remain in full force
and effect until the Obligations are paid in full and the Revolving Credit
Commitments are terminated, notwithstanding that from time to time prior thereto
the Borrower may be free from any Obligations.
(b) No payment or payments made by any Subsidiary Guarantor, the
Guarantor or any other Person or received or collected by the Administrative
Agent, the Issuing Lender or any L/C Participant from any Subsidiary Guarantor,
the Guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of the Guarantor hereunder which
shall, notwithstanding any such payment or payments other than payments made by
the Guarantor in respect of the Obligations or payments received or collected
from the Guarantor in respect of the Obligations, remain liable for the
Obligations until the Obligations are paid in full and the Revolving Credit
Commitments are terminated.
(c) The Guarantor agrees that whenever, at any time, or from time to
time, it shall make any payment to the Administrative Agent, the Issuing Lender
or any L/C Participant on account of its liability hereunder, it will notify the
Administrative Agent in writing that such payment is made under this Guarantee
for such purpose.
3. Right of Set-off. Upon the occurrence of any Event of Default
specified in the Credit Agreement, the Guarantor hereby irrevocably authorizes
the Issuing Lender or any L/C Participant at any time and from time to time
without notice to the Guarantor, any such notice being expressly waived by the
Guarantor, to set off and appropriate and apply any and all
3
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Issuing Lender or such L/C
Participant to or for the credit or the account of the Guarantor, or any part
thereof in such amounts as the Issuing Lender or such L/C Participant may elect,
against and on account of the obligations and liabilities of the Guarantor to
the Issuing Lender or such L/C Participant hereunder and claims of every nature
and description of the Issuing Lender or such L/C Participant against the
Guarantor, in any currency, whether arising hereunder, under the Credit
Agreement, the other Loan Documents or otherwise, as such Lender may elect,
whether or not the Administrative Agent, the Issuing Lender or any L/C
Participant has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. The Issuing Lender and
each L/C Participant agree to notify the Guarantor promptly of any such set-off
and the application made by the Issuing Lender or such L/C Participant, provided
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of the Issuing Lender and each L/C
Participant under this paragraph are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which the Issuing
Lender and such L/C Participant may have.
4. No Subrogation, Contribution, Reimbursement or Indemnity.
Notwithstanding anything to the contrary in this Guarantee, the Guarantor hereby
irrevocably waives all rights which may have arisen in connection with this
Guarantee to be subrogated to any of the rights (whether contractual, under the
Bankruptcy Code, including Section 509 thereof, under common law or otherwise)
of the Administrative Agent, the Issuing Lender or any L/C Participant against
the Company or against the Administrative Agent, the Issuing Lender or any L/C
Participant for the payment of the Obligations. The Guarantor hereby further
irrevocably waives all contractual, common law, statutory or other rights of
reimbursement, contribution, exoneration or indemnity (or any similar right)
from or against any Subsidiary Guarantor or any other Person which may have
arisen in connection with this Guarantee. So long as the Obligations remain
outstanding, if any amount shall be paid by or on behalf of any Subsidiary
Guarantor to the Guarantor on account of any of the rights waived in this
paragraph, such amount shall be held by the Guarantor in trust, segregated from
other funds of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Administrative Agent in the exact form received
by the Guarantor (duly indorsed by the Guarantor to the Administrative Agent, if
required), to be applied against the Obligations, whether matured or unmatured,
in such order as the Administrative Agent may determine. The provisions of this
paragraph shall survive the term of this Guarantee and the payment in full of
the Obligations and the termination of the Revolving Credit Commitments.
5. Amendments, etc. with respect to the Obligations; Waiver of
Rights. The Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against the Guarantor and without notice to or
further assent by the Guarantor, any demand for payment of any of the
Obligations made by the Administrative Agent, Issuing Lender or any L/C
Participant may be rescinded by such party and any of the Obligations continued,
and the Obligations, or the liability of any other party upon or for any part
thereof, or any guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Administrative
Agent, the Issuing Lender or any L/C Participant and the Credit
4
Agreement, the other Loan Documents or other guarantee or document in connection
therewith may be amended, modified, supplemented or terminated, in whole or in
part, as the Administrative Agent, the Issuing Lender and/or any L/C Participant
may deem advisable from time to time, and any guarantee or right of offset at
any time held by the Administrative Agent, the Issuing Lender or any L/C
Participant for the payment of the Obligations may be sold, exchanged, waived,
surrendered or released. When making any demand hereunder against the Guarantor,
the Administrative Agent, the Issuing Lender or any L/C Participant may, but
shall be under no obligation to, make a similar demand on the respective
Subsidiary Guarantor or any guarantor, and any failure by the Administrative
Agent or any Lender to make any such demand or to collect any payments from such
respective Subsidiary Guarantor or such other guarantor or any release of such
respective Subsidiary Guarantor or such other guarantor shall not relieve the
Guarantor, and shall not impair or affect the rights and remedies, express or
implied, or as a matter of law, of the Administrative Agent, the Issuing Lender
or any L/C Participant against the Guarantor. For the purposes hereof "demand"
shall include the commencement and continuance of any legal proceedings.
6. Guarantee Absolute and Unconditional. The Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Administrative Agent, the
Issuing Lender or any L/C Participant upon this Guarantee or acceptance of this
Guarantee, the Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred, or renewed, extended, amended or
waived, in reliance upon this Guarantee; and all dealings between the respective
Subsidiary Guarantor or the Guarantor and the Administrative Agent, the Issuing
Lender or any L/C Participant shall likewise be conclusively presumed to have
been had or consummated in reliance upon this Guarantee. The Guarantor waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the respective Subsidiary Guarantor or the Guarantor with
respect to the Obligations. The Guarantor understands and agrees that this
Guarantee shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity, regularity or
enforceability of the Credit Agreement, any other Loan Document, any of the
Obligations or guarantee or right of offset with respect thereto at any time or
from time to time held by the Administrative Agent, the Issuing Lender or any
L/C Participant, (b) any defense, set-off or counterclaim (other than a defense
of payment or performance) which may at any time be available to or be asserted
by the respective Subsidiary Guarantor against the Administrative Agent, the
Issuing Lender or any L/C Participant, or (c) any other circumstance whatsoever
(with or without notice to or knowledge of the respective Subsidiary Guarantor
or the Guarantor) which constitutes, or might be construed to constitute, an
equitable or legal discharge of the respective Subsidiary Guarantor for the
Obligations, or of the Guarantor under this Guarantee, in bankruptcy or in any
other instance. When pursuing its rights and remedies hereunder against the
Guarantor, the Administrative Agent, the Issuing Lender and any L/C Participant
may, but shall be under no obligation to, pursue such rights and remedies as it
may have against the respective Subsidiary Guarantor or any other Person or
against any guarantee for the Obligations or any right of offset with respect
thereto, and any failure by the Administrative Agent, the Issuing Lender or any
L/C Participant to pursue such other rights or remedies or to collect any
payments from the respective Subsidiary Guarantor or any such other Person or to
realize upon any such guarantee or to exercise any such right of offset, or any
release of the respective Subsidiary Guarantor or any such other Person or any
such guarantee or right of offset, shall not relieve the Guarantor of any
liability hereunder, and shall not impair or
5
affect the rights and remedies, whether express, implied or available as a
matter of law, of the Administrative Agent, the Issuing Lender or any L/C
Participant against the Guarantor. This Guarantee shall remain in full force and
effect and be binding in accordance with and to the extent of its terms upon the
Guarantor and the successors and assigns thereof, and shall inure to the benefit
of the Administrative Agent, the Issuing Lender and the L/C Participants, and
their respective successors, indorsees, transferees and assigns, until all the
Obligations and the obligations of the Guarantor under this Guarantee shall have
been satisfied by payment in full and the Revolving Credit Commitments shall be
terminated, notwithstanding that from time to time during the term of the Credit
Agreement the respective Subsidiary Guarantor may be free from any Obligations.
7. Reinstatement. This Guarantee shall continue to be effective, or
be reinstated, as the case may be, if at any time payment, or any part thereof,
of any of the Obligations is rescinded or must otherwise be restored or returned
by the Administrative Agent, the Issuing Lender or any L/C Participant upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
respective Subsidiary Guarantor or the Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the respective Subsidiary Guarantor or the Guarantor or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
8. Payments. The Guarantor hereby guarantees that payments hereunder
will be paid to the Administrative Agent without set-off or counterclaim in U.S.
Dollars at the office of the Administrative Agent located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇.
9. Representations and Warranties. The Guarantor hereby represents
and warrants that the representations and warranties set forth in Section 4 of
the Credit Agreement as they relate to the Guarantor, each of which is hereby
incorporated herein by reference, are true and correct, and the Administrative
Agent, the Issuing Lender and each L/C Participant shall be entitled to rely on
each of them as if they were fully set forth herein, provided that each
reference in each such representation and warranty to the respective Subsidiary
Guarantor's knowledge shall, for the purposes of this paragraph, be deemed to be
a reference to the Guarantor's knowledge.
The Guarantor agrees that the foregoing representations and
warranties shall be deemed to have been made by the Guarantor on the date of
issuance of each Letter of Credit, under the Credit Agreement on and as of such
date of issuance as though made hereunder on and as of such date (or, if stated
to relate to an earlier date, as of such earlier date).
10. Covenants. The Guarantor hereby agrees that, from and after the
Closing Date and so long as any Letter of Credit remains outstanding and unpaid
or any other amount is owing to the Issuing Lender, any L/C Participant or the
Administrative Agent under the Credit Agreement or any other Loan Document, the
Guarantor shall take, or shall refrain from taking, as the case may be, all
actions that are necessary to be taken or not taken so that no violation of any
provision, covenant or agreement contained in Section 6 or 7 of the Credit
Agreement, and so that no Default or Event of Default, is caused by any act or
failure to act of the Guarantor or any of its Subsidiaries.
6
11. Severability. Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
12. Paragraph Headings. The paragraph headings used in this
Guarantee are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
13. No Waiver; Cumulative Remedies. Neither the Administrative
Agent, the Issuing Lender nor any L/C Participant shall by any act (except by a
written instrument pursuant to paragraph 14 hereof), delay, indulgence, omission
or otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent, the Issuing Lender or any
L/C Participant, any right, power or privilege hereunder shall operate as a
waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Administrative Agent,
the Issuing Lender or any L/C Participant of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy which
the Administrative Agent, the Issuing Lender or such L/C Participant would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any rights or remedies provided by law.
14. Integration; Waivers and Amendments; Successors and Assigns;
Governing Law. This Guarantee and the other Loan Documents represent the
agreement of the Guarantor with respect to the subject matter hereof, and there
are no promises or representations by the Administrative Agent, the Issuing
Lender or any L/C Participant relative to the subject matter hereof not
reflected herein or in the other Loan Documents. None of the terms or provisions
of this Guarantee may be waived, amended or supplemented or otherwise modified
except by a written instrument executed by the Guarantor and the Administrative
Agent, provided that any provision of this Guarantee may be waived by the
Administrative Agent, the Issuing Lender and the L/C Participants in a letter or
agreement executed by the Administrative Agent or by telex or facsimile
transmission from the Administrative Agent. This Guarantee shall be binding upon
the successors and assigns of the Guarantor and shall inure to the benefit of
the Administrative Agent, the Issuing Lender and the L/C Participants and their
respective successors and assigns. This Guarantee shall be governed by and be
construed and interpreted in accordance with the law of the State of New York.
15. Notices. All notices, requests and demands to or upon the
Guarantor or the Administrative Agent, the Issuing Lender or any L/C Participant
to be effective shall be in writing (including by telecopy), and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made when delivered by hand, or, in the case of mail, 3 days after deposit in
the postal system, first class postage prepaid, or, in the case of telecopy
notice, when received, addressed to a party at the address set forth in the
Credit Agreement, in the case of the Administrative Agent, the Issuing Lender or
the L/C Participants or, in the case of the Guarantor, to the following address:
7
Landstar System, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
16. Counterparts. This Guarantee may be executed by one or more of
the parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be
duly executed and delivered by its duly authorized officer as of the day and
year first above written.
LANDSTAR SYSTEM HOLDINGS, INC.
By:
--------------------------------
Name:
Title:
EXHIBIT D TO
CREDIT AGREEMENT
FORM OF BORROWING CERTIFICATE
This Borrowing Certificate is delivered to you by the undersigned
pursuant to subsection 5.1(b) of the Third Amended and Restated Credit
Agreement, dated as of December __, 2001 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among Landstar System
Holdings, Inc. (the "Borrower"), Landstar System, Inc., the Subsidiaries of the
Borrower signatories thereto, certain Lenders parties thereto and JPMorgan Chase
Bank, as Administrative Agent. Unless otherwise defined herein, terms used
herein have the meanings provided in the Credit Agreement.
The undersigned, being the duly elected and acting Vice President
and Secretary, respectively, of the Borrower, hereby certify to the
Administrative Agent and the Lenders that:
i. The representations and warranties of the Borrower and the Parent
set forth in the Credit Agreement or which are contained in any
certificate, document or financial or other statement furnished pursuant
to or in connection with the Credit Agreement are correct in all material
respects on and as of the date hereof as if made on and as of such date
(or, if stated to relate to an earlier date, as of such earlier date).
ii. Immediately prior to and immediately after the making of the
extensions of credit under the Credit Agreement on the Closing Date, no
Default or Event of Default has occurred and is continuing under the
Credit Agreement.
iii. On and as of the date hereof, no strikes or other labor
disputes are pending or, to the knowledge of the undersigned, threatened
against the Parent, the Borrower or any of its Subsidiaries, and neither
the Parent, the Borrower nor any of its Subsidiaries are in violation of
the Fair Labor Standards Act or any other applicable Requirement of Law
dealing with labor or employment matters (including, without limitation,
employee benefits) that (individually or in the aggregate) could
reasonably be expected to have a Material Adverse Effect.
In witness whereof, we have hereto set our names on this __th day of
December, 2001.
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
EXHIBIT E-1 TO
CREDIT AGREEMENT
----------------
FORM OF OPINION OF DEBEVOISE & ▇▇▇▇▇▇▇▇
December 20, 2001
JPMorgan Chase Bank,
as Administrative Agent
under the Credit Agreement referred to below
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Each of the Lenders named in Annex A
attached hereto that are parties
to the Credit Agreement referred to below
We have acted as special counsel for Landstar System Holdings, Inc., a
Delaware corporation (the "Borrower"), Landstar System, Inc., a Delaware
corporation (the "Parent"), and the subsidiaries of the Borrower listed on
Schedule I hereto (the "Borrower's Subsidiaries") in connection with the
preparation, execution and delivery of (a) the Third Amended and Restated Credit
Agreement, dated as of December 20, 2001 (the "Credit Agreement"), among the
Borrower, the Parent, the lenders parties thereto (the "Lenders") and JPMorgan
Chase Bank, as Administrative Agent (in such capacity, the "Administrative
Agent"), and (b) the other Loan Documents (as defined below).
The opinions expressed below are furnished to you pursuant to
subsection 5.1(k)(i) of the Credit Agreement. Unless otherwise defined herein,
terms defined in the Credit Agreement are used herein as therein defined. As
used herein, the following terms shall have the following meanings: The term
"Loan Documents" means the Credit Agreement, the Notes and the Guarantees. The
term "Delaware Subsidiaries" Landstar Capacity Services, Inc., Landstar Carrier
Services, Inc., Landstar Contractor Financing, Inc., Landstar Corporate
Services, Inc., Landstar Gemini, Inc., Landstar Inway, Inc., Landstar ▇▇▇▇▇,
Inc., Landstar Logistics, Inc., Landstar Ranger, Inc., Landstar T.L.C., Inc.,
and Signature Technology Services, Inc., each a Delaware corporation. The term
"DGCL" means the General Corporation Law of the State of Delaware as in effect
on the date hereof.
In arriving at the opinions expressed below,
(1) we have examined and relied as to factual matters on the following
(including, but not limited to, the representations and warranties contained
therein):
(a) originals, or copies certified or otherwise identified
to our satisfaction, of the Loan Documents, and
(b) such corporate documents and records of the Borrower, the
Parent and the Borrower's Subsidiaries and such other instruments and
certificates of public officials, officers and representatives of the
Borrower, the Parent, the Borrower's Subsidiaries and other Persons as
we have deemed necessary or appropriate for the purposes of this
opinion; and
(2) we have made such investigations of law as we have deemed
appropriate as a basis for this opinion.
In rendering the opinions expressed below, we have assumed, with your
permission, without independent investigation or inquiry, (a) the authenticity
of all documents submitted to us as originals, the genuineness of all
signatures, and the conformity to the authentic originals of all documents
submitted to us as telecopied, certified, photostatic or reproduced copies and
the authenticity of the originals of such latter documents, (b) that each Loan
Document has been duly authorized by each Person party thereto (other than the
Parent, the Borrower and the Delaware Subsidiaries), that each such Person has
the requisite power and authority to execute, deliver and perform such Loan
Document, that each such Person is duly organized and that each such Person is
validly existing and in good standing under the laws of its jurisdiction of
organization, (c) that each Loan Document has been duly executed and delivered
by each Person party thereto and (d) that each Loan Document is the valid and
binding obligation of each Person party thereto (other than with respect to the
Parent, the Borrower and Borrower's Subsidiaries), enforceable against such
Person in accordance with its terms.
Based upon and subject to the foregoing and the qualifications
hereinafter set forth, we are of the opinion that:
1. Each of the Parent, the Borrower and the Delaware Subsidiaries is
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware.
2. Each of the Parent, the Borrower and the Delaware Subsidiaries has
the corporate power and authority to execute, deliver and perform its
obligations under each of the Loan Documents to which it is today a party and,
in the case of the Borrower, to borrow thereunder, and has taken all necessary
corporate action to authorize the execution, delivery and performance of each of
the Loan Documents to which it is today a party.
3. No consent or authorization of, approval by, notice to, or filing
with, any Federal, New York or Delaware (insofar as the DGCL is concerned) court
or governmental authority is required to be obtained or made on or prior to the
date hereof by the Parent, the Borrower or any of the Borrower's Subsidiaries,
as the case may be, in connection with its respective execution, delivery or
performance of the Loan Documents to which it is today a party or, in the case
of the Borrower, with the borrowings today under the Credit Agreement, or in
connection with the validity or enforceability against it of the Loan Documents
to which it is today a party, except for (a) any consents, authorizations,
approvals, notices and filings that have been obtained or made and (b)
-2-
those consents, authorizations, approvals, notices and filings that if not made,
obtained or done, would not, to our knowledge, have a Material Adverse Effect.
4. The execution, delivery and performance by the Parent, the Borrower
or any of the Borrower's Subsidiaries of the Loan Documents to which it is today
a party, and, in the case of the Borrower, the borrowings today and other
extensions of credit under the Credit Agreement, will not conflict with, or
result in a violation of, or result in, or require, the creation or imposition
of any Lien (other than Liens permitted by the Credit Agreement) on any of its
or their respective properties or revenues under, any existing law, rule or
regulation known to us to be applicable to the Parent, the Borrower or any of
the Borrower's Subsidiaries or any of their material properties, except, in each
case, for such violations that to our knowledge would not have a Material
Adverse Effect.
5. Each of the Loan Documents to which the Parent, the Borrower and the
Borrower's Subsidiaries is today a party constitutes the legal, valid and
binding obligation of such party, enforceable against it in accordance with its
respective terms.
6. No Loan Party is an "investment company", or a company "controlled"
by an "investment company", within the meaning of the Investment Company Act of
1940, as amended.
Our opinions set forth in paragraphs 2, 3, 4 and 5 above are subject to
the effects of (a) bankruptcy, insolvency, fraudulent conveyance, fraudulent
transfer, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights or remedies generally, and (b) general equitable
principles (whether considered in a proceeding in equity or at law). Our
opinions set forth in paragraphs 2, 3, 4 and 5 above are also subject to the
effects of (i) an implied covenant of good faith, reasonableness and fair
dealing and concepts of materiality, (ii) applicable laws and interpretations
which may affect the validity or enforceability of certain remedies provided for
in the Loan Documents, which limitations, however, do not, in our opinion, make
the remedies provided for therein inadequate for the practical realization of
the rights and benefits intended to be provided thereby (subject to the other
qualifications expressed herein), and (iii) limitations on enforceability of
rights to indemnification under securities laws or regulations or to the extent
any indemnification would violate public policy. We express no opinion as to the
validity, binding effect or enforceability of any provision of any Loan Document
that purports to (i) grant any right of set-off with respect to any contingent
or unmatured obligation or (ii) maintain or impose any obligation to pay any
amount in U.S. dollars where a final judgment concerning such obligation is
rendered in another currency. We express no opinion as to (1) Section 10.12 of
the Credit Agreement and any similar provision in any other Loan Document,
insofar as such provisions relate to the subject matter jurisdiction of a court
to adjudicate any controversy, (2) the waiver of inconvenient forum set forth in
Section 10.13(a) of the Credit Agreement and any similar provision in any other
Loan Document and (3) as to acceptance by a Federal or other court located in
the State of New York of jurisdiction in a dispute arising under any Loan
Document. We express no opinion as to the waiver by any Subsidiary Guarantor of
any defense, rights, privileges or benefit to the extent such waiver is made to
a greater extent than would be permitted by applicable law.
-3-
We express no opinion as to any matter relating to the Insurance
Subsidiary, including without limitation, as to whether the Credit Agreement
constitutes a legal, valid or binding obligation of the Insurance Subsidiary or
is enforceable against the Insurance Subsidiary in accordance with its terms.
We express no opinion as to the effect of, or compliance with, any
provisions of Delaware or New York law regarding fraudulent transfers of
conveyances or laws governing preferential transfers, or provisions of state law
restricting dividends, loans or other distributions by a corporation or for the
benefit of its stockholders, or any Federal or State securities laws, rules or
regulations, including without limitation, as to the effect thereof on the
validity, binding effect or enforceability of any of the Loan Documents.
We express no opinion as to the laws of any jurisdiction other than
the laws of the State of New York, the DGCL and the Federal laws of the United
States of America that, in our experience, are generally applicable to
transactions of this type. In particular (and without limiting the generality
of the foregoing), we express no opinion as to the laws of any country (other
than the Federal laws of the United States of America) or as to the effect of
such laws (whether limiting, prohibitive or otherwise) on any of the rights or
obligations of any Loan Party or of any other party to or beneficiary of any of
the Loan Documents. In giving the foregoing opinion, we express no opinion as
to the effect (if any) of any law of any jurisdiction (except the State of New
York) in which any Lender is located which limits the rate of interest that
such Lender may charge or collect. In giving the foregoing opinion, we have
assumed that the execution and delivery by each Loan Party of the Loan
Documents to which it is a party and the performance by each Loan Party of its
obligations thereunder will not violate any fundamental public policy under
applicable law (other than the laws of the State of New York and federal laws
of the United States of America).
The opinions expressed herein are solely for your benefit and,
without our prior consent, neither our opinion nor this opinion letter may be
disclosed publicly to or relied upon by any other person.
Very truly yours,
-4-
ANNEX A
LENDERS
-------
1. JPMorgan Chase Bank, as Administrative Agent and as a Lender
2. First Union National Bank
3. Fleet National Bank
4. SunTrust Bank
5. Bank of America, N.A.
6. The Bank of New York
7. PB Capital Corporation
-5-
SCHEDULE I
----------
BORROWER'S SUBSIDIARIES
-----------------------
Landstar Acquisition Corporation
Landstar Capacity Services, Inc.
Landstar Carrier Services, Inc.
Landstar Contractor Financing, Inc.
Landstar Corporate Services, Inc.
Landstar Express America, Inc.
Landstar Gemini, Inc.
Landstar Inway, Inc.
Landstar ▇▇▇▇▇, Inc.
Landstar Logistics, Inc.
Landstar Ranger, Inc.
Landstar T.L.C., Inc.
Risk Management Claim Services, Inc.
Signature Insurance Company
Signature Technology Services, Inc.
-6-
'
EXHIBIT E-2 TO
CREDIT AGREEMENT
----------------
FORM OF OPINION OF BORROWER COUNSEL
December 20, 2001
To the Parties named on
Annex A hereto
Ladies and Gentlemen:
I am General Counsel of Landstar System Holdings, Inc., a Delaware
corporation (the "Borrower") and of Landstar System, Inc., a Delaware
corporation (the "Parent"), and the subsidiaries of the Borrower listed on
Schedule I hereto (the "Borrower's Subsidiaries") and as such I am delivering
this opinion in connection with the transactions contemplated by the Third
Amended and Restated Credit Agreement, dated as of December __, 2001 (the
"Credit Agreement"), among the Borrower, the Parent, the lenders parties thereto
(the "Lenders") and JPMorgan Chase Bank, as Administrative Agent (in such
capacity, the "Administrative Agent").
This opinion is delivered to you pursuant to subsection 5.1(k)(ii) of
the Credit Agreement. Unless otherwise defined herein, terms defined in the
Credit Agreement are used herein as therein defined. As used herein, "Loan
Documents" shall mean the Credit Agreement, the Notes and the Guarantees.
In connection with this opinion, I have examined and relied upon the
representations and warranties as to factual matters contained in or made
pursuant to the Credit Agreement and the other Loan Documents and upon the
originals, or copies certified or otherwise identified to my satisfaction, of
such records, documents, certificates and other instruments as I have deemed
necessary or appropriate to enable me to render the opinion expressed below. I
have assumed the genuineness of all signatures of, and the authority of, persons
signing the Loan Documents on behalf of the parties thereto other than the Loan
Parties and the authenticity of all documents submitted to me as certified,
conformed or photostatic copies.
Based on the foregoing, and subject to the qualifications expressed
below, I am of the following opinion:
1. Each of the Subsidiaries of the Borrower listed on Schedule II
hereto (the "Covered Subsidiaries") (a) is duly incorporated, validly existing
and in good standing under the laws of the jurisdiction of its incorporation,
(b) has the corporate power and authority to own and operate its property, to
lease the property it operates as lessee and to conduct the business in which it
is currently engaged and (c) is duly qualified as a foreign corporation and in
good standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification,
except where the failure so to qualify, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
2. Each of the Covered Subsidiaries has the corporate power and
authority to execute, deliver and perform its obligations under each of the Loan
Documents to which it is a party and has taken all necessary corporate action to
authorize the execution, delivery and performance of the Loan Documents to which
today it is a party.
3. Each of the Loan Documents to which the Parent, the Borrower and
each of the Borrower's Subsidiaries is today a party has been duly executed and
delivered on behalf of such party.
4. The execution, delivery and performance by the Parent, the Borrower
or any of the Borrower's Subsidiaries of the Loan Documents to which it is today
a party, and the borrowings and other extensions of credit under the Credit
Agreement, will not conflict with, or result in a violation of, or result in, or
require, the creation or imposition of any Lien (other than Liens permitted by
the Credit Agreement) on any of its or their respective properties or revenues
under (a) the certificate of incorporation or by-laws of the Parent, the
Borrower or any Subsidiary, (b) any material Requirement of Law that to my
knowledge is applicable to or binding upon the Parent, the Borrower or any of
its Subsidiaries, or (c) any material Contractual Obligation of which I have
knowledge applicable to or binding upon the Parent, the Borrower or any of its
Subsidiaries.
5. To my knowledge, after due inquiry, except as disclosed in the most
recent Report on Form 10-K of the Parent for the year ended December 31, 2000,
as filed with the Securities and Exchange Commission, and all of the Reports on
Form 10-Q filed by the Parent with the Securities and Exchange Commission since
the filing of such Report on Form 10-K, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or
threatened by or against the Parent, the Borrower or any of its Subsidiaries or
against any of its or their respective properties or revenues (a) with respect
to any of the Loan Documents or any of the transactions contemplated thereby, or
(b) that could reasonably be expected to have a Material Adverse Effect.
I express no opinion as to the laws of any jurisdiction other than the
laws of the State of Illinois and the Federal laws of the United States of
America.
The opinions expressed herein are solely for your benefit and, without
my prior consent, neither my opinion nor this opinion letter may be circulated,
furnished or disclosed to or relied upon by any other person.
Very truly yours,
ANNEX A
LENDERS
-------
1. JPMorgan Chase Bank, as Administrative Agent and as a Lender
2. First Union National Bank
3. Fleet National Bank
4. SunTrust Bank
5. Bank of America, N.A.
6. The Bank of New York
7. PB Capital Corporation
SCHEDULE I
BORROWER'S SUBSIDIARIES
-----------------------
Landstar Acquisition Corporation
Landstar Capacity Services, Inc.
Landstar Carrier Services, Inc.
Landstar Contractor Financing, Inc.
Landstar Corporate Services, Inc.
Landstar Express America, Inc.
Landstar Gemini, Inc.
Landstar Inway, Inc.
Landstar ▇▇▇▇▇, Inc.
Landstar Logistics, Inc.
Landstar Ranger, Inc.
Landstar T.L.C., Inc.
Risk Management Claim Services, Inc.
Signature Insurance Company
Signature Technology Services, Inc.
SCHEDULE II
COVERED SUBSIDIARIES
--------------------
Landstar Acquisition Corporation
Landstar Express America, Inc.
Risk Management Claim Services, Inc.
EXHIBIT E-3 TO
CREDIT AGREEMENT
----------------
FORM OF OPINION OF ▇▇▇▇▇▇ AND CALDER
To: JPMorgan Chase Bank (the "Bank"), as Administrative Agent under
the Credit Agreement referred to below
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Signature Insurance Company
c/o Landstar System, Inc.
First ▇▇▇▇▇▇▇ Place
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
and each of the Lenders named in Annex A attached
Date: ___ December 2001
Dear Sirs,
RE: SIGNATURE INSURANCE COMPANY (THE "INSURANCE SUBSIDIARY")
-----------------------------------------------------------------
1. We have acted as counsel as to Cayman Islands law to the Insurance
Subsidiary in connection with the transaction agreements referred to
below. We have been asked to address this opinion to you by our client,
the Insurance Subsidiary. We have reviewed, inter alia, originals or
final drafts, photocopies, fax copies of the following documents:-
1.1 the Certificate of Incorporation and Memorandum and Articles
of Association of the Insurance Subsidiary;
1.2 minutes of a meeting of the Board of Directors of the
Insurance Subsidiary held on 18 December 2001 and the
corporate records of the Insurance Subsidiary maintained at
its registered office in the Cayman Islands;
1.3 a copy of the Third Amended and Restated Credit Agreement
(the "Credit Agreement") dated as of 20 December 2001 and
made between Landstar System Holdings, Inc., Landstar
System, Inc., the Subsidiaries of the Borrower signatories
thereto (as therein defined), various Lenders (as therein
defined) and the Bank, as Administrative Agent;
1.4 the Third Amended and Restated Subsidiaries' Guarantee dated
as of ___ December 2001 (the "Guarantee"), made by the parties
thereto in favour of the Bank, a New York banking corporation,
as Administrative Agent for the several banks and other
financial institutions that are parties to the Credit
Agreement.
1.5 a Certificate from a Director of the Insurance Subsidiary in
the form annexed hereto (the "Director's Certificate").
2. The following opinion is given only as to circumstances existing at the
date hereof and known to us and as to the laws of the Cayman Islands as
the same is in force at the date hereof. We express no opinion with
regard to any system of law other than the laws of the Cayman Islands.
In giving this opinion, we have relied upon the accuracy of the
Director's Certificate without further verification and have relied
upon the following assumptions, which we have not independently
verified:-
2.1 copy documents or the forms of documents provided to us are
true copies of, or in the final forms of, the originals;
2.2 the genuineness of all signatures and the authenticity and
completeness of all documents submitted to us whether as
originals or copies;
2.3 there is nothing under any law (other than the laws of the
Cayman Islands) which would or might affect the opinions
hereinafter appearing.
3. Based upon and subject to the foregoing and the matters referred to
below and subject to matters not disclosed to us and having regard to
such legal considerations as we deem relevant, we are of the opinion
that:-
3.1 The Insurance Subsidiary is an exempted company duly
incorporated, validly existing and in good standing under the
laws of the Cayman Islands and has the corporate power and
authority to own and operate its property and conduct the
business authorised by its Memorandum of Association.
3.2 The Insurance Subsidiary has corporate power and authority to
execute, deliver and perform its obligations under the
Guarantee and has taken all necessary corporate action to
authorise its execution, delivery and performance.
3.3 Except for (a) any consents, authorisations, approvals,
notices and filings that have been obtained or made or (b)
those consents, authorisations, approvals, notices and filings
that if not made, obtained or done would not have a material
adverse effect on the Insurance Subsidiary, no consent or
authorisation of, approval by, filing with, notice to, or
other act by any Cayman Islands court or governmental
authority is required in connection with the execution,
delivery or performance of the Guarantee.
delivery or performance of the Guarantee by the Insurance
Subsidiary or in connection with the validity or
enforceability against it of the Guarantee.
3.4 The Guarantee has been duly executed on behalf of the
Insurance Subsidiary.
3.5 The execution, delivery and performance by the Insurance
Subsidiary of the Guarantee will not conflict with, or result
in a violation of, or result in, or require, the creation or
imposition of any Lien (as defined in the Credit Agreement),
other than Liens permitted by the Credit Agreement) on any of
its property or revenue under (a) the Memorandum or Articles
of Association of the Insurance Subsidiary or (b) any existing
applicable law, statute, rule or regulation of the Cayman
Islands.
The above opinions are to be construed restrictively. We give no opinion on
anything not specifically stated herein, and in particular make no comment with
regard to any representations made by the Insurance Subsidiary or others in any
of the documents referred to above or otherwise or with regard to the commercial
terms of the Guarantee.
This opinion, although addressed to you, may be relied upon by your legal
advisers (but in that capacity only). It may not be relied upon by any other
person(s) without our prior written consent.
Yours faithfully,
▇▇▇▇▇▇ and ▇▇▇▇▇▇
ANNEX A
-------
1. JPMorgan Chase Bank, as Administrative Agent and as a Lender
2. First Union National Bank
3. Fleet National Bank
4. SunTrust Bank
5. Bank of America, N.A.
6. The Bank of New York
7. PB Capital Corporation
EXHIBIT F TO
CREDIT AGREEMENT
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Third Amended and Restated Credit
Agreement, dated as of December __, 2001 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among Landstar System
Holdings, Inc., a Delaware corporation (the "Borrower"), Landstar System, Inc.,
the Subsidiaries of the Borrower signatories thereto, the lenders from time to
time parties thereto (the "Lenders") and JPMorgan Chase Bank, as agent (in such
capacity, the "Administrative Agent"). Unless otherwise defined herein, terms
which are defined in the Credit Agreement and used herein are so used as so
defined and the meanings assigned to terms defined herein or in the Credit
Agreement shall be equally applicable to both the singular and plural forms of
such terms. This Assignment and Acceptance, between the Assignor (as set forth
on Schedule 1 hereto and made a part hereof) and the Assignee (as set forth on
Schedule 1 hereto and made a part hereof) and for the benefit of the Borrower
and the Administrative Agent, is dated as of the Transfer Effective Date (as set
forth on Schedule 1 hereto and made a part hereof, the "Transfer Effective
Date").
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Transfer Effective Date, a ___% interest (the "Assigned Interest") in and to the
Assignor's rights and obligations under the Credit Agreement with respect to the
credit facility contained in the Credit Agreement as set forth on Schedule 1
(the "Assigned Facility"), in a principal amount for such Assigned Facility as
set forth on Schedule 1; provided, however, it is expressly understood and
agreed that the Assignor is not assigning to the Assignee and the Assignor shall
retain (A) all of the Assignor's rights and obligations under subsections 2.13,
2.14 and 2.15 of the Credit Agreement with respect to any cost, reduction or
payment incurred or made prior to the Transfer Effective Date, including,
without limitation the rights to indemnification and to reimbursement for taxes,
costs and expenses and (B) any and all amounts paid to the Assignor prior to the
Transfer Effective Date and (iii) both Assignor and Assignee shall be entitled
to the benefits of subsection 10.5 of the Credit Agreement.
2. The Assignor (i) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, any other Loan Document or any other instrument or document furnished
pursuant thereto, other than that it has not created any adverse claim upon the
interest being assigned by it hereunder and that such interest is free and clear
of any adverse claim; (ii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Parent, any of its
Subsidiaries or any other obligor or the performance or observance by the
Parent, any of its Subsidiaries or any other obligor of any of their respective
obligations under the Credit Agreement or any other Loan Document or any other
instrument or document furnished pursuant hereto or thereto; and (iii) attaches
the Notes, if any, held by it evidencing the Assigned Facility and requests that
the
2
Administrative Agent exchange such Notes, if any, for new Notes payable to the
Assignor (if the Assignor has retained any interest in the Assigned Facility and
if so requested by the Assignor pursuant to the terms of the Credit Agreement)
and new Notes payable to the Assignee if so requested by the Assignee pursuant
to the terms of the Loan Agreement in the respective amounts which reflect the
assignment being made hereby (and after giving effect to any other assignments
which have become effective on the Transfer Effective Date).
3. The Assignee, for the benefit of the Assignor, the Administrative
Agent and the Borrower, (i) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (ii) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements delivered pursuant to subsection 4.1 and 6.1 of the Credit
Agreement and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Acceptance; (iii) agrees that it will, independently and without reliance upon
the Assignor, the Administrative Agent or any other person which has become a
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement; (iv) appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under the Credit Agreement and the other Loan Documents as are
delegated to the Administrative Agent by the terms thereof, together with such
powers as are incidental thereto; and (v) agrees that it will be bound by the
provisions of the Credit Agreement and will perform in accordance with its terms
all the obligations which by the terms of the Credit Agreement are required to
be performed by it as a Lender including, (A) if it is organized under the laws
of a jurisdiction outside the United States, its obligation pursuant to
subsection 2.14 of the Credit Agreement to deliver the forms prescribed by the
Internal Revenue Service of the United States certifying as to the Assignee's
exemption from United States withholding taxes with respect to all payments to
be made to the Assignee under the Credit Agreement and (B) if it is organized
under the laws of the United States or a state thereof, its obligation pursuant
to subsection 2.14 of the Credit Agreement to deliver a written statement to
that effect.
4. Following the execution of this Assignment and Acceptance, it
will be delivered to the Borrower and the Administrative Agent, together with
payment to the Administrative Agent of a registration and processing fee of
$3,500, for acceptance by the Borrower and the Administrative Agent, which
acceptance shall not be unreasonably withheld, and recording by the
Administrative Agent pursuant to subsections 10.6(d) and 10.6(e) of the Credit
Agreement, effective as of the Transfer Effective Date (which shall not, unless
otherwise agreed to by the Administrative Agent, be earlier than five Business
Days after the date of acceptance and recording by the Borrower and the
Administrative Agent of the executed Assignment and Acceptance).
5. Upon such acceptance and recording, from and after the Transfer
Effective Date, the Administrative Agent shall make all payments in respect of
the Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignee whether such amounts have accrued prior to the Transfer
Effective Date or accrue subsequent to the Transfer Effective Date. The Assignor
and the Assignee shall make all appropriate adjustments in payments by the
Administrative Agent for periods prior to the Transfer Effective Date or with
respect to the making of this assignment directly between themselves.
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6. From and after the Transfer Effective Date, (i) the Assignee
shall be a party to the Credit Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the other Loan Documents and shall be bound by the
provisions thereof and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations, and release the Borrower from its obligations to the Assignor
(other than with respect to indemnities which by their terms survive repayment
of the Loans under the Credit Agreement).
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
and Acceptance to be executed by their respective duly authorized officers on
Schedule 1 hereto.
Schedule 1 to Assignment and Acceptance relating to the Third Amended and
Restated Credit Agreement, dated as of December __, 2001, among Landstar System
Holdings, Inc., a Delaware corporation, Landstar System, Inc., the Subsidiaries
of the Borrower signatories thereto, the lenders from time to time parties
thereto and JPMorgan Chase Bank, as administrative agent (the "Credit
Agreement")
Name of Assignor:
Name of Assignee:
Transfer Effective Date of Assignment:
Percentage (as defined in
the Credit Agreement)
Commitment Assigned (to at least
Assigned Facility Amount Assigned fifteen decimals)
----------------- --------------- ---------------------------
Revolving Credit Commitments
Accepted:
LANDSTAR SYSTEM HOLDINGS, INC.
By:
-----------------------------------
Name:
Title:
JPMORGAN CHASE BANK, [ASSIGNEE]
as Administrative Agent
By: By:
---------------------------- --------------------------
Name: Name:
Title: Title:
[ASSIGNOR]
By:
--------------------------
Name:
Title: