Exhibit 10.11A
[COPY OF EXECUTION VERSION]
CREDIT AGREEMENT
Dated as of December 20, 2001
among
THE FINANCIAL INSTITUTIONS NAMED HEREIN,
as the Lenders,
BANK OF AMERICA, N. A.,
as the Agent,
and
EGL, INC.
and
CERTAIN OF ITS SUBSIDIARIES PARTY HERETO,
as Borrowers and Loan Parties
and
CERTAIN OF ITS SUBSIDIARIES PARTY HERETO,
as Loan Parties
BANK OF AMERICA, NATIONAL ASSOCIATION
BANC OF AMERICA SECURITIES LLC
Sole Lead Arrangers and Syndication Agents
TABLE OF CONTENTS
ARTICLE 1 LOANS AND LETTERS OF CREDIT ................................................................. 1
Section 1.1 Total Facility ................................................................. 1
Section 1.2 Revolving Loans ................................................................ 1
Section 1.3 Reserved ....................................................................... 5
Section 1.4 Letters of Credit and Credit Support ........................................... 5
Section 1.5 Bank Products .................................................................. 10
ARTICLE 2 INTEREST AND FEES ........................................................................... 11
Section 2.1 Interest ....................................................................... 11
Section 2.2 Continuation and Conversion Elections .......................................... 11
Section 2.3 Maximum Interest Rate .......................................................... 13
Section 2.4 Reserved ....................................................................... 14
Section 2.5 Unused Line Fee ................................................................ 14
Section 2.6 Letter of Credit Fee ........................................................... 14
Section 2.7 Other Fees ..................................................................... 15
Section 2.8 Collections Administration ..................................................... 15
ARTICLE 3 PAYMENTS AND PREPAYMENTS .................................................................... 15
Section 3.1 Revolving Loans ................................................................ 15
Section 3.2 Termination of Total Facility .................................................. 15
Section 3.3 Payments from Distributions or Loans from Subsidiaries ......................... 16
Section 3.4 Payments from Asset Dispositions ............................................... 16
Section 3.5 LIBOR Rate Loan Prepayments .................................................... 17
Section 3.6 Payments by the Borrowers ...................................................... 17
Section 3.7 Payments as Revolving Loans .................................................... 17
Section 3.8 Apportionment, Application, and Reversal of Payments ........................... 17
Section 3.9 Indemnity for Returned Payments ................................................ 18
Section 3.10 The Agent's and the Lenders' Books and Records; Monthly Statements ............. 18
ARTICLE 4 TAXES, YIELD PROTECTION, AND ILLEGALITY ..................................................... 19
Section 4.1 Taxes .......................................................................... 19
Section 4.2 Illegality ..................................................................... 20
Section 4.3 Increased Costs and Reduction of Return ........................................ 20
Section 4.4 Funding Losses ................................................................. 21
Section 4.5 Inability to Determine Rates ................................................... 21
Section 4.6 Certificates of the Agent ...................................................... 22
Section 4.7 Survival ....................................................................... 22
Section 4.8 Replacement of Affected Lender ................................................. 22
ARTICLE 5 BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES ........................................... 23
Section 5.1 Books and Records .............................................................. 23
Section 5.2 Financial Information .......................................................... 23
Section 5.3 Notices to the Lender .......................................................... 26
Section 5.4 Revisions or Updates to Schedules .............................................. 29
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ARTICLE 6 GENERAL WARRANTIES AND REPRESENTATIONS ...................................................... 29
Section 6.1 Authorization, Validity, and Enforceability of this Agreement and the other
Loan Documents; No Conflicts ................................................... 29
Section 6.2 Validity and Priority of Security Interest ..................................... 30
Section 6.3 Reserved ....................................................................... 30
Section 6.4 Corporate Name; Prior Transactions ............................................. 30
Section 6.5 Capitalization; Subsidiaries; Organization and Qualification ................... 30
Section 6.6 Financial Statements and Projections ........................................... 31
Section 6.7 Solvency ....................................................................... 32
Section 6.8 Debt ........................................................................... 32
Section 6.9 Distributions .................................................................. 32
Section 6.10 Real Estate; Leases ............................................................ 32
Section 6.11 Proprietary Rights ............................................................. 32
Section 6.12 Trade Names .................................................................... 33
Section 6.13 Litigation ..................................................................... 33
Section 6.14 Labor Disputes ................................................................. 33
Section 6.15 Environmental Laws ............................................................. 33
Section 6.16 No Violation of Law ............................................................ 35
Section 6.17 No Default ..................................................................... 35
Section 6.18 ERISA Compliance; Foreign Plans ................................................ 35
Section 6.19 Taxes .......................................................................... 36
Section 6.20 Regulated Entities ............................................................. 36
Section 6.21 Use of Proceeds; Margin Regulations ............................................ 36
Section 6.22 No Material Adverse Change ..................................................... 36
Section 6.23 Full Disclosure ................................................................ 37
Section 6.24 Material Agreements ............................................................ 37
Section 6.25 Bank Accounts .................................................................. 37
Section 6.26 Governmental Authorization ..................................................... 37
Section 6.27 Investment Property ............................................................ 37
Section 6.28 Common Enterprise .............................................................. 38
Section 6.29 Convertible Subordinated Debt Documents ........................................ 38
ARTICLE 7 AFFIRMATIVE AND NEGATIVE COVENANTS .......................................................... 38
Section 7.1 Taxes and Other Obligations .................................................... 38
Section 7.2 Legal Existence and Good Standing .............................................. 39
Section 7.3 Compliance with Law and Agreements; Maintenance of Licenses .................... 39
Section 7.4 Maintenance of Property; Inspection of Property; Appraisals .................... 39
Section 7.5 Insurance ...................................................................... 40
Section 7.6 Insurance and Condemnation Proceeds ............................................ 40
Section 7.7 Environmental Laws ............................................................. 41
Section 7.8 Compliance with ERISA and Similar Foreign Laws ................................. 43
Section 7.9 Mergers, Consolidations, or Sales .............................................. 43
Section 7.10 Distributions; Capital Change; Restricted Investments .......................... 44
Section 7.11 Transactions Affecting Collateral or Obligations ............................... 44
Section 7.12 Guaranties ..................................................................... 44
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Section 7.13 Debt ........................................................................... 45
Section 7.14 Prepayment ..................................................................... 45
Section 7.15 Transactions with Affiliates ................................................... 45
Section 7.16 Investment Banking and Finder's Fees ........................................... 45
Section 7.17 Business Conducted ............................................................. 46
Section 7.18 Liens .......................................................................... 46
Section 7.19 Sale and Leaseback Transactions ................................................ 46
Section 7.20 New Subsidiaries ............................................................... 46
Section 7.21 Fiscal Year .................................................................... 47
Section 7.22 Capital Expenditures ........................................................... 47
Section 7.23 Minimum Adjusted Tangible Net Worth ............................................ 47
Section 7.24 Use of Proceeds ................................................................ 48
Section 7.25 Bank as Depository ............................................................. 48
Section 7.26 Proceeds from Asset Dispositions by Consolidated Members other than Borrowers .. 48
Section 7.27 Guaranties ..................................................................... 48
Section 7.28 Agent's Liens .................................................................. 48
Section 7.29 Further Assurances ............................................................. 49
Section 7.30 Proceeds from Surplus Cash Deposits ............................................ 49
Section 7.31 Excess Collections, Investments, Etc ........................................... 49
Section 7.32 Collections of Accounts ........................................................ 49
Section 7.33 Availability Without Regard to Line Constraint ................................. 49
Section 7.34 Subordinated Debt .............................................................. 50
Section 7.35 Foreign Credit Debt ............................................................ 50
ARTICLE 8 CONDITIONS OF LENDING ....................................................................... 50
Section 8.1 Conditions Precedent to Making of Loans on the Closing Date .................... 50
Section 8.2 Conditions Precedent to Each Loan .............................................. 55
ARTICLE 9 DEFAULT; REMEDIES ........................................................................... 56
Section 9.1 Events of Default .............................................................. 56
Section 9.2 Remedies ....................................................................... 59
ARTICLE 10 TERM AND TERMINATION ....................................................................... 61
Section 10.1 Term and Termination ........................................................... 61
ARTICLE 11 AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS ............................... 61
Section 11.1 Amendments and Waivers ......................................................... 61
Section 11.2 Assignments; Participations .................................................... 63
ARTICLE 12 THE AGENT.... .............................................................................. 65
Section 12.1 Appointment and Authorization .................................................. 65
Section 12.2 Delegation of Duties ........................................................... 66
Section 12.3 Liability of the Agent ......................................................... 66
Section 12.4 Reliance by the Agent .......................................................... 66
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Section 12.5 Notice of Default .............................................................. 66
Section 12.6 Credit Decision ................................................................ 67
Section 12.7 Indemnification ................................................................ 67
Section 12.8 The Agent in Individual Capacity ............................................... 68
Section 12.9 Successor Agent ................................................................ 68
Section 12.10 Withholding Tax ................................................................ 68
Section 12.11 Collateral Matters ............................................................. 70
Section 12.12 Restrictions on Actions by the Lenders; Sharing of Payments .................... 71
Section 12.13 Agency for Perfection .......................................................... 72
Section 12.14 Payments by the Agent to the Lenders ........................................... 72
Section 12.15 Settlement ..................................................................... 72
Section 12.16 Letters of Credit; Intra-Lender Issues ......................................... 76
Section 12.17 Concerning the Collateral and the Related Loan Documents ....................... 78
Section 12.18 Field Audit and Examination Reports; Disclaimer by the Lenders ................. 78
Section 12.19 Relation Among the Lenders ..................................................... 79
Section 12.20 Rights of the Agent as UK Security Trustee ..................................... 79
ARTICLE 13 MISCELLANEOUS .............................................................................. 79
Section 13.1 No Waivers; Cumulative Remedies ................................................ 79
Section 13.2 Severability ................................................................... 79
Section 13.3 Governing Law; Choice of Forum ................................................. 79
Section 13.4 Waiver of Jury Trial ........................................................... 80
Section 13.5 Survival of Representations and Warranties ..................................... 81
Section 13.6 Other Security and Guaranties .................................................. 81
Section 13.7 Fees and Expenses .............................................................. 81
Section 13.8 Notices ........................................................................ 82
Section 13.9 Waiver of Notices .............................................................. 83
Section 13.10 Binding Effect ................................................................. 83
Section 13.11 Indemnity of the Agent and the Lenders by the Loan Parties ..................... 83
Section 13.12 Limitation of Liability ........................................................ 84
Section 13.13 Final Agreement ................................................................ 84
Section 13.14 Counterparts ................................................................... 85
Section 13.15 Captions ....................................................................... 85
Section 13.16 Right of Setoff ................................................................ 85
Section 13.17 Confidentiality ................................................................ 85
Section 13.18 Conflicts with other Loan Documents ............................................ 86
Section 13.19 Joint and Several Liability .................................................... 86
Section 13.20 Contribution and Indemnification Among the Borrowers ........................... 88
Section 13.21 Agency of the Parent for Each Other Loan Party ................................. 88
Section 13.22 Additional Loan Parties ........................................................ 88
Section 13.23 Express Waivers By Loan Parties In Respect of Cross Guaranties and Cross
Collateralization .............................................................. 89
Section 13.24 Payment Currency ............................................................... 90
Section 13.25 Judgment Currency .............................................................. 90
Section 13.26 Amendment and Restatement ...................................................... 91
Section 13.27 Designated Senior Debt ......................................................... 91
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EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A - Form of Revolving Loan Note
Exhibit B - Form of Borrowing Base Certificate
Exhibit C - Form of Notice of Borrowing
Exhibit D - Form of Notice of Continuation/Conversion
Exhibit E - Form of Assignment and Acceptance
Exhibit F - Form of Compliance Certificate
SCHEDULES
Schedule 6.4 - Legal Names
Schedule 6.5 - Consolidated Members; Capitalization; Organization;
Location; Qualification
Schedule 6.8 - Debt
Schedule 6.9 - Distributions
Schedule 6.10 - Real Estate; Leases
Schedule 6.11 - Proprietary Rights
Schedule 6.12 - Trade Names
Schedule 6.13 - Litigation
Schedule 6.14 - Labor Matters
Schedule 6.15 - Environmental Matters
Schedule 6.18 - ERISA Matters
Schedule 6.19 - Taxes
Schedule 6.24 - Material Agreements
Schedule 6.25 - Bank Accounts
Schedule 6.27 - Investment Property
Schedule 7.15 - Affiliate Transactions
Schedule A-1 - Commitments
Schedule A-2 - Permitted Liens
Schedule A-3 - Restricted Investments
Schedule ▇-▇ - ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇-▇ - ▇▇▇▇▇▇ Subsidiaries
Schedule A-6 - Dormant Guarantors
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CREDIT AGREEMENT
This Credit Agreement, dated as of December 20, 2001 ("Agreement"), among
the financial institutions from time to time parties hereto (such financial
institutions, together with their respective successors and assigns, are
referred to hereinafter each individually as a "Lender" and collectively as the
"Lenders"), Bank of America, N.A., with an office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, as collateral and administrative agent for the
Lenders (in such capacity, the "Agent"), and EGL, Inc., a Texas corporation, and
each of its Subsidiaries party hereto.
RECITALS:
A. The Loan Parties have requested the Lenders to make available to the
Borrowers a revolving line of credit for loans and letters of credit in the
aggregate principal amount of up to $100,000,000, which extensions of credit the
Borrowers will use for the purposes permitted by Section 7.24.
B. Capitalized terms used in this Agreement and not otherwise defined
herein shall have the meanings ascribed thereto in Annex A which is attached
hereto and incorporated herein. The rules of construction contained in Annex A
shall govern the interpretation of this Agreement, and all Annexes, Exhibits,
and Schedules attached hereto are incorporated herein by reference.
C. The Lenders have agreed to make available to the Borrowers a revolving
credit and letter of credit facility upon the terms and conditions set forth in
this Agreement.
NOW, THEREFORE, in consideration of the mutual conditions and agreements
set forth in this Agreement, and for good and valuable consideration, the
receipt of which is hereby acknowledged, the Lenders, the Agent, and the Loan
Parties hereby agree as follows.
ARTICLE 1
LOANS AND LETTERS OF CREDIT
Section 1.1 Total Facility. Subject to all of the terms and conditions of
this Agreement, the Lenders agree to make available a total credit facility of
up to $100,000,000 (the "Total Facility") for use by any one or more of the
Borrowers from time to time during the term of this Agreement. The Total
Facility shall be composed of a revolving line of credit consisting of Revolving
Loans and Letters of Credit and Credit Support as described in Section 1.2, and
Section 1.4.
Section 1.2 Revolving Loans.
(a) Amounts. Subject to the satisfaction of the conditions precedent
set forth in Article 8, each Lender severally, but not jointly, agrees,
upon a Borrower's request from time to time on any Business Day during the
period from the Closing Date to the Termination Date, to make revolving
loans (the "Revolving Loans") to the Borrowers in amounts not to exceed
such Lender's Pro Rata Share of the Availability, except for Non-Ratable
Loans and
CREDIT AGREEMENT - Page 1
Agent Advances. The Lenders, however, in their unanimous discretion, may
elect to make Revolving Loans or issue or arrange to have issued Letters
of Credit or Credit Support in excess of the Availability or the Borrowing
Base on one or more occasions, but if they do so, neither the Agent nor
the Lenders shall be deemed thereby to have changed the limits of the
Availability or the Borrowing Base or to be obligated to exceed such
limits on any other occasion. If the Aggregate Revolver Outstandings would
exceed the Availability after giving effect to any Borrowing, the Lenders
may refuse to make or may otherwise restrict the making of Revolving Loans
and the issuance of Letters of Credit and Credit Support as the Lenders
determine until such excess has been eliminated, subject to the Agent's
authority, in its sole discretion, to make Agent Advances pursuant to the
terms of Section 1.2(j).
(b) Revolving Loan Notes. The Borrowers shall execute and deliver to
each Lender a note to evidence the Revolving Loans of that Lender (each a
"Revolving Loan Note" and, collectively, the "Revolving Loan Notes"). Each
Revolving Loan Note shall be in the principal amount of the Lender's Pro
Rata Share of the Revolving Loan Commitments, dated as of the Closing Date
or the date of any assignment of a portion of any Lender's Revolving
Loans, and substantially in the form of Exhibit A. Each Revolving Loan
Note shall represent the obligation of the Borrowers to pay the amount of
the applicable Lender's Pro Rata Share of the Revolving Loan Commitments,
or, if less, such Lender's Pro Rata Share of the aggregate unpaid
principal amount of all Revolving Loans to the Borrowers together with
interest thereon as prescribed in this Section 1.2. The entire unpaid
balance of the Revolving Loans and all other non-contingent Obligations
shall be immediately due and payable in full in immediately available
funds on the Termination Date.
(c) Procedure for Borrowing.
(i) Except as otherwise provided in this Section 1.2(c), each
Borrowing of Revolving Loans shall be made upon a Borrower's
irrevocable written notice delivered to the Agent in the form of a
notice of borrowing in the form attached hereto as Exhibit C (a
"Notice of Borrowing"), which must be received by the Agent prior to
11:00 a.m. (Dallas, Texas time) (y) three (3) Business Days prior to
the requested Funding Date, in the case of LIBOR Rate Revolving
Loans and (z) on the requested Funding Date, in the case of Base
Rate Revolving Loans, specifying:
(A) the amount of the Borrowing, which in the case of
LIBOR Rate Revolving Loans shall be in an amount that is not
less than $1,000,000 or an integral multiple of $500,000 in
excess thereof or in the case of Base Rate Revolving Loans
shall be in an amount that is not less than $100,000 or an
integral multiple of $100,000 in excess thereof;
(B) the requested Funding Date, which shall be a
Business Day;
(C) whether the Revolving Loans requested are to be Base
Rate Revolving Loans or LIBOR Rate Revolving Loans; provided
that if such Borrower fails to specify whether any Revolving
Loans are to be Base Rate
CREDIT AGREEMENT - Page 2
Revolving Loans or LIBOR Rate Revolving Loans, such request
shall be deemed a request for Base Rate Revolving Loans;
(D) the duration of the Interest Period if the requested
Revolving Loans are to be LIBOR Rate Revolving Loans; provided
that if such Borrower fails to select the duration of the
Interest Period with respect to any requested LIBOR Rate
Revolving Loans, such Borrower shall be deemed to have
requested such Revolving Loans be made as LIBOR Rate Revolving
Loans with an Interest Period of one month in duration; and
(E) whether the proceeds of such Borrowing are to be
deposited to the Designated Account or sent by wire transfer
to a third party, in which case such Borrower shall provide
the Agent with wire transfer instructions satisfactory to the
Agent;
provided, however, that with respect to the Borrowing to be made on
the Closing Date, such Borrowing will consist of Base Rate Revolving
Loans only. With respect to any request for Base Rate Revolving
Loans, in lieu of delivering a Notice of Borrowing, a Borrower may
give the Agent telephonic notice of such request for advances to the
Designated Account not later than the required time specified in
this clause (i). The Agent at all times shall be entitled to rely on
such telephonic notice in making any such Revolving Loans,
regardless of whether any written confirmation is received by the
Agent.
(ii) Whenever a check or other item is presented to the Bank
for payment against the Designated Account in an amount greater than
the then available balance in such account, the presentation of such
check or other item shall be deemed to constitute a request by the
applicable Borrower for a Borrowing of a Base Rate Revolving Loan in
an amount equal to the excess of such check or other item over such
available balance.
(iii) Unless payment is otherwise timely made under this
Agreement, the becoming due of any amount required to be paid by the
Borrowers under this Agreement (including, without limitation, under
Section 1.4(e) and Section 3.7) shall be deemed to constitute a
request by the Parent for a Borrowing of a Base Rate Revolving Loan
in an amount equal to the amount then due.
(iv) The Borrowers shall have no right to request a LIBOR Rate
Revolving Loan while a Default or an Event of Default exists.
(d) Disbursement; Reliance upon Authority. The Borrowers shall
deliver to the Agent, prior to the Closing Date, a notice setting forth
the deposit account maintained with the Bank (the "Designated Account") to
which the Agent is authorized by the Borrowers to transfer the proceeds of
the Revolving Loans requested hereunder. The Borrowers may designate a
replacement deposit account from time to time by written notice to the
Agent.
CREDIT AGREEMENT - Page 3
Any designation by the Borrowers of the Designated Account must be
reasonably acceptable to the Agent. The Agent is entitled to rely
conclusively on any individual's request for Revolving Loans on behalf of
a Borrower, so long as the proceeds thereof are to be transferred to the
Designated Account or according to such other instructions as may be
provided to the Agent pursuant to Section 1.2(c)(E). The Agent shall have
no duty to verify the identity of any individual representing himself or
herself as a person authorized by any Borrower to make such requests on
its behalf.
(e) No Liability. The Agent shall not incur any liability to the
Loan Parties as a result of acting upon any notice referred to in Section
1.2(c) and Section 1.2(d), which the Agent reasonably believes to have
been given by an officer or other person duly authorized by a Borrower to
request Revolving Loans on its behalf or for otherwise acting under this
Section 1.2. The crediting of Revolving Loans to the Designated Account,
or wire transfer to such Person as a Borrower shall direct, shall
conclusively establish the obligation of the Borrowers to repay such
Revolving Loans as provided herein.
(f) Notice Irrevocable. Any Notice of Borrowing (or telephonic
notice in lieu thereof) made pursuant to Section 1.2(c) shall be
irrevocable and the Borrowers shall be bound to borrow the funds requested
therein in accordance therewith.
(g) The Agent's Election. Promptly after receipt of a Notice of
Borrowing (or telephonic notice in lieu thereof), the Agent shall elect in
its discretion to have the terms of Section 1.2(h) or the terms of Section
1.2(i) apply to such requested Borrowing. If the Bank declines in its sole
discretion to make a Non-Ratable Loan pursuant to Section 1.2(i), the
terms of Section 1.2(h) shall apply to the requested Borrowing.
(h) Making of Revolving Loans. If the Agent elects to have the terms
of this Section 1.2(h) apply to a requested Borrowing, then promptly after
receipt of a Notice of Borrowing or telephonic notice in lieu thereof, the
Agent shall notify the Lenders by telecopy, telephone, or e-mail of the
requested Borrowing. Each Lender shall transfer its Pro Rata Share of the
requested Borrowing to the Agent in immediately available funds, to the
account from time to time designated by the Agent, not later than 12:00
noon (Dallas, Texas time) on the applicable Funding Date. After the
Agent's receipt of all proceeds of such requested Borrowing, the Agent
shall make the proceeds of such requested Borrowing available to the
applicable Borrower on the applicable Funding Date by transferring same
day funds to the Designated Account; provided, however, that except as may
otherwise be provided by this Agreement the amount of Revolving Loans so
made on any date shall not exceed the Availability on such date.
(i) Making of Non-Ratable Loans. If the Agent elects, with the
consent of the Bank, to have the terms of this Section 1.2(i) apply to a
requested Borrowing, the Bank shall make a Revolving Loan in the amount of
such requested Borrowing available to the Borrowers on the applicable
Funding Date by transferring same day funds to the Designated Account.
Each Revolving Loan made solely by the Bank pursuant to this Section
1.2(i) is referred to hereinafter as a "Non-Ratable Loan", and such
Revolving Loans are collectively
CREDIT AGREEMENT - Page 4
referred to as the "Non-Ratable Loans." Each Non-Ratable Loan shall be
subject to all the terms and conditions applicable to other Revolving
Loans except that all payments thereon shall be payable to the Bank solely
for its own account. Subject to Section 11.1(a), the Agent shall not
request the Bank to make any Non-Ratable Loan if (A) the Agent has
received written notice from any Lender that one or more of the applicable
conditions precedent set forth in Article 8 will not be satisfied on the
requested Funding Date for the applicable Borrowing, or (B) the requested
Borrowing would exceed the Availability on the applicable Funding Date.
The Non-Ratable Loans shall be secured by the Agent's Liens in and to the
Collateral and shall constitute Base Rate Revolving Loans and Obligations
hereunder.
(j) Agent Advances. Subject to the limitations set forth below, the
Agent is authorized by the Borrowers and the Lenders, from time to time in
the Agent's sole discretion, (A) after the occurrence of a Default or an
Event of Default, or (B) at any time that any of the other conditions
precedent set forth in Article 8 have not been satisfied, to make Base
Rate Revolving Loans to the Borrowers or any of them, on behalf of the
Lenders in an aggregate amount outstanding at any time not to exceed ten
percent (10.0%) of the Borrowing Base which the Agent, in its reasonable
business judgment, deems necessary or desirable (1) to preserve or protect
the Collateral, or any portion thereof, (2) to enhance the likelihood of,
or maximize the amount of, repayment of the Loans and other Obligations,
or (3) to pay any other amount chargeable to the Borrowers pursuant to the
terms of this Agreement, including costs, fees, and expenses as described
in Section 13.7 (any of such advances are herein referred to as "Agent
Advances"); provided that the Majority Lenders may at any time revoke the
Agent's authorization to make Agent Advances. Any such revocation must be
in writing and shall become effective prospectively upon the Agent's
receipt thereof. Absent such revocation, the Agent's determination that
the making of an Agent Advance is required for any such purposes shall be
conclusive. The Agent Advances shall be secured by the Agent's Liens in
and to the Collateral and shall constitute Base Rate Revolving Loans and
Obligations hereunder.
Section 1.3 Reserved.
Section 1.4 Letters of Credit and Credit Support.
(a) Agreement to Issue or Cause to Issue. Subject to the terms and
conditions of this Agreement, the Agent agrees (i) to cause the Letter of
Credit Issuer to issue for the account of any of the Borrowers (whether
one or more) one or more commercial/documentary and standby letters of
credit (each a "Letter of Credit" and collectively, the ""Letters of
Credit") and/or (ii) to provide credit support or other enhancement to an
alternate issuer acceptable to the Agent, which issues a Letter of Credit
for the account of a Borrower (any such credit support or enhancement
being herein referred to as a "Credit Support") from time to time during
the term of this Agreement.
(b) Amounts; Outside Expiration Date. The Agent shall not have any
obligation to issue or cause to be issued any Letter of Credit or Credit
Support at any time if: (i) the maximum face amount of the requested
Letter of Credit or Credit Support is greater than the
CREDIT AGREEMENT - Page 5
Unused Letter of Credit Subfacility at such time; (ii) the maximum undrawn
amount of the requested Letter of Credit or Credit Support and all
commissions, fees, and charges due from such Borrower in connection with
the opening thereof would exceed the Availability at such time; or (iii)
such Letter of Credit or Credit Support has an expiration date later than
thirty (30) days prior to the Stated Termination Date or more than twelve
(12) calendar months from the date of issuance for standby letters of
credit and six (6) calendar months from the date of issuance for
commercial/documentary letters of credit.
(c) Other Conditions. In addition to being subject to the
satisfaction of the applicable conditions precedent contained in Article
8, the obligation of the Agent to cause to be issued any Letter of Credit
or Credit Support is subject to the following conditions precedent having
been satisfied in a manner reasonably satisfactory to the Agent:
(i) the Borrowers shall have delivered to the Letter of Credit
Issuer, at such times and in such manner as the Letter of Credit
Issuer may prescribe, an application in form and substance
satisfactory to the Letter of Credit Issuer and reasonably
satisfactory to the Agent for the issuance of the Letter of Credit
or Credit Support and such other documents as may be required
pursuant to the terms thereof, and the form, terms, and purpose of
the proposed Letter of Credit or Credit Support shall be
satisfactory to the Agent and the Letter of Credit Issuer (provided
that in the event any term of such application or any other document
is inconsistent with the terms of this Agreement and the Letter of
Credit Issuer is either the same Person as the Agent or any Lender,
then the terms of this Agreement shall be controlling); and
(ii) as of the date of issuance, no order of any court,
arbitrator, or Governmental Authority shall purport by its terms to
enjoin or restrain money center banks generally from issuing letters
of credit of the type and in the amount of the proposed Letter of
Credit or letter of credit for which the proposed Credit Support has
been requested, and no law, rule, or regulation applicable to money
center banks generally and no request or directive (whether or not
having the force of law) from any Governmental Authority with
jurisdiction over money center banks generally shall prohibit, or
request that the proposed Letter of Credit Issuer refrain from, the
issuance of letters of credit generally or the issuance of such
proposed Letters of Credit or Credit Support.
(d) Issuance of Letters of Credit and Credit Support.
(i) Request for Issuance. Any Borrower that wishes to cause
the issuance of a Letter of Credit or any Credit Support must notify
the Agent of such request for issuance at least three (3) Business
Days prior to the proposed issuance date. Such notice shall be
irrevocable and must specify the original face amount of the Letter
of Credit or Credit Support requested, the Business Day of issuance
of such requested Letter of Credit or Credit Support, whether such
Letter of Credit or Credit Support may be drawn in a single or in
partial draws, the Business Day on which the requested Letter of
Credit or Credit Support is to expire, the purpose for which such
CREDIT AGREEMENT - Page 6
Letter of Credit or Credit Support is to be issued, and the
beneficiary of the requested Letter of Credit or Credit Support. The
applicable Borrower shall attach to such notice the proposed form of
the Letter of Credit or letter of credit for which such Credit
Support is requested.
(ii) Responsibilities of the Agent; Issuance. The Agent shall
determine, as of the Business Day immediately preceding the
requested issuance date of the Letter of Credit or Credit Support
set forth in the notice from a Borrower pursuant to Section
1.4(d)(i), (A) the amount of the Unused Letter of Credit Subfacility
and (B) the Availability as of such date. If the face amount of the
requested Letter of Credit or Credit Support is not greater than the
Unused Letter of Credit Subfacility and the amount of such requested
Letter of Credit or Credit Support and all commissions, fees, and
charges due from the Borrower in connection with the opening thereof
does not exceed the Availability, the Agent shall cause the Letter
of Credit Issuer to issue the requested Letter of Credit or Credit
Support on the requested issuance date so long as the other
conditions hereof are met.
(iii) Extensions and Amendments. The Agent shall not be
obligated to cause the Letter of Credit Issuer to extend or amend
any Letter of Credit or Credit Support issued pursuant hereto unless
the requirements of this Section 1.4 are met as though a new Letter
of Credit or Credit Support were being requested and issued. With
respect to any Letter of Credit or Credit Support which contains any
"evergreen" or automatic renewal provision, each Lender shall be
deemed to have consented to any such extension or renewal unless
such Lender shall have provided to the Agent, written notice that it
declines to consent to any such extension or renewal at least thirty
(30) days prior to the date on which the Letter of Credit Issuer is
entitled to decline to extend or renew the Letter of Credit or
Credit Support, provided that, notwithstanding the foregoing, if all
of the requirements of this Section 1.4 are met and no Default or
Event of Default has occurred and is continuing, no Lender may
decline to consent to any such extension or renewal.
(e) Payments Pursuant to Letters of Credit and Credit Support. The
Borrowers agree to reimburse the Letter of Credit Issuer immediately for
any draw under any Letter of Credit and the Agent, for the account of the
Lenders (as applicable) upon any payment pursuant to any Credit Support,
and to pay the Letter of Credit Issuer the amount of all other charges and
fees payable to the Letter of Credit Issuer under or in connection with
any Letter of Credit immediately when due, irrespective of any claim,
setoff, defense, or other right which any Borrower may have at any time
against the Letter of Credit Issuer or any other Person. Each drawing
under any Letter of Credit or Credit Support shall constitute a request by
the Borrower at whose request such Letter of Credit or Credit Support was
issued for a Borrowing of a Base Rate Revolving Loan in the amount of such
drawing. The Funding Date with respect to such Borrowing shall be the date
of such drawing.
CREDIT AGREEMENT - Page 7
(f) Indemnification; Exoneration; Power of Attorney.
(i) Indemnification. In addition to amounts payable as
elsewhere provided in this Section 1.4, each Loan Party agrees to
protect, indemnify, pay, and save the Lenders, the Agent and the
Letter of Credit Issuer harmless from and against any and all
claims, demands, liabilities, damages, losses, costs, charges, and
expenses (including attorneys' fees) which any Lender, the Agent or
the Letter of Credit Issuer may incur or be subject to as a
consequence, direct or indirect, of the issuance of any Letter of
Credit or the provision of any Credit Support or enhancement in
connection therewith other than any such amount arising from the
Lenders', the Agent's, or the Letter of Credit Issuer's, as
applicable, gross negligence or intentional misconduct. The Loan
Parties' obligations under this Section 1.4(f) shall survive payment
of all other Obligations.
(ii) Assumption of Risk by the Loan Parties. As among the Loan
Parties, the Lenders, the Agent and the Letter of Credit Issuer, the
Loan Parties assume all risks of the acts and omissions of, or
misuse of any of the Letters of Credit by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in
limitation of the foregoing, the Lenders, the Agent and the Letter
of Credit Issuer shall not be responsible for: (A) the form,
validity, sufficiency, accuracy, genuineness, or legal effect of any
document submitted by any Person in connection with the application
for and issuance of and presentation of drafts with respect to any
of the Letters of Credit, even if it should prove to be in any or
all respects invalid, insufficient, inaccurate, fraudulent, or
forged; (B) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any
Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (C) the failure of the beneficiary of
any Letter of Credit to comply duly with conditions required in
order to draw upon such Letter of Credit; (D) errors, omissions,
interruptions, or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex, or otherwise, whether or
not they be in cipher; (E) errors in interpretation of technical
terms; (F) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of
Credit or of the proceeds thereof; (G) the misapplication by the
beneficiary of any Letter of Credit of the proceeds of any drawing
under such Letter of Credit; (H) any consequences arising from
causes beyond the control of the Lenders or the Agent, including any
act or omission, whether rightful or wrongful, of any present or
future de jure or de facto Governmental Authority or (I) the Letter
of Credit Issuer's honor of a draw for which the draw or any
certificate fails to comply in any respect with the terms of the
Letter of Credit, provided, that the forgoing shall not absolve the
Letter of Credit Issuer for any matter described in this clause (I)
caused by the Letter of Credit Issuer's gross negligence or
intentional misconduct. None of the foregoing shall affect, impair,
or prevent the vesting of any rights or powers of the Agent, any
Lender or the Letter of Credit Issuer under this Section 1.4(f).
CREDIT AGREEMENT - Page 8
(iii) Exoneration. Without limiting the foregoing, no action
or omission whatsoever by the Agent or any Lender (excluding any
Lender in its capacity as the Letter of Credit Issuer) under or in
connection with any of the Letters of Credit or Credit Support or
any related matters shall result in any liability of the Agent or
any Lender to any Loan Party, or relieve such Loan Party of any of
its obligations hereunder to any such Person.
(iv) Rights Against Letter of Credit Issuer. Nothing contained
in this Agreement is intended to limit any Borrower's rights, if
any, with respect to the Letter of Credit Issuer which arise as a
result of the letter of credit application and related documents
executed by and between such Borrower and the Letter of Credit
Issuer.
(v) Account Party. Each Borrower hereby authorizes and directs
the Letter of Credit Issuer to name any Consolidated Member,
excluding Unrestricted Subsidiaries, as the "Account Party" in any
Letter of Credit and to deliver to the Agent all instruments,
documents, and other writings and property received by the Letter of
Credit Issuer pursuant to each such Letter of Credit, and to accept
and rely upon the Agent's instructions and agreements with respect
to all matters arising in connection with each such Letter of Credit
or the application therefor.
(vi) Power of Attorney. In connection with all Inventory
financed for a Loan Party by any Letter of Credit, each Loan Party
hereby appoints the Agent, or the Agent's designee, as its attorney,
with full power and authority: (A) to sign and/or endorse such Loan
Party's name upon any warehouse or other receipts; (B) to sign such
Loan Party's name on bills of lading and other negotiable and
non-negotiable documents; (C) to clear Inventory through customs in
the Agent's such Loan Party's name, and to sign and deliver to
customs officials powers of attorney in such Loan Parties' name for
such purpose; (D) to complete in such Loan Party's or the Agent's
name, any order, sale, or transaction, obtain the necessary
documents in connection therewith, and collect the proceeds thereof;
and (E) to do such other acts and things as are necessary in order
to enable the Agent to obtain possession or control of such
Inventory and to obtain payment of the Obligations. Neither the
Agent nor its designee, as such Loan Party's attorney, will be
liable for any acts or omissions, nor for any error of judgment or
mistakes of fact or law other than for gross negligence or willful
misconduct. This power, being coupled with an interest, is
irrevocable until all Obligations have been paid and satisfied.
(vii) Control of Inventory. In connection with all Inventory
of a Loan Party financed by Letters of Credit, the Loan Parties
will, at the Agent's request, instruct all suppliers, carriers,
forwarders, customs brokers, warehouses, or others receiving or
holding cash, checks, Inventory, documents, or instruments in which
the Agent holds a security interest to deliver them to the Agent
and/or subject to the Agent's order, and if they shall come into any
Loan Parties' possession, to deliver them, upon request, to the
Agent in their original form. Loan Parties shall also, at the
Agent's
CREDIT AGREEMENT - Page 9
request, designate the Agent as the consignee on all bills of lading
and other negotiable and non-negotiable documents.
(g) Supporting Letter of Credit; Cash Collateral. If,
notwithstanding the provisions of Section 1.4(b) and Section 10.1, any
Letter of Credit or Credit Support is outstanding upon the termination of
this Agreement, then upon such termination the Borrowers shall deposit
with the Agent, for the benefit of the Agent and the Lenders, with respect
to each Letter of Credit or Credit Support then outstanding, as the Agent
in its discretion shall specify, either (i) a standby letter of credit (a
"Supporting Letter of Credit") in form and substance satisfactory to the
Agent, issued by an issuer satisfactory to the Agent in an amount equal to
the greatest amount for which such Letter of Credit or such Credit Support
may be drawn plus any fees and expenses associated with such Letter of
Credit or such Credit Support, under which Supporting Letter of Credit the
Agent is entitled to draw amounts necessary to reimburse the Agent and the
Lenders for payments to be made by the Agent and the Lenders under such
Letter of Credit or Credit Support and any fees and expenses associated
with such Letter of Credit or Credit Support or (ii) cash in an amount
necessary to reimburse the Agent and the Lenders for payments to be made
by the Agent and the Lenders under such Letter of Credit or Credit Support
and any fees and expenses associated with such Letter of Credit or Credit
Support. Such Supporting Letter of Credit or deposit of cash shall be held
by the Agent, for the benefit of the Agent and the Lenders, as security
for, and to provide for the payment of, the aggregate undrawn amount of
such Letters of Credit or such Credit Support remaining outstanding.
Section 1.5 Bank Products. The Loan Parties may request and the Agent may,
in its sole and absolute discretion, arrange for any Consolidated Member,
excluding Unrestricted Subsidiaries, to obtain Bank Products from the Bank or
the Bank's Affiliates although the Loan Parties are not required to do so except
as required by Section 7.25. To the extent Bank Products are provided by an
Affiliate of the Bank, the Loan Parties agree to indemnify and hold the Agent,
the Bank, and the Lenders harmless from any and all costs and obligations now or
hereafter incurred by the Agent, the Bank, or any of the Lenders which arise
from any indemnity given by the Agent to its Affiliates related to such Bank
Products; provided, however, nothing contained herein is intended to limit any
Consolidated Member's rights, with respect to the Bank or its Affiliates, if
any, which arise as a result of the execution of documents by and between such
Consolidated Member and the Bank or its Affiliates which relate to Bank
Products. The agreement contained in this Section shall survive termination of
this Agreement. Each Loan Party acknowledges and agrees that the obtaining of
Bank Products from the Bank or the Bank's Affiliates (a) is in the sole and
absolute discretion of the Bank or the Bank's Affiliates, and (b) is subject to
all rules and regulations of the Bank or the Bank's Affiliates.
CREDIT AGREEMENT - Page 10
ARTICLE 2
INTEREST AND FEES
Section 2.1 Interest.
(a) Interest Rates. All outstanding Obligations shall bear interest
on the unpaid principal amount thereof (including, to the extent permitted
by law, on accrued interest thereon not paid when due) from the date made
until paid in full in cash at a rate determined by reference to the Base
Rate or the LIBOR Rate, as applicable, plus the Applicable Margin as set
forth below, but not to exceed the Maximum Rate. Any of the Loans may be
converted into, or continued as LIBOR Rate Loans, subject to and in the
manner provided in Section 2.2. If at any time Loans are outstanding with
respect to which a Borrower has not delivered to the Agent a notice
specifying the basis for determining the interest rate applicable thereto
in accordance herewith, such Loans shall be Base Rate Loans and bear
interest at a rate determined by reference to the Base Rate until notice
to the contrary has been given to the Agent in accordance with this
Agreement and such notice has become effective. Except as otherwise
provided herein, the outstanding Obligations shall bear interest as
follows:
(i) For all Base Rate Revolving Loans and other Obligations
(other than LIBOR Rate Loans) at a fluctuating per annum rate equal
to the lesser of (A) the Base Rate, plus the Applicable Margin or
(B) the Maximum Rate; and
(ii) For all LIBOR Rate Revolving Loans at a per annum rate
equal to the lesser of (A) the LIBOR Rate, plus the Applicable
Margin or (B) the Maximum Rate.
Each change in the Base Rate shall be reflected in the interest rate
described in clause (i) preceding as of the effective date of such change.
Subject to Section 2.3, all interest charges shall be computed on the
basis of a year of 360 days and actual days elapsed (which results in more
interest being paid than if computed on the basis of a 365-day year).
(b) Default Rate. During the existence of any Default or Event of
Default if the Agent or the Majority Lenders in their discretion so elect,
then, while any such Default or Event of Default exists, the Obligations
shall bear interest at a rate per annum equal to the lesser of (i) the
Default Rate applicable thereto or (ii) the Maximum Rate.
(c) Interest Periods. After giving effect to any Borrowing,
conversion, or continuation of any LIBOR Rate Loan, there may not be more
than five (5) different Interest Periods in effect hereunder.
Section 2.2 Continuation and Conversion Elections.
(a) A Borrower may upon irrevocable written notice to the Agent in
accordance with Section 2.2(b):
CREDIT AGREEMENT - Page 11
(i) elect, as of any Business Day, in the case of Base Rate
Loans to convert any such Base Rate Loans (or any part thereof in an
amount not less than $1,000,000, or that is in an integral multiple
of $500,000 in excess thereof) into LIBOR Rate Loans; or
(ii) elect, as of the last day of the applicable Interest
Period, to continue any LIBOR Rate Loans having Interest Periods
expiring on such day (or any part thereof in an amount not less than
$1,000,000, or that is in an integral multiple of $500,000 in excess
thereof) as LIBOR Rate Loans;
provided, that if at any time the aggregate amount of LIBOR Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion
of part thereof to be less than $1,000,000, such LIBOR Rate Loans shall,
effective as of the expiration date of the applicable Interest Period,
automatically convert into Base Rate Loans; provided, further, that if the
notice shall fail to specify the duration of the Interest Period, such
Interest Period shall be one month.
(b) The Borrowers shall deliver a notice of continuation/conversion
in the form of Exhibit D (a "Notice of Continuation/Conversion") to the
Agent not later than 11:00 a.m. (Dallas, Texas time) at least three (3)
Business Days in advance of the Continuation/Conversion Date, if the Loans
are to be converted into or continued as LIBOR Rate Loans and specifying:
(i) the proposed Continuation/Conversion Date;
(ii) the Loans and the aggregate amount of such Loans to be
converted or continued;
(iii) the type of Loans resulting from the proposed conversion
or continuation; and
(iv) the duration of the requested Interest Period, provided,
however, the Borrower may not select an Interest Period that ends
after the Stated Termination Date.
(c) If upon the expiration of any Interest Period applicable to
LIBOR Rate Loans, the Borrowers have failed to timely select a new
Interest Period to be applicable to such LIBOR Rate Loans or if any
Default or Event of Default then exists, the Borrowers shall be deemed to
have elected to convert such LIBOR Rate Loans into Base Rate Loans
effective as of the expiration date of such Interest Period.
(d) The Agent will promptly notify each Lender of its receipt of a
Notice of Continuation/Conversion. All conversions and continuations shall
be made ratably according
CREDIT AGREEMENT - Page 12
to the respective outstanding principal amounts of the Loans with respect
to which such notice was given held by each Lender.
Section 2.3 Maximum Interest Rate. If the Interest Rate, absent the
limitation set forth in this Section 2.3, would have exceeded the Maximum Rate,
then the Interest Rate shall be the Maximum Rate, and, if in the future, the
Interest Rate would otherwise be less than the Maximum Rate, then the Interest
Rate shall remain at the Maximum Rate until such time as the amount of interest
paid hereunder equals the amount of interest which would have been paid if the
same had not been limited by the Maximum Rate. In the event that, upon payment
in full of the Obligations, the total amount of interest paid or accrued under
the terms of this Agreement is less than the total amount of interest which
would, but for this Section 2.3, have been paid or accrued if the Interest Rate
otherwise set forth in this Agreement had at all times been in effect, then the
Borrowers shall, to the extent permitted by applicable law, pay the Agent, for
the account of the Lenders, an amount equal to the excess of (a) the lesser of
(i) the amount of interest which would have been paid or accrued if the Maximum
Rate had, at all times, been in effect or (ii) the amount of interest which
would have been paid or accrued had the interest rate otherwise set forth in
this Agreement, at all times, been in effect over (b) the amount of interest
actually paid or accrued under this Agreement. The Agent, each Lender, and each
Borrower acknowledges, agrees, and declares that it is its intention to
expressly comply with all Requirements of Law in respect of limitations on the
amount or rate of interest that can legally be contracted for, charged, or
received under or in connection with the Loan Documents. Notwithstanding
anything to the contrary contained in any Loan Document (even if any such
provision expressly declares that it controls all other provisions of the Loan
Documents), in no contingency or event whatsoever shall the amount of interest
(including the aggregate of all charges, fees, benefits, or other compensation
which constitutes interest under any Requirement of Law) under the Loan
Documents paid by any Borrower, received by the Agent, the Letter of Credit
Issuer, or any Lender, agreed to be paid by any Borrower, or requested or
demanded to be paid by the Agent, the Letter of Credit Issuer, or any Lender,
exceed the Maximum Rate, and all provisions of the Loan Documents in respect of
the contracting for, charging, or receiving compensation for the use,
forbearance, or detention of money shall be limited as provided by this Section
2.3. In the event any such interest is paid to the Agent, the Letter of Credit
Issuer, or any Lender by the Borrowers, or any of them, in an amount or at a
rate which would exceed the Maximum Rate, the Agent, the Letter of Credit
Issuer, or such Lender, as the case may be, shall automatically apply such
excess to any unpaid amount of the Obligations other than interest, in inverse
order of maturity, or if the amount of such excess exceeds said unpaid amount,
such excess shall be paid to the paying Borrowers or Borrower, as applicable.
All interest paid, or agreed to be paid, by any Borrower, or taken, reserved, or
received by the Agent, the Letter of Credit Issuer, or any Lender, shall be
amortized, prorated, spread, and allocated in respect of the Obligations
throughout the full term of this Agreement. Notwithstanding any provision
contained in any of the Loan Documents, or in any other related documents
executed pursuant hereto, neither the Agent, the Letter of Credit Issuer, nor
any Lender shall ever be entitled to charge, receive, take, reserve, collect, or
apply as interest any amount which, together with all other interest under the
Loan Documents would result in a rate of interest under the Loan Documents in
excess of the Maximum Rate and, in the event the Agent, the Letter of Credit
Issuer, or any Lender ever charges, receives, takes, reserves, collects, or
applies any amount in respect of the Borrowers, or any of them, that otherwise
would, together with all other interest under the Loan Documents, be in excess
of the Maximum Rate, such
CREDIT AGREEMENT - Page 13
amount shall automatically be deemed to be applied in reduction of the unpaid
principal balance of the Obligations and, if such principal balance is paid in
full, any remaining excess shall forthwith be paid to the applicable Borrowers
or Borrower. The Borrowers, the Agent, the Letter of Credit Issuer, and the
Lenders shall, to the maximum extent permitted under any Requirement of Law, (A)
characterize any non-principal payment as a standby fee, commitment fee,
prepayment charge, delinquency charge, expense, or reimbursement for a
third-party expense rather than as interest and (B) exclude prepayments,
acceleration, and the effects thereof. Nothing in any Loan Document shall be
construed or so operate as to require or obligate the Borrowers, or any of them,
to pay any interest, fees, costs, or charges greater than is permitted by any
Requirement of Law. Subject to the foregoing, the Borrowers hereby agree that
the actual effective rate of interest from time to time existing under the Loan
Documents, including all amounts agreed to by the Borrowers or charged or
received by the Agent, the Letter of Credit Issuer, or the Lenders pursuant to
and in accordance with the Loan Documents, which may be deemed to be interest
under any Requirement of Law, shall be deemed to be a rate which is agreed to
and stipulated by the Borrowers and the Lenders in accordance with Requirements
of Law.
Section 2.4 Reserved.
Section 2.5 Unused Line Fee. Subject to Section 2.3, until the Loans have
been paid in full and this Agreement terminated, the Borrowers agree to pay to
the Agent, for the account of the Lenders, in accordance with their respective
Pro Rata Shares, on the first day of each calendar month and on the Termination
Date, an unused line fee (the "Unused Line Fee") equal to the Unused Line Fee
Percentage multiplied by the amount by which the Maximum Revolver Amount
exceeded the sum of the average daily outstanding amount of the Revolving Loans
and the average daily undrawn face amount of all outstanding Letters of Credit
and Credit Support during the immediately preceding month or shorter period if
calculated for the first month after the Closing Date or on the Termination
Date. Subject to Section 2.3 the Unused Line Fee shall be computed on the basis
of a 360 day year for the actual number of days elapsed. For purposes of
calculating the Unused Line Fee pursuant to this Section 2.5, any payment
received by the Agent (if received prior to 2:00 p.m. Dallas, Texas time) shall
be deemed to be credited to the Borrowers' Loan Account on the date such payment
is received by the Agent.
Section 2.6 Letter of Credit Fee. Subject to Section 2.3, the Borrowers
agree to pay to the Agent, for the account of the Lenders, in accordance with
their respective Pro Rata Shares, for each Letter of Credit or Credit Support, a
fee (the "Letter of Credit Fee") equal to the Letter of Credit Fee Percentage,
or during the existence of any Default or Event of Default the Default Rate with
respect to Letters of Credit, multiplied by the undrawn face amount of each
Letter of Credit or Credit Support, plus all out-of-pocket costs, fees, and
expenses incurred by the Letter of Credit Issuer in connection with the
application for, processing of, issuance of, or amendment to any Letter of
Credit or Credit Support, which costs, fees, and expenses shall include a
"fronting fee" in an amount equal to one-eighth percent (0.125%) of the face
amount of such Letter of Credit or Credit Support, payable to the Letter of
Credit Issuer on the date of issuance of each Letter of Credit or Credit
Support. The Letter of Credit Fee shall be payable monthly in arrears on the
first day of each month following any month in which a Letter of Credit or
Credit Support was issued and/or in which a Letter of Credit or Credit Support
remained outstanding and on the Termination Date. Subject to
CREDIT AGREEMENT - Page 14
Section 2.3, the Letter of Credit Fee shall be computed on the basis of a 360
day year for the actual number of days elapsed.
Section 2.7 Other Fees. The Borrowers agree to pay the Agent all other
fees and expenses as set forth in the Agent's Letter.
Section 2.8 Collections Administration. In order to reimburse the Agent or
the Bank, as applicable, for the cost of delays in the collection and clearance
of remittances, the Borrowers shall pay to the Agent or the Bank, as applicable,
for its own account, respectively, interest at the rate applicable to Base Rate
Loans for one Business Day on the amount of all uncollected funds applied to the
Revolving Loans or transferred to the Designated Account as provided by Section
2.11(f) of the Security Agreement.
ARTICLE 3
PAYMENTS AND PREPAYMENTS
Section 3.1 Revolving Loans. The Borrowers shall repay the outstanding
principal balance of the Revolving Loans, together with all other Obligations,
including all accrued and unpaid interest thereon, on the Termination Date. The
Borrowers may prepay the Revolving Loans at any time and reborrow subject to the
terms of this Agreement; provided that with respect to any LIBOR Rate Revolving
Loans prepaid prior to the expiration date of the Interest Period applicable
thereto, the Borrowers shall pay to the Agent, for the account of the Lenders,
the amounts described in Section 4.4. In addition, and without limiting the
generality of the foregoing, upon demand the Borrowers shall pay to the Agent,
for account of the Lenders, the amount, if any and without duplication, by which
the Aggregate Revolver Outstandings exceeds the lesser of the Borrowing Base or
the Maximum Revolver Amount. Accrued interest on the Revolving Loans shall be
due and payable in arrears (a) in the case of Base Rate Revolving Loans, on the
first day of each calendar month and on the Termination Date and (b) in the case
of LIBOR Rate Revolving Loans and with respect to each such Revolving Loan (i)
on the last day of the Interest Period with respect thereto and (ii) on the
Termination Date.
Section 3.2 Termination of Total Facility.
(a) The Borrowers may reduce the Maximum Revolver Amount to an
amount equal to $75,000,000 at any time effective upon five (5) Business
Days prior written notice thereof to the Agent and the Lenders, provided
that any such reduction (i) shall be in a single reduction and (ii) shall
be permanent. The Lenders shall have no obligation at any time to increase
the Maximum Revolver Amount following any such reduction.
(b) The Borrowers may terminate this Agreement upon at least thirty
(30) days prior written notice thereof to the Agent and the Lenders, upon
(a) the payment in full of all outstanding Revolving Loans, together with
accrued and unpaid interest thereon, and the cancellation and return of
all outstanding Letters of Credit and Credit Support (or alternatively,
with respect to each such Letter of Credit or Credit Support, the
furnishing to
CREDIT AGREEMENT - Page 15
the Agent, in the Agent's discretion, of a Supporting Letter of Credit or
cash deposit, in each case in amounts and in the manner required by
Section 1.4(g)), (b) the payment of the early termination fee set forth in
the following sentence, (c) the payment in full in cash of all
reimbursable expenses and other Obligations together with accrued and
unpaid interest thereon, and (e) any amount due under Section 3.5. Subject
to Section 2.3, if this Agreement is terminated at any time prior to the
Stated Termination Date, whether pursuant to this Section or pursuant to
Section 9.2, the Borrowers shall pay to the Agent, for the account of the
Lenders, an early termination fee determined in accordance with the
following table:
=========================================================================
Period during which early Early Termination Fee
termination occurs
=========================================================================
On or prior to the first Anniversary 0.50% of the Total Facility
Date
=========================================================================
After the first Anniversary Date 0.25% of the Total Facility
but on or prior to the second
Anniversary Date
=========================================================================
Notwithstanding the foregoing, no such early termination fee shall be payable in
the event this Agreement is terminated in connection with refinancing of the
Obligations in a transaction in which the Bank or any of its Affiliates provides
or arranges replacement financing or acts as underwriter or arranger of any
public offering of debt or equity securities of the Parent.
Section 3.3 Payments from Distributions or Loans from Subsidiaries. All
proceeds or other cash payments received by a Borrower constituting proceeds of
a Distribution, loan, or other advance to such Borrower, other than such
proceeds which are Revolving Loan proceeds loaned from one Borrower to another
Borrower, shall be paid to the Agent, promptly upon such receipt, for (i)
application to the Revolving Loans if Availability Without Regard to Line
Constraint, at the time of such receipt, is equal to or less than $40,000,00 or
(ii) transfer to the Designated Account if Availability Without Regard to Line
Constraint, at the time of such receipt, is greater than $40,000,00.
Section 3.4 Payments from Asset Dispositions. All Net Proceeds of any
Asset Disposition by a Consolidated Member received by (i) a Borrower (other
than proceeds of the sale by a Loan Party of Equipment, in the ordinary course
of business, which are simultaneously reinvested in acquiring replacement
Equipment of like kind, in the ordinary course of business) shall be paid to the
Agent, promptly upon such receipt, for (A) application to the Revolving Loans if
Availability Without Regard to Line Constraint, at the time of such receipt, is
equal to or less than $40,000,000 or (B) transfer to the Designated Account if
Availability Without Regard to Line Constraint, at the time of such receipt, is
greater than $40,000,00, or (ii) a Loan Party other than a Borrower shall be
deposited, promptly upon receipt, to a bank account of such Loan Party subject
to a Blocked Account Agreement (or in the case of a Loan Party other than a
Borrowing Base Party, as may otherwise be agreed by the Agent in its sole
discretion) and the requirements of Section 7.26. No provision
CREDIT AGREEMENT - Page 16
contained in this Section 3.4 shall constitute a consent to an asset disposition
that is otherwise not permitted by the terms of this Agreement.
Section 3.5 LIBOR Rate Loan Prepayments. In connection with any
prepayment, if any LIBOR Rate Loans are prepaid prior to the expiration date of
the Interest Period applicable thereto, the Borrowers shall pay to the Agent,
for the benefit of the Lenders, the amounts described in Section 4.4.
Section 3.6 Payments by the Borrowers.
(a) All payments to be made by the Borrowers shall be made without
setoff, recoupment, or counterclaim. Without in any way limiting Section
2.11 of the Security Agreement, except as otherwise expressly provided
herein, all payments by the Borrowers shall be made to the Agent for the
account of the Lenders, to the account designated by the Agent and shall
be made in Dollars and in immediately available funds, no later than 2:00
p.m. (Dallas, Texas time) on the date specified herein. Any payment
received by the Agent after such time shall be deemed to have been
received on the following Business Day and any applicable interest or fee
shall continue to accrue.
(b) Subject to the provisions set forth in the definition of
Interest Period, whenever any payment is due on a day other than a
Business Day, such payment shall be due on the following Business Day, and
such extension of time shall in such case be included in the computation
of interest or fees, as the case may be.
Section 3.7 Payments as Revolving Loans. At the election of the Agent, all
payments of principal, interest, reimbursement obligations in connection with
Letters of Credit and Credit Support, fees, premiums, reimbursable expenses
(including, without limitation, all reimbursement for expenses pursuant to
Section 13.7), and other sums payable hereunder, may be paid from the proceeds
of Revolving Loans made hereunder whether made following a request by the
Borrowers pursuant to Section 1.2 or a deemed request as provided in this
Section 3.7. The Borrowers hereby irrevocably authorize the Agent to charge the
Loan Account for the purpose of paying all amounts from time to time due
hereunder, including, without limitation, reimbursing expenses pursuant to
Section 13.7, and agree that all such amounts charged shall constitute Revolving
Loans (including Non-Ratable Loans and Agent Advances) and that all such
Revolving Loans shall be deemed to have been requested pursuant to Section 1.2.
Section 3.8 Apportionment, Application, and Reversal of Payments.
Principal and interest payments shall be apportioned ratably among the Lenders
(according to the unpaid principal balance of the Loans to which such payments
relate held by each Lender) and payments of the fees shall, as applicable, be
apportioned ratably among the Lenders, except for fees payable solely to the
Agent and the Letter of Credit Issuer and except as provided in Section 11.1(b).
All payments shall be remitted to the Agent and all such payments not relating
to principal or interest of specific Loans, or not constituting payment of
specific fees, and all proceeds of any Loan Party's Accounts or any other
Collateral received by the Agent, shall be applied, ratably, subject to the
provisions of this Agreement, first, to pay any fees, indemnities, or expense
reimbursements then due to the Agent
CREDIT AGREEMENT - Page 17
from the Obligated Parties, second, to pay any fees or expense reimbursements
then due to the Lenders from the Obligated Parties, third, to pay interest due
in respect of the Loans, including Non-Ratable Loans and Agent Advances, fourth,
to pay or prepay principal of the Non-Ratable Loans and the Agent Advances,
fifth, to pay or prepay principal of the Revolving Loans (other than Non-Ratable
Loans and Agent Advances) and unpaid reimbursement obligations in respect of
Letters of Credit and Credit Support, sixth, to pay an amount to the Agent equal
to all outstanding Letter of Credit Obligations to be held as cash collateral
for such Obligations, and seventh, to the payment of any other Obligation
including any amounts relating to Bank Products due to the Agent or any Lender.
Notwithstanding anything to the contrary contained in this Agreement, unless so
directed by a Borrower, or unless an Event of Default is in existence, neither
the Agent nor any Lender shall apply any payment which it receives to any LIBOR
Rate Loan, except (a) on the expiration date of the Interest Period applicable
to any such LIBOR Rate Loan, or (b) in the event, and only to the extent, that
there are no outstanding Base Rate Loans and, in any event, the Borrowers shall
pay the LIBOR breakage losses in accordance with Section 4.4. The Agent and the
Lenders shall have the continuing and exclusive right to apply and reverse and
reapply any and all such proceeds and payments to any portion of the Obligations
in accordance with the terms of this Agreement.
Section 3.9 Indemnity for Returned Payments. If after receipt of any
payment which is applied to the payment of all or any part of the Obligations,
the Agent, any Lender, the Bank, or any Affiliate of the Bank is for any reason
compelled to surrender such payment or proceeds to any Person because such
payment or application of proceeds is invalidated, declared fraudulent, set
aside, determined to be void or voidable as a preference, impermissible setoff,
or a diversion of trust funds, or for any other reason, then the Obligations or
part thereof intended to be satisfied shall be revived and continued and this
Agreement shall continue in full force as if such payment or proceeds had not
been received by the Agent or such Lender and the Borrowers shall be liable to
pay to the Agent and the Lenders, and each Borrower hereby indemnifies the Agent
and the Lenders and holds the Agent and the Lenders harmless for the amount of
such payment or proceeds surrendered. The provisions of this Section 3.9 shall
be and remain effective notwithstanding any contrary action which may have been
taken by the Agent or any Lender in reliance upon such payment or application of
proceeds, and any such contrary action so taken shall be without prejudice to
the Agent's and the Lenders' rights under this Agreement and shall be deemed to
have been conditioned upon such payment or application of proceeds having become
final and irrevocable. The provisions of this Section 3.9 shall survive the
termination of this Agreement.
Section 3.10 The Agent's and the Lenders' Books and Records; Monthly
Statements. The Agent shall record the principal amount of the Loans owing to
each Lender, the undrawn face amount of all outstanding Letters of Credit and
Credit Support and the aggregate amount of unpaid reimbursement obligations
outstanding with respect to the Letters of Credit and Credit Support from time
to time on its books. In addition, each Lender may note the date and amount of
each payment or prepayment of principal of such Lender's Loans in its books and
records. Failure by the Agent or any Lender to make any such notation shall not
affect the obligations of any Obligated Party with respect to the Loans, the
Letters of Credit, or any Credit Support. The Loan Parties agree that the
Agent's and each Lender's books and records showing the Obligations and the
transactions pursuant to this Agreement and the other Loan Documents shall be
admissible in any action or proceeding arising therefrom, and shall constitute
presumptive proof thereof, irrespective of whether any
CREDIT AGREEMENT - Page 18
Obligation is also evidenced by a promissory note or other instrument. The Agent
will provide to the Borrowers a monthly statement of Loans, payments, and other
transactions pursuant to this Agreement. Absent manifest error, such statement
shall be deemed correct, accurate, and binding on the Loan Parties and an
account stated (except for reversals and reapplications of payments made as
provided in Section 3.8 and corrections of errors discovered by the Agent),
unless a Borrower notifies the Agent in writing to the contrary within thirty
(30) days after such statement is rendered. In the event a timely written notice
of objections is given by a Borrower, only the items to which exception is
expressly made will be considered to be disputed.
ARTICLE 4
TAXES, YIELD PROTECTION, AND ILLEGALITY
Section 4.1 Taxes.
(a) Any and all payments by the Loan Parties or any of them, to the
Agent or any Lender under this Agreement and any other Loan Document shall
be made free and clear of, and without deduction or withholding for, any
Taxes. In addition, subject to Section 12.10(e), the Loan Parties shall
pay all Other Taxes.
(b) The Loan Parties agree to indemnify and hold harmless the Agent
and each Lender for the full amount of Taxes or Other Taxes (including any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under
this Section 4.1) paid by the Agent or any Lender and any liability
(including penalties, interest, additions to tax, and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. Payment under this
indemnification shall be made within thirty (30) days after the date the
Agent or any Lender makes written demand therefor.
(c) If the Loan Parties shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to the Agent or any Lender, then:
(i) the sum payable shall be increased as necessary so that
after making all required deductions and withholdings (including,
without limitation, deductions and withholdings applicable to
additional sums payable under this Section 4.1) the Agent or such
Lender, as the case may be, receives an amount equal to the sum it
would have received had no such deductions or withholdings been
made;
(ii) the Loan Parties shall make such deductions and
withholdings;
(iii) the Loan Parties shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in
accordance with any applicable Requirement of Law; and
(iv) the Loan Parties shall also pay to the Agent, for the
account of each
CREDIT AGREEMENT - Page 19
Lender, or each Lender at the time interest is paid, all
additional amounts which the respective Lender specifies as
necessary to preserve the after-tax yield such Lender would
have received if such Taxes or Other Taxes had not been
imposed.
(d) Within thirty (30) days after the date of any payment by the
Loan Parties of Taxes or Other Taxes, the Loan Parties shall furnish the
Agent the original or a certified copy of a receipt evidencing payment
thereof, or other evidence of payment satisfactory to the Agent.
(e) If the Loan Parties are required to pay additional amounts to
the Agent or any Lender pursuant to Section 4.1(c), then the applicable
Lender shall use reasonable efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its lending office so as to
eliminate any such additional payment by the Loan Parties which may
thereafter accrue, if such change in the judgment of such Lender is not
otherwise disadvantageous to such Lender.
Section 4.2 Illegality.
(a) If any Lender determines that the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has
asserted that it is unlawful, for such Lender or its applicable lending
office to make LIBOR Rate Loans, then, on notice thereof by such Lender to
the Borrowers through the Agent, any obligation of such Lender to make
LIBOR Rate Loans shall be suspended until such Lender notifies the Agent
and the Borrowers that the circumstances giving rise to such determination
no longer exist.
(b) If a Lender determines that it is unlawful to maintain any LIBOR
Rate Loan, the Borrowers shall, upon receipt of notice of such fact and
demand from such Lender (with a copy to the Agent), prepay in full such
LIBOR Rate Loans of such Lender then outstanding, together with accrued
and unpaid interest thereon and amounts required under Section 4.4, either
on the last day of the Interest Period thereof, if such Lender may
lawfully continue to maintain such LIBOR Rate Loans to such day, or
immediately, if such Lender may not lawfully continue to maintain such
LIBOR Rate Loans. If the Borrowers are required to so prepay any LIBOR
Rate Loans, then concurrently with such prepayment, the Borrowers shall
borrow from the affected Lender, in the amount of such repayment, a Base
Rate Loan.
Section 4.3 Increased Costs and Reduction of Return.
(a) If any Lender determines that due to either (i) the introduction
of or any change in the interpretation of any law or regulation or (ii)
the compliance by such Lender with any guideline or request from any
central bank or other Governmental Authority (whether or not having the
force of law), there shall be any increase in the cost to such Lender of
agreeing to make or making, funding, or maintaining any LIBOR Rate Loans,
then, subject to Section 2.3, the Borrowers shall be liable for, and shall
from time to time, upon
CREDIT AGREEMENT - Page 20
demand (with a copy of such demand to be sent to the Agent), pay to the
Agent for the account of such Lender, additional amounts as are sufficient
to compensate such Lender for such increased costs.
(b) If any Lender shall have determined that (i) the introduction of
any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy
Regulation, (iii) any change in the interpretation or administration of
any Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or
(iv) compliance by such Lender or any corporation or other entity
controlling such Lender with any Capital Adequacy Regulation, affects or
would affect the amount of capital required or expected to be maintained
by such Lender or any corporation or other entity controlling such Lender
and (taking into consideration such Lender's or such corporation's or
other entity's policies with respect to capital adequacy and such Lender's
desired return on capital) determines that the amount of such capital is
increased as a consequence of its Commitment, loans, credits, or
obligations under this Agreement, then, subject to Section 2.3, upon
demand of such Lender to the Borrowers through the Agent, the Borrowers
shall pay to such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender for such increase.
Section 4.4 Funding Losses. The Borrowers shall reimburse each Lender and
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of:
(a) the failure of the Borrowers to make on a timely basis any
payment of principal of any LIBOR Rate Loan;
(b) the failure of the Borrowers to borrow, continue, or convert a
Loan after any Borrower has given (or is deemed to have given) a Notice of
Borrowing or a Notice of Continuation/Conversion (except as permitted by
Section 4.5); or
(c) the prepayment or other payment (including after acceleration
thereof) of any LIBOR Rate Loans on a day that is not the last day of the
relevant Interest Period;
including any such loss of anticipated profit and any loss or expense arising
from the liquidation or reemployment of funds obtained by such Lender to
maintain its LIBOR Rate Loans or from fees payable to terminate the deposits
from which such funds were obtained. The Borrowers shall also pay any customary
administrative fees charged by any Lender in connection with the foregoing. Upon
the occurrence of any prepayment or payment described in clause (c) preceding,
the Borrowers shall pay to the Agent, for the benefit of the Lenders, a
prepayment fee in an amount reasonably determined by the Agent.
Section 4.5 Inability to Determine Rates. If the Agent determines that for
any reason adequate and reasonable means do not exist for determining the LIBOR
Rate for any requested Interest Period with respect to a proposed LIBOR Rate
Loan, or that the LIBOR Rate for any requested Interest Period with respect to a
proposed LIBOR Rate Loan does not adequately and fairly
CREDIT AGREEMENT - Page 21
reflect the cost to the Lenders of funding such Loan, the Agent will promptly so
notify the Borrowers and each Lender. Thereafter, the obligation of the Lenders
to make or maintain LIBOR Rate Loans hereunder shall be suspended until the
Agent revokes such notice in writing. Upon receipt of a notice pursuant to the
first sentence of this Section, the Borrowers may revoke any Notice of Borrowing
or Notice of Continuation/Conversion then submitted by any of them. If the
Borrowers do not revoke such Notice of Borrowing or Notice of
Continuation/Conversion, the Lenders shall make, convert, or continue the Loans,
as proposed by the Borrowers, in the amount specified in the applicable notice
submitted by a Borrower, but such Loans shall be made, converted, or continued
as Base Rate Loans instead of LIBOR Rate Loans.
Section 4.6 Certificates of the Agent. If any Lender claims reimbursement
or compensation under this Article 4, the Agent shall determine the amount
thereof and shall deliver to the Borrowers (with a copy to the affected Lender)
a certificate setting forth in reasonable detail the amount payable to the
affected Lender, and such certificate shall be conclusive and binding on the
Borrowers in the absence of manifest error.
Section 4.7 Survival. The agreements and obligations of the Loan Parties
in this Article 4 shall survive the payment of all other Obligations.
Section 4.8 Replacement of Affected Lender. Within thirty (30) days after
receipt by the Borrowers of written notice and demand from any Lender for any
payment under the terms of Section 4.1 or Section 4.3 then, subject to this
Section 4.8, the Borrowers may, at their option, notify the Agent and such
Lender (the "Affected Lender") of the Borrowers' intention to obtain, at the
Borrowers' sole expense, a replacement Lender (the "Replacement Lender") to
purchase the Affected Lender's Loans and its obligations under the Loan
Documents. Subject to this Section 4.8, the Borrowers shall, within thirty (30)
days following the delivery of such notice from the Borrowers, cause the
Replacement Lender to purchase (and the Affected Lender hereby agrees to sell
and convey to such Replacement Lender) the Loans and other obligations of the
Affected Lender and assume the Affected Lender's Commitment and obligations
hereunder in accordance with the terms of an Assignment and Acceptance for cash
in an aggregate amount equal to the aggregate unpaid principal of the Loans and
other Obligations held by such Affected Lender, all unpaid interest and fees
accrued thereon or with respect thereto, and all other Obligations owed to such
Affected Lender, including amounts owed under Section 4.1 or Section 4.3.
Notwithstanding the foregoing, (a) the Borrowers shall continue to be obligated
to pay to the Affected Lender in full all amounts then demanded and due under
Section 4.1 or Section 4.3 in accordance with the terms of this Agreement, (b)
neither the Agent nor any Lender shall have any obligation to find a Replacement
Lender, (c) the Replacement Lender must be acceptable to the Agent in its
reasonable discretion, and (d) the Bank may not be replaced under this Section
4.8 without its consent. If the Borrowers elect to replace any Affected Lender,
the Borrowers must replace all Affected Lenders as set forth in this Section,
each such replacement to occur within a reasonable period of time not to exceed
sixty (60) days from the date such Affected Lender requested any payment under
Section 4.1 or Section 4.3.
CREDIT AGREEMENT - Page 22
ARTICLE 5
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
Section 5.1 Books and Records. The Borrowers shall maintain, at all times,
correct and complete books, records, and accounts in which complete, correct,
and timely entries are made of their transactions in accordance with GAAP
applied consistently with the audited Financial Statements required to be
delivered pursuant to Section 5.2(a). The Borrowers shall, by means of
appropriate entries, reflect in such accounts and in all Financial Statements
proper liabilities and reserves for all taxes and proper provision for
depreciation and amortization of property and bad debts, all in accordance with
GAAP. The Loan Parties shall maintain at all times books and records pertaining
to the Collateral in such detail, form, and scope as the Agent or any Lender
shall reasonably require, including, but not limited to, records of (a) all
payments received and all credits and extensions granted with respect to the
Accounts, (b) the return, rejection, repossession, stoppage in transit, loss,
damage, or destruction of any Inventory, and (c) all other dealings affecting
the Collateral.
Section 5.2 Financial Information. The Loan Parties shall promptly furnish
to the Agent, all such information regarding any Consolidated Member's financial
and business affairs as the Agent or any Lender (through the Agent) shall
reasonably request. Without limiting the foregoing, the Loan Parties will
furnish, or cause to be furnished, to the Agent the following, in sufficient
copies for distribution by the Agent to each Lender, in such detail as the Agent
or the Lenders (through the Agent) shall request:
(a) The Loan Parties will furnish, or cause to be furnished, as soon
as available, but in any event not later than ninety (90) days after the
close of each Fiscal Year, consolidated audited and consolidating
unaudited balance sheets and statements of income, consolidated cash flow,
and consolidated and consolidating stockholders' equity for the
Consolidated Members for such Fiscal Year, and the accompanying notes
thereto, setting forth in each case in comparative form figures for the
previous Fiscal Year, all in reasonable detail, fairly presenting the
financial position and the results of operations of the Consolidated
Members as at the date thereof and for the Fiscal Year then ended, and
prepared in accordance with GAAP. Such Financial Statements shall be
examined in accordance with generally accepted auditing standards by and,
in the case of such Financial Statements performed on a consolidated
basis, accompanied by a report thereon, unqualified in any respect, of
independent certified public accountants of national standing selected by
the Parent. Each Loan Party hereby authorizes the Agent to communicate
directly with its certified public accountants and, by this provision,
authorizes those accountants to disclose to the Agent any and all
financial statements and other supporting financial documents and
schedules relating to the Consolidated Members and to discuss directly
with the Agent the finances and affairs of the Consolidated Members,
provided, that if no Default or Event of Default has occurred and
continues in existence, the Parent shall have received written notice and
a reasonable opportunity to be present in connection with any such
communications.
CREDIT AGREEMENT - Page 23
(b) The Loan Parties will furnish or cause to be furnished, (i) as
soon as available, but in any event not later than thirty (30) days after
the end of each month other than any month which is the end of a fiscal
year or fiscal quarter of the Parent, consolidated unaudited balance
sheets of the Consolidated Members as at the end of such month and
consolidated unaudited statements of income and cash flow for the
Consolidated Members for such month and for the period from the beginning
of the Fiscal Year to the end of such month and (ii) as soon as available,
but in any event not later than forty five (45) days after the end of each
fiscal quarter other than the fiscal quarter which is the end of a fiscal
year of the Parent, consolidating unaudited balance sheets of the
Consolidated Members as at the end of such fiscal quarter and
consolidating unaudited statements of income for such fiscal quarter and
for the period from the beginning of the Fiscal Year to the end of such
fiscal quarter, and consolidated unaudited balance sheets of the
Consolidated Members as at the end of such fiscal quarter and consolidated
unaudited statements of income and cash flow for the Consolidated Members
for such fiscal quarter and for the period from the beginning of the
Fiscal Year to the end of such fiscal quarter, in each case all in
reasonable detail, fairly presenting the financial position and results of
operations of the Consolidated Members as at the date thereof and for such
periods, and, in each case, in comparable form, figures for the
corresponding period in the prior Fiscal Year and prepared in accordance
with GAAP (other than for presentation of footnotes and subject to normal
year-end audit adjustments) applied consistently with the audited
Financial Statements required to be delivered pursuant to Section 5.2(a).
The Parent shall certify by a certificate signed by its chief financial
officer, chief accounting officer, or treasurer that all such Financial
Statements have been prepared in accordance with GAAP (other than
presentation of footnotes) and present fairly, subject to normal year-end
adjustments, the financial position of the Consolidated Members as at the
dates thereof and its results of operations for the periods then ended.
(c) Reserved.
(d) The Loan Parties will furnish or cause to be furnished, with
each of the annual audited Financial Statements delivered pursuant to
Section 5.2(a), and with each of the unaudited Financial Statements for
any fiscal quarter ending March 31, June 30, or September 30 delivered
pursuant to Section 5.2(b), a certificate of the chief financial officer,
chief accounting officer, or treasurer of the Parent in the form of
Exhibit F (a "Compliance Certificate") (i) setting forth in reasonable
detail the calculations required to establish the Loan Parties' compliance
with the covenants set forth in Section 7.22 and Section 7.23 during the
period covered by such Financial Statements and as at the end thereof and
(ii) stating that, except as explained in reasonable detail in such
certificate, (A) all of the representations and warranties of the Loan
Parties contained in this Agreement and the other Loan Documents are
correct and complete in all material respects as at the date of such
certificate as if made at such time, except for those that speak as of a
particular date, (B) the Loan Parties are, at the date of such
certificate, in compliance in all material respects with all of their
respective covenants and agreements in this Agreement and the other Loan
Documents, (C) no Default or Event of Default then exists or existed
during the period covered by such Financial Statements, (D) describing and
analyzing in reasonable detail all material trends, changes, and
developments in each and all such Financial Statements, and
CREDIT AGREEMENT - Page 24
(E) explaining the variances of the figures in the corresponding budgets
and prior Fiscal Year Financial Statements. If such certificate discloses
that a representation or warranty is not correct or complete, or that a
covenant has not been complied with, or that a Default or Event of Default
existed or exists, such certificate shall set forth what action the Loan
Parties have taken or propose to take with respect thereto.
(e) The Loan Parties will furnish, or cause to be furnished, no
sooner than sixty (60) days and not less than thirty (30) days prior to
the beginning of each Fiscal Year, annual forecasts prepared by the Parent
during such time period (to include forecasted consolidated and
consolidating balance sheets and statements of income and consolidated
cash flow) for the Consolidated Members as at the end of and for each
month of such Fiscal Year.
(f) Without limiting Section 5.3(l), the Loan Parties will furnish,
or cause to be furnished, promptly after filing with the PBGC, the IRS, or
any other Governmental Authority, a copy of each annual report or other
material filing filed with respect to each Plan or Foreign Plan of any
Consolidated Member.
(g) The Loan Parties will furnish, or cause to be furnished, (i)
promptly upon the filing thereof, copies of all material reports, if any,
to or other documents filed by any Consolidated Member with the Securities
and Exchange Commission under the Exchange Act, to the extent required to
be filed with any Governmental Authority pursuant to any Requirement of
Law requiring public disclosure, (ii) promptly upon receipt or sending
thereof, all reports, notices, and statements sent or received by any
Consolidated Member to or from the holders of any equity interests of any
Consolidated Member or of any Debt of any Consolidated Member, and (iii)
promptly upon receipt or sending thereof, all material reports, notices,
and statements sent or received by any Consolidated Member to or from the
trustee under any indenture under which any Debt is issued.
(h) The Loan Parties will furnish, or cause to be furnished, as soon
as available, but in any event not later than fifteen (15) days after any
Consolidated Member's receipt thereof, a copy of all management reports
and management letters prepared by any independent certified public
accountants of any Consolidated Member.
(i) The Loan Parties will furnish, or cause to be furnished,
promptly after their preparation, copies of any and all proxy statements,
financial statements, and reports which the Parent makes available to its
shareholders or any holder of any Debt.
(j) If requested by the Agent, the Loan Parties will furnish, or
cause to be furnished, promptly after filing with the IRS, a copy of each
tax return filed by any Consolidated Member.
(k) The Parent shall provide, or cause to be provided, to the Agent
the following on or before the twentieth (20th) day of each calendar month
or on a more frequent basis if requested by the Agent or required to
redetermine Availability: (A) a schedule of each Borrowing Base Party's
Accounts created since the last such schedule and a Borrowing Base
CREDIT AGREEMENT - Page 25
Certificate, in each case in form reasonably satisfactory to the Agent,
(B) an aging of each Borrowing Base Party's Accounts together with a
reconciliation (including without limitation, reconciliation of
ineligibles) to the previous calendar month end's accounts receivable
balance of such Borrowing Base Party's Accounts and to its general ledger;
(C) an aging of each Borrowing Base Party's accounts payable; (D) upon the
Agent's request, copies of invoices in connection with each Borrowing Base
Party's Accounts, customer statements, credit memos, remittance advices
and reports, deposit slips, and shipping and delivery documents in
connection with each Borrowing Base Party's Accounts and for Equipment
acquired by each Loan Party, purchase orders, and invoices; (E) upon the
Agent's request, a statement of the balance of each of the Intercompany
Accounts; (F) such other reports as to the Collateral as the Agent shall
reasonably request from time to time; and (G) with the delivery of each of
the foregoing, a certificate of the Loan Parties executed by a Responsible
Officer of the Parent on behalf of all of the Loan Parties certifying as
to the accuracy and completeness of the foregoing. If any of the Loan
Parties' records or reports of the Collateral are prepared by an
accounting service or other agent, each Loan Party hereby authorizes, and
shall cause each Loan Party to authorize, such service or agent to deliver
such records, reports, and related documents to the Agent, for
distribution to the Lenders.
(l) The Canada Subsidiaries will furnish, or cause to be furnished,
within thirty (30) days of the last day of each fiscal quarter, copies of
bank statements for each deposit account of each such Canada Subsidiary
received by such Canada Subsidiary since the prior such delivery.
(m) The Loan Parties will furnish, or cause to be furnished, such
additional information as the Agent and/or any Lender may from time to
time reasonably request regarding the financial and business affairs of
any Consolidated Member.
Section 5.3 Notices to the Lender. The Loan Parties shall notify the Agent
and the Lenders in writing of the following matters at the following times:
(a) immediately after becoming aware of any Default or Event of
Default;
(b) immediately after becoming aware of the assertion by any holder
or holders of more than 1% of the Capital Stock of the Parent or the
holder of any Debt in excess of $5,000,000 of any Loan Party or $5,000,000
of any other Consolidated Member that a default exists with respect
thereto or that any Consolidated Member is not in compliance with the
terms thereof, or the written threat or commencement by such holder of any
enforcement action because of such asserted default or non-compliance;
(c) immediately after becoming aware of any event or circumstance
which could have, or has resulted in, a Material Adverse Effect;
(d) immediately after becoming aware of any pending or threatened
(in writing) action, suit, proceeding, or counterclaim by any Person, or
any pending or threatened
CREDIT AGREEMENT - Page 26
investigation by a Governmental Authority, which could reasonably be
expected to have, or has resulted in, a Material Adverse Effect;
(e) immediately after becoming aware of any pending or threatened
(in writing) strike, work stoppage, unfair labor practice claim, or other
labor dispute affecting any Consolidated Member which could reasonably be
expected to have, or has resulted in, a Material Adverse Effect;
(f) immediately after becoming aware of any violation of any law,
statute, regulation, or ordinance of a Governmental Authority affecting
any Consolidated Member which could reasonably be expected to have, or has
resulted in, a Material Adverse Effect;
(g) immediately after receipt of any notice of any violation by any
Consolidated Member of any Environmental Law which could reasonably be
expected to have, or has resulted in, a Material Adverse Effect or that
any Governmental Authority has asserted in writing that any Consolidated
Member is not in compliance with any Environmental Law or is investigating
any Consolidated Member's compliance therewith;
(h) immediately after receipt of any written notice that any
Consolidated Member is or may be liable to any Person as a result of the
Release or threatened Release of any Contaminant or that any Consolidated
Member is subject to investigation by any Governmental Authority
evaluating whether any remedial action is needed to respond to the Release
or threatened Release of any Contaminant which, in either case, is
reasonably likely to give rise to liability in excess of $2,000,000;
(i) immediately after receipt of any written notice of the
imposition of any Environmental Lien against any property of any Obligated
Party;
(j) any change in any Loan Party's name as it appears in the state
of its organization, state of organization, type of entity, organizational
identification number, locations of Collateral, or trade names under which
such Loan Party will sell Inventory or create Accounts, or to which
instruments in payment of Accounts may be made payable, in each case at
least thirty (30) days prior thereto;
(k) within ten (10) Business Days after any Loan Party or any ERISA
Affiliate knows or has reason to know, that an ERISA Event or a prohibited
transaction (as defined in Sections 406 of ERISA and 4975 of the Code) has
occurred, and, when known, any action taken or threatened by the IRS, the
DOL, or the PBGC with respect thereto;
(l) upon request, or, in the event that such filing reflects a
significant change with respect to the matters covered thereby which could
reasonably be expected to have, or have resulted in, a Material Adverse
Effect, within three (3) Business Days after the filing thereof with the
PBGC, the DOL, or the IRS, as applicable, copies of the following: (i)
each annual report (form 5500 series), including Schedule B thereto, filed
with the PBGC, the DOL, or the IRS with respect to each Plan, (ii) a copy
of each funding waiver request filed with the
CREDIT AGREEMENT - Page 27
PBGC, the DOL, or the IRS with respect to any Plan and all communications
received by any Loan Party or any ERISA Affiliate from the PBGC, the DOL,
or the IRS with respect to such request, and (iii) a copy of each other
filing or notice filed with the PBGC, the DOL, or the IRS, with respect to
each Plan by either any Loan Party or any ERISA Affiliate;
(m) upon request, copies of each actuarial report for any Plan or
Multi-employer Plan and annual report for any Multi-employer Plan, and
within three (3) Business Days after receipt thereof by any Loan Party or
any ERISA Affiliate, copies of the following: (i) any notices of the
PBGC's intention to terminate a Plan or to have a trustee appointed to
administer such Plan; (ii) any unfavorable determination letter from the
IRS regarding the qualification of a Plan under Section 401(a) of the
Code; or (iii) any notice from a Multi-employer Plan regarding the
imposition of withdrawal liability in excess of $1,000,000;
(n) within three (3) Business Days after the occurrence thereof: (i)
any changes in the benefits of any existing Plan or Foreign Plan which
increase any Consolidated Member's annual costs with respect thereto by an
amount in excess of $1,000,000, or the establishment of any new Plan or
Foreign Plan or the commencement of contributions to any Plan or Foreign
Plan to which any Consolidated Member or any ERISA Affiliate was not
previously contributing; or (ii) any failure by any Consolidated Member or
any ERISA Affiliate to make a required installment or any other required
payment to a Plan or Foreign Plan in excess of $1,000,000 under
Requirements of Law on or before the due date for such installment or
payment;
(o) within three (3) Business Days after any Consolidated Member or
any ERISA Affiliate knows or has reason to know that any of the following
events has or will occur: (i) a Multi-employer Plan has been or will be
terminated, become insolvent, or involved in a reorganization; (ii) the
administrator or plan sponsor of a Multi-employer Plan intends to
terminate a Multi-employer Plan; or (iii) any Consolidated Member or any
ERISA Affiliate knows or has reason to know that a liability will be
asserted or incurred with respect to a Multi-employer Plan which is not
asserted or incurred in the ordinary course of ongoing operations of such
Multi-employer Plan;
(p) promptly upon the Agent's request, or, in the event that a
filing referenced in this clause (p) reflects a significant change with
respect to the matters covered thereby, within three (3) Business Days of
the filing thereof with any Governmental Authority, copies of the
following: (i) each filing report or notice filed with any Governmental
Authority with respect to each Foreign Plan; (ii) any notices received
from a Governmental Authority or relating to or concerning either the
funding status of any Foreign Plan or any claims against any Consolidated
Member regarding any Foreign Plan;
(q) immediately upon becoming aware of any default or event of
default (howsoever defined) or other breach or failure to perform under
(a) any Subordinated Debt or Subordinated Debt Documents or (b) any claim
is asserted against a Loan Party or other Consolidated Member alleging any
occurrence described in clause (a) preceding; and
CREDIT AGREEMENT - Page 28
(r) immediately upon commencement of any proceedings contesting any
tax, fee, assessment, or other governmental charge in excess of
$5,000,000.
Each notice given under this Section shall describe the subject matter thereof
in reasonable detail, and shall set forth the action that any Consolidated
Member or any ERISA Affiliate, as applicable, has taken or proposes to take with
respect thereto.
Section 5.4 Revisions or Updates to Schedules. Should any of the
information or disclosures provided on any of the schedules originally attached
hereto become outdated or incorrect in any material respect, the Borrowers shall
deliver to the Agent and the Lenders, concurrently with the next Compliance
Certificate required to be delivered pursuant to Section 5.2(d), such revisions
or updates to such schedule(s) whereupon such schedules shall be deemed to be
amended by such revisions or updates, as may be necessary or appropriate to
update or correct such schedule(s), provided that, notwithstanding the
foregoing, (i) no such revisions or updates to Schedule 6.10, 6.11 or 6.27 shall
be deemed to have amended, modified, or superseded any such schedules as
originally attached hereto, or to have cured any breach of warranty or
representation resulting from the inaccuracy or incompleteness of any such
schedules, unless and until the Agent shall have received all agreements,
certificates, and documents reasonably required to evidence and perfect the
Agent's Liens in any Collateral listed on any such Schedule and (ii) without
limiting any other provision of this Agreement, no such revisions or updates to
Schedules 6.8, 6.13, 6.14, 6.15, 6.18, ▇-▇, ▇-▇, ▇-▇, ▇-▇ and A-6 shall be
deemed to have amended, modified, or superseded any such schedules as originally
attached hereto, or to have cured any breach of warranty or representation
resulting from the inaccuracy or incompleteness of any such schedules, unless
and until the Agent and the Majority Lenders shall have accepted in writing such
revisions or updates to any such schedules.
ARTICLE 6
GENERAL WARRANTIES AND REPRESENTATIONS
Each Loan Party warrants and represents to the Agent and the Lenders that
except as set forth in the Schedules to this Agreement as they may be modified
from time to time pursuant to Section 5.4, and except as hereafter disclosed to
and accepted by the Majority Lenders in writing:
Section 6.1 Authorization, Validity, and Enforceability of this Agreement
and the other Loan Documents; No Conflicts. Each Obligated Party has the power
and authority to execute, deliver, and perform this Agreement and the other Loan
Documents to which it is a party, to incur the Obligations, and to grant to the
Agent Liens upon the Collateral. Each Obligated Party has taken all necessary
action (including obtaining approval of its stockholders, partners, general
partner(s), members, or other applicable equity owners, if necessary) to
authorize its execution, delivery, and performance of this Agreement and the
other Loan Documents to which it is a party. This Agreement and the other Loan
Documents have been duly executed and delivered by each Loan Party or other
Obligated Party, and constitute the legal, valid, and binding obligations of
each Loan Party or other Obligated Party, enforceable against it in accordance
with their respective terms without defense, setoff, or counterclaim, except as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, or
similar laws at the time in effect affecting the rights of creditors
CREDIT AGREEMENT - Page 29
generally and subject to general principles of equity whether applied by a court
of law or equity. Each Loan Party's or other Obligated Party's execution,
delivery, and performance of this Agreement and the other Loan Documents to
which it is a party do not and will not conflict with, or constitute a violation
or breach of, or constitute a default under, or result in or require the
creation or imposition of any Lien upon the property of any Loan Party or other
Obligated Party by reason of the terms of (a) any contract, mortgage, Lien,
lease, agreement, indenture, document, or instrument (including, without
limitation, the Subordinated Debt Documents or the Synthetic Lease Transaction
Documents, or any agreements entered into in connection therewith, respectively)
to which such Loan Party or other Obligated Party is a party or which is binding
upon it, (b) any Requirement of Law applicable to such Loan Party or other
Obligated Party, or (c) the certificate or articles of incorporation, bylaws,
limited liability company or limited partnership agreement, or other
organizational or constituent documents, as the case may be, of such Loan Party
or other Obligated Party. The Borrowers' incurrence of the Obligations as
provided by this Agreement is not prohibited under the terms of any Subordinated
Debt Documents or the Synthetic Lease Transaction Documents.
Section 6.2 Validity and Priority of Security Interest. The provisions of
this Agreement and the other Loan Documents create legal and valid Liens on all
the Collateral in favor of the Agent, for the benefit of the Agent and the
Lenders, and such Liens constitute perfected and continuing Liens on the
Collateral, securing the Obligations, enforceable against the Obligated Party
and all third parties, and having priority over all other Liens on the
Collateral (a) except in the case of Liens described in clauses (b), (c), (d),
(e), (f), (g) and (i) of the definition of Permitted Liens to the extent any
such Liens would have priority over the Agent's Liens pursuant to any
Requirement of Law and (b) except for Liens in certificated vehicles, and Liens
perfected only by possession to the extent the Agent has not obtained or does
not maintain possession of such Collateral.
Section 6.3 Reserved.
Section 6.4 Corporate Name; Prior Transactions. Except as set forth on
Schedule 6.4, other than the legal name in which it has executed the Loan
Documents no Loan Party has during the past five (5) years been known by or used
any other corporate or fictitious name, or been a party to any merger or
consolidation, or acquired all or substantially all of the assets of any Person,
or acquired any of its property outside of the ordinary course of business.
Section 6.5 Capitalization; Subsidiaries; Organization and Qualification.
Schedule 6.5 is a correct and complete list of the name and relationship to the
Parent of each and all of the Parent's Subsidiaries. Schedule 6.5 sets forth, as
of the Closing Date, a true and complete listing of each class of each Obligated
Party's authorized Capital Stock, of which all of such issued shares are validly
issued, outstanding, fully paid and non-assessable, and owned beneficially and
of record by the Persons identified on Schedule 6.5. Each Consolidated Member is
duly incorporated, formed, or organized and validly existing in good standing
under the laws of its state or other jurisdiction of incorporation, formation,
or organization set forth on Schedule 6.5. The location of the chief executive
office of each Obligated Party is at the address set forth with respect to each
Obligated Party on Schedule 6.5. Each Consolidated Member is duly licensed or
qualified to do business and in good standing (as applicable) in each of the
jurisdictions in which the nature of the business
CREDIT AGREEMENT - Page 30
transacted by it or the nature of the property owned or leased by it makes such
licensing or qualification necessary, except where the failure to be so licensed
or qualified could not reasonably be expected to have a Material Adverse Effect
and (c) has all requisite corporate, partnership or limited liability company
power and authority to conduct its business and own its property. The
Subsidiaries of the Parent listed in Schedule 6.5 constitute all of the
Subsidiaries of the Parent, and 100% of the Capital Stock of each such
Subsidiary is directly or indirectly owned by the Parent except as otherwise
specified in Schedule 6.5. As of the Closing Date, each of the Dormant
Guarantors is dormant, conducts no business and has no assets. It is not
intended by any Dormant Guarantor, the Parent or any other Loan Party that such
Dormant Guarantor will conduct any business or own any property after on or
after the Closing Date. Schedule 6.5 sets forth a listing, separately for each
Loan Party, of each Foreign Subsidiary directly owned by such Loan Party, the
total number of shares and the percentage of the total issued and outstanding
shares of such Capital Stock owned by such Loan Party.
Section 6.6 Financial Statements and Projections.
(a) The Parent has delivered to the Agent and the Lenders the
audited consolidated balance sheet and related statements of income,
retained earnings, cash flow, and changes in stockholders' equity for the
Parent and its Subsidiaries as of December 31, 2000, and for the Fiscal
Year then ended, accompanied by the report thereon of the Parent's
independent certified public accountants, PriceWaterhouseCoopers LLP. The
Parent has also delivered to the Agent and the Lenders the unaudited
consolidated balance sheet and related statements of income and cash flow
for the Parent and its Subsidiaries as of October 31, 2001. All such
financial statements have been prepared in accordance with GAAP and fairly
present the financial position of the Parent and its Subsidiaries as at
the dates thereof and their results of operations for the periods then
ended (except with respect to the financial statements dated October 31,
2001, for the absence of applicable footnotes and subject to normal
year-end adjustments). The Financial Statements for the Parent and its
Subsidiaries as of October 31, 2001 reflect EBITDA for the Consolidated
Members for the calendar month October, 2001, was greater than $2,000,000.
(b) The Latest Projections described in clause (a) of the definition
of Latest Projections in each case (i) include provision for all tax
consequences described in the report by the Parent's accountants delivered
by the Parent to the Agent prior to the Closing Date and (ii) demonstrate
that the Borrowers will meet the minimum Availability Without Regard to
Line Constraint required by Section 8.1(b). As of the Closing Date, the
Parent and the other Consolidated Members have met the financial
performance projections contained in the Latest Projections.
(c) The Latest Projections when submitted to the Agent and the
Lenders as required herein represent the Loan Parties' good faith estimate
of the future financial performance of the Consolidated Members for the
periods set forth therein. The Latest Projections have been prepared on
the basis of the assumptions set forth therein, which the Loan Parties
believe are fair and reasonable in light of current and reasonably
foreseeable business conditions at the time submitted to the Agent and the
Lenders.
CREDIT AGREEMENT - Page 31
Section 6.7 Solvency. Each Obligated Party is Solvent prior to and after
giving effect to the Loan Documents, the Borrowings to be made on the Closing
Date and the issuance of the Letters of Credit and Credit Support to be issued
on the Closing Date (if any), and shall remain Solvent during the term of this
Agreement.
Section 6.8 Debt. After giving effect to the making of the Loans to be
made on the Closing Date, the Consolidated Members (other than Unrestricted
Subsidiaries) have no Debt, except (a) the Obligations, (b) Debt described on
Schedule 6.8, (c) the Subordinated Debt under the Convertible Subordinated Notes
and the Convertible Subordinated Debt Documents and (d) other Debt entered into
after the Closing Date as permitted by Section 7.13 and reflected in the
Financial Statements delivered pursuant to Section 5.2.
Section 6.9 Distributions. Except as reflected on Schedule 6.9, as of the
Closing Date, since December 31, 2000, no Distribution has been declared, paid,
or made upon or in respect of any Capital Stock of the Parent.
Section 6.10 Real Estate; Leases. As of the Closing Date, Schedule 6.10
sets forth a correct and complete list of all Real Estate owned by each Loan
Party, all leases and subleases of real or personal property by each Loan Party
as lessee or sublessee (other than leases of personal property as to which it is
lessee or sublessee for which the aggregate lease payments is less than
$500,000), and all leases and subleases of real or personal property by each
Loan Party as lessor or sublessor. Each of such leases and subleases is valid
and enforceable in accordance with its terms and is in full force and effect,
and no default by any party to any such lease or sublease exists in any material
respect. Each Loan Party has good and indefeasible title in fee simple to the
Real Estate identified on Schedule 6.10 as owned by such Loan Party, or valid
leasehold interests in all Real Estate designated therein as "leased" by such
Loan Party, and each Loan Party has good and indefeasible title to all of its
other property reflected on the October 31, 2001 Financial Statements delivered
to the Agent and the Lenders, except as disposed of in the ordinary course of
business since the date thereof, free of all Liens except Permitted Liens.
Section 6.11 Proprietary Rights. Schedule 6.11 sets forth a correct and
complete list of all of each Consolidated Member's patents, patent applications,
trademark and service ▇▇▇▇ registrations and applications, and copyright
registrations and applications. None of the Proprietary Rights listed in
Schedule 6.11 is subject to any licensing agreement or similar arrangement with
any Person other than another Consolidated Member except as set forth on
Schedule 6.11. The Proprietary Rights described on Schedule 6.11 constitute all
of the property of such type necessary to the current and anticipated future
conduct of the Consolidated Members' business. To the best of each Loan Party's
knowledge, no slogan or other advertising device, product, process, method,
substance, part, or other material now employed, or now contemplated to be
employed, by any Consolidated Member infringes in any material respect upon any
rights held by any other Person. Except as set forth in Schedule 6.13, no claim
or litigation regarding any of the foregoing is pending or, to the best of any
Loan Party's knowledge, threatened, which impairs, or could reasonably be
expected to impair, any such Proprietary Rights in any material respect. No
patent, invention, device, application, principle or any statute, law, rule,
regulation, standard, or code is pending or,
CREDIT AGREEMENT - Page 32
to the knowledge of any Borrower, proposed, which, in either case, could
reasonably be expected to have a Material Adverse Effect.
Section 6.12 Trade Names. All trade names or styles under which any
Borrowing Base Party will sell Inventory or create Accounts, or to which
instruments in payment of Accounts may be made payable, are listed on Schedule
6.12.
Section 6.13 Litigation. Except as set forth on Schedule 6.13, there is no
pending, or to the best of any Loan Party's knowledge threatened, action, suit,
proceeding, or counterclaim by any Person, or investigation by any Governmental
Authority, or any basis for any of the foregoing, which could reasonably be
expected to have a Material Adverse Effect.
Section 6.14 Labor Disputes. Except as set forth on Schedule 6.14, as of
the Closing Date, (a) there is no collective bargaining agreement or other labor
contract covering employees of any Consolidated Member, (b) no such collective
bargaining agreement or other labor contract is scheduled to expire during the
term of this Agreement, (c) to the knowledge of the Loan Parties, no union or
other labor organization is seeking to organize, or to be recognized as, a
collective bargaining unit of employees of any Consolidated Member or for any
similar purpose, and (d) there is no pending or (to the best of any Loan Party's
knowledge) threatened, strike, work stoppage, material unfair labor practice
claim, or other material labor dispute against or affecting any Consolidated
Member or its employees.
Section 6.15 Environmental Laws. Except as otherwise disclosed on Schedule
6.15:
(a) Each Consolidated Member has complied in all material respects
with all Environmental Laws and no Consolidated Member nor any of its
presently or previously owned Real Estate, presently conducted or prior
operations, or any property now or previously in its charge, management,
or control is subject to any enforcement order from or liability agreement
with any Governmental Authority or private Person respecting (i)
compliance with any Environmental Law or (ii) any potential liabilities
and costs or remedial action (involving a liability in excess of
$2,000,000) arising from the Release or threatened Release of a
Contaminant.
(b) Each Consolidated Member has obtained all material permits
necessary for its current operations under Environmental Laws, and all
such permits are in good standing, and each Consolidated Member is in
compliance with all material terms and conditions of such permits, other
than permits which the failure to obtain or comply with could not
reasonably be expected to have a Material Adverse Effect.
(c) No Consolidated Member nor to the best of any Loan Party's
knowledge any of its predecessors in interest has in violation of any
Environmental Law stored, treated, or disposed of any hazardous waste (as
defined pursuant to 40 CFR Part 261 or any equivalent Environmental Law)
on any property now or previously in its charge, management, or control
other than violations that could not reasonably be expected to have a
Material Adverse Effect.
CREDIT AGREEMENT - Page 33
(d) No Consolidated Member has received any summons, complaint,
order, or similar written notice indicating that it is not currently in
compliance with, or that any Governmental Authority is investigating its
compliance with, any Environmental Laws or that it is or may be liable to
any other Person as a result of a Release or threatened Release of a
Contaminant.
(e) None of the present or past operations of any Consolidated
Member or any property now or previously in its charge, management, or
control is the subject of any investigation by any Governmental Authority
evaluating whether any remedial action is needed to respond to a Release
or threatened Release of a Contaminant in each such case that could
reasonably be expected to have a Material Adverse Effect.
(f) There is not now, nor to the best of any Loan Party's knowledge
has there ever been, on or in the Real Estate of any Consolidated Member a
violation of Environmental Laws, other than violations that could not
reasonably be expected to have a Material Adverse Effect:
(i) any underground storage tanks or surface impoundments,
(ii) any asbestos-containing material, or
(iii) any polychlorinated biphenyls (PCBs) used in hydraulic
oils, electrical transformers, or other equipment.
(g) No Obligated Party has filed any notice under any requirement of
Environmental Law reporting a spill or accidental and unpermitted Release
or discharge of a Contaminant into the environment. No Consolidated Member
other than an Obligated Party has filed any notice under any requirement
of Environmental Law reporting a spill or accidental and unpermitted
Release or discharge of a Contaminant into the environment, which spill or
accidental and unpermitted Release could reasonably be expected to have a
Material Adverse Effect.
(h) No Consolidated Member has entered into any negotiations or
settlement agreements with any Person (including the prior owner of its
property or any Governmental Authority) imposing material obligations or
liabilities on any Consolidated Member with respect to any remedial action
in response to the Release of a Contaminant or environmentally related
claim.
(i) None of the products manufactured, distributed, or sold by any
Consolidated Member contains asbestos containing material.
(j) No Environmental Lien has attached to the Real Estate of any
Consolidated Member.
CREDIT AGREEMENT - Page 34
Section 6.16 No Violation of Law. No Consolidated Member is in violation
of any law, statute, regulation, ordinance, judgment, order, or decree
applicable to it which violation could reasonably be expected to have a Material
Adverse Effect.
Section 6.17 No Default. No default or event of default (howsoever
defined), breach or noncompliance exists under or with respect to any of the
Subordinated Debt Documents that would permit, or with the passage of time or
the giving of notice, or both, would permit, any holder of any Debt thereunder,
or any trustee for such holder, to accelerate the Debt thereunder to be
immediately due and payable or exercise any other remedies thereunder. No
Consolidated Member is in default with respect to any note, indenture, loan
agreement, mortgage, lease, deed, or other agreement to which such Consolidated
Member is a party or by which it is bound, which default could reasonably be
expected to have a Material Adverse Effect.
Section 6.18 ERISA Compliance; Foreign Plans. Except as described on
Schedule 6.18:
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code, and other federal or state law.
Each Plan which is intended to qualify under Section 401(a) of the Code
has received a favorable determination letter from the IRS and to the best
knowledge of the Loan Parties, nothing has occurred which would cause the
loss of such qualification. Each Loan Party and each ERISA Affiliate has
made all required contributions to any Plan subject to Section 412 of the
Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan.
(b) There are no pending or, to the best knowledge of any Loan
Party, threatened claims, actions, or lawsuits, or action by any
Governmental Authority, with respect to any Plan or Foreign Plan which has
resulted or could reasonably be expected to result in a Material Adverse
Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan or Foreign Plan
which has resulted or could reasonably be expected to result in a Material
Adverse Effect.
(c) Except for instances, if any, which together do not give rise to
liability in excess of $1,000,000 in the aggregate, (i) no ERISA Event has
occurred or is reasonably expected to occur, (ii) no Pension Plan has any
Unfunded Pension Liability, (iii) no Loan Party nor any ERISA Affiliate
has incurred, or reasonably expects to incur, any liability under Title IV
of ERISA with respect to any Pension Plan (other than premiums due and not
delinquent under Section 4007 of ERISA), (iv) no Loan Party nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any liability (and
no event has occurred which, with the giving of notice under Title IV of
ERISA, would result in such liability) under Title IV of ERISA with
respect to a Multi-employer Plan (other than liabilities incurred in the
ordinary course of operations of such Multi-employer Plan , including, but
not limited to, liability under Sections 4201 and 4243 of ERISA), and (v)
no Loan Party nor any ERISA Affiliate has engaged in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA.
CREDIT AGREEMENT - Page 35
(d) Each Foreign Plan is in compliance in all material respects with
the laws and regulations applicable to such Foreign Plan and each
Consolidated Member has satisfied all contribution obligations in all
material respects with respect to such Foreign Plan (to the extent
applicable). Each Foreign Plan and related funding arrangement that is
intended to qualify for tax- favored status has been reviewed and approved
for such status by the appropriate Governmental Authority (or has been
submitted for such review and approval within the applicable time period),
and nothing has occurred and no condition exists that is likely to cause
the loss or denial of such tax-favored status. No Foreign Plan has any
liabilities in any material respect in excess of the current value of such
Foreign Plan's assets, determined in accordance with the assumptions used
for funding such Foreign Plan pursuant to reasonable accounting standards
in accordance with applicable law. No Consolidated Member has incurred or
reasonably expects to incur any material liability as a result of the
termination or other insolvency of any Foreign Plan or any material
liability which is not otherwise funded or satisfied with readily
available assets set aside with respect to such Foreign Plan.
Section 6.19 Taxes. Except as listed in Schedule 6.19, each Obligated
Party has filed all federal, provincial, state, and other tax returns and
reports required to be filed (or appropriate extensions have been timely filed),
and has paid all federal, provincial, state, and other taxes, assessments, fees,
and other governmental charges levied or imposed upon it or its properties,
income, or assets otherwise due and payable unless such unpaid taxes and
assessments would constitute a Permitted Lien. Each Consolidated Member other
than an Obligated Party has filed all federal, provincial, state, and other tax
returns and reports required to be filed (or appropriate extensions have been
timely filed), and has paid all federal, provincial, state, and other taxes,
assessments, fees, and other governmental charges levied or imposed upon it or
its properties, income, or assets otherwise due and payable unless the failure
to pay any such unpaid taxes and assessments could reasonably be expected to
have a Material Adverse Effect.
Section 6.20 Regulated Entities. No Consolidated Member nor any Person
controlling any Consolidated Member is an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940. No Consolidated Member is a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate" of a "holding
company" or a "public utility" within the meaning of the Public Utility Holding
Company Act of 1935, or a regulated entity under the Federal Power Act, the
Interstate Commerce Act, any state public utilities code or law, or any other
federal or state statute or regulation limiting its ability to incur
indebtedness.
Section 6.21 Use of Proceeds; Margin Regulations. The proceeds of the
Loans are to be used solely for the purposes specified in Section 7.24. No
Consolidated Member is engaged in the business of buying or selling Margin Stock
or extending credit for the purpose of buying or carrying Margin Stock.
Section 6.22 No Material Adverse Change. No Material Adverse Effect has
occurred since the latest date of the Financial Statements delivered to the
Lenders referenced in Section 6.6. No
CREDIT AGREEMENT - Page 36
event or condition which has occurred on or prior to the Closing Date has had,
or in the business judgment of the Loan Parties is expected or is reasonably
likely to have, a Material Adverse Effect.
Section 6.23 Full Disclosure. None of the representations or warranties
made by any Obligated Party in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement, or certificate furnished
by or on behalf of any Obligated Party in connection with the Loan Documents
(including the offering and disclosure materials delivered by or on behalf of
any Obligated Party to the Lenders prior to the Closing Date), contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of the time when made
or delivered.
Section 6.24 Material Agreements. As of the Closing Date, Schedule 6.24
sets forth all material agreements and contracts (other than the Loan Documents)
of any Consolidated Member which are required to be publicly disclosed pursuant
to any Requirement of Law since the date of the Parent's quarterly report for
the fiscal quarter ended September 30, 2001.
Section 6.25 Bank Accounts. As of the Closing Date, Schedule 6.25 contains
a complete and accurate list of all bank accounts maintained by each
Consolidated Member with any bank or other financial institution.
Section 6.26 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or other Person is necessary or required in connection
with the execution, delivery, or performance by, or enforcement against, (a) any
Loan Party of this Agreement or any other Loan Document to which such Loan Party
is a party or (b) any Consolidated Member, excluding the Unrestricted
Subsidiaries, of any Loan Document to which such Consolidated Member is a party,
except for those which have been duly obtained by the Loan Parties or other
Consolidated Members, as applicable, copies of which have been provided to the
Agent, and for filing of financing statements and the Mortgages.
Section 6.27 Investment Property.
(a) Schedule 6.27 sets forth a correct and complete list of all
Investment Property owned by each Obligated Party. Each Obligated Party is
the legal and beneficial owner of such Investment Property, as so
reflected, free and clear of any Lien (other than Permitted Liens), and
has not sold, granted any option with respect to, assigned or transferred,
or otherwise disposed of any of its rights or interest therein.
(b) To the extent any Obligated Party is the owner of or becomes the
issuer of any Investment Property that is Collateral (each such Person
which issues any such Investment Property being referred to herein as an
"Issuer"): (i) the owners of such Issuer's Capital Stock that are
Consolidated Members and the ownership interest of each such Person are as
set forth on Schedule 6.27 , and each such Person is the registered owner
thereof on the books of the Issuer; (ii) the Issuer acknowledges the
Agent's Lien; (iii) to the extent required to perfect the Agent's Liens,
such security interest, collateral assignment, lien, and pledge in
CREDIT AGREEMENT - Page 37
favor of the Agent has been registered on the books of the Issuer for such
purpose as of the date hereof; and (iv) the Issuer is not aware of any
liens, restrictions, or adverse claims which exist on any such Investment
Property other than the Agent's Lien.
Section 6.28 Common Enterprise. The successful operation and condition of
each of the Consolidated Members is dependent on the continued successful
performance of the functions of the group of Consolidated Members as a whole and
the successful operation of each Consolidated Member is dependent on the
successful performance and operation of each other Consolidated Member. Each of
the Loan Parties expects to derive benefit (and its board of directors or other
governing body has determined that it may reasonably be expected to derive
benefit), directly and indirectly, from successful operations of the Parent and
each of the other Consolidated Members. Each Loan Party expects to derive
benefit (and the boards of directors or other governing body of each such Loan
Party have determined that it may reasonably be expected to derive benefit),
directly and indirectly, from the credit extended by the Lenders to the
Borrowers hereunder, both in their separate capacities and as members of the
group of companies. Each Loan Party has determined that execution, delivery, and
performance of this Agreement and any other Loan Documents to be executed by
such Loan Party is within its purpose, will be of direct and indirect benefit to
such Loan Party, and is in its best interest.
Section 6.29 Convertible Subordinated Debt Documents. The Parent has
delivered to the Agent true and correct copies of the Convertible Subordinated
Debt Documents. The issuance by the Parent of the Convertible Subordinated Notes
was in compliance in all material respects with applicable federal and state
securities laws. During the period December 7, 2001 through the Business Day
preceding the Closing Date, the Parent received net cash proceeds of
Subordinated Debt under the Convertible Subordinated Debt Documents in an amount
not less than $97,010,416.67, which proceeds were applied by the Parent in
reduction of the Original Loans.
ARTICLE 7
AFFIRMATIVE AND NEGATIVE COVENANTS
Each Loan Party covenants to the Agent and each Lender that so long as any
of the Obligations remain outstanding or this Agreement is in effect each Loan
Party will keep and perform, and shall cause each other Consolidated Member, as
applicable, to keep and perform, each of the following covenants, unless agreed
otherwise or waived in accordance with Section 11.1:
Section 7.1 Taxes and Other Obligations. Except as otherwise permitted by
the terms of this Agreement, each Consolidated Member shall (a) file when due
all tax returns and other reports which it is required to file, (b) pay, or
provide for the payment, when due, of all taxes, fees, assessments, and other
governmental charges against it or upon its property, income, and franchises,
make all required withholding and other tax deposits, and establish adequate
reserves for the payment of all such items, and provide to the Agent and the
Lenders, upon request, satisfactory evidence of its timely compliance with the
foregoing, and (c) pay when due all Debt owed by it and all claims of
materialmen, mechanics, carriers, warehousemen, landlords, processors, and other
like Persons, and all other indebtedness owed by it and perform and discharge in
a timely manner all
CREDIT AGREEMENT - Page 38
other obligations undertaken by it; provided, however, such Consolidated Member
need not pay any tax, fee, assessment, or governmental charge (w) that it is
contesting in good faith by appropriate proceedings diligently pursued, (x) for
which it has established proper reserves as required under GAAP, (y) for which
no Lien (other than a Permitted Lien) results from such non-payment, and (z)
with respect to which any such tax, fee, assessment, or governmental charge in
excess of $500,000, a Loan Party has notified the Agent in writing of any
contest described in clause (w) preceding.
Section 7.2 Legal Existence and Good Standing. Except as may be allowed
otherwise by Section 7.9, each Consolidated Member shall maintain its legal
existence and its qualification and good standing in all jurisdictions in which
the failure to maintain such existence and qualification or good standing could
reasonably be expected to have a Material Adverse Effect.
Section 7.3 Compliance with Law and Agreements; Maintenance of Licenses.
Each Consolidated Member shall comply in all material respects with all
Requirements of Law of any Governmental Authority having jurisdiction over it or
its business (including the Federal Fair Labor Standards Act and all
Environmental Laws). Each Consolidated Member shall obtain and maintain all
material licenses, permits, franchises, and governmental authorizations
necessary to own its property and to conduct its business as conducted on the
Closing Date. No Consolidated Member shall modify, amend, or alter its
certificate or articles of incorporation, bylaws, limited liability company
operating agreement, limited partnership agreement, or other similar constituent
documents other than in a manner which does not adversely affect the rights of
the Lenders or the Agent.
Section 7.4 Maintenance of Property; Inspection of Property; Appraisals.
(a) Each Consolidated Member, excluding Unrestricted Subsidiaries,
shall maintain all of its property necessary and useful in the conduct of
its business, in good operating condition and repair, ordinary wear and
tear excepted.
(b) Each Consolidated Member, excluding Unrestricted Subsidiaries,
shall permit representatives and independent contractors of the Agent (at
the expense of the Loan Parties not to exceed four (4) times per year
unless an Event of Default has occurred and is continuing) to visit and
inspect any of its properties, to examine its corporate, financial, and
operating records, and make copies thereof or abstracts therefrom and to
discuss its affairs, finances, and accounts with its directors, officers,
and independent public accountants, at such reasonable times during normal
business hours and as soon as may be reasonably desired, upon reasonable
advance notice to such Consolidated Member; provided, however, when an
Event of Default exists, the Agent or any Lender may do any of the
foregoing at the expense of the Loan Parties at any reasonable time and
without advance notice. The costs of any such visits and inspections shall
be paid by the Loan Parties as provided in Section 13.7.
(c) At any time when a Default or Event of Default exists, and at
such other times not more frequently than once per year as the Agent
requests, the Borrowers shall, at their expense and upon the Agent's
request, provide the Agent with appraisals or updates thereof
CREDIT AGREEMENT - Page 39
of any or all Collateral consisting of Real Estate covered by any Mortgage
or Equipment, from an appraiser, and prepared on a basis and in form,
satisfactory to the Agent, such appraisals and updates to include, without
limitation, information required by applicable law and regulations and by
the internal policies of the Lenders.
Section 7.5 Insurance.
(a) Each Consolidated Member, excluding Unrestricted Subsidiaries,
shall maintain with financially sound and reputable insurers having a
rating of at least A+ or better by Best Rating Guide, insurance against:
(i) loss or damage by fire with extended coverage; (ii) theft, burglary,
pilferage, and loss in transit; (iii) public liability and third party
property damage; (iv) larceny, embezzlement, or other criminal liability;
(v) business interruption; and (vi) such other hazards or of such other
types as is customary for Persons engaged in the same or similar business
as such Consolidated Member, all such insurance to be reasonably
consistent with prudent industry practice and as the Agent, in its
reasonable discretion, or acting at the direction of the Majority Lenders,
may specify, in amounts, and under policies acceptable to the Agent and
the Majority Lenders. Without limiting the foregoing, in the event that
any improved Real Estate located in the United States covered by a
Mortgage is determined to be located within an area that has been
identified by the Director of the Federal Emergency Management Agency as a
Special Flood Hazard Area ("SFHA"), the Loan Parties shall purchase and
maintain, or cause to be purchased and maintained, flood insurance on such
Real Estate and any Equipment and Inventory located on such Real Estate.
The amount of such flood insurance will be consistent with industry
practice and shall, at a minimum, comply with applicable federal
regulations as required by the Flood Disaster Protection Act of 1973, as
amended. Each Obligated Party shall also maintain flood insurance for its
Inventory and Equipment which is, at any time, located in a SFHA.
(b) For each of the insurance policies issued as required by this
Section 7.5, each Obligated Party shall cause the Agent, for the benefit
of the Agent and the Lenders, to be named as secured party or mortgagee
and sole loss payee or additional insured, in a manner acceptable to the
Agent. Each policy of insurance shall contain a clause or endorsement
requiring the insurer to give not less than thirty (30) days prior written
notice to the Agent in the event of cancellation of such policy for any
reason whatsoever and a clause or endorsement stating that the interest of
the Agent shall not be impaired or invalidated by any act or neglect of
the insured Person or the owner of any premises for purposes more
hazardous than are permitted by such policy. All premiums for such
insurance shall be paid when due, and certificates of insurance and, if
requested by the Agent or any Lender, photocopies of the policies shall be
delivered to the Agent, in each case, in sufficient quantity for
distribution by the Agent to each of the Lenders. If any Obligated Party
fails to procure (or cause to be procured) such insurance or to pay the
premiums therefor when due, the Agent may, and at the direction of the
Majority Lenders shall, do so from the proceeds of Revolving Loans.
Section 7.6 Insurance and Condemnation Proceeds. Each Loan Party shall
promptly notify the Agent and the Lenders of loss, damage, or destruction to the
Collateral which exceeds
CREDIT AGREEMENT - Page 40
$5,000,000 in any Fiscal Year, whether or not covered by insurance. The Agent is
hereby authorized to directly collect all insurance and condemnation proceeds in
respect of Collateral of a Loan Party and to apply such proceeds to the
reduction of the Obligations as follows:
(a) With respect to insurance and condemnation proceeds relating to
Collateral of a Loan Party other than Fixed Assets, after deducting from
such proceeds the reasonable expenses, if any, incurred by the Agent in
the collection or handling thereof, the Agent shall apply such proceeds to
the reduction of the Obligations in the manner provided for in Section
3.8.
(b) With respect to insurance and condemnation proceeds relating to
Collateral of a Loan Party consisting of Fixed Assets, after deducting
from such proceeds the reasonable expenses, if any, incurred by the Agent
in the collection or handling thereof, the Agent shall permit or require
the affected Loan Party to use such proceeds, or any part thereof, to
replace, repair, restore, or rebuild the relevant Fixed Assets in a
diligent and expeditious manner with materials and workmanship of
substantially the same quality as existed before the loss, damage, or
destruction so long as (i) no Default or Event of Default exists, (ii) the
aggregate of any such proceeds in any Fiscal Year do not exceed
$3,000,000, and (iii) such Loan Party first (A) provides the Agent and the
Majority Lenders with plans and specifications for any such repair or
restoration which shall be reasonably satisfactory to the Agent and the
Majority Lenders and (B) demonstrates to the reasonable satisfaction of
the Agent and the Majority Lenders that the funds available to it will be
sufficient to complete such project in the manner provided therein. In all
other circumstances, the Agent shall apply such insurance and condemnation
proceeds, ratably, to the reduction of the Obligations in the manner
provided for in Section 3.8).
Without limiting the foregoing, with respect to any such insurance or
condemnation proceeds of any Canada Subsidiary, at the request of the Parent
(but without obligation to do so) the Agent in its sole discretion may allow
such proceeds to be held as cash Collateral, rather than immediately applied to
the Obligations, on such terms as may be acceptable to the Agent.
Section 7.7 Environmental Laws.
(a) Each Obligated Party shall conduct its business in compliance
with all Environmental Laws applicable to it, including those relating to
the generation, handling, use, storage, and disposal of any Contaminant
except where the failure to do so could reasonably be expected to give
rise to or cause a liability of any Obligated Party in excess of
$2,000,000. Each Obligated Party shall take prompt and appropriate action
to respond to any non-compliance with Environmental Laws and shall
regularly report to the Agent on such response. Each Loan Party shall
cause each other Consolidated Member other than an Obligated Party to
conduct its business in compliance with all Environmental Laws applicable
to it, including those relating to the generation, handling, use, storage,
and disposal of any Contaminant, except where the failure to so comply
could not reasonably be expected to have a Material Adverse Effect. Each
Loan Party shall cause each other Consolidated Member other than an
Obligated Party to take prompt and appropriate action
CREDIT AGREEMENT - Page 41
to respond to any non-compliance with Environmental Laws, and shall
regularly report to the Agent on such response, except with respect to any
such non-compliance which could reasonably be expected to have a Material
Adverse Effect.
(b) Without limiting the generality of the foregoing, the Loan
Parties shall ,upon the Agent's request, submit to the Agent and the
Lenders annually, commencing on the first Anniversary Date, and on each
Anniversary Date thereafter, an update of the status of each environmental
compliance or liability issue, if any, concerning any Real Estate at any
time covered by any Mortgage. The Agent or any Lender may request, in
which case the Loan Parties will promptly furnish or cause to be furnished
to the Agent, copies of technical reports with respect to any such Real
Estate prepared by or for any Consolidated Member and its communications
with any Governmental Authority to determine whether any Consolidated
Member is proceeding reasonably to correct, cure, or contest in good faith
any alleged non-compliance or environmental liability. Each Loan Party
shall, at the Agent's or the Majority Lenders' request and at such Loan
Party's expense, (i) retain an independent environmental engineer
acceptable to the Agent to evaluate any site located on any such Real
Estate, including tests if appropriate, where the non- compliance or
alleged non-compliance with Environmental Laws has occurred and prepare
and deliver to the Agent, in sufficient quantity for distribution by the
Agent to the Lenders, a report setting forth the results of such
evaluation, a proposed plan for responding to any environmental problems
described therein, and an estimate of the costs thereof and (ii) provide
to the Agent, in sufficient quantity for distribution by the Agent to the
Lenders, a supplemental report of such engineer whenever the scope of the
environmental problems (if any), or the response thereto or the estimated
costs thereof, shall increase in any material respect.
(c) The Agent and its representatives shall have the right at any
reasonable time to enter and visit any Real Estate at any time covered by
any Mortgage for the purposes of observing the Real Estate, taking and
removing soil or groundwater samples, and conducting tests on any part of
the Real Estate. The Agent is under no duty, however, to visit or observe
any Real Estate or to conduct tests, and any such acts by the Agent will
be solely for the purposes of protecting the Agent's Liens and preserving
the Agent and the Lenders' rights under the Loan Documents. No site visit,
observation, or testing by the Agent and the Lenders will result in a
waiver of any Default or Event of Default or impose any liability on the
Agent or the Lenders. In no event will any site visit, observation, or
testing by the Agent be a representation that hazardous substances are or
are not present in, on or under any Real Estate, or that there has been or
will be compliance with any Environmental Law. Neither any Consolidated
Member nor any other party is entitled to rely on any site visit,
observation, or testing by the Agent. The Agent and the Lenders owe no
duty of care to protect the Consolidated Members or any other party
against, or to inform the Consolidated Members or any other party of, any
hazardous substances or any other adverse condition affecting any Real
Estate. The Agent may in its discretion disclose to any Consolidated
Member or to any other party if so required by law any report or findings
made as a result of, or in connection with, any site visit, observation,
or testing by the Agent. The Agent makes no warranty or representation to
the Consolidated Members or any other party regarding the truth, accuracy,
or completeness of any such report or findings that may be disclosed. The
Loan Parties
CREDIT AGREEMENT - Page 42
understand, and shall cause each other Consolidated Member to understand,
that depending on the results of any site visit, observation, or testing
by the Agent and disclosed to any Consolidated Member, a Consolidated
Member may have a legal obligation to notify one or more environmental
agencies of the results, that such reporting requirements are
site-specific, and are to be evaluated by the Consolidated Members without
advice or assistance from the Agent. In each instance, the Agent will give
the Parent reasonable notice before entering any Real Estate or any other
place the Agent is permitted to enter pursuant to this Section 7.7(c). The
Agent will make reasonable efforts to avoid interfering with any
Consolidated Member's use of any Real Estate or any other property in
exercising any rights provided hereunder.
Section 7.8 Compliance with ERISA and Similar Foreign Laws. Each
Consolidated Member shall, and shall cause each of its ERISA Affiliates to: (a)
maintain each Plan in compliance in all material respects with the applicable
provisions of ERISA, the Code, and other federal or state law; (b) cause each
Plan which is qualified under Section 401(a) of the Code to maintain such
qualification; (c) make all required contributions to any Plan subject to
Section 412 of the Code; (d) not engage in a prohibited transaction or violation
of the fiduciary responsibility rules with respect to any Plan or Foreign Plan;
(e) not engage in a transaction that could be subject to Section 4069 or 4212(c)
of ERISA; and (f) maintain each Foreign Plan in compliance in all material
respects with Requirements of Law applicable to such Foreign Plan; (g) satisfy
all contribution obligations in all material respects with respect to such
Foreign Plan; and (h) cause each Foreign Plan and related funding arrangements
that are intended to qualify for tax-favored status to maintain such tax-favored
status.
Section 7.9 Mergers, Consolidations, or Sales. No Consolidated Member,
excluding the Unrestricted Subsidiaries, shall enter into any transaction of
merger, amalgamation, reorganization, or consolidation, or transfer, sell,
assign, lease, or otherwise dispose of all or any part of its property, or wind
up, liquidate or dissolve, or agree to do any of the foregoing, except for sales
of Inventory in the ordinary course of its business, sales or other dispositions
(in each case subject to Sections 3.4 and 7.26) of Real Estate and Equipment in
the ordinary course of its business and not otherwise prohibited by this
Agreement that is obsolete or no longer useable by such Consolidated Member in
its business, and assignments of Proprietary Rights between or among
Consolidated Members; provided that, notwithstanding the foregoing or any other
provision of this Agreement, as long as no Default or Event of Default exists or
would result therefrom and provided the Parent gives the Agent and the Lenders
prior written notice:
(a) a Consolidated Member, other than the Parent, may wind-up,
dissolve, or liquidate if (i) its property is transferred to the Parent or
another Loan Party (provided, that the property of a Borrowing Base Party
may only be transferred to another Borrowing Base Party) and (ii) the
Person acquiring such property complies with its obligations under Section
7.28 of this Agreement and Section 2.3 of the Security Agreement
simultaneously with such acquisition (provided, that a Dormant Guarantor
may dissolve without compliance with clauses (i) and (ii) preceding so
long as such Dormant Guarantor owns no property);
(b) a Consolidated Member, other than the Parent, may merge or
consolidate with the Parent or another Loan Party (provided the Parent or
such other Loan Party is the survivor
CREDIT AGREEMENT - Page 43
of any such merger or consolidation to which it is a party, and provided
further, that a Borrowing Base Party may merge or consolidate only with
another Borrowing Base Party);
(c) a Loan Party may make Permitted Acquisitions;
(d) subject to Sections 3.4 and 7.26 a Consolidated Member, other
than the Unrestricted Subsidiaries, may enter into sales or other
dispositions (other than transactions subject to Section 7.19) of its
property consisting of Equipment and Real Estate if (A) the Orderly
Liquidation Value of such Equipment and the appraised fair market value of
such Real Estate does not exceed $15,000,000 in the aggregate (net of the
related sales costs, if any, of such Equipment and Real Estate) during the
term of this Agreement for all of the Consolidated Members, other than the
Unrestricted Subsidiaries, collectively, (B) the Agent shall have received
written notice of any such sale or disposition involving Equipment with an
Orderly Liquidation Value and Real Estate having an appraised fair market
value in excess of $500,000, and (C) the cash consideration received by
the applicable Consolidated Member at the time of any such sale or other
disposition shall be not less than seventy-five percent (75.0%) of the
total consideration received; and
(e) Subject to Section 3.4, a Consolidated Member, other than the
Unrestricted Subsidiaries, may enter into transactions permitted under
Section 7.19.
The inclusion of proceeds in the definition of Collateral shall not be deemed to
constitute the Agent's or any Lender's consent to any sale or other disposition
of the Collateral except as expressly permitted herein.
Section 7.10 Distributions; Capital Change; Restricted Investments. No
Consolidated Member, excluding the Unrestricted Subsidiaries, shall (a) directly
or indirectly declare or make, or incur any liability to make, any Distribution,
except Distributions by a Consolidated Member to a Loan Party, (b) make any
change in its capital structure which could have a Material Adverse Effect, or
(c) make any Restricted Investment. Notwithstanding any other provision of this
Agreement, the Loan Parties shall not (i) permit the aggregate value of all
Unrestricted Subsidiaries other than EGL Trade Services, Inc. to exceed $50,000
at any time and (ii) shall not permit the Consolidated Members to at any time
own Margin Stock with an aggregate value in excess of $50,000.
Section 7.11 Transactions Affecting Collateral or Obligations. No
Consolidated Member shall enter into any transaction which could be reasonably
expected to result in a Material Adverse Effect.
Section 7.12 Guaranties. No Consolidated Member, excluding the
Unrestricted Subsidiaries, shall make, issue, or become liable on any Guaranty,
except Guaranties of the Debt of a Consolidated Member, excluding an
Unrestricted Subsidiary, allowed under clauses (a) and (c) of Section 7.13, or
clauses (b) or (d) of Section 7.13 to the extent any such Guaranty of any such
Debt exists on the Closing Date.
CREDIT AGREEMENT - Page 44
Section 7.13 Debt. No Consolidated Member, excluding the Unrestricted
Subsidiaries, shall incur or maintain any Debt, other than: (a) the Obligations
of the Loan Parties; (b) the Debt described on Schedule 6.8; (c) Capital Leases
of Equipment and purchase money secured Debt incurred to purchase Equipment;
provided that (i) the Liens securing such Capital Leases and purchase money
secured Debt shall attach only to the Equipment acquired by the incurrence of
such Capital Leases and purchase money secured Debt and shall not secure any
other Debt and (ii) the aggregate amount of such Debt (including Capital Leases)
outstanding does not exceed $25,000,000 at any time; (d) Debt evidencing a
refunding, renewal, or extension of the Debt described on Schedule 6.8; provided
that (i) the principal amount thereof is not increased, (ii) the Liens, if any,
securing such refunded, renewed, or extended Debt do not attach to any assets in
addition to those assets, if any, securing the Debt to be refunded, renewed, or
extended, (iii) no Person that is not an obligor or guarantor of such Debt as of
the Closing Date shall become an obligor or guarantor thereof (except pursuant
to a transaction permitted by clause (b) of Section 7.9) and (iv) the terms of
such refunding, renewal, or extension are, in the Agent's reasonable discretion,
no less favorable to such Consolidated Member, the Agent, or the Lenders than
the original Debt; (e) Debt owing by an Obligated Party to a Loan Party for
intercompany loans and advances made by such Loan Party for working capital in
the ordinary course of business; and (f) the Subordinated Debt evidenced by the
Convertible Subordinated Notes and the Convertible Subordinated Debt Documents,
in each case as existing on the Closing Date.
Section 7.14 Prepayment. No Consolidated Member, excluding the
Unrestricted Subsidiaries, shall voluntarily prepay any Debt except the
Obligations.
Section 7.15 Transactions with Affiliates. Except as set forth below, no
Loan Party shall sell, transfer, distribute, or pay any money or property,
including, but not limited to, any fees or expenses of any nature (including,
but not limited to, any fees or expenses for management services), to any
Affiliate that is not a Loan Party, or lend or advance money or property to any
Affiliate that is not a Loan Party, or invest in (by capital contribution or
otherwise) or purchase or repurchase any Capital Stock or indebtedness, or any
property, of any Affiliate that is not a Loan Party, or become liable on any
Guaranty of the indebtedness, dividends, or other obligations of any Affiliate
that is not a Loan Party. Notwithstanding the foregoing, if no Default or Event
of Default is in existence or would result therefrom, any Consolidated Member
may engage in transactions with an Affiliate (including without limitation as
described in Schedule 7.15) in the ordinary course of such Consolidated Member's
business consistent with past practices and upon terms no less favorable to such
Consolidated Member than would be obtained in a comparable arm's-length
transaction with a third party who is not an Affiliate.
Section 7.16 Investment Banking and Finder's Fees. No Consolidated Member
shall pay or agree to pay, or reimburse any other party with respect to, any
investment banking or similar or related fee, underwriter's fee, finder's fee,
or broker's fee to any Person in connection with this Agreement other than
pursuant to the Agent's Letter. The Loan Parties shall defend and indemnify the
Agent and the Lenders against and hold them harmless from (a) all claims of any
Person that any Borrower is obligated to pay any such fees and (b) all costs and
expenses (including Attorneys Costs) incurred by the Agent and/or any Lender in
connection therewith.
CREDIT AGREEMENT - Page 45
Section 7.17 Business Conducted. The Consolidated Members shall not
engage, directly or indirectly, in any line of business other than the
businesses in which the Consolidated Members are engaged on the Closing Date and
any business activities that are substantially similar, related, or incidental
thereto.
Section 7.18 Liens. No Consolidated Member, excluding the Unrestricted
Subsidiaries, shall create, incur, assume, or permit to exist any Lien on any
property (excluding Margin Stock) now owned or hereafter acquired by it, except
Permitted Liens. Other than as set forth in this Agreement or in connection with
the creation or incurrence of any Debt under Section 7.13(c) no Consolidated
Member, excluding the Unrestricted Subsidiaries, will enter into or become
subject to any Negative Pledge; provided that any Negative Pledge entered into
in connection with the creation or incurrence of Debt under Section 7.13(c)
shall be limited to the property subject to the purchase money Lien securing
such Debt.
Section 7.19 Sale and Leaseback Transactions. No Consolidated Member,
excluding the Unrestricted Subsidiaries, shall, directly or indirectly, enter
into any arrangement (a "sale and leaseback arrangement") with any Person
providing for such Consolidated Member to lease or rent property that such
Consolidated Member has sold or will sell or otherwise transfer to such Person
if, after giving effect to such arrangement, the aggregate value (determined on
a valuation basis acceptable to the Agent) of all property which has been made
subject to a sale and leaseback arrangement under this Section (excluding sale
and leaseback arrangements on the Parent's headquarters location in Houston,
Texas and its facility in Denver, Colorado) would exceed $15,000,000.
Section 7.20 New Subsidiaries. The Consolidated Members shall not,
directly or indirectly, organize, create, acquire, or permit to exist any (a)
Unrestricted Subsidiary other than Unrestricted Subsidiaries existing on the
Closing Date or any other Subsidiary of the Parent which the Agent, in its sole
discretion at the request of the Parent, designates as an Unrestricted
Subsidiary, or (b) any other Subsidiary other than the Subsidiaries of the
Parent in existence on the Closing Date except, in the case of this clause (b),
as permitted by this Section 7.20. Not later than thirty (30) days prior to
creation or acquisition of any Domestic Subsidiary of a Loan Party, such Loan
Party shall notify the Agent that it intends to create or acquire such Domestic
Subsidiary and propose to the Agent that such new Domestic Subsidiary become,
and with the Agent's and the Majority Lenders' consent pursuant to Section 13.22
cause such new Domestic Subsidiary to become, a Loan Party as a Borrower,
subject to the terms of this Agreement. Not later than thirty (30) days prior to
creation or acquisition of any Eligible Foreign Subsidiary, the Parent shall
notify the Agent that it, or one of its Subsidiaries, intends to create or
acquire such Subsidiary and propose to the Agent that such new Subsidiary
become, and with the Agent's and the Majority Lenders' consent pursuant to
Section 13.22 cause such new Subsidiary to become, a Loan Party as a Borrowing
Base Party but not as a Borrower, subject to the terms of this Agreement. In
connection with the forgoing, at the Agent's request the Loan Parties shall
promptly execute and deliver or cause to be promptly executed and delivered to
the Agent such guaranties, amendment agreements, consents, and other documents
and agreements as the Agent requests so that such Subsidiary guarantees the
Obligations (other than Existing Obligations in the case of any such documents
executed by a Newly Obligated Borrower) and grants a Lien to secure such
Guaranty and such Obligations on the same terms as the existing
CREDIT AGREEMENT - Page 46
Loan Parties (including the execution and delivery of a joinder agreement in
form and substance satisfactory to the Agent or the execution of such new Loan
Documents and consents as the Agent determines are necessary to have the same
effect in different jurisdictions). In connection therewith and within fifteen
(15) days after the formation of any such new Subsidiary, the Parent shall
deliver or cause to be delivered to the Agent the Capital Stock of such new
Subsidiary (together with any other agreements, certificates, or documents
required to evidence and perfect the Agent's Liens in such Capital Stock),
provide organizational documents and if requested by the Agent, opinion letters
reasonably satisfactory to the Agent reflecting the status of such new
Subsidiary and the authorization, authority, noncontravention, and
enforceability of such agreements. With respect to any such Subsidiary that
becomes a Loan Party after the Closing Date, upon execution and delivery of such
Loan Documents and other instruments, certificates, and agreements, such
Subsidiary shall automatically become a Loan Party, and with the consent of the
Agent and the Majority Lenders, a Borrower, and thereupon shall have all of the
rights, benefits, duties, and obligations in such capacity under the Loan
Documents.
Section 7.21 Fiscal Year. The Loan Parties shall not change the last day
of their Fiscal Year.
Section 7.22 Capital Expenditures.
(a) No Consolidated Member, excluding the Unrestricted Subsidiaries,
shall make or incur any Capital Expenditure (other than from insurance
proceeds to the extent permitted by Section 7.6(b)) if, after giving
effect thereto, the aggregate amount of all Capital Expenditures by the
Consolidated Members, excluding the Unrestricted Subsidiaries, on a
consolidated basis (a) during the fiscal quarter ending December 31, 2001,
would exceed $12,000,000, (b) during any of the first three (3)
fiscal-quarter-to-date periods during any Fiscal Year beginning with the
Fiscal Year ending December 31, 2002, would exceed (i) $12,000,000 for the
first of such Fiscal Quarters, (ii) $24,000,000 in the aggregate for the
first and second of such Fiscal Quarters or (iii) $36,000,000 in the
aggregate for the first, second and third of such Fiscal Quarters, as
applicable, or (c) during any Fiscal Year beginning with the Fiscal Year
ending December 31, 2002, $48,000,000 (the respective dollar limitations
specified in clauses (a) and (b) preceding each hereinafter being called a
"Capex Limitation");
(b) If, after giving effect to any proposed Capital Expenditures,
the Availability Without Regard to Line Constraint is greater than
$40,000,000, then, at the Borrowers' option, the Capex Limitation
applicable with respect to such Capital Expenditure may be increased by
the additional amount of $3,000,000, provided, that no more than one (1)
such increase may be utilized during any fiscal quarter.
Section 7.23 Minimum Adjusted Tangible Net Worth. Adjusted Tangible Net
Worth, determined for the Parent and its Subsidiaries, excluding the
Unrestricted Subsidiaries, as of the last day of the fiscal quarter ending
December 31, 2001 and continuing as of the last day of each fiscal quarter
ending thereafter, shall not be less than the Adjusted Tangible Net Worth
Requirement.
CREDIT AGREEMENT - Page 47
Section 7.24 Use of Proceeds. The Borrowers shall use the proceeds of the
initial Loans to (a) pay and discharge all Original Loans of the Terminating
Lenders, (b) renew and continue (but not extinguish) the Original Loan of the
Bank and (c) pay costs, fees and expenses in connection with this Agreement. The
Borrowers shall use the proceeds of all other Loans for business purposes not
otherwise prohibited by this Agreement, and shall not use any portion of the
Loan proceeds, directly or indirectly, (i) to buy or carry any Margin Stock,
other than Permitted Stock Repurchases not otherwise prohibited by this
Agreement, (ii) to repay or otherwise refinance indebtedness of the Borrowers or
others incurred to buy or carry any Margin Stock, (iii) to extend credit for the
purpose of buying or carrying any Margin Stock, (iv) to acquire any security in
any transaction that is subject to Section 13 or 14 of the Exchange Act or (v)
to make any payment under or in respect of any Subordinated Debt if any Default
or Event of Default is in existence, or would exist after giving effect to such
Loan.
Section 7.25 Bank as Depository. Each Borrower shall maintain the Bank (or
in the case of a Loan Party that is not a Borrower, the Bank or an Affiliate of
the Bank) as its principal depository bank, including for the maintenance of
operating, administrative, cash management, collection activity, and other
deposit accounts for the conduct of its business.
Section 7.26 Proceeds from Asset Dispositions by Consolidated Members
other than Borrowers. Each Borrower shall cause each of its Subsidiaries that is
not a Borrower, excluding the Unrestricted Subsidiaries, to cause all cash
proceeds of any Asset Disposition by such Subsidiary (including without
limitation proceeds of asset dispositions permitted by Sections 7.9(d) and
7.9(e)), to be transferred to such Borrower, by loan, Distribution, or other
inter-company transfer if (i) such assets are not replaced by such Consolidated
Member with assets of a similar nature which are usable in its business within
six (6) months of the subject Asset Disposition and (ii) on the last day of such
six (6) month period, Availability Without Regard to Line Constraint is less
than $25,000,000.
Section 7.27 Guaranties. Each Loan Party, including any Person which
becomes a Loan Party after the Closing Date pursuant to the terms of this
Agreement, shall guarantee payment and performance of the Obligations (other
than Obligations owing by itself and excluding Existing Obligations in the case
of any such guarantee by a Newly Obligated Borrower) pursuant to a Guaranty
Agreement in form and substance satisfactory to the Agent, duly executed by each
such Loan Party. Each such guaranteeing Loan Party that is a Borrower
acknowledges and expressly agrees with the Agent and each Lender that the
Guaranty by such Borrower is required solely as a condition to, and is given
solely as inducement for and in consideration of, credit or accommodations
extended or to be extended under the Loan Documents to any or all of the other
Borrowers and is not required or given as a condition of extensions of credit to
such Borrower.
Section 7.28 Agent's Liens. Each Loan Party, including any Person which
becomes a Loan Party after the Closing Date pursuant to the terms of this
Agreement, as security for the Obligations (other than Existing Obligations in
the case of a Newly Obligated Borrower) and its Guaranty granted pursuant to
Section 7.27, shall grant to the Agent, for the benefit of the Agent, the
Lenders and the Issuer, pursuant to Loan Documents in form and substance
satisfactory to the Agent, a continuing first priority and exclusive (other than
Permitted Liens) Lien on (i) all assets (except as limited with respect to Real
Estate as provided by clause (iii) following) now owned and hereafter
CREDIT AGREEMENT - Page 48
acquired by each such Loan Party, including without limitation, all existing and
future acquired Accounts, Intercompany Accounts, contract rights, inventory,
machinery and equipment, vehicles and rolling stock, chattel paper, documents,
instruments, deposit accounts, investment property (except as limited pursuant
to clause (ii) following), general intangibles (including, without limitation,
payment intangibles, intercompany accounts, trademarks, tradenames, patents,
copyrights and licenses), software, fixtures, commercial tort claims, supporting
obligations, letter of credit rights and other goods now owned and hereafter
acquired by each such Loan Party, (ii) (A) 100% of the Capital Stock of each
Borrower other than the Parent, (B) sixty-five percent (65.0%) of the Capital
Stock of EGL (UK) Holding Company Limited, (C) and the maximum amount which is
less than 66 2/3% of all Capital Stock of each other direct Foreign Subsidiary
of any Loan Party, as may be requested by the Agent in its sole discretion, and
(iii) the Real Estate and the improvements thereon owned by any Loan Party and
located in Houston, Texas, San Francisco (to the extent not sold prior to the
Closing Date), California, Denver, Colorado, and Boston, Massachusetts.
Section 7.29 Further Assurances. Without limiting any other provision of
this Agreement or the other Loan Documents, the Loan Parties shall, and shall
cause each Obligated Party to, execute and deliver, or cause to be executed and
delivered, to the Agent such documents and agreements, and shall take or cause
to be taken such actions as the Agent may, from time to time, reasonably request
to carry out the terms and conditions of this Agreement and the other Loan
Documents.
Section 7.30 Proceeds from Surplus Cash Deposits. Any Borrowing Base
Party, who is not a Borrower, that has on deposit in any bank account unapplied
cash (being surplus cash not used for general working capital needs) exceeding
$5,000,000, at any time when Availability Without Regard to Line Constraint is
less than $25,000,000, shall, unless otherwise agreed by the Agent in its sole
discretion, transfer such unapplied cash to the Parent by loan, Distribution, or
other intercompany transfer.
Section 7.31 Excess Collections, Investments, Etc. No Loan Party, other
than a Borrower, shall have, in the aggregate, a sum exceeding the equivalent
amount of $8,000,000 in the form of (a) a deposit of cash in any bank account,
(b) securities (other than Capital Stock of a Subsidiary of the Parent), or (c)
property that is of the type described in clauses (d), (e), (f), (h), (l) or (m)
of the definition of Restricted Investment, unless otherwise agreed by the Agent
in its sole discretion.
Section 7.32 Collections of Accounts. Collections of Accounts of the
Borrowers shall be administered as provided by the Security Agreement. Unless
otherwise agreed by the Agent in its discretion, collections of Accounts of the
Loan Parties other than the Borrowers shall be transferred daily to a Payment
Account maintained with the Agent, an Affiliate of the Agent or other financial
institution acceptable to the Agent, subject to a Blocked Account Agreement
satisfactory to the Agent, which shall provide for sweeps of Collateral proceeds
to the Agent on terms satisfactory to the Agent.
Section 7.33 Availability Without Regard to Line Constraint. Availability
Without Regard to Line Constraint, shall equal or exceed (i) on each day after
the Closing Date until all requirements, if any, of the Postclosing Agreement
are satisfied to the Agent's satisfaction or waived in accordance with Section
11.1, $40,000,000, (ii) on each day on and after the date when clause (i) is no
longer
CREDIT AGREEMENT - Page 49
applicable through the Availability Measurement Reduction Date, $25,000,000 and
(ii) provided that clause (i) is no longer applicable, on each day on and after
the Availability Measurement Reduction Date, $15,000,000.
Section 7.34 Subordinated Debt. No Subordinated Debt Document shall be
amended or modified without the prior written consent of the Agent and the
Majority Lenders.
Section 7.35 Foreign Credit Debt. On or before the expiration of sixty
(60) days after the Closing Date the Parent will cause all Debt under the
Foreign Credit Debt to be satisfied and discharged in full and the Foreign
Credit Debt Documents to be terminated, subject to the terms thereof.
ARTICLE 8
CONDITIONS OF LENDING
Section 8.1 Conditions Precedent to Making of Loans on the Closing Date.
The obligation of the Lenders to make the initial Loans on the Closing Date, and
the obligation of the Agent to cause the Letter of Credit Issuer to issue any
Letter of Credit or Credit Support on the Closing Date, are subject to the
following conditions precedent having been satisfied in a manner satisfactory to
the Agent and each Lender:
(a) The Agent shall have received each of the following documents,
all of which shall be satisfactory in form and substance to the Agent and
the Lenders:
(i) a certificate of the corporate secretary, general partner
or comparable authorized representative of each Loan Party, stating
that the certified copies of the certificate of incorporation,
certificate of limited partnership, or comparable organizational
document of each such Obligated Party and the bylaws, regulations,
operating agreement, or similar governing document of each such Loan
Party (in each case with all amendments, if any), delivered to the
Agent in connection with the Original Credit Agreement, in each case
are true and correct and in effect on the Closing Date;
(ii) certificates of incumbency and specimen signatures with
respect to each Person authorized to execute and deliver this
Agreement and the other Loan Documents on behalf of each Loan Party
and each other Person executing any document, certificate, or
instrument to be delivered in connection with this Agreement and the
other Loan Documents and, in the case of each Borrower, to request
Borrowings and the issuance of Letters of Credit or Credit Support;
(iii) a certificate of the corporate secretary, general
partner or comparable authorized representative of each Loan Party,
stating that the certificates evidencing the existence of each such
Loan Party, and the certificates evidencing the good standing of
each such Loan Party, delivered to the Agent in connection with the
CREDIT AGREEMENT - Page 50
Original Credit Agreement, in each case are true and correct and in
effect on the Closing Date as if such certificates had been issued
as of the Closing Date;
(iv) certified copies of all action taken by each Loan Party
to authorize the execution, delivery, and performance of this
Agreement, the other Loan Documents, and with respect to the
Borrowers, the Borrowings and the issuance of Letters of Credit
and/or Credit Support;
(v) a certificate of each Loan Party signed by a Responsible
Officer:
(A) stating that all of the representations and
warranties made or deemed to be made under this Agreement are
true and correct as of the Closing Date, after giving effect
to the Loans to be made at such time and the application of
the proceeds thereof and the issuance of any Letter(s) of
Credit and/or Credit Support at such time,
(B) stating that no Default or Event of Default exists,
(C) specifying the account of the Borrowers which is the
Designated Account, and
(D) certifying as to (i) attachment of true an correct
copies of the Synthetic Lease Transaction Documents and the
Convertible Subordinated Debt Documents and (ii) such other
factual matters as may be reasonably requested by the Agent;
(vi) with respect to any Letter of Credit or Credit Support to
be issued, all documentation required by Section 1.4, duly executed;
(vii) a Revolving Loan Note payable to the order of each
Lender in the amount of its Commitment with respect thereto, duly
executed and delivered by each Borrower, complying with the
requirements of Section 1.2(b);
(viii) (A) UCC financing statements and/or amendments to
existing UCC financing statements with respect to all Collateral as
may be requested by the Agent, duly executed by the respective
Obligated Parties, to the extent any such Liens may be perfected
under the UCC and (B) with respect to any Loan Party that is an
Eligible Foreign Subsidiary, all filings and recordations required
by Requirements of Law in all jurisdictions that the Agent may deem
necessary or desirable in order to perfect the Agent's Lien in
Collateral owned by such Loan Party;
(ix) (A) duly executed UCC-3 termination statements or
assignments with respect to the UCC and such other releases or
instruments, in each case in form and substance satisfactory to the
Agent, in each case as shall be necessary to terminate and satisfy
all Liens, except Permitted Liens, on the property of the Loan
Parties, and
CREDIT AGREEMENT - Page 51
(B) releases, terminations, or other instruments under the
Requirements of Law of each Eligible Foreign Jurisdiction
(including, without limitation, under the PPSA and the CCQ), and
such other releases or instruments, in each case in form and
substance satisfactory to the Agent, as shall be necessary to
terminate and satisfy all Liens, except Permitted Liens, on the
Accounts and Deposit Accounts of any Loan Party;
(x) as may be required by the Agent in its discretion, any
Copyright Security Agreement, Patent Security Agreement and/or
Trademark Security Agreement, as applicable, with respect to any and
all Proprietary Rights, if any, owned by any Loan Party which must
be registered with any Governmental Authority to perfect the Agent's
Liens in such Proprietary Rights, duly executed by each such Loan
Party, as applicable;
(xi) each Guaranty Agreement, duly executed and delivered by
each Loan Party required pursuant to Section 7.27;
(xii) the Security Agreement, duly executed by the Loan
Parties, and all Canadian Security Documents (or amendments to
Canadian Security Documents executed in connection with the Original
Credit Agreement), duly executed by the Loan Parties that are
Canadian Subsidiaries, as applicable, as required by the Agent;
(xiii) (A) except as previously delivered to the Agent in
connection with the Original Credit Agreement, stock certificates
and stock powers (duly executed in blank) for all Capital Stock
referenced in clause (ii) of Section 7.28, in form and substance
satisfactory to the Agent, (B) as may be required by the Agent in
its reasonable discretion for any Investment Property, "control"
agreements (pursuant to the UCC or the laws of any foreign
jurisdiction), each duly executed, as the Agent may request with
respect to any other Investment Property (other than Capital Stock
of a Subsidiary of the Parent) listed in Schedule 6.27, and (C) such
other notices, acknowledgments, and other documents as may be
required in order to perfect the Agent's Lien in such Investment
Property pursuant to applicable Requirements of Law;
(xiv) a Borrowing Base Certificate effective as of the
Business Day preceding the day such initial Loans are to be funded
or any such Letter of Credit or Credit Support is to be issued;
(xv) as requested by the Agent in its discretion, a landlord's
or mortgagee's waiver and consent agreement, in form and substance
reasonably acceptable to the Agent, duly executed on behalf of each
landlord or mortgagee, as the case may be, of Real Estate on which
any books and records in respect of the Collateral is located
(provided that the Loan Parties may defer delivery of any such
agreements for a period not to exceed ninety (90) days from the
Closing Date; provided, further, that thereafter the Agent may, in
its discretion, establish a reserve with respect to any such
CREDIT AGREEMENT - Page 52
requested landlord's or mortgagee's waiver and consent agreement
which has not been delivered to the Agent;
(xvi) each Blocked Account Agreement duly executed as required
by the Security Agreement or the Foreign Security Documents or as
otherwise required by the Agent, and the Agent shall have
established all administrative requirements in respect of
collections on Accounts of the Loan Parties in a manner satisfactory
to the Agent;
(xvii) (A) the Agent shall have received satisfactory evidence
that the Agent has a valid, exclusive (other than Permitted Liens)
and perfected first priority Lien in all Collateral as required by
Section 7.28, to the extent such Liens may be perfected under the
UCC or the Requirements of Law of each applicable Eligible Foreign
Jurisdiction (excluding any Liens on vehicles for which a
certificate of title has been issued and Liens perfected solely by
possession, but only to the extent the Agent has not requested
perfection of its Liens in such vehicles or possession of such
Collateral), and in connection therewith each Loan Party shall have
executed and delivered to the Agent such Loan Documents as may be
required by the Agent, in each case in form and substance
satisfactory to the Agent;
(xviii) with respect to Real Estate referenced in clause (iii)
of Section 7.28, the applicable Loan Party shall have executed and
delivered to the Agent an amendment or modification of the Mortgage
previously executed and delivered in connection with the Original
Credit Agreement with respect to such Real Estate, in each case in
proper form for recording in the jurisdiction in which such Real
Estate is located, in form and substance reasonably satisfactory to
the Agent, and true and complete copies of each of the following to
the extent it exists and is in the possession or control of any
Consolidated Member and has not already been delivered to the Agent
in connection with the Original Credit Agreement, in each case with
respect to such Real Estate: (1) any owner's or mortgagee's policy
of title insurance, (2) any environmental site assessment, (3) any
boundary survey, and (4) such other information, documentation,
opinions, and certifications with respect to any such parcel of Real
Estate as may be reasonably requested by the Agent;
(xix) signed opinions of counsel for the Loan Parties, opining
as to such matters in connection with the transactions contemplated
by this Agreement as the Agent may reasonably request, each such
opinion to be in a form, scope, and substance satisfactory to the
Agent, the Lenders, and their respective counsel;
(xx) the Agent shall have received evidence, in form, scope,
and substance, reasonably satisfactory to the Agent, of all
insurance coverage as required by this Agreement;
(xxi) the Agent shall have received true and complete copies
of the Convertible Subordinated Debt Documents, with all exhibits
and schedules thereto,
CREDIT AGREEMENT - Page 53
together with all opinions and related agreements executed and/or
delivered in connection therewith;
(xxii) the Agent shall have received true and complete copies
of all Synthetic Lease Transaction Documents, with all exhibits and
schedules thereto, together with all opinions and related agreements
executed and/or delivered in connection therewith; and
(xxiii) such other documents and instruments as the Agent or
any Lender may reasonably request.
(b) On the Closing Date, after giving effect to the making of all
Loans (including any Loans made to finance payment or reimbursement for
fees, costs, and expenses then payable under or pursuant to this
Agreement) and issuance of all Letters of Credit and Credit Support and
with all of their obligations current to the Agent's satisfaction, the
Availability Without Regard to Line Constraint shall be in an amount not
less than $40,000,000.
(c) All representations and warranties made hereunder and in the
other Loan Documents shall be true and correct.
(d) No Default or Event of Default shall exist or would exist after
giving effect to the Loans to be made and the Letters of Credit and Credit
Support to be issued.
(e) The Loan Parties shall have paid all fees and expenses of the
Agent and the Attorney Costs incurred in connection with any of the Loan
Documents and the transactions contemplated thereby to the extent
invoiced.
(f) The Agent and the Lenders shall have had an opportunity to
examine the books of account and other records and files of the
Consolidated Members and to make copies thereof, and to conduct a
pre-closing audit which shall include, without limitation, verification of
Accounts and the Borrowing Base, and the results of such examination and
audit shall have been satisfactory to the Agent and the Lenders in all
respects.
(g) All proceedings taken in connection with the execution of this
Agreement, the other Loan Documents, and all documents and papers relating
thereto shall be satisfactory in form, scope, and substance to the Agent
and the Lenders.
(h) Without limiting the generality of the items described above,
the Obligated Parties and each Person guaranteeing or securing payment of
the Obligations shall have delivered or caused to be delivered to the
Agent (in form and substance reasonably satisfactory to the Agent), the
financial statements, instruments, resolutions, documents, agreements,
certificates, opinions and other items required by the Agent.
(i) The Agent and the Lenders shall be satisfied that the Loan
Parties are able to comply with Collateral and financial reporting
requirements under the Loan Documents.
CREDIT AGREEMENT - Page 54
(j) There shall exist no action, suit, investigation, litigation, or
proceeding pending or threatened in any court or before any arbitrator or
governmental authority that in the Agent's or any Lender's reasonable
judgment (i) could reasonably be expected to have a Material Adverse
Effect on the business, management, condition (financial or otherwise),
operations, performance, properties, profits, or prospects of the Loan
Parties or which could impair the Loan Parties' ability to perform
satisfactorily under the Loan Documents or (ii) could materially and
adversely affect the transactions contemplated by the Loan Documents.
The acceptance by the Borrowers of any Loans made or Letters of Credit or Credit
Support issued on the Closing Date shall be deemed to be a representation and
warranty made by the Loan Parties to the effect that all of the conditions
precedent to the making of such Loans or issuance of such Letters of Credit or
Credit Support have been satisfied, with the same effect as delivery to the
Agent and the Lenders of a certificate signed by a Responsible Officer of the
Loan Parties, dated the Closing Date, to such effect. Execution and delivery to
the Agent by a Lender of a counterpart of this Agreement shall be deemed
confirmation by such Lender that (i) all conditions precedent in this Section
8.1 have been fulfilled or waived to the satisfaction of such Lender, (ii) the
decision of such Lender to execute and deliver to the Agent an executed
counterpart of this Agreement was made by such Lender independently and without
reliance on the Agent or any other Lender as to the satisfaction of any
condition precedent set forth in this Section 8.1, and (iii) all documents sent
to such Lender for approval, consent, or satisfaction were acceptable to such
Lender.
Section 8.2 Conditions Precedent to Each Loan. The obligation of the
Lenders to make each Loan, including the initial Loans on the Closing Date, and
the obligation of the Agent to cause the Letter of Credit Issuer to issue any
Letter of Credit or Credit Support shall be subject to the further conditions
precedent that on and as of the date of any such extension of credit the
following statements shall be true, and the acceptance by the Borrowers of any
extension of credit shall be deemed to be a statement to the effect set forth in
clause (a), clause (b), and clause (c) following with the same effect as the
delivery to the Agent and the Lenders of a certificate signed by a Responsible
Officer of the Loan Parties, dated the date of such extension of credit, stating
that:
(a) the representations and warranties contained in this Agreement
and the other Loan Documents are correct in all material respects on and
as of the date of such extension of credit as though made on and as of
such date, other than any such representation or warranty which relates to
a specified prior date and except to the extent the Agent and the Lenders
have been notified in writing by the Loan Parties that any representation
or warranty is not correct and the Majority Lenders have explicitly waived
in writing compliance with such representation or warranty;
(b) no event has occurred and is continuing, or would result from
such extension of credit, which constitutes a Default or an Event of
Default; and
(c) no event has occurred and is continuing, or would result from
such extension of credit, which has had or would have a Material Adverse
Effect, whether resulting in whole or in part from an event that occurred
prior to, or occurs after, the Closing Date.
CREDIT AGREEMENT - Page 55
Except as provided by Section 11.1(a), no Borrowing or issuance of any Letter of
Credit or Credit Support shall exceed the Availability, provided, however, that
the foregoing conditions precedent are not conditions to the requirement for
each Lender participating in or reimbursing the Bank or the Agent for such
Lenders' Pro Rata Share of any Non-Ratable Loan or Agent Advance made in
accordance with the provisions of Section 1.2(i) and Section 1.2(j).
ARTICLE 9
DEFAULT; REMEDIES
Section 9.1 Events of Default. It shall constitute an event of default
("Event of Default") if any one or more of the following shall occur for any
reason:
(a) any failure by the Borrowers to pay the principal of or interest
or premium on any of the Obligations or any fee or other amount owing
hereunder when due, whether upon demand or otherwise;
(b) any representation or warranty made or deemed made by any Loan
Party in this Agreement or by any Obligated Party in any other Loan
Document, any Financial Statement, or any certificate furnished by any
Obligated Party at any time to the Agent or any Lender shall prove to be
untrue in any material respect as of the date on which made, deemed made,
or furnished;
(c) any default shall occur in
(i) the observance or performance of any of the covenants and
agreements contained in Section 5.2(k), Section 7.2 (insofar as it
requires the preservation of the existence of the Obligated
Parties), or Sections 7.9 through 7.35 or Section 2.11 of the
Security Agreement, or
(ii) observance or performance of any of the covenants and
agreements contained in Section 5.2 (other than Section 5.2(k)) or
Section 5.3 and such default shall continue for three (3) days or
more, or
(iii) observance or performance of any of the other covenants
or agreements contained in this Agreement other than as referenced
in Section 9.1(a), Section 9.1(b), and clause (i) and clause (ii)
preceding, any other Loan Document, or any other agreement entered
into at any time to which any Obligated Party and the Agent or any
Lender are party (including in respect of any Bank Products) and
such default shall continue for more than fifteen (15) days,
or if any such agreement or document shall terminate (other than in
accordance with its terms or the terms hereof or with the written consent
of the Agent and the Majority Lenders) or
CREDIT AGREEMENT - Page 56
become void or unenforceable without the written consent of the Agent and
the Majority Lenders;
(d) any default shall occur with respect to any Debt (other than the
Obligations) of the Loan Parties in an outstanding principal amount which
exceeds $5,000,000, or under any agreement or instrument under or pursuant
to which any such Debt may have been issued, created, assumed, or
guaranteed by any Loan Party, and such default shall continue for more
than the period of grace, if any, therein specified, if the effect thereof
(with or without the giving of notice or further lapse of time or both) is
to accelerate or to permit the holders of any such Debt to accelerate, the
maturity of any such Debt, or any such Debt shall be declared due and
payable or be required to be prepaid (other than by a regularly scheduled
required prepayment) prior to the stated maturity thereof;
(e) any Consolidated Member shall (i) file a voluntary petition in
bankruptcy or file a voluntary petition or an answer or file any proposal
or notice of intent to file a proposal or otherwise commence any action or
proceeding seeking reorganization, arrangement, consolidation, or
readjustment of its debts or which seeks to stay or has the effect of
staying any creditor or for any other relief under the Bankruptcy Code or
under any other bankruptcy, insolvency, liquidation, winding-up,
corporate, or similar Requirement of Law, now or hereafter existing, or
consent to, approve of, or acquiesce in, any such petition, proposal,
action, or proceeding, (ii) apply for or acquiesce in the appointment of a
receiver, assignee, liquidator, sequestrator, custodian, monitor,
administrator, trustee, or similar officer for it or for all or any part
of its property, (iii) make an assignment for the benefit of its
creditors, or (iv) be unable generally to pay its debts as they become
due;
(f) an involuntary petition or proposal shall be filed or an action
or proceeding otherwise commenced seeking reorganization, arrangement,
consolidation, or readjustment of the debts of any Consolidated Member or
for any other relief under the Bankruptcy Code or under any other
bankruptcy, insolvency, liquidation, winding-up, corporate, or similar
Requirement of Law, now or hereafter existing and such petition, proposal,
or proceeding shall not be dismissed within sixty (60) days after the
filing or commencement thereof or an order of relief (or comparable order
under any other Requirement of Law) shall be entered with respect thereto;
(g) a receiver, assignee, liquidator, sequestrator, custodian,
monitor, administrator, trustee, or similar officer for any Consolidated
Member or for all or any part of its property shall be appointed or a
warrant of attachment, execution, writ of seizure or seizure and sale, or
similar process shall be issued against any part of the property of any
Consolidated Member or any distress or analogous process is levied upon
all or any part of any Consolidated Member;
(h) any Consolidated Member shall file a certificate of dissolution
or like process under any Requirement of Law or shall be liquidated,
dissolved, or wound-up (except in a transaction allowed under Section 7.9
or shall commence or have commenced against it any action or proceeding
for dissolution, winding-up, or liquidation which is not vacated or set
CREDIT AGREEMENT - Page 57
aside within thirty (30) days of the initiation or such action or
proceeding, or shall take any corporate action in furtherance thereof;
(i) all or any material part of the property of any Obligated Party
shall be nationalized, expropriated, condemned, seized, or otherwise
appropriated, or custody or control of such property or of any Obligated
Party shall be assumed by any Governmental Authority or any court of
competent jurisdiction at the instance of any Governmental Authority or
any other Person, except where contested in good faith by proper
proceedings diligently pursued where a stay of enforcement is in effect;
(j) any Loan Document, including any Guaranty of the Obligations,
shall be terminated, revoked, or declared void or invalid or unenforceable
or challenged by any Consolidated Member or any Affiliate thereof or any
other obligor or any Affiliate thereof;
(k) one or more judgments, orders, decrees, or arbitration awards is
entered against any Consolidated Member involving liability in the
aggregate for all of the Consolidated Members (to the extent not covered
by independent third-party insurance as to which the insurer does not
dispute coverage) as to any single or related or unrelated series of
transactions, incidents, or conditions, of $5,000,000 or more, and the
same shall remain unsatisfied, unvacated, and unstayed pending appeal for
a period of thirty (30) days after the entry thereof;
(l) any loss, theft, damage, or destruction of any item or items of
Collateral or other property of any Consolidated Member occurs which could
reasonably be expected to cause a Material Adverse Effect and is not
adequately covered by insurance;
(m) there is filed against any Consolidated Member any action, suit,
or proceeding under any federal or state racketeering statute (including
the Racketeer Influenced and Corrupt Organization Act of 1970), which
action, suit, or proceeding (i) is not dismissed within one hundred twenty
(120) days and (ii) could reasonably be expected to result in the
confiscation or forfeiture of any material portion of the Collateral;
(n) for any reason other than the failure of the Agent to take any
action available to it to maintain perfection of the Agent's Liens
pursuant to the Loan Documents, any Loan Document ceases to be in full
force and effect or any Lien with respect to any material portion of the
Collateral intended to be secured thereby ceases to be, or is not, valid,
perfected, and prior to all other Liens (other than Permitted Liens which
are expressly permitted to have priority over the Agent's Liens) or is
terminated, revoked, or declared void;
(o) (i) an ERISA Event shall occur with respect to a Pension Plan or
Multi-employer Plan which has resulted or could reasonably be expected to
result in liability of any Consolidated Member under Title IV of ERISA to
the Pension Plan, Multi-employer Plan, or the PBGC in an aggregate amount
in excess of $1,000,000; (ii) the aggregate amount of Unfunded Pension
Liability among all Pension Plans at any time exceeds $1,000,000; (iii)
any Consolidated Member or any ERISA Affiliate shall fail to pay when due,
after the
CREDIT AGREEMENT - Page 58
expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multi-employer Plan in an aggregate amount in excess of $1,000,000; or
(iv) all of the Foreign Plans in the aggregate have liabilities in excess
of assets (determined in accordance the assumptions under each such
Foreign Plan and under Requirements of Law used for funding each Foreign
Plan pursuant to reasonable accounting standards in accordance with
Requirements of Law) in an amount in excess of $1,000,000;
(p) there occurs a Change of Control;
(q) any breach, noncompliance, default or event of default
(howsoever defined) occurs under any of the Synthetic Lease Transaction
Documents that would permit, or with the passage of time or the giving of
notice, or both, would permit, any holder of Debt thereunder, or any
trustee for such holder, to accelerate the Debt thereunder to be
immediately due and payable or exercise any other remedies thereunder;
(r) there occurs a Material Adverse Effect; or
(s) any breach, noncompliance, default or event of default
(howsoever defined) occurs under any Subordinated Debt Documents that
would permit, or with the passage of time or the giving of notice, or
both, would permit, any holder of any Debt thereunder, or any trustee for
such holder, to accelerate the Debt thereunder to be immediately due and
payable or exercise any other remedies thereunder.
Section 9.2 Remedies.
(a) If a Default or an Event of Default exists, the Agent may, in
its discretion, and shall, at the direction of the Majority Lenders, do
one or more of the following at any time or times and in any order,
without notice to or demand on any Loan Party or any other Obligated
Party: (i) reduce the Maximum Revolver Amount, or the advance rates
against Eligible Accounts used in computing the Borrowing Base, or reduce
or increase one or more of the other elements used in computing the
Borrowing Base; (ii) restrict the amount of or refuse to make Revolving
Loans; and (iii) restrict or refuse to provide Letters of Credit or Credit
Support. If an Event of Default exists, the Agent shall, at the direction
of the Majority Lenders, do one or more of the following, in addition to
the actions described in the preceding sentence, at any time or times and
in any order, without notice to or demand on any Loan Party or any other
Obligated Party: (A) terminate the Commitments and this Agreement; (B)
declare any or all Obligations to be immediately due and payable;
provided, however, that upon the occurrence of any Event of Default with
respect to a Loan Party described in Sections 9.1(e), 9.1(f), 9.1(g), or
9.1(h), the Commitments shall automatically and immediately expire and all
Obligations shall automatically become immediately due and payable without
notice or demand of any kind; (C) require the Loan Parties to cash
collateralize all Obligations outstanding with respect to Letters of
Credit and Credit Support; and (D) pursue its other rights and remedies
under the Loan Documents and applicable law.
CREDIT AGREEMENT - Page 59
(b) If an Event of Default has occurred and is continuing: (i) the
Agent shall have, for the benefit of the Agent and the Lenders, in
addition to all other rights of the Agent and the Lenders, the rights and
remedies of a secured party under the Loan Documents and Requirements of
Law (including, without limitation, under the UCC, PPSA, CCQ, the
Mortgages Act of Ontario and any similar laws of any applicable foreign
jurisdiction); (ii) the Agent may, at any time, take possession of the
Collateral and keep it on any Loan Party's premises, at no cost to the
Agent or any Lender, or remove any part of it to such other place or
places as the Agent may desire, or any Loan Party shall, upon the Agent's
demand, at such Loan Party's cost, assemble the Collateral and make it
available to the Agent at a place reasonably convenient to the Agent; and
(iii) the Agent may sell and deliver any Collateral at public or private
sales, for cash, upon credit, or otherwise, at such prices and upon such
terms as the Agent deems advisable, in its sole discretion, and may, if
the Agent deems it reasonable, postpone or adjourn any sale of the
Collateral by an announcement at the time and place of sale or of such
postponed or adjourned sale without giving a new notice of sale. Without
in any way requiring notice to be given in the following manner, each Loan
Party agrees that any notice by the Agent of sale, disposition, or other
intended action hereunder or in connection herewith, whether required by
the UCC, PPSA, CCQ, the Mortgages Act of Ontario or any similar laws of
any applicable foreign jurisdiction) or otherwise, shall constitute
reasonable notice to the Loan Parties if such notice is mailed by
registered or certified mail, return receipt requested, postage prepaid,
or is delivered personally against receipt, at least ten (10) Business
Days prior to such action to the Loan Parties' address specified in or
pursuant to Section 13.8. If any Collateral is sold on terms other than
payment in full at the time of sale, no credit shall be given against the
Obligations until the Agent or the Lenders receive payment, and if the
buyer defaults in payment, the Agent may resell the Collateral without
further notice to any Loan Party or any other Obligated Party. In the
event the Agent seeks to take possession of all or any portion of the
Collateral by judicial process, each Loan Party irrevocably waives: (A)
the posting of any bond, surety, or security with respect thereto which
might otherwise be required; (B) any demand for possession prior to the
commencement of any suit or action to recover the Collateral; and (C) any
requirement that the Agent retain possession and not dispose of any
Collateral until after trial or final judgment. Each Loan Party agrees
that the Agent has no obligation to preserve rights to the Collateral or
marshal any Collateral for the benefit of any Person. The Agent is hereby
granted a license or other right to use, without charge, each Loan Party's
labels, patents, copyrights, name, trade secrets, trade names, trademarks,
and advertising matter, or any similar property, in completing production
of, advertising, or selling any Collateral, and each Loan Party's rights
under all licenses and all franchise agreements shall inure to the Agent's
benefit for such purpose. The proceeds of sale shall be applied first to
all expenses of sale, including Attorney Costs, and then to the
Obligations. The Agent will return any excess to the Loan Parties and the
Loan Parties shall remain liable for any deficiency.
(c) If an Event of Default occurs and is continuing, each Loan Party
hereby waives all rights to notice and hearing prior to the exercise by
the Agent of the Agent's rights to repossess the Collateral without
judicial process or to replevy, attach, or levy upon the Collateral
without notice or hearing.
CREDIT AGREEMENT - Page 60
ARTICLE 10
TERM AND TERMINATION
Section 10.1 Term and Termination. The term of this Agreement shall end on
the Stated Termination Date unless sooner terminated in accordance with the
terms hereof. The Agent upon direction from the Majority Lenders may terminate
this Agreement, without notice to the Borrowers, during the existence of an
Event of Default. Upon the effective date of termination of this Agreement for
any reason whatsoever, all Obligations (including all unpaid principal, accrued
and unpaid interest, and any early termination or prepayment fees or penalties
but excluding indemnification obligations to the extent no claim with respect
thereto has been asserted and remains unsatisfied) shall become immediately due
and payable and the Loan Parties shall immediately arrange for the cancellation
and return of all Letters of Credit and Credit Support then outstanding.
Notwithstanding the termination of this Agreement, until all Obligations are
indefeasibly paid and performed in full in cash, the Loan Parties shall remain
bound by the terms of this Agreement and the other Loan Documents and shall not
be relieved of any of their Obligations hereunder or under any other Loan
Document, and the Agent and the Lenders shall retain all their rights and
remedies hereunder and under the other Loan Documents (including, without
limitation, the Agent's Liens in and all rights and remedies with respect to all
then existing and after-arising Collateral).
ARTICLE 11
AMENDMENTS; WAIVERS; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
Section 11.1 Amendments and Waivers.
(a) No amendment or waiver of any provision of this Agreement or any
other Loan Document, and no consent with respect to any departure by any
Loan Party therefrom, shall be effective unless the same shall be in
writing and signed by the Majority Lenders (or by the Agent at the written
request of the Majority Lenders) and the Loan Parties (which signature by
the Loan Parties may be evidenced by the signature of the Parent pursuant
to Section 13.21) and then any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which
given; provided, however, that no such waiver, amendment, or consent
shall, unless in writing and signed by all the Lenders and the Loan
Parties (which signature by the Loan Parties may be evidenced by the
signature of the Parent pursuant to Section 13.21) and acknowledged by the
Agent, do any of the following:
(i) increase or extend the Commitment of any Lender;
(ii) postpone or delay any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees, or
other amounts due to the Lenders (or any of them) hereunder or under
any other Loan Document;
CREDIT AGREEMENT - Page 61
(iii) reduce the principal of, or the rate of interest
specified herein on any Loan, or any fees or other amounts payable
hereunder or under any other Loan Document;
(iv) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which is required for
the Lenders or any of them to take any action hereunder;
(v) increase any of the percentages set forth in the
definition of the Borrowing Base;
(vi) amend this Section 11.1 or any provision of this
Agreement providing for consent or other action by all of the
Lenders;
(vii) release Collateral other than as permitted by Section
12.11;
(viii) change the definition of "Majority Lenders"; or
(ix) increase the Maximum Revolver Amount or the Letter of
Credit Subfacility;
provided, however, the Agent may, in its sole discretion and
notwithstanding the limitations contained in clause (v) and clause (ix)
preceding and any other terms of this Agreement, make Non-Ratable Loans in
accordance with Section 1.2(i) and make Agent Advances in an amount not to
exceed ten percent (10.0%) of the Maximum Revolver Amount in accordance
with Section 1.2(j) and, provided, further, that no amendment, waiver, or
consent shall, unless in writing and signed by the Agent, affect the
rights or duties of the Agent under this Agreement or any other Loan
Document and, provided, further, that Schedule A-1 ("Commitments") may be
amended from time to time by the Agent alone to reflect assignments of
Commitments in accordance herewith.
(b) If any fees are paid to the Lenders as consideration for
amendments, waivers, or consents with respect to this Agreement, at the
Agent's election, such fees may be paid only to those Lenders that agree
to such amendments, waivers, or consents within the time specified for
submission thereof.
(c) If, in connection with any proposed amendment, waiver, or
consent (a "Proposed Change"):
(i) requiring the consent of all of the Lenders, the consent
of the Majority Lenders is obtained, but the consent of the other
Lenders is not obtained (any such Lender whose consent is not
obtained as described in this clause (i) and in clause (ii)
following being referred to as a "Non-Consenting Lender"), or
CREDIT AGREEMENT - Page 62
(ii) requiring the consent of the Majority Lenders, the
consent of the Majority Lenders is obtained,
then, so long as the Agent is not a Non-Consenting Lender, at the
Borrowers' request the Agent (in its individual capacity as a Lender) or
an Eligible Assignee (with the Agent's approval) shall have the right (but
not the obligation) to purchase from each Non-Consenting Lender, and each
Non-Consenting Lender agrees that it shall sell, such Non-Consenting
Lender's Commitments for an amount equal to the principal balances thereof
and all accrued interest and fees with respect thereto through the date of
sale pursuant to an Assignment and Acceptance, without premium or
discount.
Section 11.2 Assignments; Participations.
(a) Any Lender may, with the written consent of the Agent (which
consent shall not be unreasonably withheld), assign and delegate to one or
more Eligible Assignees (provided that no consent of the Agent shall be
required in connection with any assignment and delegation by a Lender to
an Affiliate of such Lender) (each an "Assignee") all, or any ratable part
of all, of the Loans, the Commitments, and the other rights and
obligations of such Lender hereunder, in a minimum amount of $10,000,000
(provided that, unless an assignor Lender has assigned and delegated all
of its Loans and Commitments, no such assignment and/or delegation shall
be permitted unless, after giving effect thereto, such assignor Lender
retains a Commitment in a minimum amount of $10,000,000); provided,
however, that the Loan Parties and the Agent may continue to deal solely
and directly with such Lender in connection with the interest so assigned
to an Assignee until (i) written notice of such assignment, together with
payment instructions, addresses, and related information with respect to
the Assignee, shall have been given to the Loan Parties and the Agent by
such Lender and the Assignee; (ii) such Lender and its Assignee shall have
delivered to the Loan Party and the Agent an Assignment and Acceptance in
the form of Exhibit E (an "Assignment and Acceptance") together with any
Note or Notes subject to such assignment, and (iii) the assignor Lender or
Assignee has paid to the Agent a processing fee in the amount of $5,000
(provided that the Agent may waive such fee in its discretion in
connection with the initial syndication of the Commitments). The Borrowers
agree to promptly execute and deliver new or replacement Notes as
reasonably requested by the Agent to evidence assignments of the Loans and
Commitments in accordance herewith.
(b) From and after the date that the Agent notifies the assignor
Lender that it has received an executed Assignment and Acceptance and
payment of the above-referenced processing fee, (i) the Assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations, including, but not limited to, the obligation to participate
in Letters of Credit and Credit Support have been assigned to it pursuant
to such Assignment and Acceptance, shall have the rights and obligations
of a Lender under the Loan Documents, and (ii) the assignor Lender shall,
to the extent that rights and obligations hereunder and under the other
Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations
under this Agreement (and in the case of an Assignment and Acceptance
covering all or the remaining portion of
CREDIT AGREEMENT - Page 63
an assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the Assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Lender
makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties, or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency, or value of this Agreement or
any other Loan Document furnished pursuant hereto or the attachment,
perfection, or priority of any Lien granted by any Obligated Party to the
Agent or any Lender in the Collateral; (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to
the financial condition of the Consolidated Members, or any of them, or
the performance or observance by any Loan Party of any of its obligations
under this Agreement or of any Loan Party or any other Obligated Party
under any other Loan Document furnished pursuant hereto; (iii) such
Assignee confirms that it has received a copy of this Agreement, together
with such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment
and Acceptance; (iv) such Assignee will, independently and without
reliance upon the Agent, such assigning Lender, or any other 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 this Agreement; (v) such Assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement and the other Loan Documents as
are delegated to the Agent by the terms hereof, together with such powers,
including the discretionary rights and incidental power, as are reasonably
incidental thereto; and (vi) such Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of
this Agreement are required to be performed by it as a Lender.
(d) Immediately upon satisfaction of the requirements of Section
11.2(a), this Agreement shall be deemed to be amended to the extent, but
only to the extent, necessary to reflect the addition of the Assignee and
the resulting adjustment of the Commitments arising therefrom. The
Commitment allocated to each Assignee shall reduce such Commitments of the
assigning Lender pro tanto.
(e) Any Lender may at any time sell to one or more Participants
participating interests in any Loans, the Commitment of that Lender, and
the other interests of that Lender (the "originating Lender") hereunder
and under the other Loan Documents; provided, however, that (i) the
originating Lender's obligations under this Agreement shall remain
unchanged, (ii) the originating Lender shall remain solely responsible for
the performance of such obligations, (iii) the Loan Parties and the Agent
shall continue to deal solely and directly with the originating Lender in
connection with the originating Lender's rights and obligations under this
Agreement and the other Loan Documents, and (iv) no Lender shall transfer
or grant any participating interest under which the Participant has rights
to approve
CREDIT AGREEMENT - Page 64
any amendment to, or any consent or waiver with respect to, this Agreement
or any other Loan Document except the matters set forth in Section
11.1(a)(i), Section 11.1(a)(ii), and Section 11.1(a)(iii), and (v) all
amounts payable by the Loan Parties hereunder shall be determined as if
such Lender had not sold such participation, except that, if amounts
outstanding under this Agreement are due and 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 and subject to the same limitation as if
the amount of its participating interest were owing directly to it as a
Lender under this Agreement.
(f) Notwithstanding any other provision in this Agreement, any
Lender may at any time create a security interest in, or pledge, all or
any portion of its rights under and interest in this Agreement in favor of
any Federal Reserve Bank in accordance with Regulation A of the Federal
Reserve Board or United States Treasury Regulation 31 CFR ss.203.14, and
such Federal Reserve Bank may enforce such pledge or security interest in
any manner permitted under applicable law.
ARTICLE 12
THE AGENT
Section 12.1 Appointment and Authorization. Each Lender hereby designates
and appoints the Bank (acting in its capacity as the Agent) as its agent under
this Agreement and the other Loan Documents and each Lender hereby irrevocably
authorizes the Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. The Agent agrees to act as such on the express
conditions contained in this Article 12. The provisions of this Article 12 are
solely for the benefit of the Agent and the Lenders, and the Consolidated
Members shall have no rights as a third party beneficiary of any of the
provisions contained herein other than as expressly provided in Section 12.10
and Section 12.11. Notwithstanding any provision to the contrary contained
elsewhere in this Agreement or in any other Loan Document, the Agent shall not
have any duties or responsibilities, except those expressly set forth herein,
nor shall the Agent have or be deemed to have any fiduciary relationship with
any 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 Agent. Without limiting the generality
of the foregoing sentence, the use of the term "agent" in this Agreement with
reference to the Agent is not intended to, and shall not, connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties. Except as expressly otherwise provided in this
Agreement, the Agent shall have and may use its sole discretion with respect to
exercising or refraining from exercising any discretionary rights or taking or
refraining from taking any actions which the Agent is expressly entitled to take
or assert under this Agreement and the other Loan Documents, including (a) the
CREDIT AGREEMENT - Page 65
determination of the applicability of ineligibility criteria with respect to the
calculation of the Borrowing Base, (b) the making of Agent Advances pursuant to
Section 1.2(j), and (c) the exercise of remedies pursuant to Section 9.2, and
any action so taken or not taken shall be deemed consented to by the Lenders.
Section 12.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees,
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
Section 12.3 Liability of the Agent. None of the Agent-Related Persons
shall (a) be liable for any action taken or omitted to be taken by any of them
under or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or (b) be responsible in any manner to any of the Lenders for any
recital, statement, representation, or warranty made by any Loan Party or any
other Obligated Party or Affiliate of any Loan Party or any other Obligated
Party, or any officer thereof, contained in this Agreement or in any other Loan
Document, or in any certificate, report, statement, or other document referred
to or provided for in, or received by the Agent under or in connection with,
this Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability, or sufficiency of this Agreement or any other Loan
Document, or for any failure of any Loan Party or any other Obligated Party or
any other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party or
any Loan Party's Affiliates.
Section 12.4 Reliance by the Agent. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex, or
telephone message, statement, or other document or conversation believed by it
to be genuine and correct and to have been signed, sent, or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including,
without limitation, counsel to any Obligated Party), independent accountants and
other experts selected by the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the Lenders
as it deems appropriate and, if it so requests, 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 Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Majority Lenders (or all Lenders if so required by
Section 11.1) and such request and any action taken or failure to act pursuant
thereto shall be binding upon all of the Lenders.
Section 12.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, unless
the Agent shall have received
CREDIT AGREEMENT - Page 66
written notice from a Lender or a Loan Party referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default." The Agent will notify the Lenders of its receipt of any
such notice. The Agent shall take such action with respect to such Default or
Event of Default as may be requested by the Majority Lenders in accordance with
Article 9; provided, however, that unless and until the Agent has received any
such request, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable.
Section 12.6 Credit Decision. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Consolidated Members and their Affiliates, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon any Agent-Related Person and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition, and
creditworthiness of the Borrowers and the other Consolidated Members, and all
applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to the Borrowers. Each Lender also represents that it will, independently
and without reliance upon any Agent-Related Person and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals, and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition, and
creditworthiness of the Borrowers and the other Consolidated Members. Except for
notices, reports, and other documents expressly herein required to be furnished
to the Lenders by the Agent, the Agent shall not have any duty or responsibility
to provide any Lender with any credit or other information concerning the
business, prospects, operations, property, financial and other condition, or
creditworthiness of any Borrower or any other Consolidated Member which may come
into the possession of any of the Agent-Related Persons.
Section 12.7 Indemnification. WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED
HEREBY ARE CONSUMMATED, THE LENDERS SHALL UPON DEMAND INDEMNIFY THE
AGENT-RELATED PERSONS (TO THE EXTENT NOT REIMBURSED BY OR ON BEHALF OF THE LOAN
PARTIES AND WITHOUT LIMITING THE OBLIGATION OF THE LOAN PARTIES TO DO SO), IN
ACCORDANCE WITH THEIR PRO RATA SHARES, FROM AND AGAINST ANY AND ALL INDEMNIFIED
LIABILITIES; PROVIDED, HOWEVER, THAT NO LENDER SHALL BE LIABLE FOR THE PAYMENT
TO THE AGENT-RELATED PERSONS OF ANY PORTION OF SUCH INDEMNIFIED LIABILITIES (AS
DEFINED HEREIN)RESULTING SOLELY FROM SUCH PERSON'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT. Without limitation of the foregoing, each Lender shall reimburse the
Agent upon demand for its Pro Rata Share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment, or
enforcement (whether through negotiations, legal proceedings, or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to
CREDIT AGREEMENT - Page 67
the extent that the Agent is not reimbursed for such expenses by or on behalf of
the Loan Parties. The undertaking in this Section shall survive the payment of
all Obligations hereunder and the resignation or replacement of the Agent.
Section 12.8 The Agent in Individual Capacity. The Bank and its Affiliates
may make loans to, issue letters of credit for the account of, accept deposits
from, acquire equity interests in, and generally engage in any kind of banking,
trust, financial advisory, underwriting, or other business with any Consolidated
Member and its Affiliates as though the Bank were not the Agent hereunder and
without notice to or consent of the Lenders. The Bank or its Affiliates may
receive information regarding any Consolidated Member or its Affiliates and
Account Debtors (including information that may be subject to confidentiality
obligations in favor of any such Consolidated Member or Affiliate), and the
Lenders acknowledge that the Agent and the Bank shall be under no obligation to
provide such information to the Lenders. With respect to its Loans, the Bank as
a Lender shall have the same rights and powers under this Agreement as any other
Lender and may exercise the same as though it were not the Agent, and the terms
"Lender" and "Lenders" include the Bank in its individual capacity.
Section 12.9 Successor Agent. The Agent may resign as Agent upon at least
thirty (30) days prior notice to the Lenders and the Loan Parties, such
resignation to be effective upon the acceptance of a successor agent to its
appointment as the Agent. In the event the Bank sells all of its Commitments and
Loans as part of a sale, transfer, or other disposition by the Bank of
substantially all of its loan portfolio, the Bank shall resign as the Agent and
such purchaser or transferee shall become the successor Agent hereunder. Subject
to the foregoing, if the Agent resigns (the "resigning Agent") under this
Agreement, the Majority Lenders shall appoint from among the Lenders a successor
agent for the Lenders (the "successor Agent"). If no successor Agent is
appointed prior to the effective date of the resignation of the resigning Agent,
the resigning Agent may appoint, after consulting with the Lenders and the Loan
Parties, a successor Agent from among the Lenders. Upon the acceptance of its
appointment as the successor Agent, the successor Agent shall succeed to all the
rights, powers, and duties of the resigning Agent and the term "Agent" shall
mean the successor Agent and the resigning Agent's appointment, powers, and
duties as the Agent shall be terminated. After any resigning Agent's resignation
hereunder as the Agent, the provisions of this Article 12 shall continue to
inure to its benefit as to any actions taken or omitted to be taken by it while
it was the Agent under this Agreement.
Section 12.10 Withholding Tax.
(a) If any Lender is a "foreign person" within the meaning of the
Code and such Lender claims exemption from, or a reduction of, United
States withholding tax under Sections 1441 or 1442 of the Code, such
Lender agrees with and in favor of the Agent, to deliver to the Agent and
the Parent:
(i) if such Lender claims an exemption from, or a reduction
of, withholding tax under a United States tax treaty, two (2)
properly completed and executed copies of IRS Form W-8BEN before the
payment of any interest in the first
CREDIT AGREEMENT - Page 68
calendar year and before the payment of any interest in each third
succeeding calendar year during which interest may be paid under
this Agreement;
(ii) if such Lender claims that interest paid under this
Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such
Lender, two (2) properly completed and executed copies of IRS Form
W-8ECI before the payment of any interest in the first calendar year
and before the payment of any interest in each fourth (or more
frequently if requested by the Agent) succeeding calendar year
during which interest may be paid under this Agreement, and IRS Form
W-9; and
(iii) such other form or forms as may be required under the
Code or other laws of the United States as a condition to exemption
from, or reduction of, United States withholding tax.
Such Lender agrees to promptly notify the Agent and the Parent of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form
W-8BEN and such Lender sells, assigns, grants a participation in, or
otherwise transfers all or part of the Obligations owing to such Lender,
such Lender agrees to notify the Agent and the Parent of the percentage
amount in which it is no longer the beneficial owner of Obligations owing
to such Lender. To the extent of such percentage amount, the Agent and the
Parent will treat such Lender's IRS Form W-8BEN as no longer valid.
(c) If any Lender claiming exemption from United States withholding
tax by filing IRS Form W-8ECI with the Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations
owing to such Lender, such Lender agrees to undertake sole responsibility
for complying with the withholding tax requirements imposed by Sections
1441 and 1442 of the Code.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, the Agent or any Borrower may withhold from any interest
payment to such Lender an amount equivalent to the applicable withholding
tax after taking into account such reduction. If the forms or other
documentation required by clause (a) preceding are not delivered to the
Agent and the Parent, then the Agent or any Borrower may withhold from any
interest payment to such Lender not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Agent or any Loan
Party did not properly withhold tax from amounts paid to or for the
account of any Lender (because the appropriate form was not delivered, was
not properly executed, or because such Lender failed to notify the Agent
or any Loan Party of a change in circumstances which rendered the
exemption from, or
CREDIT AGREEMENT - Page 69
reduction of, withholding tax ineffective, or for any other reason) such
Lender shall indemnify the Agent or any Loan Party fully for all amounts
paid, directly or indirectly, by the Agent or any such Loan Party as tax
or otherwise, including penalties and interest, and including any taxes
imposed by any jurisdiction on the amounts payable to the Agent under this
Section 12.10, together with all costs and expenses (including Attorney
Costs). The obligation of the Lenders under this clause (e) shall survive
the payment of all Obligations and the resignation or replacement of the
Agent.
Section 12.11 Collateral Matters.
(a) The Lenders hereby irrevocably authorize the Agent, at its
option and in its sole discretion, to release any Agent's Liens upon any
Collateral (i) upon the termination of the Commitments and payment and
satisfaction in full of all Loans and reimbursement obligations in respect
of Letters of Credit and Credit Support, and the termination of all
outstanding Letters of Credit and Credit Support (whether or not any of
such obligations are due) and all other Obligations (other than contingent
indemnities which survive the termination of this Agreement); (ii)
constituting property being sold or disposed of if the Obligated Party
disposing of such property certifies to the Agent that the sale or
disposition is made in compliance with Section 7.9 (and the Agent may rely
conclusively on any such certificate, without further inquiry); (iii)
constituting property in which no Obligated Party owned any interest at
the time the Lien was granted or at any time thereafter; or (iv)
constituting property leased to an Obligated Party under a lease which has
expired or been terminated in a transaction permitted under this
Agreement. Except as provided above, the Agent will not release any of the
Agent's Liens without the prior written authorization of the Lenders;
provided that the Agent may, in its discretion, release the Agent's Liens
on Collateral valued in the aggregate not in excess of $3,000,000 during
each Fiscal Year without the prior written authorization of the Lenders
and the Agent may release the Agent's Liens on Collateral valued in the
aggregate not in excess of $9,000,000 during each Fiscal Year with the
prior written authorization of the Majority Lenders. Upon request by the
Agent or an Obligated Party at any time, the Lenders will confirm in
writing the Agent's authority to release any Agent's Liens upon particular
types or items of Collateral pursuant to this Section 12.11.
(b) Upon receipt by the Agent of any authorization required pursuant
to Section 12.11(a) from the Lenders of the Agent's authority to release
any Agent's Liens upon particular types or items of Collateral, and upon
at least five (5) Business Days prior written request by an Obligated
Party, the Agent shall (and is hereby irrevocably authorized by the
Lenders to) execute such documents as may be necessary to evidence the
release of the Agent's Liens upon such Collateral; provided, however, that
(i) the Agent shall not be required to execute any such document on terms
which, in the Agent's opinion, would expose the Agent to liability or
create any obligation or entail any consequence other than the release of
such Liens without recourse or warranty, and (ii) such release shall not
in any manner discharge, affect, or impair the Obligations or any Liens
(other than those expressly being released) upon (or obligations of the
Obligated Parties in respect of) all interests
CREDIT AGREEMENT - Page 70
retained by the Obligated Parties, including the proceeds of any sale, all
of which shall continue to constitute part of the Collateral.
(c) The Agent shall have no obligation whatsoever to any of the
Lenders to assure that the Collateral exists or is owned by any Obligated
Party or is cared for, protected, or insured or has been encumbered, or
that the Agent's Liens have been properly or sufficiently or lawfully
created, perfected, protected, or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner or
under any duty of care, disclosure, or fidelity, or to continue
exercising, any of the rights, authorities, and powers granted or
available to the Agent pursuant to any of the Loan Documents, it being
understood and agreed that in respect of the Collateral, or any act,
omission, or event related thereto, the Agent may act in any manner it may
deem appropriate, in its sole discretion given the Agent's own interest in
the Collateral in its capacity as one of the Lenders and that the Agent
shall have no other duty or liability whatsoever to any Lender as to any
of the foregoing.
Section 12.12 Restrictions on Actions by the Lenders; Sharing of Payments.
(a) Each of the Lenders agrees that it shall not, without the
express consent of all Lenders, and that it shall, to the extent it is
lawfully entitled to do so, upon the request of all Lenders, setoff
against the Obligations, or against any Debt owing to any such Lender by
any other Obligated Party, any amounts owing by such Lender to any
Obligated Party or any accounts of any Obligated Party now or hereafter
maintained with such Lender. Each of the Lenders further agrees that it
shall not, unless specifically requested to do so by the Agent, take or
cause to be taken any action to enforce its rights under this Agreement or
any other Loan Document or against any Obligated Party, including the
commencement of any legal or equitable proceedings, to foreclose any Lien
on, or otherwise enforce any security interest in, any of the Collateral.
(b) If at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff, or otherwise, any proceeds of Collateral or any
payments with respect to the Obligations, or any Guaranty thereof by any
Obligated Party, owing to such Lender arising under, or relating to, this
Agreement or the other Loan Documents, except for any such proceeds or
payments received by such Lender from the Agent pursuant to the terms of
this Agreement, or (ii) payments from the Agent in excess of such Lender's
ratable portion of all such distributions by the Agent, such Lender shall
promptly (1) turn the same over to the Agent, in kind, and with such
endorsements as may be required to negotiate the same to the Agent, or in
same day funds, as applicable, for the account of all of the Lenders and
for application to the Obligations in accordance with the applicable
provisions of this Agreement, or (2) purchase, without recourse or
warranty, an undivided interest and participation in the Obligations owed
to the other Lenders so that such excess payment received shall be applied
ratably as among the Lenders in accordance with their Pro Rata Shares;
provided, however, that if all or part of such excess payment received by
the purchasing party is thereafter recovered from it, those purchases of
participations shall be rescinded in whole or in part, as applicable, and
the applicable portion of the purchase price paid therefor shall be
returned to such purchasing party, but without interest except to the
CREDIT AGREEMENT - Page 71
extent that such purchasing party is required to pay interest in
connection with the recovery of the excess payment.
Section 12.13 Agency for Perfection. Each Lender hereby appoints each
other Lender as agent for the purpose of perfecting the Lenders' security
interest in assets which, in accordance with Article 9 of the UCC or any other
Requirement of Law of the United States or any foreign jurisdiction can be
perfected only by possession. Should any Lender (other than the Agent) obtain
possession of any such Collateral, such Lender shall notify the Agent thereof,
and, promptly upon the Agent's request therefor shall deliver such Collateral to
the Agent or otherwise deal with such Collateral in accordance with the Agent's
instructions.
Section 12.14 Payments by the Agent to the Lenders. All payments to be
made by the Agent to the Lenders shall be made by bank wire transfer or internal
transfer of immediately available funds to each Lender pursuant to wire transfer
instructions delivered in writing to the Agent on or prior to the Closing Date
(or if such Lender is an Assignee, with or in the applicable Assignment and
Acceptance), or pursuant to such other wire transfer instructions as each party
may designate for itself by written notice to the Agent. Concurrently with each
such payment, the Agent shall identify whether such payment (or any portion
thereof) represents principal, premium, or interest on the Loans or otherwise.
Unless the Agent receives notice from the Borrowers prior to the date on which
any payment is due to the Lenders that the Borrowers will not make such payment
in full as and when required, the Agent may assume that the Borrowers have made
such payment in full to the Agent on such date in immediately available funds
and the Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Borrowers have not made
such payment in full to the Agent, each Lender shall repay to the Agent on
demand such amount distributed to such Lender, together with interest thereon at
the Federal Funds Rate for each day from the date such amount is distributed to
such Lender until the date repaid.
Section 12.15 Settlement.
(a) Each Lender's funded portion of the Revolving Loans is intended
by the Lenders to be equal at all times to such Lender's Pro Rata Share of
the outstanding Revolving Loans. Notwithstanding such agreement, the
Agent, the Bank, and the other Lenders agree (which agreement shall not be
for the benefit of or enforceable by the Loan Parties or any other
Consolidated Member) that in order to facilitate the administration of
this Agreement and the other Loan Documents, settlement among them as to
the Revolving Loans, including the Non-Ratable Loans and the Agent
Advances, shall take place on a periodic basis in accordance with the
following provisions:
(i) The Agent shall request settlement (a "Settlement") with
the Lenders on at least a weekly basis, or on a more frequent basis
at the Agent's election, (A) on behalf of the Bank, with respect to
each outstanding Non-Ratable Loan, (B) for itself, with respect to
each Agent Advance, and (C) with respect to collections received, in
each case, by notifying the Lenders of such requested Settlement by
telecopy, telephone, or other similar form of transmission, of such
requested Settlement, no
CREDIT AGREEMENT - Page 72
later than 12:00 noon (Dallas, Texas time) on the date of such
requested Settlement (the "Settlement Date"). Each Lender (other
than the Bank, in the case of Non-Ratable Loans and the Agent in the
case of Agent Advances) shall transfer the amount of such Lender's
Pro Rata Share of the outstanding principal amount of the
Non-Ratable Loans and Agent Advances with respect to which
Settlement is requested to the Agent, to such account of the Agent
as the Agent may designate, not later than 2:00 p.m. (Dallas, Texas
time), on the Settlement Date applicable thereto. Settlements may
occur during the continuation of a Default or an Event of Default
and whether or not the applicable conditions precedent set forth in
Article 8 have then been satisfied. Such amounts transferred to the
Agent shall be applied against the amounts of the applicable
Non-Ratable Loan or Agent Advance and, together with the portion of
such Non-Ratable Loan or Agent Advance representing the Bank's Pro
Rata Share thereof, shall constitute Revolving Loans of such
Lenders, respectively. If any such amount is not transferred to the
Agent by any Lender on the Settlement Date applicable thereto, the
Agent shall be entitled to recover such amount on demand from such
Lender together with interest thereon at the Federal Funds Rate for
the first three (3) days from and after the Settlement Date and
thereafter at the Interest Rate then applicable to the Base Rate
Revolving Loans (Y) on behalf of the Bank, with respect to each
outstanding Non- Ratable Loan, and (Z) for itself, with respect to
each Agent Advance.
(ii) Notwithstanding the foregoing, not more than one (1)
Business Day after demand is made by the Agent (whether before or
after the occurrence of a Default or an Event of Default and
regardless of whether the Agent has requested a Settlement with
respect to a Non-Ratable Loan or Agent Advance), each other Lender
(A) shall irrevocably and unconditionally purchase and receive from
the Bank or the Agent, as applicable, without recourse or warranty,
an undivided interest and participation in such Non-Ratable Loan or
Agent Advance equal to such Lender's Pro Rata Share of such
Non-Ratable Loan or Agent Advance and (B) if Settlement has not
previously occurred with respect to such Non-Ratable Loans or Agent
Advances, upon demand by the Bank or the Agent, as applicable, shall
pay to the Bank or the Agent, as applicable, as the purchase price
of such participation an amount equal to one-hundred percent (100%)
of such Lender's Pro Rata Share of such Non-Ratable Loans or Agent
Advances. If such amount is not in fact transferred to the Agent by
any Lender, the Agent shall be entitled to recover such amount on
demand from such Lender together with interest thereon at the
Federal Funds Rate for the first three (3) days from and after such
demand and thereafter at the Interest Rate then applicable to Base
Rate Revolving Loans.
(iii) From and after the date, if any, on which any Lender
purchases an undivided interest and participation in any Non-Ratable
Loan or Agent Advance pursuant to clause (ii) preceding, the Agent
shall promptly distribute to such Lender, such Lender's Pro Rata
Share of all payments of principal and interest and all proceeds of
Collateral received by the Agent in respect of such Non-Ratable Loan
or Agent Advance.
CREDIT AGREEMENT - Page 73
(iv) Between Settlement Dates, to the extent no Agent Advances
are outstanding, the Agent may pay over to the Bank any payments
received by the Agent, which in accordance with the terms of this
Agreement would be applied to the reduction of the Revolving Loans,
for application to the Bank's Revolving Loans including Non- Ratable
Loans. If, as of any Settlement Date, collections received since the
then immediately preceding Settlement Date have been applied to the
Bank's Revolving Loans (other than to Non-Ratable Loans or Agent
Advances in which a Lender has not yet funded its purchase of a
participation pursuant to clause (ii) preceding), as provided for in
the previous sentence, the Bank shall pay to the Agent for the
accounts of the Lenders, to be applied to the outstanding Revolving
Loans of such Lenders, an amount such that each Lender shall, upon
receipt of such amount, have, as of such Settlement Date, its Pro
Rata Share of the Revolving Loans. During the period between
Settlement Dates, the Bank with respect to Non-Ratable Loans, the
Agent with respect to Agent Advances, and each Lender with respect
to the Revolving Loans other than Non-Ratable Loans and Agent
Advances, shall be entitled to interest at the applicable rate or
rates payable under this Agreement on the actual average daily
amount of funds employed by the Bank, the Agent, and the other
Lenders.
(v) Unless the Agent has received written notice from a Lender
to the contrary, the Agent may assume that the applicable conditions
precedent set forth in Article 8 have been satisfied and the
requested Borrowing will not exceed Availability on any Funding Date
for a Revolving Loan or Non-Ratable Loan.
(b) The Lenders' Failure to Perform. All Revolving Loans (other than
Non-Ratable Loans and Agent Advances) shall be made by the Lenders
simultaneously and in accordance with their Pro Rata Shares. It is
understood that (i) no Lender shall be responsible for any failure by any
other Lender to perform its obligation to make any Revolving Loans
hereunder, nor shall any Commitment of any Lender be increased or
decreased as a result of any failure by any other Lender to perform its
obligation to make any Revolving Loans hereunder, (ii) no failure by any
Lender to perform its obligation to make any Revolving Loans hereunder
shall excuse any other Lender from its obligation to make any Revolving
Loans hereunder, and (iii) the obligations of each Lender hereunder shall
be several, not joint and several.
(c) Defaulting Lenders. Unless the Agent receives notice from a
Lender on or prior to the Closing Date or, with respect to any Borrowing
after the Closing Date, at least one (1) Business Day prior to the date of
such Borrowing, that such Lender will not make available as and when
required hereunder to the Agent that Lender's Pro Rata Share of such
Borrowing, the Agent may assume that each Lender has made such amount
available to the Agent in immediately available funds on the Funding Date.
Furthermore, the Agent may, in reliance upon such assumption, make
available to the Borrowers on such date a corresponding amount. If any
Lender has not transferred its full Pro Rata Share to the Agent in
immediately available funds and if the Agent has transferred a
corresponding amount to
CREDIT AGREEMENT - Page 74
the Borrowers on the Business Day following such Funding Date the
applicable Lender shall make such amount available to the Agent, together
with interest at the Federal Funds Rate for that day. A notice by the
Agent submitted to any Lender with respect to amounts owing shall be
conclusive, absent manifest error. If each Lender's full Pro Rata Share is
transferred to the Agent as required, the amount transferred to the Agent
shall constitute such Lender's Revolving Loan for all purposes of this
Agreement. If any such amount is not transferred to the Agent on the
Business Day following the Funding Date, the Agent will notify the
Borrowers of such failure to fund and, upon demand by the Agent, the
Borrowers shall pay such amount to the Agent for the Agent's account,
together with interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the Interest Rate applicable at
the time to the Revolving Loans comprising that particular Borrowing. The
failure of any Lender to make any Revolving Loan on any Funding Date (any
such Lender, prior to the cure of such failure, being hereinafter referred
to as a "Defaulting Lender") shall not relieve any other Lender of its
obligation hereunder to make a Revolving Loan on such Funding Date. No
Lender shall be responsible for any other Lender's failure to advance such
other Lenders' Pro Rata Share of any Borrowing.
(d) Retention of Defaulting Lender's Payments. The Agent shall not
be obligated to transfer to a Defaulting Lender any payments made by any
Borrower to the Agent for the Defaulting Lender's benefit, nor shall a
Defaulting Lender be entitled to the sharing of any payments hereunder.
Amounts payable to a Defaulting Lender shall instead be paid to or
retained by the Agent. In its discretion, the Agent may loan the Borrowers
the amount of all such payments received or retained by it for the account
of such Defaulting Lender. Any amounts so loaned to the Borrowers shall
bear interest at the rate applicable to Base Rate Revolving Loans and for
all other purposes of this Agreement shall be treated as if they were
Revolving Loans, provided, however, that for purposes of voting or
consenting to matters with respect to the Loan Documents and determining
Pro Rata Shares, such Defaulting Lender shall be deemed not to be a
"Lender". Until a Defaulting Lender cures its failure to fund its Pro Rata
Share of any Borrowing (i) such Defaulting Lender shall not be entitled to
any portion of the Unused Line Fee and (ii) the Unused Line Fee shall
accrue in favor of the Lenders which have funded their respective Pro Rata
Shares of such requested Borrowing and shall be allocated among such
performing Lenders ratably based upon their relative Commitments. This
Section shall remain effective with respect to such Lender until such time
as the Defaulting Lender shall no longer be in default of any of its
obligations under this Agreement. The terms of this Section shall not be
construed to increase or otherwise affect the Commitment of any Lender, or
relieve or excuse the performance by any Loan Party of its duties and
obligations hereunder.
(e) Removal of Defaulting Lender. At the Borrowers' request, the
Agent or an Eligible Assignee reasonably acceptable to the Agent and the
Borrowers shall have the right (but not the obligation) to purchase from
any Defaulting Lender, and each Defaulting Lender shall, upon such
request, sell and assign to the Agent or such Eligible Assignee, all of
the Defaulting Lender's outstanding Commitments hereunder. Such sale shall
be consummated promptly after the Agent has arranged for a purchase by the
Agent or an Eligible Assignee pursuant to an Assignment and Acceptance,
and at a price equal to the outstanding principal
CREDIT AGREEMENT - Page 75
balance of the Defaulting Lender's Loans, plus accrued interest and fees,
without premium or discount.
Section 12.16 Letters of Credit; Intra-Lender Issues.
(a) Notice of Letter of Credit Balance. On each Settlement Date, the
Agent shall notify each Lender of the issuance of all Letters of Credit
and Credit Support since the prior Settlement Date.
(b) Participations in Letters of Credit.
(i) Purchase of Participations. Immediately upon issuance of
any Letter of Credit or Credit Support in accordance with Section
1.4(d), each Lender shall be deemed to have irrevocably and
unconditionally purchased and received without recourse or warranty,
an undivided interest and participation equal to such Lender's Pro
Rata Share of the face amount of such Letter of Credit or Credit
Support in connection with the issuance of such Letter of Credit or
Credit Support (including all obligations of the Borrower for whose
account such Letter of Credit or Credit Support was issued, and any
security therefor or guaranty pertaining thereto).
(ii) Sharing of Reimbursement Obligation Payments. Whenever
the Agent receives a payment from a Borrower on account of
reimbursement obligations in respect of a Letter of Credit or Credit
Support as to which the Agent has previously received for the
account of the Agent or the Letter of Credit Issuer payment from a
Lender, the Agent shall promptly pay to such Lender such Lender's
Pro Rata Share of such payment from such Borrower. Each such payment
shall be made by the Agent on the next Settlement Date.
(iii) Documentation. Upon the request of any Lender, the Agent
shall furnish to such Lender copies of any Letter of Credit, Credit
Support, reimbursement agreements executed in connection therewith,
applications for any Letter of Credit or Credit Support, and such
other documentation as may reasonably be requested by such Lender.
(iv) Obligations Irrevocable. The obligation of each Lender to
make payments to the Agent with respect to any Letter of Credit or
Credit Support or with respect to their participation therein or
with respect to the Revolving Loans made as a result of a drawing
under a Letter of Credit or Credit Support and the obligation of the
Borrowers to make payments to the Agent, for the account of the
Lenders, with respect to any Letter of Credit or Credit Support
shall be irrevocable and shall not be subject to any qualification
or exception whatsoever, including any of the following
circumstances:
(A) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
CREDIT AGREEMENT - Page 76
(B) the existence of any claim, setoff, defense, or
other right which any Borrower may have at any time against a
beneficiary named in a Letter of Credit or any transferee of
any Letter of Credit (or any Person for whom any such
transferee may be acting), any Lender, the Agent, the Letter
of Credit Issuer, or any other Person, whether in connection
with this Agreement, any Letter of Credit or Credit Support,
the transactions contemplated herein or any unrelated
transactions (including any underlying transactions between
such Borrower or any Consolidated Member or any other Person
and the beneficiary named in any Letter of Credit);
(C) any draft, certificate, or any other document
presented under any Letter of Credit proving to be forged,
fraudulent, invalid, or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
(D) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the
Loan Documents;
(E) the occurrence of any Default or Event of Default;
or
(F) the failure of the Loan Parties to satisfy the
applicable conditions precedent set forth in Article 8.
(c) Recovery or Avoidance of Payments; Refund of Payments in Error.
In the event any payment by or on behalf of any Borrower received by the
Agent with respect to any Letter of Credit or Credit Support and
distributed by the Agent to the Lenders on account of their respective
participations therein is thereafter set aside, avoided, or recovered from
the Agent in connection with any receivership, liquidation, or bankruptcy
proceeding, the Lenders shall, upon demand by the Agent, pay to the Agent
their respective Pro Rata Shares of such amount set aside, avoided, or
recovered, together with interest at the rate required to be paid by the
Agent upon the amount required to be repaid by it. Unless the Agent
receives notice from the Borrowers prior to the date on which any payment
is due to the Lenders that the Borrowers will not make such payment in
full as and when required, the Agent may assume that the Borrowers have
made such payment in full to the Agent on such date in immediately
available funds and the Agent may (but shall not be so required), in
reliance upon such assumption, distribute to each Lender on such due date
an amount equal to the amount then due such Lender. If and to the extent
the Borrowers have not made such payment in full to the Agent, each Lender
shall repay to the Agent on demand such amount distributed to such Lender,
together with interest thereon at the Federal Funds Rate for each day from
the date such amount is distributed to such Lender until the date repaid.
(d) Indemnification by the Lenders. To the extent not reimbursed by
the Loan Parties and without limiting the obligations of the Loan Parties
hereunder, the Lenders agree
CREDIT AGREEMENT - Page 77
to indemnify the Letter of Credit Issuer ratably in accordance with their
respective Pro Rata Shares, for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including attorneys' fees) or disbursements of any kind and nature
whatsoever that may be imposed on, incurred by or asserted against the
Letter of Credit Issuer in any way relating to or arising out of any
Letter of Credit or Credit Support or the transactions contemplated
thereby or any action taken or omitted by the Letter of Credit Issuer
under any Letter of Credit or Credit Support or any Loan Document in
connection therewith; provided that no Lender shall be liable for any of
the foregoing to the extent it arises from the gross negligence or willful
misconduct of the Person to be indemnified. Without limitation of the
foregoing, each Lender agrees to reimburse the Letter of Credit Issuer
promptly upon demand for its Pro Rata Share of any costs or expenses
payable by any Borrower to the Letter of Credit Issuer, to the extent that
the Letter of Credit Issuer is not promptly reimbursed for such costs and
expenses by a Borrower. The agreement contained in this Section shall
survive payment in full of all other Obligations.
Section 12.17 Concerning the Collateral and the Related Loan Documents.
Each Lender authorizes and directs the Agent to enter into the other Loan
Documents, for the ratable benefit and obligation of the Agent and the Lenders.
Each Lender agrees that any action taken by the Agent or the Majority Lenders,
as applicable, in accordance with the terms of this Agreement or the other Loan
Documents, and the exercise by the Agent or the Majority Lenders, as applicable,
of their respective powers set forth therein or herein, together with such other
powers that are reasonably incidental thereto, shall be binding upon all of the
Lenders. The Lenders acknowledge that the Revolving Loans, Agent Advances,
Non-Ratable Loans, Hedge Agreements, Bank Products, and all interest, fees, and
expenses hereunder constitute one Debt, secured pari passu by all of the
Collateral.
Section 12.18 Field Audit and Examination Reports; Disclaimer by the
Lenders. By signing this Agreement, each Lender:
(a) is deemed to have requested that the Agent furnish such Lender,
promptly after it becomes available, a copy of each field audit or
examination report (each a "Report" and collectively, the "Reports")
prepared by or on behalf of the Agent;
(b) expressly agrees and acknowledges that neither the Bank nor the
Agent (i) makes any representation or warranty as to the accuracy of any
Report, or (ii) shall be liable for any information contained in any
Report;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Agent, the Bank, or any
other party performing any audit or examination will inspect only specific
information regarding the Loan Parties and will rely significantly upon
the Loan Parties' books and records, as well as on representations of the
Loan Parties' personnel;
(d) agrees to keep all Reports confidential and strictly for its
internal use, and not to distribute except to its participants, or use any
Report in any other manner; and
CREDIT AGREEMENT - Page 78
(e) without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold the Agent and
any such other Lender preparing a Report harmless from any action the
indemnifying Lender may take or conclusion the indemnifying Lender may
reach or draw from any Report in connection with any loans or other credit
accommodations that the indemnifying Lender has made or may make to the
Borrowers, or the indemnifying Lender's participation in, or the
indemnifying Lender's purchase of, a loan or loans of the Borrowers; and
(ii) to pay and protect, and indemnify, defend, and hold the Agent and any
such other Lender preparing a Report harmless from and against, the
claims, actions, proceedings, damages, costs, expenses, and other amounts
(including Attorney Costs) incurred by the Agent and any such other Lender
preparing a Report as the direct or indirect result of any third parties
who might obtain all or part of any Report through the indemnifying
Lender.
Section 12.19 Relation Among the Lenders. The Lenders are not partners or
co-venturers, and no Lender shall be liable for the acts or omissions of, or
(except as otherwise set forth herein in case of the Agent) authorized to act
for, any other Lender.
Section 12.20 Rights of the Agent as UK Security Trustee. In its capacity
as UK Security Trustee, the Agent shall have (a) the benefit of all of the
provisions contained in this Article 12, (b) all the powers of an absolute owner
of the security constituted by the UK Security Documents and (c) all the rights
and powers granted to it and be subject to all the obligations and duties owed
by it under the UK Security Documents.
ARTICLE 13
MISCELLANEOUS
Section 13.1 No Waivers; Cumulative Remedies. No failure by the Agent or
any Lender to exercise any right, remedy, or option under this Agreement or any
present or future supplement hereto, or in any other agreement between or among
any Obligated Party and the Agent and/or any Lender, or delay by the Agent or
any Lender in exercising the same, will operate as a waiver thereof. Subject to
Section 11.1, no waiver by the Agent or any Lender will be effective unless it
is in writing, and then only to the extent specifically stated. No waiver by the
Agent or the Lenders on any occasion shall affect or diminish the Agent's and
each Lender's rights thereafter to require strict performance by the Loan
Parties of any provision of this Agreement. The Agent and the Lenders may
proceed directly to collect the Obligations without any prior recourse to the
Collateral. The Agent's and each Lender's rights under this Agreement will be
cumulative and not exclusive of any other right or remedy which the Agent or any
Lender may have.
Section 13.2 Severability. The illegality or unenforceability of any
provision of this Agreement, any other Loan Document, or any instrument or
agreement required hereunder shall not in any way affect or impair the legality
or enforceability of the remaining provisions of this Agreement, any other Loan
Document, or any instrument or agreement required hereunder.
Section 13.3 Governing Law; Choice of Forum.
CREDIT AGREEMENT - Page 79
(a) THIS AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS AND
LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE
INTERNAL LAWS (AS OPPOSED TO THE CONFLICT OF LAWS PROVISIONS, PROVIDED
THAT PERFECTION ISSUES WITH RESPECT TO ARTICLE 9 OF THE UCC MAY GIVE
EFFECT TO APPLICABLE CHOICE OR CONFLICT OF LAW RULES SET FORTH IN ARTICLE
9 OF THE UCC) OF THE STATE OF TEXAS; PROVIDED THAT THE AGENT AND THE
LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS
OR OF THE UNITED STATES LOCATED IN DALLAS COUNTY, TEXAS, AND BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH OF THE LOAN PARTIES, THE AGENT, AND
THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON- EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE LOAN PARTIES, THE
AGENT, AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR
ANY DOCUMENT RELATED HERETO. NOTWITHSTANDING THE FOREGOING (i) THE AGENT
AND THE LENDERS SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING
AGAINST ANY LOAN PARTY OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION THE AGENT OR THE LENDERS DEEM NECESSARY OR APPROPRIATE IN
ORDER TO REALIZE ON THE COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS
AND (ii) EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT ANY APPEALS FROM THE
COURTS DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE THOSE JURISDICTIONS.
(c) TO THE MAXIMUM EXTENT ALLOWED BY ANY APPLICABLE REQUIREMENT OF
LAW, EACH LOAN PARTY HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS
UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY
REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO SUCH BORROWER AT
ITS ADDRESS SET FORTH IN SECTION 13.8 AND SERVICE SO MADE SHALL BE DEEMED
TO BE COMPLETED TEN (10) DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED
IN THE UNITED STATES MAILS POSTAGE PREPAID. NOTHING CONTAINED HEREIN SHALL
AFFECT THE RIGHT OF THE AGENT OR THE LENDERS TO SERVE LEGAL PROCESS BY ANY
OTHER MANNER PERMITTED BY LAW.
Section 13.4 Waiver of Jury Trial. EACH OF THE LOAN PARTIES, THE LENDERS,
AND THE AGENT IRREVOCABLY WAIVES ITS RESPECTIVE RIGHTS TO A TRIAL BY
CREDIT AGREEMENT - Page 80
JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO
THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING, OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED
PERSON, PARTICIPANT, OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS, OR OTHERWISE. EACH OF THE LOAN PARTIES, THE LENDERS, AND THE AGENT
AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL
WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, EACH OF THE PARTIES FURTHER
AGREES THAT ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF
THIS SECTION AS TO ANY ACTION, COUNTERCLAIM, OR OTHER PROCEEDING WHICH SEEKS, IN
WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT,
THE OTHER LOAN DOCUMENTS, OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS, OR MODIFICATIONS TO
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
Section 13.5 Survival of Representations and Warranties. All
representations and warranties of the Loan Parties contained in this Agreement
shall survive the execution, delivery, and acceptance thereof by the parties,
notwithstanding any investigation by the Agent or the Lenders or their
respective agents.
Section 13.6 Other Security and Guaranties. The Agent may, without notice
or demand and without affecting the Loan Parties' obligations hereunder, from
time to time: (a) take from any Person and hold collateral (other than the
Collateral) for the payment of all or any part of the Obligations and exchange,
enforce, or release such collateral or any part thereof; and (b) accept and hold
any endorsement or guaranty of payment of all or any part of the Obligations and
release or substitute any such endorser or guarantor, or any Person who has
given any Lien in any other collateral as security for the payment of all or any
part of the Obligations, or any other Person in any way obligated to pay all or
any part of the Obligations.
Section 13.7 Fees and Expenses. Each Loan Party agrees to pay to the
Agent, for its benefit, on demand, all costs and expenses that the Agent pays or
incurs in connection with the negotiation, preparation, syndication,
consummation, administration, enforcement, and termination of this Agreement or
any of the other Loan Documents, including: (a) Attorney Costs; (b) costs and
expenses (including Attorney Costs) for any amendment, supplement, waiver,
consent, or subsequent closing in connection with the Loan Documents and the
transactions contemplated thereby; (c) costs and expenses of lien and title
searches, and environmental audits; (d) taxes, fees, and other charges for
recording the Mortgages, filing financing statements and continuations, and
other actions to perfect, protect, and continue the Agent's Liens (including
costs and expenses paid or incurred by the Agent in connection with the
consummation of this Agreement); (e) sums paid or incurred to pay any amount or
take any action required of any Loan Party under the Loan Documents that such
Loan Party fails to pay or take; (f) costs of appraisals, inspections, and
verifications of the Collateral, including travel, lodging, and meals for field
examinations and inspections of the Collateral and the Obligated Parties'
operations by the Agent, plus the Agent's then customary charge for field
CREDIT AGREEMENT - Page 81
examinations and audits and the preparation of reports thereof (such charge is
currently $750 per day (or portion thereof) for each Person retained or employed
by the Agent with respect to each field examination or audit); and (g) costs and
expenses of forwarding loan proceeds, collecting checks and other items of
payment, and establishing and maintaining Payment Accounts and lock boxes, and
costs and expenses of preserving and protecting the Collateral. In addition, the
Loan Parties agree to pay costs and expenses incurred by the Agent (including
Attorney Costs), for its benefit, on demand, all reasonable fees, expenses, and
disbursements paid or incurred by the Agent and to pay to the Lenders, for their
benefit, on demand, all reasonable fees, expenses, and disbursements paid or
incurred by the Lenders during the existence of an Event of Default for one law
firm retained by the Lenders separate from the Agent to obtain payment of the
Obligations, enforce the Agent's Liens, sell or otherwise realize upon the
Collateral, and otherwise enforce the provisions of the Loan Documents, or to
defend any claims made or threatened against the Agent or any Lender arising out
of the transactions contemplated hereby (including preparations for and
consultations concerning any such matters). The foregoing shall not be construed
to limit any other provisions of the Loan Documents regarding costs and expenses
to be paid by the Loan Parties. All of the foregoing costs and expenses shall be
charged to the Borrowers' Loan Account as Revolving Loans as described in
Section 3.7.
Section 13.8 Notices. Except as otherwise provided herein, all notices,
demands, and requests that any party is required or elects to give to any other
shall be in writing, or by a telecommunications device capable of creating a
written record, and any such notice shall become effective (a) upon personal
delivery thereof, including, but not limited to, delivery by overnight mail or
courier service, (b) four (4) days after it shall have been mailed by United
States mail, first class, certified or registered, with postage prepaid, or (c)
in the case of notice by such a telecommunications device, when properly
transmitted, in each case addressed to the party to be notified as follows:
If to the Agent or to the Bank:
Bank of America, N.A..
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Business Credit: URGENT
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
If to the Loan Parties or any of them:
EGL, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy No. ▇▇▇-▇▇▇-▇▇▇▇
or to such other address as each party may designate for itself by like notice.
For purposes of providing any notice to a Lender, such notice shall be delivered
to such Lender at the address for
CREDIT AGREEMENT - Page 82
notice of such Lender set forth on the signature pages of this Agreement or on
the most recent Assignment and Acceptance to which such Lender is a party.
Failure or delay in delivering copies of any notice, demand, request, consent,
approval, declaration, or other communication to the persons designated above to
receive copies shall not adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration, or other communication.
Section 13.9 Waiver of Notices. Unless otherwise expressly provided
herein, each Loan Party waives presentment, notice of demand or dishonor,
protest as to any instrument, notice of intent to accelerate the Obligations,
and notice of acceleration of the Obligations, as well as any and all other
notices to which it might otherwise be entitled. No notice to or demand on any
Loan Party which the Agent or any Lender may elect to give shall entitle any
Loan Party to any or further notice or demand in the same, similar, or other
circumstances.
Section 13.10 Binding Effect. The provisions of this Agreement shall be
binding upon and inure to the benefit of the respective representatives,
successors, and assigns of the parties hereto; provided, however, that no
interest herein may be assigned by any Loan Party without the prior written
consent of the Agent and each Lender. The rights and benefits of the Agent and
the Lenders hereunder shall, if such Persons so agree, inure to any party
acquiring any interest in the Obligations or any part thereof.
Section 13.11 Indemnity of the Agent and the Lenders by the Loan Parties.
(a) EACH LOAN PARTY AGREES TO DEFEND, INDEMNIFY, AND HOLD THE
AGENT-RELATED PERSONS, AND EACH LENDER AND EACH OF ITS RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, COUNSEL, REPRESENTATIVES, AGENTS, AND
ATTORNEYS-IN-FACT (EACH, AN "INDEMNIFIED PERSON") HARMLESS FROM AND
AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, SUITS, COSTS, CHARGES, EXPENSES, AND DISBURSEMENTS
(INCLUDING ATTORNEY COSTS) OF ANY KIND OR NATURE WHATSOEVER WHICH MAY AT
ANY TIME (INCLUDING AT ANY TIME FOLLOWING REPAYMENT OF THE LOANS AND THE
TERMINATION, RESIGNATION, OR REPLACEMENT OF THE AGENT OR REPLACEMENT OF
ANY LENDER) BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST ANY SUCH
PERSON IN ANY WAY RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY
DOCUMENT CONTEMPLATED BY OR REFERRED TO HEREIN, OR THE TRANSACTIONS
CONTEMPLATED HEREBY, OR ANY ACTION TAKEN OR OMITTED BY ANY SUCH PERSON
UNDER OR IN CONNECTION WITH ANY OF THE FOREGOING, INCLUDING WITH RESPECT
TO ANY INVESTIGATION, LITIGATION, OR PROCEEDING (INCLUDING ANY INSOLVENCY
PROCEEDING OR APPELLATE PROCEEDING) RELATED TO OR ARISING OUT OF THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT, OR THE LOANS OR THE USE OF THE
PROCEEDS THEREOF, WHETHER OR NOT ANY INDEMNIFIED PERSON IS A PARTY THERETO
(ALL THE FOREGOING, COLLECTIVELY, THE "INDEMNIFIED LIABILITIES"); PROVIDED
THAT THE LOAN PARTIES SHALL HAVE NO
CREDIT AGREEMENT - Page 83
OBLIGATION HEREUNDER TO ANY INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED
LIABILITIES TO THE EXTENT RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF SUCH INDEMNIFIED PERSON. THE AGREEMENTS IN THIS SECTION
13.11 SHALL SURVIVE PAYMENT OF ALL OTHER OBLIGATIONS.
(b) EACH LOAN PARTY AGREES TO INDEMNIFY, DEFEND, AND HOLD HARMLESS
THE AGENT AND THE LENDERS FROM ANY LOSS OR LIABILITY DIRECTLY OR
INDIRECTLY ARISING OUT OF THE USE, GENERATION, MANUFACTURE, PRODUCTION,
STORAGE, RELEASE, THREATENED RELEASE, DISCHARGE, DISPOSAL, OR PRESENCE OF
A HAZARDOUS SUBSTANCE RELATING TO ANY LOAN PARTIES' OPERATIONS, BUSINESS,
OR PROPERTY. THIS INDEMNITY WILL APPLY WHETHER THE HAZARDOUS SUBSTANCE IS
ON, UNDER, OR ABOUT ANY LOAN PARTY'S PROPERTY OR OPERATIONS OR PROPERTY
LEASED TO ANY LOAN PARTY. THE INDEMNITY INCLUDES BUT IS NOT LIMITED TO
ATTORNEY COSTS. THE INDEMNITY EXTENDS TO THE AGENT AND THE LENDERS, THEIR
AFFILIATES, SUBSIDIARIES, AND ALL OF THEIR DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS, SUCCESSORS, ATTORNEYS, AND ASSIGNS. AS USED IN THIS CLAUSE (B),
"HAZARDOUS SUBSTANCES" MEANS ANY SUBSTANCE, MATERIAL, OR WASTE THAT IS OR
BECOMES DESIGNATED OR REGULATED AS "TOXIC," "HAZARDOUS," "POLLUTANT," OR
"CONTAMINANT" OR A SIMILAR DESIGNATION OR REGULATION UNDER ANY FEDERAL,
STATE, OR LOCAL LAW (WHETHER UNDER COMMON LAW, STATUTE, REGULATION, OR
OTHERWISE) OR JUDICIAL OR ADMINISTRATIVE INTERPRETATION OF SUCH, INCLUDING
PETROLEUM OR NATURAL GAS. THIS INDEMNITY WILL SURVIVE REPAYMENT OF ALL
OTHER OBLIGATIONS.
Section 13.12 Limitation of Liability. NO CLAIM MAY BE MADE BY ANY LOAN
PARTY, ANY LENDER, OR OTHER PERSON AGAINST THE AGENT, ANY LENDER, OR THE
AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, COUNSEL, REPRESENTATIVES, AGENTS, OR
ATTORNEYS-IN-FACT OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, OR
PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER
THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY ACT, OMISSION, OR EVENT
OCCURRING IN CONNECTION THEREWITH, AND EACH LOAN PARTY AND EACH LENDER HEREBY
WAIVES, RELEASES, AND AGREES NOT TO ▇▇▇ UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER
OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.
Section 13.13 Final Agreement. This Agreement and the other Loan Documents
are intended by the Loan Parties, the Agent, and the Lenders to be the final,
complete, and exclusive expression of the agreement between them. This Agreement
and the other Loan Documents supersede any and all prior oral or written
agreements relating to the subject matter hereof and
CREDIT AGREEMENT - Page 84
thereof. No modification, rescission, waiver, release, or amendment of any
provision of this Agreement or any other Loan Document shall be made, except by
a written agreement signed by the Loan Parties and a duly authorized officer of
each of the Agent and the Majority Lenders or all of the Lenders, as applicable.
THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
Section 13.14 Counterparts. This Agreement and the other Loan Documents
may be executed in any number of counterparts, and by the Agent, each Lender,
and the Loan Parties in separate counterparts, each of which shall be an
original, but all of which shall together constitute one and the same agreement.
Signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document and a telecopy of any such executed signature page shall be
valid as an original.
Section 13.15 Captions. The captions contained in this Agreement and the
other Loan Documents are for convenience of reference only, are without
substantive meaning and should not be construed to modify, enlarge, or restrict
any provision.
Section 13.16 Right of Setoff. In addition to any rights and remedies of
the Lenders provided by law, if an Event of Default exists or the Loans have
been accelerated, each Lender is authorized at any time and from time to time,
without prior notice to the Loan Parties, any such notice being waived by the
Loan Parties to the fullest extent permitted by law, to setoff and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held by, and other indebtedness at any time owing by, such Lender or any
Affiliate of such Lender to or for the credit or the account of the Loan
Parties, or any of them, against any and all Obligations, or any Guaranty
thereof by any Obligated Party, owing to such Lender, now or hereafter existing,
irrespective of whether or not the Agent or such Lender shall have made demand
under this Agreement or any other Loan Document and although such Obligations or
Guaranty may be contingent or unmatured. Each Lender agrees promptly to notify
the Loan Parties and the Agent after any such setoff and application made by
such Lender; provided, however, the failure to give such notice shall not affect
the validity of such setoff and application. NOTWITHSTANDING THE FOREGOING, NO
LENDER SHALL EXERCISE ANY RIGHT OF SETOFF, BANKER'S LIEN, OR THE LIKE AGAINST
ANY DEPOSIT ACCOUNT OR PROPERTY OF ANY LOAN PARTY HELD OR MAINTAINED BY SUCH
LENDER WITHOUT THE PRIOR WRITTEN UNANIMOUS CONSENT OF THE LENDERS.
Section 13.17 Confidentiality.
(a) Each Loan Party hereby consents that the Agent and each Lender
may issue and disseminate to the public general information describing the
credit accommodation entered into pursuant to this Agreement, including
the name and address of the Loan Parties
CREDIT AGREEMENT - Page 85
and a general description of the Loan Parties' business and may use each
Loan Party's name in advertising and other promotional material.
(b) Each Lender severally agrees to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all
information identified as "confidential" or "secret" by any Loan Party and
provided to the Agent or such Lender by or on behalf of any Loan Party,
under this Agreement or any other Loan Document, except to the extent that
such information (i) was or becomes generally available to the public
other than as a result of disclosure by the Agent or such Lender, or (ii)
was or becomes available on a nonconfidential basis from a source other
than a Loan Party, provided that such source is not bound by a
confidentiality agreement with a Loan Party known to the Agent or such
Lender; provided, however, that the Agent and any Lender may disclose such
information (A) at the request or pursuant to any requirement of any
Governmental Authority to which the Agent or such Lender is subject or in
connection with an examination of the Agent or such Lender by any such
Governmental Authority; (B) pursuant to subpoena or other court process;
(C) when required to do so in accordance with the provisions of any
applicable Requirement of Law; (d) to the extent reasonably required in
connection with any litigation or proceeding (including, but not limited
to, any bankruptcy proceeding) to which the Agent, any Lender or their
respective Affiliates may be party; (e) to the extent reasonably required
in connection with the exercise of any remedy hereunder or under any other
Loan Document; (f) to the Agent's or such Lender's independent auditors,
accountants, attorneys, and other professional advisors; (g) to any
prospective Participant or Assignee, actual or potential, provided that
such prospective Participant or Assignee agrees in writing to keep such
information confidential to the same extent required of the Agent and the
Lenders hereunder; (h) as expressly permitted under the terms of any other
document or agreement regarding confidentiality to which any Borrower is
party or is deemed party with the Agent or such Lender; and (i) to its
Affiliates.
Section 13.18 Conflicts with other Loan Documents. Unless otherwise
expressly provided in this Agreement (or in another Loan Document by specific
reference to the applicable provision contained in this Agreement), if any
provision contained in this Agreement conflicts with any provision of any other
Loan Document, the provision contained in this Agreement shall govern and
control.
Section 13.19 Joint and Several Liability. All Loans, upon funding, shall
be deemed to be jointly funded to and received by the Borrowers. Each Borrower
jointly and severally agrees to pay, and shall be jointly and severally liable
under this Agreement for, all Obligations (excluding Existing Obligations in the
case of a Newly Obligated Borrower), regardless of the manner or amount in which
proceeds of Loans are used, allocated, shared, or disbursed by or among the
Borrowers themselves, or the manner in which the Agent and/or any Lender
accounts for such Loans or other extensions of credit on its books and records.
Each Borrower shall be liable for all amounts due to the Agent and/or any Lender
under this Agreement, regardless of which Borrower actually receives Loans or
other extensions of credit hereunder or the amount of such Loans and extensions
of credit received or the manner in which the Agent and/or such Lender accounts
for such Loans or other extensions of credit on its books and records. Each
Borrower's Obligations with respect to Loans
CREDIT AGREEMENT - Page 86
and other extensions of credit made to it, and such Borrower's Obligations
arising as a result of the joint and several liability of such Borrower
hereunder, with respect to Loans made to the other Borrowers hereunder, shall be
separate and distinct obligations, but all such Obligations shall be primary
obligations of such Borrower. The Borrowers acknowledge and expressly agree with
the Agent and each Lender that the joint and several liability of each Borrower
is required solely as a condition to, and is given solely as inducement for and
in consideration of, credit or accommodations extended or to be extended under
the Loan Documents to any or all of the other Borrowers and is not required or
given as a condition of extensions of credit to such Borrower. Each Loan Party's
obligations under this Agreement and as an obligor under a Guaranty Agreement
shall be separate and distinct obligations. Each Loan Party's obligations under
this Agreement shall, to the fullest extent permitted by law, be unconditional
irrespective of (i) the validity or enforceability, avoidance, or subordination
of the Obligations of any other Loan Party or of any promissory note or other
document evidencing all or any part of the Obligations of any other Loan Party,
(ii) the absence of any attempt to collect the Obligations from any other Loan
Party, any other Obligated Party, or any other security therefor, or the absence
of any other action to enforce the same, (iii) the waiver, consent, extension,
forbearance, or granting of any indulgence by the Agent and/or any Lender with
respect to any provision of any instrument evidencing the Obligations of any
other Loan Party or other Obligated Party, or any part thereof, or any other
agreement now or hereafter executed by any other Loan Party or other Obligated
Party and delivered to the Agent and/or any Lender, (iv) the failure by the
Agent and/or any Lender to take any steps to perfect and maintain its security
interest in, or to preserve its rights to, any security or collateral for the
Obligations of any other Loan Party or other Obligated Party, (v) the Agent's
and/or any Lender's election, in any proceeding instituted under the Bankruptcy
Code, of the application of Section 1111(b)(2) of the Bankruptcy Code or under
any similar provision of the BIA, the Companies Creditors Arrangement Act
(Canada), or any other applicable laws of any foreign jurisdiction, (vi) any
borrowing or grant of a security interest by any other Loan Party or other
Obligated Party, as debtor-in-possession under Section 364 of the Bankruptcy
Code or under any similar provision of the BIA, the Companies Creditors
Arrangement Act (Canada), or any other applicable laws of any foreign
jurisdiction, (vii) the disallowance of all or any portion of the Agent's and/or
any Lender's claim(s) for the repayment of the Obligations of any other Loan
Party or other Obligated Party under Section 502 of the Bankruptcy Code or under
any similar provision of the BIA, the Companies Creditors Arrangement Act
(Canada), or any other applicable laws of any foreign jurisdiction, or (viii)
any other circumstances which might constitute a legal or equitable discharge or
defense of a guarantor or of any other Loan Party or other Obligated Party. With
respect to any Borrower's Obligations arising as a result of the joint and
several liability of the Borrowers hereunder with respect to Loans or other
extensions of credit made to any of the other Borrowers hereunder, such Borrower
waives, until the Obligations shall have been paid in full and this Agreement
shall have been terminated, any right to enforce any right of subrogation or any
remedy which the Agent and/or any Lender now has or may hereafter have against
any other Borrower, any other Obligated Party, or any other endorser or any
guarantor of all or any part of the Obligations, and any benefit of, and any
right to participate in, any security or collateral given to the Agent and/or
any Lender to secure payment of the Obligations or any other liability of any
Loan Party or other Obligated Party to the Agent and/or any Lender. Upon any
Event of Default, the Agent may proceed directly and at once, without notice,
against any Loan Party or other Obligated Party to collect and recover the full
amount, or any portion of the Obligations, without first proceeding against any
other Loan Party or other Obligated Party or any other Person, or against any
CREDIT AGREEMENT - Page 87
security or collateral for the Obligations. Each Loan Party consents and agrees
that the Agent shall be under no obligation to marshal any assets in favor of
any Loan Party or against or in payment of any or all of the Obligations.
Section 13.20 Contribution and Indemnification Among the Borrowers. Each
Borrower is obligated to repay the Obligations as joint and several obligors
under this Agreement. To the extent that any Borrower shall, under this
Agreement as a joint and several obligor, repay any of the Obligations
constituting Loans made to another Borrower hereunder or other Obligations
incurred directly and primarily by any other Borrower (an "Accommodation
Payment"), then the Borrower making such Accommodation Payment shall be entitled
to contribution and indemnification from, and be reimbursed by, each of the
other Borrowers in an amount, for each of such other Borrowers, equal to a
fraction of such Accommodation Payment, the numerator of which fraction is such
other Borrower's Allocable Amount and the denominator of which is the sum of the
Allocable Amounts of all of the Borrowers. As of any date of determination, the
"Allocable Amount" of each Borrower shall be equal to the maximum amount of
liability for Accommodation Payments which could be asserted against such
Borrower hereunder without (a) rendering such Borrower "insolvent" within the
meaning of Section 101 (31) of the Bankruptcy Code, Section 2 of the Uniform
Fraudulent Transfer Act ("UFTA") or Section 2 of the Uniform Fraudulent
Conveyance Act ("UFCA"), (b) leaving such Borrower with unreasonably small
capital or assets, within the meaning of Section 548 of the Bankruptcy Code,
Section 4 of the UFTA, or Section 5 of the UFCA, or (c) leaving such Borrower
unable to pay its debts as they become due within the meaning of Section 548 of
the Bankruptcy Code or Section 4 of the UFTA, or Section 5 of the UFCA. All
rights and claims of contribution, indemnification, and reimbursement under this
Section shall be subordinate in right of payment to the prior payment in full of
the Obligations. The provisions of this Section shall, to the extent expressly
inconsistent with any provision in any Loan Document, supersede such
inconsistent provision.
Section 13.21 Agency of the Parent for Each Other Loan Party. Each of the
Loan Parties other than the Parent irrevocably appoints the Parent as its agent
for all purposes relevant to this Agreement, including the giving and receipt of
notices and execution and delivery of all documents, instruments, and
certificates contemplated herein (including, without limitation, execution and
delivery to the Agent of Borrowing Base Certificates, Notices of Borrowing, and
Notices of Continuation/Conversion) and all modifications hereto. Any agreement,
acknowledgment, consent, direction, certification, or other action which might
otherwise be valid or effective only if given or taken by all or any of the Loan
Parties or acting singly, shall be valid and effective if given or taken only by
the Parent, whether or not any of the other Loan Parties joins therein, and the
Agent and the Lenders shall have no duty or obligation to make further inquiry
with respect to the authority of the Parent under this Section 13.21, provided
that nothing in this Section 13.21 shall limit the effectiveness of, or the
right of the Agent and the Lenders to rely upon, any notice (including without
limitation a Notice of Borrowing or a Notice of Continuation/Conversion),
document, instrument, certificate, acknowledgment, consent, direction,
certification, or other action delivered by any Borrower or other Loan Party
pursuant to this Agreement.
Section 13.22 Additional Loan Parties. Addition of any Person as a party
to this Agreement is subject to approval of the Agent and the Majority Lenders,
and may be conditioned upon such
CREDIT AGREEMENT - Page 88
requirements as they may determine in their discretion, including, without
limitation, (a) the furnishing of such financial and other information as the
Agent or any such Lender may request; (b) approval by all appropriate approval
authorities of the Agent and each of the Majority Lenders; (c) execution and
delivery by the then existing Loan Parties, such Person, the Agent, and the
Majority Lenders of such agreements and other documentation (including, without
limitation, an amendment to this Agreement or any other Loan Document), and the
furnishing by such Person or any of the Loan Parties of such certificates,
opinions, and other documentation, as the Agent and any such of the Majority
Lenders may request. Neither the Agent nor any Lender shall have any obligation
to approve any such Person for addition as a party to this Agreement.
Section 13.23 Express Waivers By Loan Parties In Respect of Cross
Guaranties and Cross Collateralization. Each Loan Party agrees as follows:
(a) Each Loan Party hereby waives: (i) notice of acceptance of this
Agreement; (ii) notice of the making of any Loans, the issuance of any
Letter of Credit or Credit Support, or any other financial accommodations
made or extended under the Loan Documents or the creation or existence of
any Obligations; (iii) notice of the amount of the Obligations, subject,
however, to such Loan Party's right to make inquiry of the Agent to
ascertain the amount of the Obligations at any reasonable time; (iv)
notice of any adverse change in the financial condition of any other
Obligated Party or of any other fact that might increase such Loan Party's
risk with respect to such other Obligated Party under the Loan Documents;
(v) notice of presentment for payment, demand, protest, and notice thereof
as to any promissory notes or other instruments among the Loan Documents;
and (vii) all other notices (except if such notice is specifically
required to be given to such Loan Party hereunder or under any of the
other Loan Documents to which such Loan Party is a party) and demands to
which such Loan Party might otherwise be entitled;
(b) Each Loan Party hereby waives the right by statute or otherwise
to require the Agent or any Lender to institute suit against any other
Obligated Party or to exhaust any rights and remedies which the Agent or
any Lender has or may have against any other Obligated Party. Each Loan
Party further waives any defense arising by reason of any disability or
other defense of any other Obligated Party (other than the defense that
the Obligations shall have been fully and finally performed and
indefeasibly paid) or by reason of the cessation from any cause whatsoever
of the liability of any such Obligated Party in respect thereof.
(c) Each Loan Party hereby waives and agrees not to assert against
the Agent, any Lender, or the Letter of Credit Issuer: (i) any defense
(legal or equitable), setoff, counterclaim, or claim which such Loan Party
may now or at any time hereafter have against any other Obligated Party or
any other party liable under the Loan Documents; (ii) any defense, setoff,
counterclaim, or claim of any kind or nature available to any other
Obligated Party against the Agent, any Lender, the Bank, or the Letter of
Credit Issuer, arising directly or indirectly from the present or future
lack of perfection, sufficiency, validity, or enforceability of the
Obligations or any security therefor; (iii) any right or defense arising
by reason of any claim or defense based upon an election of remedies by
the Agent, any Lender,
CREDIT AGREEMENT - Page 89
+the Bank, or the Letter of Credit Issuer under any applicable law; (iv)
the benefit of any statute of limitations affecting any other Loan Party's
liability hereunder;
(d) Each Loan Party consents and agrees that, without notice to or
by such Loan Party and without affecting or impairing the obligations of
such Loan Party hereunder, the Agent may (subject to any requirement for
consent of any of the Lenders to the extent required by this Agreement),
by action or inaction: (i) compromise, settle, extend the duration or the
time for the payment of, or discharge the performance of, or may refuse to
or otherwise not enforce the Loan Documents; (ii) release all or any one
or more parties to any one or more of the Loan Documents or grant other
indulgences to any other Obligated Party in respect thereof; (iii) amend
or modify in any manner and at any time (or from time to time) any of the
Loan Documents; or (iv) release or substitute any Person liable for
payment of the Obligations, or enforce, exchange, release, or waive any
security for the Obligations or any Guaranty of the Obligations;
Each Loan Party represents and warrants to the Agent and the Lenders that such
Loan Party is currently informed of the financial condition of all other
Consolidated Members and all other circumstances which a diligent inquiry would
reveal and which bear upon the risk of nonpayment of the Obligations. Each Loan
Party further represents and warrants that such Loan Party has read and
understands the terms and conditions of the Loan Documents. Each Loan Party
agrees that neither the Agent, any Lender, the Bank, nor the Letter of Credit
Issuer has any responsibility to inform any Loan Party of the financial
condition of any other Obligated Party or of any other circumstances which bear
upon the risk of nonpayment or nonperformance of the Obligations.
Section 13.24 Payment Currency. Unless otherwise specified, all payments
under this Agreement or any of the other Loan Documents, whether constituting
payments of principal or interest on Loans, fees, costs or expenses, or other
Obligations payable of any kind, shall be made in Dollars. To the extent any
payments or proceeds of Collateral are received by or on behalf of the Agent in
currency other than Dollars ("foreign currency"), for application to the
Obligations, the amount to be applied and credited to the Obligations shall be
equal (and limited) to the amount in Dollars which could be received on the
Business Day following the Agent's receipt thereof in immediately available
funds, in exchange for such foreign currency at the applicable exchange rate
available to the Agent on the date of such exchange, less associated costs and
expenses.
Section 13.25 Judgment Currency. If, for the purpose of obtaining judgment
in any court in any jurisdiction with respect to this Agreement or any other
Loan Document or the Collateral, it becomes necessary to convert into the
currency of such jurisdiction (herein called the "Judgment Currency") any amount
due hereunder in any currency other than the Judgment Currency, then conversion
shall be made at the rate of exchange prevailing on the Business Day before the
day on which judgment is given. For this purpose, "rate of exchange" means the
rate at which the Agent is able, on the relevant date, to sell the currency of
the amount due hereunder in New York, New York against the Judgment Currency. In
the event that there is a change in the rate of exchange prevailing between the
Business Day before the day on which the judgment is given and the date of
payment of the amount due, each Borrower agrees that it will, on the date of
payment, pay such additional amounts (if any) as may be necessary to ensure that
the amount paid on such date is the
CREDIT AGREEMENT - Page 90
amount in the Judgment Currency which, when converted at the rate of exchange
prevailing on the date of payment, is the amount then due under this Agreement
in Dollars. Any additional amount due under this Section 13.25 will be due as a
separate indebtedness and shall not be affected by judgment being obtained for
any other sums due under or in respect of this Agreement or any other Loan
Document.
Section 13.26 Amendment and Restatement. This Agreement shall constitute
an amendment and restatement of the Original Credit Agreement. On the Closing
Date, the Original Loan of the Bank shall be deemed to be renewed and continued,
and not extinguished, and thereupon and thereafter shall constitute a Revolving
Loan under this Agreement, and the Original Revolving Note of the Bank shall be
deemed to be renewed and replaced, but not extinguished, by the Revolving Loan
Note of the Bank under this Agreement. Upon funding of the initial Loans by the
Bank as a Lender under this Agreement the proceeds thereof (in excess of the
principal amount of the Original Loan of the Bank renewed and continued as
referenced in the preceding sentence) shall be used to pay and discharge in full
the Original Loans and Original Revolving Notes of each Terminating Lender and
the Bank, as a Lender under this Agreement, shall be subrogated to all rights of
the Terminating Lenders in respect thereof. On the Closing Date, the
"Administrative Agent's Lien" as defined in and evidenced by the Original Credit
Documents shall automatically be deemed to be renewed and continued (and not
extinguished) by this Agreement and the other Loan Documents and thereupon and
thereafter shall be the Agent's Lien under this Agreement and the other Loan
Documents, which shall continue in full force and effect as security for all
Obligations in accordance with the terms of this Agreement and the other Loan
Documents. All Original Letters of Credit shall be deemed to be outstanding
under this Agreement and all references to Letters of Credit in this Agreement
and the other Loan Documents shall include the Original Letters of Credit. All
references in the Original Credit Documents to the Original Credit Agreement
shall be deemed to mean this Agreement, as an amendment and restatement of the
Original Credit Agreement, all references in the Original Credit Documents to
the "Administrative Agent" shall mean the Agent and all references in the
Original Credit Documents to "Bank of America," "Bank of America, N.A.,"or "Bank
of America, National Association" shall mean the Bank.
Section 13.27 Designated Senior Debt. All Obligations existing from time
to time, including any increases, renewals, extensions or modifications thereof,
are hereby expressly designated as being "Designated Senior Indebtedness" for
purposes of, and as defined by, the Convertible Subordinated Debt Documents.
[Remainder of page intentionally left blank]
CREDIT AGREEMENT - Page 91
IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.
BORROWERS:
EGL, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, Corporate Secretary
ALROD INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
CIRCLE AIRFREIGHT JAPAN, LTD.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
CIRCLE OVERSEAS CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
CIRCLE INTERNATIONAL GROUP, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
CREDIT AGREEMENT
CIRCLE INTERNATIONAL HOLDINGS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
CIRCLE INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
EAGLE MARITIME SERVICES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
By: /s/ ▇▇▇▇▇ ▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇▇▇▇, Secretary
EAGLE PARTNERS L.P.
By: EUSA HOLDINGS, INC.,
its General Partner
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, President
CREDIT AGREEMENT
EAGLE USA IMPORT BROKERS, INC.
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, President
EGL (CANADA) HOLDING COMPANY, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
EGL DELAWARE LIMITED LIABILITY COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, Manager
By: /s/ E. ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
E. ▇▇▇▇▇▇ ▇▇▇▇▇, Manager
EGL EAGLE GLOBAL LOGISTICS, LP
By: EGL MANAGEMENT, LLC,
its Sole General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
CREDIT AGREEMENT
EGL MANAGEMENT, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
EUSA HOLDINGS, INC.
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, President
EUSA PARTNERS, INC.
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, President
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & CO., INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
J.R. ▇▇▇▇▇▇▇, INCORPORATED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
▇▇▇ ▇▇▇▇▇▇▇▇ INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
CREDIT AGREEMENT
AGENT:
BANK OF AMERICA, N.A., as the Agent
By: /s/ ▇▇▇ ▇▇▇▇
----------------------------------
▇▇▇ ▇▇▇▇, Senior Vice President
LENDERS:
BANK OF AMERICA, N.A.
By: /s/ ▇▇▇ ▇▇▇▇
----------------------------------
▇▇▇ ▇▇▇▇, Senior Vice President
Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Business Credit: URGENT
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
CREDIT AGREEMENT
LOAN PARTIES - GUARANTORS:
EGL EAGLE GLOBAL LOGISTICS (CANADA)
CORP.
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
CREDIT AGREEMENT
ANNEX A
to
Credit Agreement
Definitions, Accounting Terms, and Interpretive Provisions
DEFINITIONS:
Capitalized terms wherever used in the Loan Documents shall have the following
respective meanings (unless otherwise defined therein):
"Account" and "Accounts" have the meanings specified in the Security
Agreement.
"Accommodation Payment" has the meaning specified in Section 13.20.
"Account Debtor" means each Person obligated in any way on or in
connection with an Account, Chattel Paper, or General Intangibles (including a
payment intangible).
"ACH Transactions" means any cash management or related services
including, without limitation, the automated clearinghouse transfer of funds by
the Bank for the account of any Consolidated Member pursuant to agreement or
overdrafts.
"Adjusted Net Earnings from Operations" means, with respect to any fiscal
period of the Parent, the Consolidated Members' net income after provision for
income taxes for such fiscal period, as determined in accordance with GAAP and
reported on the Financial Statements for such period, excluding any and all of
the following included in such net income: (a) gain or loss arising from the
sale of any capital assets; (b) gain arising from any write-up in the book value
of any asset; (c) earnings of any Person, substantially all the assets of which
have been acquired by any Consolidated Member other than an Unrestricted
Subsidiary in any manner, to the extent realized by such other Person prior to
the date of acquisition; (d) earnings of any Person in which any Consolidated
Member other than an Unrestricted Subsidiary has an ownership interest unless
(and only to the extent) such earnings shall actually have been received by such
Consolidated Member in the form of cash distributions; (e) earnings of any
Person to which assets of any Consolidated Member other than an Unrestricted
Subsidiary shall have been sold, transferred, or disposed of, or into which any
Consolidated Member other than an Unrestricted Subsidiary shall have been
merged, or which has been a party with any Consolidated Member other than an
Unrestricted Subsidiary to any consolidation or other form of reorganization,
prior to the date of such transaction; (f) gain arising from the acquisition of
debt or equity securities of any Consolidated Member other than an Unrestricted
Subsidiary or from cancellation or forgiveness of Debt; (g) gain or loss arising
from extraordinary items, other than any such items arising with respect to an
Unrestricted Subsidiary, as determined in accordance with GAAP, or from any
other non-recurring transaction; and (h) any income or loss resulting from the
operations of the Unrestricted Subsidiaries.
ANNEX A TO CREDIT AGREEMENT - Page 1
"Adjusted Tangible Assets" means, as applied to any Person, all of such
Person's assets except: (a) patents, copyrights, trademarks, trade names,
franchises, goodwill, and other similar intangibles; (b) Restricted Investments;
(c) unamortized debt discount and expense; (d) assets constituting Intercompany
Accounts; and (e) fixed assets to the extent of any write-up in the book value
thereof resulting from a revaluation effective after the Closing Date.
"Adjusted Tangible Net Worth" means, as applied to any Person, at any date
and determined in accordance with GAAP (a) the book value (after deducting
related depreciation, obsolescence, amortization, valuation, and other proper
reserves) at which the Adjusted Tangible Assets would be shown on a balance
sheet of such Person at such date, less (b) the amount at which such Person's
liabilities would be shown on such balance sheet, including as liabilities all
reserves for contingencies and other potential liabilities which would be
required to be shown on such balance sheet.
"Adjusted Tangible Net Worth Requirement" means, as of the end of each
fiscal quarter of the Parent ending after the Closing Date, an amount equal to
the amount specified corresponding to the applicable fiscal quarter end in the
table below, respectively:
====================================================================================
Fiscal Quarter End Adjusted Tangible Net Worth
Requirement
====================================================================================
Fiscal quarter ending December 31, 2001 $270,000,000
------------------------------------------------------------------------------------
Fiscal quarter ending March 31, 2002 and $270,000,000 plus the cumulative
each fiscal quarter ending thereafter amount of all Adjusted Tangible Net
Worth Requirement Increases
====================================================================================
"Adjusted Tangible Net Worth Requirement Increase" means an amount,
determined for the Parent and its Subsidiaries, excluding the Unrestricted
Subsidiaries, on a consolidated basis as of the end of any fiscal quarter of the
Parent, commencing with the fiscal quarter ending March 31, 2002, equal to the
sum of (a) seventy-five percent (75.0%) of the amount (not less than zero) of
Net Income for such fiscal quarter, plus (b) seventy-five percent (75.0%) of the
net amount of all equity proceeds received during such fiscal quarter minus (c)
the aggregate amount of all Permitted Stock Repurchases during such fiscal
quarter; plus or minus, as the case may be, without duplication, adjustments
(increases or decreases) to net worth made during such period pursuant to
Statement of Financial Accounting Standards (SFAS) 142.
"Affected Lender" has the meaning specified in Section 4.8.
"Affiliate" means, as to any Person (the "subject Person"), including any
Consolidated Member, any other Person which, directly or indirectly, is in
control of, is controlled by, or is under common control with, the subject
Person or which owns, directly or indirectly, five percent (5.0%) or more of the
outstanding Capital Stock of the subject Person. A Person shall be deemed to
control another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause
ANNEX A TO CREDIT AGREEMENT - Page 2
the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract, or otherwise.
"Agent" means the Bank in its capacity as sole and exclusive
administrative and/or collateral agent for the Lenders, and as lead arranger and
book manager, and any successor to Bank of America by merger and any successor
administrative and/or collateral agent.
"Agent Advances" has the meaning specified in Section 1.2(j).
"Agent's Letter" means that certain letter agreement, dated as of the
Closing Date, among the Borrowers and the Agent as such letter agreement may be
amended, restated, or otherwise modified.
"Agent's Liens" means the Liens in the Collateral granted to the Agent (or
to any other Person as agent, trustee, or otherwise for the benefit of the
Agent), for the benefit of the Lenders, the Bank, and the Agent pursuant to this
Agreement and the other Loan Documents.
"Agent-Related Persons" means the Agent, together with its Affiliates, and
the officers, directors, employees, counsel, representatives, agents, and
attorneys-in-fact of the Agent and its Affiliates.
"Aggregate Revolver Outstandings" means, at any time, the sum of (a) the
unpaid balance of the Revolving Loans, (b) the aggregate amount of Pending
Revolving Loans, (c) one hundred percent (100%) of the aggregate undrawn face
amount of all outstanding Letters of Credit and Credit Support, and (d) the
aggregate amount of any unpaid reimbursement obligations in respect of Letters
of Credit and Credit Support.
"Agreement" means the Credit Agreement to which this Annex A is attached,
as amended, restated, or otherwise modified from time to time.
"Anniversary Date" means an anniversary of the Closing Date.
"Applicable Margin" means, as of the Closing Date,
(a) with respect to Base Rate Revolving Loans and all other
Obligations (other than LIBOR Rate Loans), 0.00%; and
(b) with respect to LIBOR Rate Revolving Loans, 2.50%.
in each case subject to adjustment from time to time, after June 30, 2002, to
the applicable percentage specified corresponding to the monthly average
Availability Without Regard to Line Constraint (determined on a calendar month
basis for each respective calendar month beginning June, 2002 and thereafter),
as set forth below, respectively:
ANNEX A TO CREDIT AGREEMENT - Page 3
=========================================================================================================
Availability Without Regard to Line Constraint Base Rate Loans LIBOR Rate Loans
=========================================================================================================
Greater than or equal to $65,000,000 0.00% 2.00%
---------------------------------------------------------------------------------------------------------
Less than $65,000,000 but greater than or equal 0.00% 2.25%
to $45,000,000
---------------------------------------------------------------------------------------------------------
Less than $45,000,000 but greater than or equal 0.00% 2.50%
to $25,000,000
---------------------------------------------------------------------------------------------------------
Less than $25,000,000 0.25% 2.75%
=========================================================================================================
For the purpose of determining any such adjustments to the Applicable Margin,
the monthly average Availability Without Regard to Line Constraint, for any such
calendar month, shall be determined by the Agent and any resulting adjustment,
if any, shall become effective prospectively on the fifteenth (15th) day of the
next calendar month. If a Default or Event of Default exists at the time any
reduction in the Applicable Margin is to be implemented, such reduction shall
not occur until the first day of the first calendar month, if any, following the
date on which such Default or Event of Default is waived or cured.
"Asset Disposition" means, with respect to any Person, the sale, lease or
other disposition of any asset of such Person other than the sale of Inventory
or the use of cash in the ordinary course of business.
"Assignee" has the meaning specified in Section 11.2(a).
"Assignment and Acceptance" has the meaning specified in Section 11.2(a).
"Attorney Costs" means and includes all reasonable fees, expenses, and
disbursements of any law firm or other counsel engaged by the Agent and the
reasonably allocated costs and expenses of internal legal services of the Agent.
"Availability" means, at any time (a) the lesser of (i) the Maximum
Revolver Amount or (ii) the Borrowing Base, minus (b) Reserves other than
Reserves deducted in the calculation of the Borrowing Base, minus (c) the
Aggregate Revolver Outstandings.
"Availability Measurement Reduction Date" means the date that is five (5)
Business Days after the date of delivery of Financial Statements first
demonstrating EBITDA for the Consolidated Members in an amount equal to or
exceeding any of the following amounts for the specified periods: (i) $9,700,000
for the fiscal quarter ending December 31, 2001, (ii) $9,800,000 for the fiscal
quarter ending March 31, 2001 or (iii) $13,200,000 for the fiscal quarter ending
June 30, 2002.
"Availability Without Regard to Line Constraint" means, at any time, the
Borrowing Base minus Reserves other than Reserves deducted in the calculation of
the Borrowing Base minus the Aggregate Revolver Outstandings minus the sum of
the Borrowing Base Parties' accounts payable
ANNEX A TO CREDIT AGREEMENT - Page 4
which remain unpaid more than sixty (60) days from their respective invoice date
or thirty (30) days from their respective due date (other than accounts
contested in good faith), whichever time period is longer.
"Bank" means Bank of America, National Association, a national banking
association (also known as Bank of America, N.A.), or any successor entity
thereto.
"Bank Products" means any one or more of the following types of services
or facilities extended to any Consolidated Member, excluding the Unrestricted
Subsidiaries, by the Bank or any Affiliate of the Bank in reliance on the Bank's
agreement to indemnify such Affiliate: (a) credit cards; (b) ACH Transactions;
(c) cash management, including, without limitation, controlled disbursement
services; (d) Hedge Agreements and (e) the Foreign Credit Debt.
"Bank Product Reserves" means all reserves which the Agent from time to
time establishes in its reasonable discretion for the Bank Products then
provided or outstanding.
"Bankruptcy Code" means Title 11 of the United States Code (11 ▇.▇.▇.▇▇.
101 et seq.).
"Base Rate" means, for any day, the rate of interest in effect for such
day as publicly announced from time to time by the Bank in Charlotte, North
Carolina as its "prime rate" (the "prime rate" being a rate set by the Bank
based upon various factors including the Bank's costs and desired return,
general economic conditions, and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate). Any change in the prime rate announced by the Bank shall take effect at
the opening of business on the day specified in the public announcement of such
change. Each Interest Rate based upon the Base Rate shall be adjusted
simultaneously with any change in the Base Rate.
"Base Rate Loans" means, collectively, the Base Rate Revolving Loans.
"Base Rate Revolving Loan" means a Revolving Loan during any period in
which it bears interest based on the Base Rate.
"BIA" means the Bankruptcy and Insolvency Act (Canada) and all regulations
thereunder.
"Blocked Account Agreement" means an agreement (including, without
limitation, a collection account agreement) among one or more of the Loan
Parties or other Obligated Parties, the Agent, and a Clearing Bank, in form and
substance reasonably satisfactory to the Agent, concerning the collection of
payments which represent the proceeds of Accounts or of any other Collateral.
"Borrower" means, separately and individually, any of the Parent and the
Domestic Subsidiaries, and any other Person who becomes a party to this
Agreement as a "Borrower" pursuant to the terms hereof, jointly, severally, and
collectively, and "Borrowers" means more than one or all of the foregoing
Persons, jointly, severally, and collectively, as the context requires.
ANNEX A TO CREDIT AGREEMENT - Page 5
"Borrowing" means a borrowing hereunder consisting of Revolving Loans
xmade on the same day by the Lenders to the Borrowers, or any of them, or by the
Bank (in the case of a Borrowing funded by Non-Ratable Loans) or by the Agent
(in the case of a Borrowing consisting of an Agent Advance), or the issuance of
a Letter of Credit or Credit Support hereunder.
"Borrowing Base" means, at any time, an amount equal to (a) the sum of (i)
up to eighty-five percent (85.0%) of the Net Amount of billed and posted
Eligible Accounts generated and owned by the Borrowing Base Parties plus (ii) up
to eighty-five percent (85.0%) of the Net Amount of billed and unposted Eligible
Accounts generated and owned by the Borrowers and owing by Account Debtors
located in the United States (subject to a maximum aggregate availability cap in
the case of Eligible Accounts under this clause (ii) of $10,000,000) plus (iii)
up to fifty percent (50%) of the Net Amount of unbilled (fully earned) and
unposted Eligible Accounts generated and owned by the Borrowers and owing by
Account Debtors located in the United States (subject to a maximum aggregate
availability cap in the case of Eligible Accounts under this clause (iii) of
$10,000,000) minus (b) Reserves from time to time established by the Agent in
its reasonable credit judgment.
"Borrowing Base Certificate" means a certificate by a Responsible Officer
of the Borrowers, or the Parent on behalf of the Borrowers, substantially in the
form of Exhibit B (or another form acceptable to the Agent) setting forth the
calculation of the Borrowing Base, including a calculation of each component
thereof (including to the extent a Borrower has received notice of any Reserve
from the Agent, any of the Reserves included in such calculation pursuant to
clause (b) of the definition of Borrowing Base), all in such detail as shall be
reasonably satisfactory to the Agent. All calculations of the Borrowing Base in
connection with the preparation of any Borrowing Base Certificate shall
originally be made by the Borrowers, or the Parent on behalf of the Borrowers,
and certified to the Agent; provided that the Agent shall have the right to
review and adjust, in the exercise of its reasonable credit judgment, any such
calculation (a) to reflect its reasonable estimate of declines in value of any
of the Collateral described therein, and (b) to the extent that such calculation
is not in accordance with this Agreement.
"Borrowing Base Party" means the Parent, a Domestic Subsidiary or an
Eligible Foreign Subsidiary, and "Borrowing Base Parties" means any two or more,
or all, of such Persons.
"Business Day" means (a) any day that is not a Saturday, Sunday, or a day
on which banks in Dallas, Texas or Charlotte, North Carolina are required or
permitted to be closed, and (b) with respect to all notices, determinations,
fundings, and payments in connection with the LIBOR Rate or LIBOR Rate Loans,
any day that is a Business Day pursuant to clause (a) preceding and that is also
a day on which trading in Dollars is carried on by and between banks in the
London interbank market.
"Canadian Security Document" means each of that certain Guarantee, General
Security Agreement, Security Agreement (Trademark), and Collection Account
Agreement executed and delivered to the Agent by Eagle Canada, and any other
agreements, certificates, documents, or instruments delivered in connection
therewith, and "Canadian Security Documents" means all of such documents
collectively. "Canadian Security Document" includes, without limitation, each
"Canadian Security Document" as defined in, and executed and delivered pursuant
to, the Original
ANNEX A TO CREDIT AGREEMENT - Page 6
Credit Agreement, as any such Canadian Security Document has been, or may be,
renewed, modified, amended or restated from time to time.
"Canada Subsidiary" each Subsidiary of the Parent that is organized under
the laws of Canada, or any province thereof, and has its chief executive office
and principal place of business in Canada, including, without limitation, each
such Subsidiary of the Parent so identified in Schedule A-5, and "Canada
Subsidiaries" means all such Subsidiaries, provided, however, that in any event
"Canada Subsidiary" and "Canada Subsidiaries" specifically excludes any
Unrestricted Subsidiary.
"Capital Adequacy Regulation" means any guideline, request, or directive
of any central bank or other Governmental Authority, or any other law, rule, or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any bank or of any corporation controlling a bank.
"Capital Expenditures" means all payments due (whether or not paid during
any fiscal period) in respect of the cost of any fixed asset or improvement, or
replacement, substitution, or addition thereto, which has a useful life of more
than one year, including, without limitation, those costs arising in connection
with the direct or indirect acquisition of such asset by way of increased
product or service charges or in connection with a Capital Lease.
"Capital Lease" means any lease of property by a Consolidated Member
which, in accordance with GAAP, should be reflected as a capital lease on the
consolidated balance sheet of the Parent.
"Capital Stock" has the meaning specified for such term by the Security
Agreement.
"CCQ" means the Civil Code of Quebec, and all regulations thereunder, as
amended from time to time, and any successor statutes.
"Change of Control" means the occurrence of any of the following: (a)
except as allowed by Section 7.9, the adoption of a plan relating to the
liquidation or dissolution of the Parent or any other Loan Party; (b) the
acquisition by any Person or group (as such term is used in Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended) of a direct or indirect
majority in interest (more than fifty percent (50.0%)) of the voting power of
the voting stock of the Parent by way of merger or consolidation or otherwise;
(c) during any period of twelve (12) consecutive calendar months, individuals
(i) who were members of the Management Group of the Parent on the first day of
such period, or (ii) whose election or nomination for election to the Management
Group of the Parent was recommended or approved by at least a majority of the
Management Group then still in office who were members of the Management Group
of the Parent on the first day of such period, or whose election or nomination
for election was so approved, shall cease to constitute a majority of the
Management Group of the Parent; (d) except as allowed by Section 7.9, any Loan
Party (other than the Parent) shall cease to be a Wholly-Owned Subsidiary of the
Parent; or (e) any "Change in Control" as defined by the Convertible
Subordinated Debt Documents.
"Chattel Paper" has the meaning specified in the Security Agreement.
ANNEX A TO CREDIT AGREEMENT - Page 7
"Clearing Bank" means the Bank or any other banking institution with whom
a Payment Account has been established pursuant to a Blocked Account Agreement.
"Closing Date" means the date of this Agreement as specified in the
introductory paragraph.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time and any successor statute and the regulations promulgated thereunder.
"Collateral" means (a) all of the "Collateral," as such term is defined in
the Security Agreement, including without limitation all property now owned or
hereafter acquired by each Loan Party as described in clauses (i), (ii) and
(iii) of Section 7.28, (b) all other personal property at any time subject to
the Agent's Liens, including, without limitation, any property now owned or
hereafter acquired by a Loan Party in which a Lien is granted to the Agent or
otherwise for the benefit of the Agent and the Lenders pursuant to any Foreign
Security Documents and (c) all accessions to, substitutions for, and
replacements, products and proceeds of any of the foregoing, including, but not
limited to, proceeds of any insurance policies, claims against third parties,
and condemnation or requisition payments with respect to all or any of the
foregoing.
"Commitment" means, at any time with respect to a Lender, the principal
amount set forth beside such Lender's name under the heading "Commitment" on
Schedule A-1 or on the signature page of the most recent Assignment and
Acceptance to which such Lender is a party, as such Commitment may be adjusted
from time to time in accordance with the provisions of Section 11.2, and
"Commitments" means, collectively, the aggregate amount of the Commitments of
all of the Lenders.
"Compliance Certificate' has the meaning specified in Section 5.2(d).
"Consolidated Members" means the Parent and its Subsidiaries and
"Consolidated Member" means any of the foregoing.
"Contaminant" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos in any form or condition, polychlorinated biphenyls
("PCBs"), or any constituent of any such substance or waste as defined in any
Environmental Law.
"Continuation/Conversion Date" means the effective date of (a) any
conversion of LIBOR Rate Loans to Base Rate Loans or of Base Rate Loans to LIBOR
Rate Loans or (b) any continuation of LIBOR Rate Loans as LIBOR Rate Loans.
"Convertible Subordinated Debt Documents" means (i) the certain Indenture
dated as of December 7, 2001, between the Parent and JPMorgan Chase Bank, as
Trustee and (ii) the certain First Supplemental Indenture dated December 7,
2001, between the Parent and JPMorgan Chase Bank, as Trustee.
ANNEX A TO CREDIT AGREEMENT - Page 8
"Convertible Subordinated Notes" means the certain 5% Convertible
Subordinated Notes due December 15, 2006, executed and delivered by the Parent
in the original aggregate principal amount of $100,000,000 pursuant to the terms
of the Convertible Subordinated Debt Documents.
"Copyright Security Agreement" means any Copyright Security Agreement,
dated as of the Closing Date or any subsequent date, executed and delivered by
an Obligated Party to the Agent, for the benefit of the Agent and the Lenders,
to evidence and perfect the Agent's security interest in such Obligated Parties'
present and future copyrights and related licenses and rights, as such agreement
may be amended, restated, or otherwise modified from time to time.
"Credit Support" has the meaning specified in Section 1.4(a).
"Debt" means, without duplication, with respect to any Person (the
"subject Person") all liabilities, obligations, and indebtedness of the subject
Person to any other Person, of any kind or nature, now or hereafter owing,
arising, due, or payable, howsoever evidenced, created, incurred, acquired, or
owing, whether primary, secondary, direct, contingent, fixed, or otherwise,
consisting of indebtedness for borrowed money or the deferred purchase price of
property, excluding trade payables, but including, without in any way limiting
the generality of the foregoing: (a) in the case of the Loan Parties, the
Obligations; (b) all indebtedness, liabilities, and obligations of any Person
secured by any Lien on the subject Person's property, even if the subject Person
shall not have assumed or become liable for the payment thereof; provided,
however, that all such indebtedness, liabilities, and obligations which are
limited in recourse to such property shall be included in Debt only to the
extent of the book value of such property as would be shown on a balance sheet
of the subject Person prepared in accordance with GAAP; (c) all indebtedness,
liabilities, and obligations created or arising under any Capital Lease or
conditional sale or other title retention agreement with respect to property
used or acquired by the subject Person, even if the rights and remedies of the
lessor, seller, or lender thereunder are limited to repossession of such
property; provided, however, that all such indebtedness, liabilities, and
obligations which are limited in recourse to such property shall be included in
Debt only to the extent of the book value of such property as would be shown on
a balance sheet of the subject Person prepared in accordance with GAAP; (d) all
indebtedness, liabilities, and obligations under Guaranties; and (e) the present
value (discounted at the Base Rate) of lease payments due under synthetic
leases.
"Default" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured, waived, or otherwise
remedied during such time) constitute an Event of Default.
"Default Rate" means a fluctuating per annum interest rate at all times
equal to the sum of (a) the otherwise applicable Interest Rate, plus (b) two
percent (2.0%) per annum. Each Default Rate shall be adjusted simultaneously
with any change in the applicable Interest Rate. In addition, with respect to
Letters of Credit and Credit Support, the Default Rate shall mean the Letter of
Credit Fee Percentage, plus two percent (2.0%) per annum.
"Defaulting Lender" has the meaning specified in Section 12.15(c).
ANNEX A TO CREDIT AGREEMENT - Page 9
"Deposit Accounts" has the meaning specified in the Security Agreement.
"Designated Account" has the meaning specified in Section 1.2(d).
"Distribution" means, with respect to any Person (other than a natural
person): (a) the payment or making of any dividend or other distribution of
property in respect of such Person's Capital Stock (or any options or warrants
for, or other rights with respect to, such Capital Stock) of such Person, other
than distributions solely in such Person's Capital Stock (or any options or
warrants for, or other rights with respect to, such Capital Stock) of the same
class; or (b) the redemption or other acquisition by such Person of any Capital
Stock (or any options or warrants for, or other rights with respect to, such
Capital Stock) of such Person.
"DOL" means the United States Department of Labor or any successor
department or agency.
"Dollar" and "$" means dollars in the lawful currency of the United
States.
"Domestic Subsidiary" means each Subsidiary of the Parent that is
organized under the laws of the United States or any State thereof, and has its
chief executive office and principal place of business in the United States,
including, without limitation, each Subsidiary of the Parent listed in Schedule
A-4, and "Domestic Subsidiaries" means all such Subsidiaries, provided, however,
that in any event "Domestic Subsidiary" and "Domestic Subsidiaries" specifically
excludes any Unrestricted Subsidiary.
"Dormant Guarantor" means each of the Loan Parties listed in Schedule A-6.
"EBITDA" means, with respect to any fiscal period of the Parent, Adjusted
Net Earnings from Operations, plus, to the extent deducted in the determination
of Adjusted Net Earnings from Operations for such fiscal period, Interest
Expense, plus Federal, state, local, and foreign income taxes, plus depreciation
and amortization.
"Eligible Accounts" means the Accounts of a Borrowing Base Party which the
Agent in the exercise of its reasonable commercial discretion determines to be
Eligible Accounts. Without limiting the discretion of the Agent to establish
other criteria of ineligibility, Eligible Accounts shall not, unless the Agent
in its reasonable discretion elects, include any Account:
(a) with respect to which more than one hundred twenty (120) days
have elapsed since the date of the original invoice therefor;
(b) with respect to which any of the representations, warranties,
covenants, and agreements contained in the Security Agreement are
incorrect or have been breached;
(c) with respect to which Account (or any other Account due from the
applicable Account Debtor), in whole or in part, a check, promissory note,
draft, trade acceptance, or other instrument for the payment of money has
been received, presented for payment, and returned uncollected for any
reason;
ANNEX A TO CREDIT AGREEMENT - Page 10
(d) which represents a progress billing (as hereinafter defined) or
as to which the applicable Borrowing Base Party has extended the time for
payment without the consent of the Agent (for the purposes hereof,
"progress billing" means any invoice for goods sold or leased or services
rendered under a contract or agreement pursuant to which the Account
Debtor's obligation to pay such invoice is conditioned upon such Borrowing
Base Party's completion of any further performance under such contract or
agreement);
(e) with respect to which any one or more of the following events
has occurred to the Account Debtor on such Account: (i) death or judicial
declaration of incompetency of such Account Debtor who is a natural
person; (ii) the filing by or against such Account Debtor of a request or
petition for liquidation, reorganization, arrangement, adjustment of
debts, adjudication as a bankrupt, winding-up, or other relief under the
Bankruptcy Code, the BIA, or other similar Requirements of Law of any
jurisdiction or any other bankruptcy, insolvency, or similar laws of the
United States, any state or territory thereof, or any foreign
jurisdiction, now or hereafter in effect; (iii) the making of any general
assignment by such Account Debtor for the benefit of creditors; (iv) the
appointment of a receiver or trustee for such Account Debtor or for any of
the assets of the Account Debtor, including, without limitation, the
appointment of or taking possession by a "custodian," as defined in the
Bankruptcy Code; (v) the institution by or against such Account Debtor of
any other type of insolvency proceeding (under the Bankruptcy Code, the
BIA, or other similar Requirements of Law of any jurisdiction or
otherwise) or of any formal or informal proceeding for the dissolution or
liquidation of, settlement of claims against, or winding up of affairs of,
such Account Debtor; (vi) the sale, assignment, or transfer of all or any
material part of the assets of such Account Debtor; (vii) the nonpayment
generally by such Account Debtor of its debts as they become due; or
(viii) the cessation of the business of such Account Debtor as a going
concern;
(f) if fifty percent (50.0%) or more of the aggregate Dollar amount
of outstanding Accounts owed at such time by the Account Debtor thereon is
classified as ineligible pursuant to the other provisions of this
definition;
(g) owed by an Account Debtor which (i) does not maintain its chief
executive office and a billing address in the United States or Canada,
(ii) is not organized under the laws of the United States or Canada or any
political subdivision, state, or province thereof, or (iii) is the
government of any foreign country or sovereign state, or of any state,
province, municipality, or other political subdivision thereof, or of any
department, agency, public corporation, or other instrumentality thereof,
except to the extent that such Account is secured or payable by a letter
of credit satisfactory to the Agent in its discretion;
(h) owed by an Account Debtor which is an Affiliate or employee of
such Borrowing Base Party or Affiliate;
(i) with respect to Accounts of a Borrower, except as provided in
clause (k) following, with respect to which either the perfection,
enforceability, or validity of the Agent's Liens in such Account, or the
Agent's right or ability to obtain direct payment to the
ANNEX A TO CREDIT AGREEMENT - Page 11
Agent of the proceeds of such Account, is governed by any federal, state,
or local statutory requirements other than those of the UCC or
Requirements of Law of Canada;
(j) owed by an Account Debtor to which a Consolidated Member or any
Affiliate thereof is indebted in any way, or which is subject to any right
of setoff or recoupment by the Account Debtor, unless the Account Debtor
has entered into an agreement acceptable to the Agent to waive setoff
rights, or if the Account Debtor thereon has disputed liability or made
any claim with respect to any other Account due from such Account Debtor,
but in each such case only to the extent of such indebtedness, setoff,
recoupment, dispute, or claim;
(k) owed by the government of the United States or any Eligible
Foreign Jurisdiction, or any department, agency, public corporation, or
other instrumentality thereof, unless, in the case of the United States,
the Federal Assignment of Claims Act of 1940, as amended (31 U.S.C. ss.
3727 et seq.), and any other steps necessary to perfect the Agent's Liens
therein, have been complied with to the Agent's satisfaction with respect
to such Account;
(l) owed by any state, province, municipality, or other political
subdivision of the United States or any other government, country or
jurisdiction, or any department, agency, public corporation, or other
instrumentality thereof (including, without limitation, of any Eligible
Foreign Jurisdiction) and as to which the Agent determines that its Lien
therein is not or cannot be perfected;
(m) which represents a sale on a ▇▇▇▇-and-hold, guaranteed sale,
sale and return, sale on approval, consignment, or other repurchase or
return basis;
(n) which is evidenced by a promissory note or other instrument or
by chattel paper;
(o) with respect to which the Agent believes, in the exercise of its
reasonable judgment, that the prospect of collection of such Account is
impaired or that such Account may not be paid by reason of the Account
Debtor's financial inability to pay;
(p) with respect to which the Account Debtor is located in any state
requiring the filing of a Notice of Business Activities Report or similar
report in order to permit such Borrowing Base Party to seek judicial
enforcement in such state of payment of such Account, unless such
Borrowing Base Party has qualified to do business in such state or has
filed a Notice of Business Activities Report or equivalent report for the
then current year;
(q) which arises out of a sale not made in the ordinary course of
such Loan Party's business;
(r) with respect to which the goods giving rise to such Account have
not been shipped and delivered to and accepted by, or have been rejected
or objected to by, the Account Debtor or the services giving rise to such
Account have not been fully performed
ANNEX A TO CREDIT AGREEMENT - Page 12
by such Borrowing Base Party, and, if applicable, accepted by the Account
Debtor, or the Account Debtor revokes its acceptance of such goods or
services;
(s) owed by an Account Debtor or group of affiliated Account Debtors
which is obligated to the Borrowing Base Parties, or any of them,
respecting Accounts the aggregate unpaid balance of which exceeds twenty
five percent (25.0%) of the aggregate unpaid balance of all Accounts owed
to the Borrowing Base Parties at such time by all of the Borrowing Base
Parties' Account Debtors, but only to the extent of such excess;
(t) which is not subject to a first priority and perfected security
interest in favor of the Agent, for the benefit of the Agent and the
Lenders;
(u) with respect to which collections administration has not been
established in a manner satisfactory to the Agent;
(v) with respect to which such Borrowing Base Party or the Agent has
deemed such Account as uncollectible or has any reason to believe that
such Account is uncollectible; and
(w) which the Agent determines in its reasonable discretion is
ineligible for any other reason.
If any Account at any time ceases to be an Eligible Account, then such Account
shall promptly be excluded from the calculation of the Borrowing Base.
"Eligible Assignee" means (a) a commercial bank, commercial finance
company, or other asset based lender having total assets in excess of
$1,000,000,000, (b) any Lender listed on the signature pages of this Agreement,
(c) any Affiliate of any Lender, and (d) if an Event of Default has occurred and
is continuing, any Person reasonably acceptable to the Agent.
"Eligible Foreign Jurisdiction" means Canada.
"Eligible Foreign Subsidiary" means the Canada Subsidiaries.
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for a Release or
injury to the environment.
"Environmental Compliance Reserve" means any reserve which the Agent
establishes from time to time in its reasonable discretion after prior written
notice to the Borrowers for amounts that are reasonably likely to be expended by
a Loan Party in order for such Loan Party and its operations and property (a) to
comply with any notice from a Governmental Authority asserting material
non-compliance with Environmental Laws or (b) to correct any such material
non-compliance identified in a report delivered to the Agent and the Lenders
pursuant to Section 7.7.
ANNEX A TO CREDIT AGREEMENT - Page 13
"Environmental Laws" means all federal, state, provincial, or local laws,
statutes, common law duties, rules, regulations, ordinances, and codes, together
with all administrative orders, directed duties, licenses, authorizations, and
permits of, and agreements with, any Governmental Authority, in each case
relating to environmental, health and safety.
"Environmental Lien" means a Lien in favor of any Governmental Authority
or any other Person for (a) any liability under Environmental Laws or (b)
damages arising from, or costs incurred by such Governmental Authority in
response to, a Release or threatened Release of a Contaminant into the
environment.
"Equipment" has the meaning specified in the Security Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with a Borrower within the meaning of Section
414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes
of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension Plan,
(b) a withdrawal by a Borrower or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations which is treated as such a withdrawal under Section 4062(e) of
ERISA, (c) a complete or partial withdrawal by a Borrower or any ERISA Affiliate
from a Multi-employer Plan or notification that a Multi-employer Plan is in
reorganization or insolvent, (d) the filing of a notice of intent to terminate,
the treatment of a Plan amendment as a termination under Section 4041 or 4041A
of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or the termination, insolvency, or reorganization of a Multi-employer Plan,
(e) the occurrence of an event or condition which might reasonably be expected
to constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multi-employer Plan,
or (f) the imposition of any liability under Title IV of ERISA, other than for
PBGC premiums due but not delinquent under Section 4007 of ERISA, upon a
Borrower or any ERISA Affiliate.
"Event of Default" has the meaning specified in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, and regulations
promulgated thereunder.
"Existing Obligations" means, with respect to a Newly Obligated Borrower,
any Obligations which are outstanding and unpaid as of the time such Newly
Obligated Borrower becomes a Borrower.
"FDIC" means the Federal Deposit Insurance Corporation, and any
Governmental Authority succeeding to any of its principal functions.
ANNEX A TO CREDIT AGREEMENT - Page 14
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th of 1.00%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate charged to the
Bank on such day on such transactions as determined by the Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any successor thereto.
"Financial Statements" means, according to the context in which used, the
financial statements referred to in Section 5.2 and Section 6.6 or any other
financial statements required to be given to the Agent or the Lenders pursuant
to this Agreement.
"Fiscal Year" means, with respect to the Parent and the other Consolidated
Members, their fiscal year for financial accounting purposes. The current Fiscal
Year of the Parent and the other Consolidated Members will end on December 31,
2001.
"Fixed Assets" means, with respect to a Person, the Equipment and Real
Estate of such Person.
"Fixed Charge Coverage Ratio" means, as of the end of any fiscal quarter,
determined for the Parent and its Subsidiaries, excluding the Unrestricted
Subsidiaries, for the preceding four (4) fiscal quarters on a consolidated basis
in accordance with GAAP (other than the exclusion from such determination of any
of the following items used in such determination to the extent that it arises
with respect to an Unrestricted Subsidiary or a Subsidiary of the Parent prior
to the date such Person becomes a Subsidiary of, or is consolidated with, the
Parent), the ratio of (a) EBITDA for such period, minus (i) the cash amount of
income or franchise taxes paid during such period, minus (ii) the amount of Net
Capital Expenditures during such period, minus (iii) the cash amount of
Distributions paid by the Parent during such period minus (iv) the aggregate
amount of Permitted Stock Repurchases during such period, if any, to (b) the sum
of (i) the aggregate amount of all principal payments made with respect to Debt
during such period (excluding repayments on the Revolving Loans prior to the
Stated Termination Date), plus (ii) the cash amount of Interest Expense paid
during such period.
"Foreign Credit Debt" means the $10,000,000 multi-currency line of credit
as evidenced by the certain Foreign Credit Debt Documents.
"Foreign Credit Debt Documents" means the certain Foreign Credit
Reimbursement Agreement dated June 28, 2001 between the Bank and the Parent, as
may heretofore or hereafter be renewed, extended, modified, amended or restated
from time to time.
ANNEX A TO CREDIT AGREEMENT - Page 15
"Foreign Plan" means any benefit plan established or maintained outside of
the United States which a Consolidated Member maintains, sponsors, or to which
such Person has any obligation or liability and which provides or otherwise
makes available retirement or deferred benefits of any kind whatsoever to
employees.
"Foreign Security Document" means the Canadian Security Documents, the UK
Security Documents and any other Guaranty, pledge, Mortgage, personal property
mortgage, security agreement, assignment, security instrument, hypothecation,
charge or other agreement or document by which any Foreign Subsidiary grants or
otherwise conveys to the Agent or any Affiliate of the Agent for the benefit of
the Agent, or any other Person for or on behalf of the Agent or any such
Affiliate, any Guaranty, pledge, lien, security interest, mortgage, charge,
collateral assignment or similar interest in property of such Foreign Subsidiary
as security for the Obligations or any portion thereof, and any and all
renewals, extensions, modifications, amendments or restatements thereof.
"Foreign Subsidiary" means any Subsidiary of the Parent other than the
Domestic Subsidiaries and the Unrestricted Subsidiaries.
"Funding Date" means the date on which a Borrowing occurs.
"GAAP" means generally accepted accounting principles and practices set
forth from time to time in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
United States accounting profession), which are applicable to the circumstances
as of the Closing Date.
"General Intangibles" has the meaning specified in the Security Agreement.
"Governmental Authority" means any nation or government, any state,
province, municipality, or other political subdivision thereof, any central bank
(or similar monetary or regulatory authority) thereof, any entity exercising
executive, legislative, judicial, regulatory, or administrative functions of or
pertaining to government, any corporation or other entity owned or controlled,
through stock or capital ownership or otherwise, by any of the foregoing, and
any department, agency, board, commission, tribunal, committee, or
instrumentality of any of the foregoing.
"Guaranty" means, with respect to any Person, all obligations of such
Person which in any manner directly or indirectly guarantee or assure, or in
effect guarantee or assure, the payment or performance of any indebtedness,
dividend, or other obligations of any other Person (the "guaranteed
obligations"), or assure or in effect assure the holder of the guaranteed
obligations against loss in respect thereof, including any such obligations
incurred through an agreement, contingent or otherwise: (a) to purchase the
guaranteed obligations or any property constituting security therefor; (b) to
advance or supply funds for the purchase or payment of the guaranteed
obligations or to maintain a working capital or other balance sheet condition;
or (c) to lease property or to purchase any debt or equity securities or other
property or services.
ANNEX A TO CREDIT AGREEMENT - Page 16
"Guaranty Agreement" means the Parent Guaranty or a Subsidiary Guaranty,
as the case may be.
"Hedge Agreement" means any and all transactions, agreements, or documents
now existing or hereafter entered into, which provide for an interest rate,
credit, commodity, or equity swap, cap, floor, collar, forward foreign exchange
transaction, currency swap, cross currency rate swap, currency option, or any
combination of, or option with respect to, these or similar transactions, for
the purpose of hedging a Person's exposure to fluctuations in interest or
exchange rates, loan, credit exchange, security, or currency valuations, or
commodity prices.
"Indemnified Liabilities" has the meaning specified in Section 13.11(a).
"Indemnified Person" has the meaning specified in Section 13.11(a).
"Intercompany Accounts" has the meaning specified in the Security
Agreement.
"Interest Expense" means, with respect to any Person for any period, the
interest expense of such Person for such period, determined in accordance with
GAAP.
"Interest Period" means, with respect to any LIBOR Rate Loan, the period
commencing on the Funding Date of such Loan or on the Continuation/Conversion
Date on which such Loan is continued as or converted into a LIBOR Rate Loan, and
ending on the date one, two, or three months thereafter as selected by a
Borrower in its Notice of Borrowing or Notice of Continuation/Conversion,
provided that:
(a) if any Interest Period would otherwise end on a day that is not
a Business Day, such Interest Period shall be extended to the following
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event such Interest
Period shall end on the preceding Business Day;
(b) any Interest Period pertaining to a LIBOR Rate 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 the calendar
month at the end of such Interest Period; and
(c) no Interest Period shall extend beyond the Stated Termination
Date.
"Interest Rate" means each or any of the interest rates, including the
Default Rate, set forth in Section 2.1.
"Inventory" has the meaning specified in the Security Agreement.
"Investment Property" has the meaning specified in the Security Agreement.
ANNEX A TO CREDIT AGREEMENT - Page 17
"IRS" means the Internal Revenue Service and any Governmental Authority
succeeding to any of its principal functions under the Code.
"Issuer" has the meaning prescribed for such term in Section 6.27(b).
"Latest Projections" means (a) on the Closing Date and thereafter until
the Agent receives new projections pursuant to Section 5.2(e), (i) the
projections of the Consolidated Members' financial condition, results of
operations, and cash flows and Availability and (ii) the income statement
forecast separately stated on a stand-alone basis for the Foreign Subsidiaries,
in each case on a monthly basis and including monthly detail for the period
commencing on November 1, 2001 and ending on December 31, 2001 and on a
quarterly basis and including quarterly detail for the period commencing on
January 1, 2002 and ending on December 31, 2002 and on an annual basis and
including annual detail for the period commencing January 1, 2003 and ending on
December 31, 2004, in each case delivered to the Agent prior to the Closing Date
and (b) thereafter, the projections most recently received by the Agent pursuant
to Section 5.2(e).
"Lender" and "Lenders" have the meanings specified in the introductory
paragraph hereof and shall include the Agent to the extent of any Agent Advance
outstanding and the Bank to the extent of any Non- Ratable Loan outstanding;
provided that no such Agent Advance or Non-Ratable Loan shall be taken into
account in determining any Lender's Pro Rata Share.
"Letter of Credit" has the meaning specified in Section 1.4(a).
"Letter of Credit Fee" has the meaning specified in Section 2.6.
"Letter of Credit Fee Percentage" means with respect to any Letter of
Credit or any Credit Support issued hereunder, on any date of determination, a
per annum percentage equal to the Applicable Margin for LIBOR Rate Revolving
Loans.
"Letter of Credit Issuer" means the Bank, any Affiliate of the Bank, or
any other financial institution that issues any Letter of Credit or Credit
Support pursuant to this Agreement.
"Letter of Credit Subfacility" means $50,000,000.
"LIBOR Rate" means, for any Interest Period, with respect to LIBOR Rate
Loans, the rate of interest per annum determined pursuant to the following
formula:
LIBOR Rate = Offshore Base Rate
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
ANNEX A TO CREDIT AGREEMENT - Page 18
"Eurodollar Reserve Percentage" means, for any day during any
Interest Period, the reserve percentage (expressed as a decimal,
rounded upward to the next 1/100th of 1.00%) in effect on such day
applicable to member banks under regulations issued from time to
time by the Federal Reserve Board for determining the maximum
reserve requirement (including any emergency, supplemental, or other
marginal reserve requirement) with respect to Eurocurrency funding
(currently referred to as "Eurocurrency liabilities"). The LIBOR
Rate for each outstanding LIBOR Rate Loan shall be adjusted
automatically as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Offshore Base Rate" means the rate per annum appearing on Telerate
Page 3750 (or any successor page) as the London interbank offered
rate for deposits in Dollars at approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any
reason such rate is not available, the Offshore Base Rate shall be,
for any Interest Period, the rate per annum appearing on Reuters
Screen LIBOR Page as the London interbank offered rate for deposits
in Dollars at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more than
one rate is specified on Reuters Screen LIBOR Page, the applicable
rate shall be the arithmetic mean of all such rates. If for any
reason none of the foregoing rates is available, the Offshore Base
Rate shall be, for any Interest Period, the rate per annum
determined by the Agent as the rate of interest at which Dollar
deposits in the approximate amount of the LIBOR Rate Loan comprising
part of such Borrowing would be offered by the Bank's London Branch
to major banks in the offshore Dollar market at their request at or
about 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period for a term comparable to such Interest
Period.
"LIBOR Rate Loans" means, collectively, the LIBOR Rate Revolving Loans.
"LIBOR Rate Revolving Loan" means a Revolving Loan during any period in
which it bears interest based on the LIBOR Rate.
"Lien" means (a) any interest in property securing an obligation owed to,
or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute, or contract, and including a
security interest, hypothec, charge, claim, or lien arising from a mortgage,
deed of trust, encumbrance, pledge, hypothecation, assignment, deposit
arrangement, agreement, security agreement, charge, conditional sale or trust
receipt or a lease, consignment, or bailment for security purposes, (b) to the
extent not included under clause (a) preceding, (i) any reservation, exception,
encroachment, easement, right-of-way, covenant, condition, restriction, lease,
or other title exception or encumbrance affecting property and (ii) any other
lien, charge, privilege, secured claim, title retention, garnishment right,
deemed trust, encumbrance, or other right affecting property, ▇▇▇▇▇▇ or
inchoate, whether or not crystallized or fixed whether or not for amounts due or
coming due, arising by any statute, act of law of any jurisdiction, at common
law, in equity, or by any agreement, and (c) any contingent or other agreement
to provide any of the foregoing or any
ANNEX A TO CREDIT AGREEMENT - Page 19
other arrangement the intention or result of which is to confer security upon or
prefer the beneficiary thereof.
"Loan Account" means the loan account of the Borrowers, which account
shall be maintained by the Agent.
"Loan Documents" means, collectively, this Agreement, the Revolving Loan
Notes, the Security Agreement, the Mortgages, each Copyright Security Agreement
(if any), each Patent Security Agreement (if any), each Trademark Security
Agreement, the Parent Guaranty, the Subsidiary Guaranty, the Foreign Security
Documents, the Postclosing Agreement, any and all Hedge Agreements in favor of
any Lender or Affiliate of any Lender and any other agreements, instruments, and
documents heretofore, now or hereafter evidencing, securing, guaranteeing, or
otherwise relating to the Obligations, the Collateral, or any other aspect of
the transactions contemplated by this Agreement, in each case including any and
all renewals, extensions, modifications, amendments or restatements thereof.
"Loan Documents" includes, without limitation, all "Credit Documents" as defined
in, and executed and delivered pursuant to, the Original Credit Agreement, as
any such "Credit Document" has been, or may be, renewed, modified, amended or
restated from time to time.
"Loan Party" means each of the Borrowers and EGL Eagle Global Logistics
(Canada) Corp., and any Subsidiary that becomes a Loan Party after the Closing
Date pursuant to Section 7.20.
"Loans" means, collectively, all loans and advances provided for in
Article 1.
"Majority Lenders" means, at any time, Lenders whose Pro Rata Shares
aggregate more than fifty percent (50.0%) of the Commitments.
"Management Group" means, as of any date of determination, the board of
directors, board of managers, or similar constituency having management
authority in respect of an entity under any Requirement of Law.
"Margin Stock" means "margin stock" as such term is defined in Regulation
T, U, or X of the Federal Reserve Board.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, performance, business, properties,
condition (financial or otherwise), or prospects of the Loan Parties, or any of
them, or of the Consolidated Members taken as a whole, or the Collateral
(including without limitation any material deterioration or adverse effect on
the commercial markets in which the Consolidated Parties, or any of them,
operate, whether resulting in whole or in part from an event that occurred prior
to, or occurs after, the Closing Date), (b) a material impairment of the ability
of any Loan Party to perform under any Loan Document to which it is a party, or
(c) a material adverse effect upon the legality, validity, binding effect, or
enforceability against any Loan Party of any Loan Document to which it is a
party.
ANNEX A TO CREDIT AGREEMENT - Page 20
"Maximum Rate" means, at any time, the maximum rate of interest the
Lenders may lawfully contract for, charge, or receive in respect of the
Obligations as allowed by any Requirement of Law. For purposes of determining
the Maximum Rate under the Requirements of Law of the State of Texas, the
applicable rate ceiling shall be (a) the "weekly ceiling" described in and
computed in accordance with the provisions of Section 303.003 of the Texas
Finance Code, as amended or (b) if the parties subsequently contract as allowed
by any Requirement of Law, the "quarterly ceiling" or the "annualized ceiling"
computed pursuant to Section 303.008 of the Texas Finance Code, as amended;
provided, however, that at any time the "weekly ceiling", the "quarterly
ceiling", or the "annualized ceiling" shall be less than eighteen percent
(18.0%) per annum or more than twenty-four percent (24.0%) per annum, the
provisions of Section 303.009(a) and Section 303.009(b) of the Texas Finance
Code, as amended, shall control for purposes of such determination, as
applicable.
"Maximum Revolver Amount" means (i) on any day prior to the Syndication
Completion Date, $75,000,000 and (ii) at all times on and after the Syndication
Completion Date, $100,000,000.
"Mortgage" means and includes any mortgage, deed of trust, charge/mortgage
of land, deed to secure debt, assignment, or other instrument executed and
delivered by any Obligated Party to or for the benefit of the Agent by which the
Agent, for the benefit of the Agent and the Lenders, acquires a Lien on any Real
Estate or a collateral assignment of such Obligated Party's interest under a
lease of Real Estate, and any amendment, modification, or supplement thereto.
"Mortgage" includes, without limitation, each "Mortgage" as defined in, and
executed and delivered pursuant to, the Original Credit Agreement, as any such
Mortgage has been, or may be, renewed, modified, amended or restated from time
to time.
"Multi-employer Plan" means a "multi-employer plan" as defined in Section
4001(a)(3) of ERISA which is or was at any time during the current calendar year
or the immediately preceding six (6) calendar years contributed to by a Borrower
or any ERISA Affiliate.
"Negative Pledge" means any agreement, contract, or other arrangement
whereby any Consolidated Member, excluding the Unrestricted Subsidiaries, is
prohibited from, or would otherwise be in default as a result of, creating,
assuming, incurring, or suffering to exist, directly or indirectly, any Lien on
any of its assets in favor of the Agent under the Loan Documents.
"Net Amount" means, with respect to Eligible Accounts, at any time, the
gross amount of Eligible Accounts less sales, excise, or similar taxes, and less
returns, discounts, claims, credits, allowances, accrued rebates, offsets,
deductions, counterclaims, disputes, and other defenses of any nature at any
time issued, owing, granted, outstanding, available, or claimed, in each case
calculated and determined in Dollars.
"Net Capital Expenditures" means, for any period, the aggregate amount of
Capital Expenditures during such period, minus net proceeds of sale of fixed
assets or improvement, minus the aggregate amount of such Capital Expenditures
which were financed during such period with Debt other than the Revolving Loans.
ANNEX A TO CREDIT AGREEMENT - Page 21
"Net Proceeds" means, in respect of an Asset Disposition of by a Person,
all proceeds received by and/or payable to such Person in consideration thereof,
net of (a) commissions and other reasonable and customary transaction costs,
fees and expenses properly attributable to such transaction and payable by such
Person in connection therewith (in each case, paid to non-Affiliates), (b)
transfer taxes, (c) amounts payable to holders of senior Liens (to the extent
such Liens constitute Permitted Liens), if any, and (d) an appropriate reserve
for income taxes in accordance with GAAP in connection therewith.
"Newly Obligated Borrower" means each Person, if any, who becomes party to
this Agreement as a Borrower effective as of any date after the Closing Date.
"Non-Ratable Loan" and "Non-Ratable Loans" have the respective meanings
specified in Section 1.2(i).
"Notes" means the Revolving Loan Notes.
"Notice of Borrowing" has the meaning specified in Section 1.2(c).
"Notice of Continuation/Conversion" has the meaning specified in Section
2.2(b).
"Obligated Parties" means (a) the Loan Parties and (b) any other
Consolidated Member, excluding the Unrestricted Subsidiaries, that executes and
delivers to the Agent any Foreign Security Document, and "Obligated Party" means
any of the foregoing.
"Obligations" means all present and future loans, advances, liabilities,
obligations, covenants, duties, and debts owing by the Borrowers, or any of
them, or any of the other Loan Parties, or any of them, to the Agent and/or any
Lender, arising under or pursuant to this Agreement or any of the other Loan
Documents, whether or not evidenced by any note, or other instrument or
document, whether arising from an extension of credit, opening of a letter of
credit, acceptance, loan, guaranty, indemnification, or otherwise, whether
direct or indirect, absolute or contingent, due or to become due, primary or
secondary, as principal or guarantor, and including all principal, interest,
charges, expenses, fees, attorneys' fees, filing fees, and any other sums
chargeable to any Borrower or other Loan Party hereunder or under any of the
other Loan Documents. "Obligations" includes, without limitation, (a) all debts,
liabilities, and obligations now or hereafter arising from or in connection with
the Letters of Credit and Credit Support and (b) all debts, liabilities, and
obligations to the Agent and/or any Lender, or any Affiliate thereof,
respectively, now or hereafter arising from or in connection with Bank Products;
provided, however, that notwithstanding the foregoing, in the case of and with
regard to or in connection with any Newly Obligated Borrower, the term
"Obligations," wherever in any manner used in the Loan Documents, excludes
Existing Obligations.
"Orderly Liquidation Value" means, with respect to Equipment, the orderly
liquidation value thereof as determined in a manner acceptable to the Agent by
an experienced and reputable appraiser acceptable to the Agent, net of all costs
of liquidation thereof.
ANNEX A TO CREDIT AGREEMENT - Page 22
"Original Credit Agreement" means the certain Amended and Restated Credit
Agreement, dated as of November 9, 2001, among EGL, Inc., the "Banks" (as
defined therein) party thereto, SouthTrust Bank and the Bank of Mitsubishi,
Ltd., acting as "Co-Agents" as provided therein, and Bank of America, N.A.,
acting as "Administrative Agent" as defined therein.
"Original Letter of Credit" means any "Letter of Credit" as defined by the
Original Credit Agreement and "Original Letters of Credit" means more than one,
or all, of each such Original Letter of Credit, collectively.
"Original Loan" means a "Revolving Loan" as defined by the Original Credit
Agreement.
"Original Revolving Note" means a "Revolving Loan Note" as defined by the
Original Credit Agreement.
"Other Taxes" means any present or future stamp or documentary taxes or
any other excise or property taxes, charges, or similar levies (excluding, in
the case of each Lender and the Agent, such taxes (including income taxes or
franchise taxes) as are imposed on or measured by each Lender's or the Agent's
net income) which arise from any payment made hereunder or from the execution,
delivery, or registration of, or otherwise with respect to, this Agreement or
any other Loan Documents.
"Parent" means EGL, Inc., a Texas corporation.
"Parent Guaranty" means an agreement of Guaranty executed by the Parent
pursuant to which the Parent guarantees the Obligations or any portion thereof.
"Participant" means any commercial bank, financial institution, or other
Person not an Affiliate of the Loan Parties who shall have been granted the
right by any Lender to participate in the financing provided by such Lender
under this Agreement, and who shall have entered into a participation agreement
in form and substance satisfactory to such Lender.
"Patent Security Agreement" means the Patent Security Agreement, dated as
of the Closing Date or any subsequent date, executed and delivered by an
Obligated Party to the Agent, for the benefit of the Agent and the Lenders, to
evidence and perfect the Agent's security interest in such Obligated Party's
present and future patents and related licenses and rights, as such agreement
may be amended, restated, or otherwise modified from time to time.
"Payment Account" has the meaning specified in the Security Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any Governmental
Authority succeeding to the functions thereof.
"Pending Revolving Loans" means, at any time, the aggregate principal
amount of all Revolving Loans requested in any Notice of Borrowing received by
the Agent which have not yet been advanced.
ANNEX A TO CREDIT AGREEMENT - Page 23
"Pension Plan" means a pension plan (as defined in Section 3(2) of ERISA)
subject to Title IV of ERISA which any Borrower or any ERISA Affiliate sponsors,
maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a Multi-employer Plan has made contributions at
any time during the immediately preceding five (5) plan years.
"Permitted Acquisition" means any acquisition of the Capital Stock of a
Person or any acquisition of property which constitutes a significant or
material portion of an existing business of a Person, in each case, in a
transaction that satisfies each of the following requirements:
(a) both before and after giving effect to such acquisition and the
Revolving Loans (if any) requested to be made in connection therewith, no
Default or Event of Default exists or will exist or would result
therefrom;
(b) as soon as available, but not less than thirty (30) Business
Days prior to such acquisition, the Parent has provided to the Lenders a
copy of the information provided to the board of directors of the Parent
or other Borrower making such acquisition;
(c) the Cash Purchase Consideration paid in connection with such
acquisition does not exceed $10,000,000, and the Cash Purchase
Consideration paid in connection with all acquisitions during the term of
this Agreement does not exceed $25,000,000;
(d) if such acquisition is an acquisition of the Capital Stock of a
Person, the acquisition is structured so that the acquired Person is added
as an Obligated Party pursuant to the terms of this Agreement, and if such
acquisition is an acquisition of assets, the acquisition is structured so
that an Obligated Party shall acquire such assets;
(e) no Loan Party shall, as a result of or in connection with any
such acquisition, assume or incur any direct or contingent liabilities
(whether relating to environmental, tax, litigation, or other matters)
that could reasonably be expected, as of the date of such acquisition, to
result in the existence or occurrence of a Material Adverse Effect;
(f) the Fixed Charge Coverage Ratio, without giving effect to such
acquisition, shall be greater than or equal to 1.20 to 1.00 for the most
recently completed period of four (4) Fiscal Quarters;
(g) the Pro Forma Fixed Charge Coverage Ratio, after giving effect
to such acquisition, for the following period of four (4) Fiscal Quarters
shall be greater than or equal to 1.20 to 1.00; and
(h) the Loan Party making such acquisition shall certify (and
provide the Agent with a pro forma calculation in form and substance
reasonably satisfactory to the Agent) to the Agent and the Lenders that,
after giving effect to completion of such acquisition, the Availability
Without Regard to Line Constraint is not less than $40,000,000 on a pro
forma basis which includes all consideration given in connection with such
acquisition, other than
ANNEX A TO CREDIT AGREEMENT - Page 24
Capital Stock of the Parent delivered to the seller(s) in such
acquisition, as having been paid in cash at the time of making such
acquisition.
"Permitted Liens" means:
(a) the Agent's Liens;
(b) Liens, if any, which are described on Schedule A-2 ("Permitted
Liens") on the Closing Date and Liens resulting from the refinancing of
the related Debt, provided that such refinancing is on the same or
substantially similar terms, the Debt secured thereby shall not be
increased, and the Liens shall not cover any additional property;
(c) Liens for taxes, fees, assessments, or other charges of a
Governmental Authority which are not delinquent or statutory Liens for
taxes, fees, assessments, or other charges of a Governmental Authority in
an amount not to exceed $1,000,000; provided that the payment of such
taxes which are due and payable is being contested in good faith and by
appropriate proceedings diligently pursued and as to which adequate
financial reserves have been established in accordance with GAAP on the
applicable Loan Party's books and records and a stay of enforcement of any
such Lien is in effect;
(d) Liens consisting of deposits made in the ordinary course of
business in connection with, or to secure payment of, obligations under
worker's compensation, unemployment insurance, social security, and other
similar laws, or to secure the performance of bids, tenders, or contracts
(other than for the repayment of Debt) or to secure indemnity,
performance, or other similar bonds for the performance of bids, tenders,
or contracts (other than for the repayment of Debt) or to secure statutory
obligations (other than liens arising under ERISA or Environmental Liens)
or surety or appeal bonds, or to secure indemnity, performance, or other
similar bonds;
(e) Liens securing the claims or demands of materialmen, mechanics,
carriers, warehousemen, landlords, and other similar Persons, provided
that if any such Lien arises from the nonpayment of such claims or demands
when due, such claims or demands do not exceed $1,000,000 in the
aggregate;
(f) Liens constituting encumbrances in the nature of reservations,
exceptions, encroachments, easements, rights of way, covenants running
with the land, and other similar title exceptions or encumbrances
affecting any Real Estate, provided that any such Liens do not in the
aggregate materially detract from the value of such Real Estate or
materially interfere with its use in the ordinary conduct of a Borrower's
business;
(g) Liens which constitute purchase money Liens and secure Debt
permitted under clause (c) of Section 7.13;
(h) Liens arising from judgments and attachments or pre-judgment
attachments in connection with court proceedings, provided that the
attachment or enforcement of such
ANNEX A TO CREDIT AGREEMENT - Page 25
Liens would not result in an Event of Default hereunder and such Liens are
being contested in good faith by appropriate proceedings, adequate
financial reserves have been established on the applicable Loan Party's
books and records in accordance with GAAP, no material property is subject
to a material risk of loss or forfeiture, the claims in respect of such
Liens are fully covered by insurance (subject to ordinary and customary
deductibles), and a stay of execution pending appeal or proceeding for
review is in effect; and
(i) Liens in favor of ABN Amro Bank NV (i) on Cash and or Cash
Equivalents of Eagle Global Logistics (Holland) B.V. not in excess of
1,500,000 Eurodollars to secure Eagle Global Logistics (Holland) B.V.'s
existing facility with ABN Amro Bank NV used for customs charges, duties,
and similar fees and expenses in the ordinary course of business of Eagle
Global Logistics (Holland) B.V., or any replacement Lien on the real
property of Eagle Global Logistics (Holland) B.V. located in the
Netherlands, (ii) on fixtures and equipment on the real estate owned by
Eagle Global Logistics (Holland) B.V. in the Netherlands to the extent
included in the Lien in favor of ABN Amro Bank NV described in Schedule
A-2 and (iii) without limiting the requirements for Eligible Receivables,
on any deposit account owned and maintained by Eagle Global Logistics
(Holland) B.V. at ABN Amro Bank NV;
provided that none of such Liens listed in clause (b) through clause (h)
preceding may attach to any Accounts of a Borrowing Base Party.
"Permitted Stock Repurchase" means a purchase by the Parent of Capital
Stock of the Parent; provided that at the time of making such purchase and after
giving effect thereto (a) no Default or Event of Default exists, (b)
Availability Without Regard to Line Constraint exceeds $50,000,000, (c) the
Parent has reported positive net income (as determined in accordance with GAAP)
for the two immediately preceding months, and (d) all such Capital Stock
repurchased shall be immediately canceled by the Parent.
"Person" means any individual, sole proprietorship, partnership, limited
liability company, joint venture, trust, unincorporated organization,
association, corporation, Governmental Authority, or any other entity.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which any Borrower sponsors or maintains or to which any Borrower makes,
is making, or is obligated to make contributions and includes any Pension Plan.
"Postclosing Agreement" means the certain Postclosing Agreement dated as
of the Closing Date among the Agent, the Loan Parties and the Lenders.
"PPSA" means the Personal Property Security Act of Ontario, and all
regulations thereunder, as amended from time to time, and any successor
statutes.
"Pro Forma Fixed Charge Coverage Ratio" means the ratio, for any period,
determined according to the definition of Fixed Charge Coverage Ratio, provided,
that each item thereof shall
ANNEX A TO CREDIT AGREEMENT - Page 26
be calculated as of the end of such period on a pro forma basis for the next
succeeding (rather than the immediately preceding) four (4) fiscal quarters.
"Pro Rata Share" means, with respect to a Lender, a fraction (expressed as
a percentage), the numerator of which is the amount of such Lender's Commitment
and the denominator of which is the sum of the amounts of all of the Lenders'
Commitments, or if no Commitments are outstanding, a fraction (expressed as a
percentage), the numerator of which is the amount of Obligations owed to such
Lender and the denominator of which is the aggregate amount of the Obligations
owed to the Lenders, in each case giving effect to a Lender's participation in
Non-Ratable Loans and Agent Advances.
"Proprietary Rights" has the meaning specified in the Security Agreement.
"Real Estate" means, with respect to any Person, all of such Person's now
or hereafter owned or leased estates in real property, including, without
limitation, all fees, leaseholds, and future interests, together with all of
such Person's now or hereafter owned or leased interests in the improvements
thereon, the fixtures attached thereto, and the easements appurtenant thereto.
"Release" means a release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching, or migration of a Contaminant
into the indoor or outdoor environment or into or out of any Real Estate or
other property, including the movement of Contaminants through or in the air,
soil, surface water, groundwater, or Real Estate or other property.
"Replacement Lender" has the meaning specified in Section 4.8.
"Report" has the meaning specified in Section 12.18(a).
"Reportable Event" means, any of the events set forth in Section 4043(b)
of ERISA or the regulations thereunder, other than any such event for which the
30-day notice requirement under ERISA has been waived in regulations issued by
the PBGC.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule, or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
"Reserves" means reserves that limit the availability of credit hereunder,
consisting of reserves against Availability or Eligible Accounts, established by
the Agent from time to time in the Agent's reasonable credit judgment. Without
limiting the generality of the foregoing, the following reserves shall be deemed
to be a reasonable exercise of the Agent's credit judgment: (a) Bank Product
Reserves; (b) a reserve for accrued and unpaid interest on the Obligations; (c)
reserves for rent at leased locations subject to statutory or contractual
landlord liens; (d) Environmental Compliance Reserves; (e) reserves for customs
charges, dilution, and warehousemen's or bailees' charges; (f) reserves which
may be applicable to any Borrowing Base Party for preferential claims against
Collateral; (g) reserves with respect to unpaid accounts payable of a Borrowing
Base Party;
ANNEX A TO CREDIT AGREEMENT - Page 27
(h) reserves in respect of potential taxes, withholding requirements, duties, or
other similar obligations and (i) reserves with respect to potential liability
of the Borrower under its Interest Hedge Agreement with The Bank of
Tokyo-Mitsubishi, Ltd. to the extent it exists on and after the Closing Date.
"Responsible Officer" means, with respect to any Loan Party, the chief
executive officer or the president, or any other officer having substantially
the same authority and responsibility, and, with respect to compliance with
financial covenants and the preparation of Borrowing Base Certificates, the
chief financial officer, chief accounting officer, or treasurer of the Parent or
any other Borrower, or any other officer having substantially the same authority
and responsibility.
"Restricted Investment" means, with respect to any Consolidated Member,
any investment or acquisition of property by such Consolidated Member in
exchange for cash or other property, whether in the form of an investment in or
acquisition of Capital Stock, debt, or other indebtedness or obligation, or the
purchase or acquisition of any other property, or a loan, advance, capital
contribution, or subscription, except the following: (a) acquisitions of
Equipment to be used in the business of such Consolidated Member so long as the
acquisition costs thereof constitute Capital Expenditures permitted hereunder;
(b) acquisitions of Inventory in the ordinary course of business of such
Consolidated Member; (c) acquisitions of other current assets acquired in the
ordinary course of business of such Consolidated Member; (d) direct obligations
of the United States, or any agency thereof, or obligations guaranteed by the
United States, provided that such obligations mature within one year from the
date of acquisition thereof; (e) acquisitions of certificates of deposit
maturing within one year from the date of acquisition, bankers' acceptances,
Eurodollar bank deposits, or overnight bank deposits, in each case issued by,
created by, or with a bank or trust company organized under the laws of the
United States or any state thereof having capital and surplus aggregating at
least $100,000,000; (f) acquisitions of commercial paper given a rating of "A2"
or better by Standard & Poor's Corporation or "P2" or better by ▇▇▇▇▇'▇
Investors Service, Inc. and maturing not more than ninety (90) days from the
date of creation thereof; (g) Hedge Agreements entered into for the purpose of
hedging interest payable under this Agreement; (h) investments in mutual funds
substantially all of the assets of which are comprised of securities of the
types described in clause (d), clause (e), and clause (f) preceding; (i)
Permitted Stock Repurchases; (j) Permitted Acquisitions; (k) investments
consisting of intercompany loans between a Loan Party and a Loan Party or
investments in the Capital Stock of a Loan Party by a Loan Party; (l)
investments consisting of intercompany loans, not exceeding the aggregate unpaid
amount of $15,000,000 at any time, from a Loan Party to a Consolidated Member
other than a Loan Party, (m) existing investments listed on the attached
Schedule A-3; and (n) subject to Section 7.10, other investments not listed in
clause (a) through clause (l) preceding in an aggregate amount at any time not
exceeding $5,000,000;
"Revolving Loans" has the meaning specified in Section 1.2 and includes
each Agent Advance and Non-Ratable Loan.
"Revolving Loan Note" and "Revolving Loan Notes" have the meanings
specified in Section 1.2(b).
ANNEX A TO CREDIT AGREEMENT - Page 28
"Security Agreement" means the Security Agreement dated concurrently
herewith among the Loan Parties and the Agent, for the benefit of the Agent and
the Lenders, as such agreement may be amended, restated, or otherwise modified
from time to time.
"Settlement" and "Settlement Date" have the meanings specified in Section
12.15(a)(i).
"Shares Mortgage" means the "Shares Mortgage" as defined by the Original
Credit Agreement, as such agreement may be amended, restated, or otherwise
modified from time to time.
"Solvent" means, when used with respect to any Person, that at the time of
determination:
(a) the assets of such Person, at a fair valuation, are in excess of
the total amount of its debts (including contingent liabilities);
(b) the present fair saleable value of its assets is greater than
its probable liability on its existing debts as such debts become absolute
and matured;
(c) it is then able and expects to be able to pay its debts
(including contingent debts and other commitments) as they mature; and
(d) it has capital sufficient to carry on its business as conducted
and as proposed to be conducted.
For purposes of determining whether a Person is Solvent, the amount of any
contingent liability shall be computed as the amount that, in light of all the
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Stated Termination Date" means December 20, 2004.
"Subordinated Debt" means all indebtedness, liabilities, and obligations
owing by the Parent or any other Consolidated Member pursuant to any
Subordinated Debt Documents
"Subordinated Debt Documents" means collectively, (a) the Convertible
Subordinated Debt Documents, the Convertible Subordinated Notes and all other
agreements, certificates, documents, and instruments executed or delivered by
the parties thereto in connection therewith, respectively, and (b) all other
agreements, certificates, documents, and instruments executed or delivered by
the Parent or any other Consolidated Member evidencing unsecured Debt of the
Parent or any such Consolidated Member which has maturities and terms, and which
is subordinated to payment of the Obligations in a manner approved in writing by
the Agent and the Majority Lenders, and in each such case described in clauses
(a) and (b) preceding, any renewals, modifications, or amendments thereof which
are approved in writing by the Agent and the Majority Lenders.
"Subsidiary" means, with respect to any Person (the "subject Person"), any
corporation, association, partnership, limited liability company, joint venture,
or other business entity of which
ANNEX A TO CREDIT AGREEMENT - Page 29
more than fifty percent (50.0%) of the voting Capital Stock or other Capital
Stock, is owned or controlled directly or indirectly by the subject Person, or
one or more of the Subsidiaries of the subject Person, or a combination thereof.
Unless the context otherwise clearly requires, references herein to a
"Subsidiary" refer to a Subsidiary of the Parent.
"Subsidiary Guaranty" means an agreement of Guaranty executed by any
Subsidiary of the Parent pursuant to which such Subsidiary guarantees the
Obligations or any portion thereof.
"Supporting Letter of Credit" has the meaning specified in Section 1.4(g).
"Syndication Completion Date" means the date on which (i) the Commitment
of the Bank has been reduced to an amount equal to or less than $35,000,000 and
(ii) the sum of the Commitments of all Lenders other than the Bank equals or
exceeds $65,000,000.
"Synthetic Lease Transaction Documents" means the Synthetic Lease
Transaction (1997) Documents, the Synthetic Lease Transaction (1998) Documents
and the Synthetic Lease Transaction (Lawrence, NY) Documents.
"Synthetic Lease Transaction (1997) Documents" means the Lease and
Development Agreement dated as of January 10, 1997 between Asset XI Holdings
Company, L.L.C., as lessor ("1997 Lessor") and Eagle USA Airfreight, Inc. (now
known as EGL, Inc.), as lessee ("Lessee"), Loan Agreement dated as of January
10, 1997 between 1997 Lessor, as borrower and Bank One, Texas, N.A. (now known
as Bank One, NA), as lender ("Bank One"), Participation Agreement dated as of
January 10, 1997 among Lessor, Lessee, and Bank One, and all agreements,
instruments, and documents executed in connection therewith (as each of the same
was, from time to time, amended, modified, and supplemented, including, without
limitation, the First Amendment to Participation Agreement, Lease and
Development Agreement and Loan Agreement dated as of May 15, 1998 among 1997
Lessor, Lessee, and Bank One).
"Synthetic Lease Transaction (1998) Documents" means the Master Lease and
Development Agreement dated as of April 3, 1998 between Asset XVI Holdings
Company, L.L.C., as lessor ("1998 Lessor") and Eagle USA Airfreight, Inc. (now
known as EGL, Inc.), as lessee ("Lessee"), Loan Agreement dated as of April 3,
1998 between 1998 Lessor, as borrower, and Bank One, Texas, N.A. (now known as
Bank One, NA), as lender ("Bank One"), Master Participation Agreement dated as
of April 3, 1998 among 1998 Lessor, Lessee, and Bank One, and all agreements,
instruments, and documents executed in connection therewith (as each of the same
was, from time to time, amended, modified, and supplemented, including, without
limitation, the Amendment to Master Participation Agreement dated as of April 1,
1999 among 1998 Lessor, Lessee, and Bank One, and Second Amendment to
Participation Agreement, Lease Agreement and Loan Agreement dated as of October
20, 2000 among 1998 Lessor, Lessee, and Bank One).
"Synthetic Lease Transaction (▇▇▇▇▇▇▇▇, NY) Documents" means each of the
agreements among Circle International, Inc., Wilmington Trust Company and others
in respect of the master operating lease arrangement for a ten (10) year
$12,885,000 master operating lease entered into on
ANNEX A TO CREDIT AGREEMENT - Page 30
or about January 1, 1998, to finance the construction of a terminal and
warehouse facilities at ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Airport in New York, New York.
"Taxes" means any and all present or future taxes, levies, imposts,
deductions, charges, or withholdings, and all liabilities with respect thereto,
excluding, in the case of the Agent and each Lender, such taxes (including
income taxes or franchise taxes) as are imposed on or measured by the Agent's or
such Lender's net income in the jurisdiction (whether federal, state, or local
and including any political subdivision thereof) under the laws of which the
Agent or such Lender, as the case may be, is organized or maintains a lending
office.
"Terminating Lenders" means the "Lenders" under the Original Credit
Agreement other than the Bank.
"Termination Date" means the earliest to occur of (a) the Stated
Termination Date, (b) the date the Total Facility is terminated either by the
Borrowers pursuant to Section 3.2 or by the Majority Lenders pursuant to Section
9.2, and (c) the date this Agreement is otherwise terminated for any reason
whatsoever pursuant to the terms of this Agreement.
"Total Facility" has the meaning specified in Section 1.1.
"Trademark Security Agreement" means the Trademark Security Agreement,
dated as of the Closing Date or any subsequent date, executed and delivered by
an Obligated Party to the Agent, for the benefit of the Agent and the Lenders,
to evidence and perfect the Agent's security interest in such Obligated Party's
present and future trademarks and related licenses and rights, as such agreement
may be amended, restated, or otherwise modified from time to time. "Trademark
Security Agreement" includes, without limitation, each "Trademark Security
Agreement" as defined in, and executed and delivered pursuant to, the Original
Credit Agreement, as any such Trademark Security Agreement has been, or may be,
renewed, modified, amended or restated from time to time.
"UCC" means the Uniform Commercial Code (or any successor statute), as in
effect from time to time, of the State of Texas or of any other state the laws
of which are required as a result thereof to be applied in connection with the
issue of perfection of security interests; provided that to the extent that the
UCC is used to define any term herein or in any other documents and such term is
defined differently in different Articles or Divisions of the UCC, the
definition of such term contained in Article or Division 9 shall govern.
"UK Security Documents" means the Shares Mortgage.
"UK Security Trustee" means the Bank, acting through its London branch at
Bank of America House, ▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇, in its capacity as security
trustee under the UK Security Documents, and includes any successor entity
thereto.
"Unfunded Pension Liability" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan's assets, determined in accordance with
ANNEX A TO CREDIT AGREEMENT - Page 31
the assumptions used for funding the Pension Plan pursuant to Section 412 of the
Code for the applicable plan year.
"United States" means the United States of America.
"Unrestricted Subsidiary" means each of Jet Urban Renewal Corporation and
EGL Trade Services, Inc., respectively, and any other Subsidiary of the Parent
which the Agent, in its sole discretion, at the request of the Parent,
designates as an "Unrestricted Subsidiary", and "Unrestricted Subsidiaries"
means more than one of the foregoing.
"Unused Letter of Credit Subfacility" means an amount equal to the Letter
of Credit Subfacility minus the sum of (a) the aggregate undrawn amount of all
outstanding Letters of Credit and Credit Support, plus, without duplication, (b)
the aggregate unpaid reimbursement obligations with respect to all Letters of
Credit and Credit Support.
"Unused Line Fee" has the meaning specified in Section 2.5.
"Unused Line Fee Percentage" means, as of the Closing Date, one-half of
one percent (.50%), subject to adjustment from time to time after June 30, 2002,
to the applicable percentage specified corresponding to the monthly average
Availability Without Regard to Line Constraint (determined on a calendar month
basis for each respective calendar month beginning June, 2002 and thereafter),
as set forth below, respectively:
======================================================================================
Availability Without Regard to Line Constraint Unused Line Fee Percentage
======================================================================================
Greater than or equal to $65,000,000 0.25%
--------------------------------------------------------------------------------------
Less than $65,000,000 but greater than or equal 0.375%
to $45,000,000
--------------------------------------------------------------------------------------
Less than $45,000,000 but greater than or equal 0.50%
to $25,000,000
--------------------------------------------------------------------------------------
Less than $25,000,000 0.50%
======================================================================================
For the purpose of determining any such adjustments to the Unused Line Fee
Percentage, the monthly average Availability Without Regard to Line Constraint,
for any such calendar month, shall be determined by the Agent and any resulting
adjustment, if any, shall become effective prospectively on the fifteenth (15th)
day of the next calendar month. If a Default or Event of Default exists at the
time any reduction in the Applicable Margin is to be implemented, such reduction
shall not occur until the first day of the first calendar month, if any,
following the date on which such Default or Event of Default is waived or cured.
"Wholly-Owned Subsidiary" when used to determine the relationship of a
Subsidiary to a Person, means a Subsidiary all of the issued and outstanding
Capital Stock (other than directors'
ANNEX A TO CREDIT AGREEMENT - Page 32
qualifying shares) of which shall at the time be owned by such Person or one or
more of such Person's Wholly-Owned Subsidiaries or by such Person and one or
more of such Person's Wholly-Owned Subsidiaries.
ACCOUNTING TERMS:
Any accounting term used in this Agreement shall have, unless otherwise
specifically provided herein, the meaning customarily given to such term in
accordance with GAAP, and all financial computations in this Agreement shall be
computed, unless otherwise specifically provided herein, in accordance with GAAP
as consistently applied and using the same method for inventory valuation as
used in the preparation of the Financial Statements.
INTERPRETIVE PROVISIONS:
Wherever used in this Agreement,
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms. Terms used herein that are
defined in the UCC and are not otherwise defined herein shall have the
meanings specified therefor in the UCC.
(b) Unless otherwise defined in this Agreement, terms defined in any
other Loan Document, if and where used in this Agreement, shall have the
same meanings in this Agreement as are prescribed by such Loan Document.
(b) The words "hereof," "herein," "hereunder," and similar words
refer to this Agreement as a whole and not to any particular provision of
this Agreement. Section, Schedule, and Exhibit references are to this
Agreement unless otherwise specified. The term "documents" includes any
and all instruments, documents, agreements, certificates, indentures,
notices, and other writings, however evidenced. The term "including" is
not limiting and means "including, without limitation." In the computation
of periods of time from a specified date to a later specified date, the
word "from" means "from and including," the words "to" and "until" each
mean "to but excluding" and the word "through" means "to and including."
The word "or" is not exclusive. The words "hereof," "herein," "hereunder"
and similar words refer to the Agreement as a whole and not to any
particular provision of the Agreement; and Subsection, Section, Schedule
and Exhibit references are to the Agreement unless otherwise specified.
"Knowledge" means, with respect to knowledge of any Consolidated Member,
knowledge of any officer (or comparable capacity) of such Consolidated
Member, including without limitation its chief executive officer,
president, chief financial officer, treasurer or controller (or any Person
serving in any comparable capacity).
(c) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments
shall be deemed to include all subsequent amendments, restatements, and
other modifications thereto, but only to the extent such amendments,
restatements, and other modifications are not prohibited by the terms of
ANNEX A TO CREDIT AGREEMENT - Page 33
any Loan Document, and (ii) references to any statute or regulation are to
be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing, or interpreting the
statute or regulation.
(d) The captions and headings of this Agreement are for convenience
of reference only and shall not affect the interpretation of this
Agreement.
(e) This Agreement and the other Loan Documents may use several
different limitations, tests, or measurements to regulate the same or
similar matters. All such limitations, tests, and measurements are
cumulative and shall each be performed in accordance with their terms.
(f) For purposes of Section 9.1, a breach of a financial covenant
contained in Section 7.22 and Section 7.23 shall be deemed to have
occurred as of any date of determination thereof by the Agent or as of the
last day of any specified measuring period, regardless of when the
Financial Statements reflecting such breach are delivered to the Agent and
the Lenders.
(g) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, each
Lender, and the Loan Parties and are the products of all parties.
Accordingly, this Agreement and the other Loan Documents shall not be
construed against the Agent, the Lender, or the Loan Parties merely
because of their respective involvement in their preparation.
ANNEX A TO CREDIT AGREEMENT - Page 34
EXHIBIT A
FORM OF REVOLVING LOAN NOTE
REVOLVING LOAN NOTE
$_____________ __________, ____
EACH OF THE UNDERSIGNED (collectively, the "Borrowers"), for value
received, jointly and severally, hereby promises to pay to the order of
_____________________, a _______________________ with an office located at
__________________________ (the "Payee"), the principal amount of
_______________________________DOLLARS ($__________) or such lesser amount as
may from time to time be advanced and remain unpaid and outstanding hereunder,
together with accrued interest thereon as provided hereinbelow.
This Revolving Loan Note ("Note") is executed and delivered by the
Borrowers pursuant to that certain Credit Agreement, dated as of December 20,
2001 (as such agreement may be amended, restated, or otherwise modified from
time to time, the "Credit Agreement") among the Borrowers, certain Affiliates of
the Borrowers, each of the financial institutions from time to time party
thereto (the "Lenders"), and Bank of America, National Association, in its
capacity as administrative agent for the Lenders (the "Agent"), and is a
"Revolving Loan Note" as defined therein. All terms defined in the Credit
Agreement, wherever used herein, unless otherwise defined herein, shall have the
same meanings herein as are prescribed by the Credit Agreement.
All Revolving Loans from time to time requested by any Borrower, and from
time to time made and outstanding hereunder, are subject in all respects to the
terms and provisions of the Credit Agreement. Reference hereby is made to the
Credit Agreement for a statement of the obligations of the Borrowers and the
rights of the Payee in relation thereto, provided that nothing shall impair the
absolute and unconditional, joint and several, obligation of the Borrowers to
pay the outstanding principal and unpaid accrued interest on this Note when due.
The Credit Agreement, among other things, contains provisions for acceleration
of the maturity of this Note upon the happening of certain stated events and for
prepayments of the Revolving Loans prior to the maturity of this Note upon the
terms and conditions specified in the Credit Agreement.
The unpaid principal from day to day outstanding under this Note shall
bear interest at the applicable rate prescribed for the Revolving Loans as
provided by the Credit Agreement. The Agent's and the Payee's books and records
shall be prima facie evidence of Revolving Loans, interest accruals, and
payments hereunder, absent manifest error.
The Borrowers unconditionally, jointly and severally, promise to pay all
principal of and accrued interest on the Revolving Loans from time to time
outstanding under this Note as prescribed by the Credit Agreement. This Note
shall automatically mature and become due and payable in full on the Termination
Date.
All rights and remedies of the Payee, and of the Agent for the benefit of
the Payee, with respect to the Revolving Loans evidenced by this Note
(including, without limitation, the right upon the occurrence of an Event of
Default to accelerate the entire unpaid principal balance and unpaid accrued
interest hereunder to be immediately due and payable) as provided by the Credit
Agreement are incorporated herein by reference. All obligations and indebtedness
from time to
REVOLVING NOTE - Page 2
time evidenced by this Note are secured by the Agent's Liens as provided by the
Credit Agreement and the other Loan Documents.
No delay or omission by the Agent or the Payee in exercising any power,
right, or remedy hereunder or under any of the other Loan Documents shall
operate as a waiver or impair any such powers, rights, or remedies. Except as
specifically provided in the Credit Agreement, each of the Borrowers and each
other party ever liable hereunder severally hereby expressly waives presentment,
demand, notice of intention to accelerate, notice of acceleration, protest,
notice of protest, and any other notice of any kind, and agrees that its joint
and several liability hereunder shall not be affected by any renewals,
extensions, or modifications, from time to time, of the time or manner of
payment hereof, or by any release or modification of any Collateral or other
Person liable for the Obligations.
The Borrowers hereby, jointly and severally, promise to pay to the Agent,
for the benefit of the Agent and the Payee, all fees, costs, and expenses
incurred by the Agent or the Payee in enforcement and collection of any amounts
under this Note, including, without limitation, Attorney Costs.
The Agent, the Payee, and each Borrower acknowledges, agrees, and declares
that it is its intention to expressly comply with all Requirements of Law in
respect of limitations on the amount or rate of interest that can legally be
contracted for, charged, or received under or in connection with the Loan
Documents. Notwithstanding anything to the contrary contained in any Loan
Document (even if any such provision expressly declares that it controls all
other provisions of the Loan Documents), in no contingency or event whatsoever
shall the amount of interest (including the aggregate of all charges, fees,
benefits, or other compensation which constitutes interest under any Requirement
of Law) under the Loan Documents paid by any Borrower, received by the Agent or
the Payee, agreed to be paid by any Borrower, or requested or demanded to be
paid by the Agent or the Payee, exceed the Maximum Rate, and all provisions of
the Loan Documents in respect of the contracting for, charging, or receiving
compensation for the use, forbearance, or detention of money shall be limited as
provided by Section 2.3 of the Credit Agreement and herein. In the event any
such interest is paid to the Agent or the Payee by the Borrowers, or any of
them, in an amount or at a rate which would exceed the Maximum Rate, the Agent
or the Payee, as the case may be, shall automatically apply such excess to any
unpaid amount of the Obligations other than interest, in inverse order of
maturity, or if the amount of such excess exceeds said unpaid amount, such
excess shall be paid to the paying Borrowers or Borrower, as applicable. All
interest paid, or agreed to be paid, by any Borrower, or taken, reserved, or
received by the Agent or the Payee, shall be amortized, prorated, spread, and
allocated in respect of the Obligations throughout the full term of this Note
and the Credit Agreement. Notwithstanding any provision contained in any of the
Loan Documents, or in any other related documents executed pursuant to the
Credit Agreement, neither the Agent nor the Payee shall ever be entitled to
charge, receive, take, reserve, collect, or apply as interest any amount which,
together with all other interest under the Loan Documents would result in a rate
of interest under the Loan Documents in excess of the Maximum Rate and, in the
event the Agent or the Payee ever charges, receives, takes, reserves, collects,
or applies any amount in respect of the Borrowers, or any of them, that
otherwise would, together with all other interest under the Loan Documents, be
in excess of the Maximum Rate, such amount shall automatically
REVOLVING NOTE - Page 3
be deemed to be applied in reduction of the unpaid principal balance of the
Obligations and, if such principal balance is paid in full, any remaining excess
shall forthwith be paid to the applicable Borrowers or Borrower. The Borrowers,
the Agent and the Payee shall, to the maximum extent permitted under any
Requirement of Law, (a) characterize any non-principal payment as a standby fee,
commitment fee, prepayment charge, delinquency charge, expense, or reimbursement
for a third-party expense rather than as interest and (b) exclude prepayments,
acceleration, and the effects thereof. Nothing in any Loan Document shall be
construed or so operate as to require or obligate the Borrowers, or any of them,
to pay any interest, fees, costs, or charges greater than is permitted by any
Requirement of Law. Subject to the foregoing, the Borrowers hereby agree that
the actual effective rate of interest from time to time existing under the Loan
Documents in respect of this Note, including all amounts agreed to by the
Borrowers or charged or received by the Agent or the Payee pursuant to and in
accordance with the Loan Documents, which may be deemed to be interest under any
Requirement of Law, shall be deemed to be a rate which is agreed to and
stipulated by the Borrowers and the Payee in accordance with Requirements of
Law.
This Note may not be amended, restated, or otherwise modified except in
writing executed by the Payee and the Borrowers in the manner prescribed by the
Credit Agreement.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF TEXAS, PROVIDED THAT TO THE EXTENT FEDERAL LAW WOULD ALLOW A
HIGHER RATE OF INTEREST THAN WOULD BE ALLOWED BY THE LAWS OF THE STATE OF TEXAS,
THEN WITH RESPECT TO THE PROVISIONS OF ANY LAW WHICH PURPORTS TO LIMIT THE
AMOUNT OF INTEREST THAT MAY BE CONTRACTED FOR, CHARGED, OR RECEIVED IN
CONNECTION WITH THIS NOTE, SUCH FEDERAL LAW SHALL APPLY.
This Note shall be binding upon the Borrowers and the Borrowers'
successors and assigns.
THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
All obligations and indebtedness of the Parent evidenced by this Note, now
and hereafter existing, including any increases, renewals, extensions,
modifications or amendments hereof, are hereby expressly designated as being
"Designated Senior Indebtedness" for purposes of, and as defined by, the certain
Indenture dated as of December 7, 2001, between the Parent and JPMorgan Chase
Bank, as Trustee as supplemented by the certain First Supplemental Indenture
dated December 7, 2001, between the Parent and JPMorgan Chase Bank, as Trustee,
as may be modified or amended from time to time.
This Note is in renewal and replacement of (but not extinguishment of) the
indebtedness evidenced by the certain Revolving Loan Note dated January 5, 2001,
previously executed and
REVOLVING NOTE - Page 4
delivered by EGL, Inc. payable to the order of Bank of America, N.A., in the
principal amount of $25,000,000, and the indebtedness evidenced by this Note
shall hereafter be governed by and payable in accordance with the terms hereof.
[Remainder of page intentionally left blank]
REVOLVING NOTE - Page 5
Executed as of the date set forth above.
BORROWERS:
EGL, INC.
By:_____________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
By:_____________________________________
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, Corporate
Secretary
ALROD INTERNATIONAL, INC.
By:_____________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
CIRCLE AIRFREIGHT JAPAN, LTD.
By:_____________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
CIRCLE OVERSEAS CORP.
By:_____________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
CIRCLE INTERNATIONAL GROUP, INC.
By:_____________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
REVOLVING NOTE - Page 6
CIRCLE INTERNATIONAL HOLDINGS, INC.
By:_____________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
CIRCLE INTERNATIONAL, INC.
By:_____________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO.
By:_____________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
By:_____________________________________
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
EAGLE MARITIME SERVICES, INC.
By:_____________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
By:_____________________________________
▇▇▇▇▇ ▇▇▇▇, Secretary
EAGLE PARTNERS L.P.
By: EUSA HOLDINGS, INC.,
its General Partner
By: ______________________________
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, President
REVOLVING NOTE - Page 7
EAGLE USA IMPORT BROKERS, INC.
By: __________________________________
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, President
EGL (CANADA) HOLDING COMPANY, INC.
By: __________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
EGL DELAWARE LIMITED LIABILITY COMPANY
By: __________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, Manager
By: __________________________________
E. ▇▇▇▇▇▇ ▇▇▇▇▇, Manager
EGL EAGLE GLOBAL LOGISTICS, LP
By: EGL MANAGEMENT, LLC,
its Sole General Partner
By:_______________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
By:_______________________________
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
REVOLVING NOTE - Page 8
EGL MANAGEMENT, LLC
By: __________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
By: __________________________________
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, Secretary
EUSA HOLDINGS, INC.
By: __________________________________
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, President
EUSA PARTNERS, INC.
By: __________________________________
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇, President
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & CO., INC.
By: __________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
J.R. ▇▇▇▇▇▇▇, INCORPORATED
By: __________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
▇▇▇ ▇▇▇▇▇▇▇▇ INTERNATIONAL, INC.
By: __________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
REVOLVING NOTE - Page 9
EXHIBIT C
FORM OF NOTICE OF BORROWING
EXHIBIT C - Cover Page
Date: __________, 20__
To: Bank of America, N. A., as Agent for the Lenders who are parties to the
Credit Agreement dated as of December 20, 2001 (as amended, restated, or
otherwise modified from time to time, the "Credit Agreement") among EGL,
Inc. and certain of its Subsidiaries, the Lenders party thereto, and Bank
of America, National Association, as administrative agent for the Lenders
Ladies and Gentlemen:
The undersigned refers to the Credit Agreement, the terms defined therein
being used herein as therein defined and, subject to the terms of the Credit
Agreement, hereby gives you notice irrevocably of the Borrowing specified below:
1. The Business Day of the proposed Borrowing is _____________, 20__.
2. The aggregate amount of the proposed Borrowing is $__________.
3. The proposed Borrowing is to be comprised of $__________ of Base Rate
Revolving Loans and $__________ of LIBOR Rate Revolving Loans.
4. The duration of the Interest Period for the LIBOR Rate Revolving Loans,
if any, included in the proposed Borrowing shall be _____ months.
5. The proceeds of the Borrowing are to be deposited to the [Designated
Account] [insert wire transfer instructions].
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the proposed Borrowing, before
and after giving effect thereto and to the application of the proceeds
therefrom:
(a) The representations and warranties of each of the Loan Parties
contained in the Credit Agreement are true and correct as though made on and as
of such date (except to the extent that any of such representations or
warranties are expressly by their terms made only as of the Closing Date or
another specific date);
(b) No Default or Event of Default has occurred and is continuing, or
would result from the proposed Borrowing; and
(c) The proposed Borrowing will not cause the aggregate principal amount
of all outstanding Revolving Loans plus the aggregate amount available for
drawing under all outstanding Letters of Credit and Credit Support, to exceed
the lesser of the Borrowing Base or the Maximum Revolver Amount.
NOTICE OF BORROWING - Page 1
PARENT:
EGL, INC.,
As agent for itself and the other
Borrowers
By:_____________________________________
Name:___________________________________
Title:__________________________________
OR
[SIGNATURE BLOCK FOR ANY OTHER BORROWER]
BORROWER:
[NAME OF BORROWER]
By:_____________________________________
Name:___________________________________
Title:__________________________________
NOTICE OF BORROWING - Page 2
EXHIBIT D
FORM OF NOTICE OF CONTINUATION/CONVERSION
EXHIBIT D - Cover Page
Date: ______________, 20__
To: Bank of America, N. A., as Agent for the Lenders who are parties to the
Credit Agreement dated as of December 20, 2001 (as amended, restated, or
otherwise modified from time to time, the "Credit Agreement") among EGL,
Inc. and certain of its Subsidiaries, the Lenders party thereto, and Bank
of America, National Association, as administrative agent for the Lenders
Ladies and Gentlemen:
The undersigned refers to the Credit Agreement, the terms defined therein
being used herein as therein defined and, subject to the terms of the Credit
Agreement, hereby gives you notice irrevocably of the [conversion]
[continuation] of the Revolving Loans specified herein, that:
1. The Continuation/Conversion Date is ___________, 20__.
2. The aggregate amount of the Revolving Loans to be [converted]
[continued] is $_________.
3. The Revolving Loans are to be [converted into] [continued as] [LIBOR
Rate] [Base Rate] Revolving Loans.
4. The duration of the Interest Period for the LIBOR Rate Revolving Loans
included in the [conversion] [continuation] shall be _________ months.
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the proposed Continuation/Conversion Date,
before and after giving effect thereto and to the application of the proceeds
therefrom:
(a) The representations and warranties of the Loan Parties contained in
the Credit Agreement are true and correct as though made on and as of such date
(except to the extent that any of such representations or warranties are
expressly by their terms made only as of the Closing Date or another specific
date);
(b) Default or Event of Default has occurred and is continuing, or would
result from the proposed [conversion] [continuation]; and
(c) The proposed [conversion] [continuation] will not cause the aggregate
principal amount of all outstanding Revolving Loans plus the aggregate amount
available for drawing under all outstanding Letters of Credit and Credit Support
to exceed the lesser of the Borrowing Base or the Maximum Revolver Amount.
NOTICE OF CONTINUATION/CONVERSION - Page 1
PARENT:
EGL, INC.,
As agent for itself and the other
Borrowers
By:_____________________________________
Name:___________________________________
Title:__________________________________
OR
[SIGNATURE BLOCK FOR ANY OTHER BORROWER]
BORROWER:
[NAME OF BORROWER]
By:_____________________________________
Name:___________________________________
Title:__________________________________
NOTICE OF CONTINUATION/CONVERSION - Page 2
EXHIBIT E
FORM OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT E - Cover Page
ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and
Acceptance") dated as of [________, 20__] is made between
[________________________] (the "Assignor") and __________________________ (the
"Assignee").
RECITALS:
A. The Assignor is party to that certain Credit Agreement dated as of
December 20, 2001 (as amended, restated, or otherwise modified from time to
time, the "Credit Agreement") among EGL, Inc., a Texas corporation and certain
of its Subsidiaries party thereto (collectively, the "Loan Parties"), the
several financial institutions from time to time party thereto (including the
Assignor, the "Lenders"), and Bank of America, National Association, as
administrative agent for the Lenders (the "Agent"). Any terms defined in the
Credit Agreement and not defined in this Assignment and Acceptance shall have
the respective meanings herein as in the Credit Agreement.
B. As provided under the Credit Agreement, the Assignor has committed to
making Loans (the "Committed Loans") to the Borrowers in an aggregate amount not
to exceed $[__________] (the "Commitment").
C. As of the date hereof, Committed Loans owing to the Assignor from the
Borrowers equal an aggregate principal amount of $[__________];
D. [The Assignor has acquired a participation in its pro rata share of the
Lenders' liabilities under Letters of Credit and Credit Support in an aggregate
principal amount of $[__________] (the "L/C Obligations")] [no Letters of Credit
are outstanding under the Credit Agreement].
E. The Assignor wishes to assign to the Assignee [part of the] [all]
rights and obligations of the Assignor under the Credit Agreement in respect of
its Commitment, together with a corresponding portion of its outstanding
Committed Loans [and L/C Obligations], in an amount equal to $[__________] (the
"Assigned Amount") on the terms and subject to the conditions set forth herein,
and the Assignee wishes to accept assignment of such rights and to assume such
obligations from the Assignor on such terms and subject to such conditions.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. Assignment and Acceptance.
(a) Subject to the terms and conditions of this Assignment and
Acceptance, (i) the Assignor hereby sells, transfers, and assigns to the
Assignee, and (ii) the Assignee hereby purchases, assumes, and undertakes
from the Assignor, without recourse and without representation or warranty
(except as provided in this Assignment and Acceptance) ___________percent
(__%) (the "Assignee's Percentage Share") of (A) the Commitment
ASSIGNMENT AND ACCEPTANCE AGREEMENT - Page 1
[and][,] the Committed Loans [and the L/C Obligations] of the Assignor and
(B) all related rights, benefits, obligations, liabilities, and
indemnities of the Assignor under and in connection with the Credit
Agreement and the Loan Documents.
(b) On and after the Effective Date (as defined in paragraph 5
hereof), the Assignee shall be a party to the Credit Agreement and succeed
to all of the rights and be obligated to perform all of the obligations of
a Lender under the Credit Agreement, including the requirements concerning
confidentiality and the payment of indemnification, with a Commitment in
an amount equal to the Assigned Amount. The Assignee agrees that it will
perform in accordance with their terms all of the obligations which by the
terms of the Credit Agreement are required to be performed by it as a
Lender. It is the intent of the parties hereto that the Commitment of the
Assignor shall, as of the Effective Date, be reduced by an amount equal to
the Assigned Amount and the Assignor shall relinquish its rights and be
released from its obligations under the Credit Agreement to the extent
such obligations have been assumed by the Assignee; provided, however, the
Assignor shall not relinquish its rights under Section 3.9 and Section
13.11 of the Credit Agreement (or any other provision of the Loan
Documents to the extent such provision, by its terms, survives termination
of the Credit Agreement) to the extent such rights relate to the time
prior to the Effective Date.
(c) After giving effect to the assignment and assumption set forth
herein, on the Effective Date the Assignee's Commitment will be
$[__________].
(d) After giving effect to the assignment and assumption set forth
herein, on the Effective Date the Assignor's Commitment will be
$[__________].
2. Payments.
(a) As consideration for the sale, assignment and transfer
contemplated in paragraph 1 hereof, the Assignee shall pay to the Assignor
on the Effective Date in immediately available funds an amount equal to
$[__________], representing the Assignee's Pro Rata Share of the principal
amount of all Committed Loans.
(b) The Assignee further agrees to pay to the Agent a processing fee
in the amount specified in Section 11.2(a) of the Credit Agreement.
3. Reallocation of Payments. Any interest, fees, and other payments
accrued to the Effective Date with respect to the Commitment[,][and] Committed
Loans[, and L/C Obligations] shall be for the account of the Assignor. Any
interest, fees, and other payments accrued on and after the Effective Date with
respect to the Assigned Amount shall be for the account of the Assignee. Each of
the Assignor and the Assignee agrees that it will hold in trust for the other
party any interest, fees, and other amounts which it may receive to which the
other party is entitled pursuant to the preceding sentence and pay to the other
party any such amounts which it may receive promptly upon receipt.
ASSIGNMENT AND ACCEPTANCE AGREEMENT - Page 2
4. Independent Credit Decision. The Assignee (a) acknowledges that it has
received a copy of the Credit Agreement and the Annex, Schedules, and Exhibits
thereto, together with copies of the most recent financial statements of the
Loan Parties, and such other documents and information in respect of the Loan
Parties and the other Consolidated Members, or otherwise, as it has deemed
appropriate to make its own credit and legal analysis and decision to enter into
this Assignment and Acceptance; and (b) agrees that it will, independently and
without reliance upon the Assignor, the Agent, or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit and legal decisions in taking or not taking
action under the Credit Agreement.
5. Effective Date; Notices.
(a) As between the Assignor and the Assignee, the effective date for
this Assignment and Acceptance shall be __________, 20__ (the "Effective
Date"); provided that the following conditions precedent have been
satisfied on or before the Effective Date:
(i) this Assignment and Acceptance shall be executed and
delivered by the Assignor and the Assignee;
(ii) the consent of the Agent required for an effective
assignment of the Assigned Amount by the Assignor to the Assignee
shall have been duly obtained and shall be in full force and effect
as of the Effective Date;
(iii) the Assignee shall pay to the Assignor all amounts due
to the Assignor under this Assignment and Acceptance;
(iv) the Assignee shall have complied with Section 11.2 of the
Credit Agreement (if applicable);
(v) the processing fee referred to in Section 2(b) hereof and
in Section 11.2(a) of the Credit Agreement shall have been paid to
the Agent; and
(b) Promptly following the execution of this Assignment and
Acceptance, the Assignor shall deliver to the Borrowers and the Agent for
acknowledgment by the Agent, a Notice of Assignment in the form attached
hereto as Schedule 1.
6. [Agent. [INCLUDE ONLY IF THE ASSIGNOR IS THE AGENT]
(a) The Assignee hereby appoints and authorizes the Assignor to take
such action as administrative agent on its behalf and to exercise such
powers under the Credit Agreement as are delegated to the Agent by the
Lenders pursuant to the terms of the Credit Agreement.
(b) The Assignee shall assume no duties or obligations held by the
Assignor in its capacity as Agent under the Credit Agreement.]
ASSIGNMENT AND ACCEPTANCE AGREEMENT - Page 3
7. Withholding Tax. The Assignee (a) represents and warrants to the Agent
and the Borrowers that under applicable law and treaties no tax will be required
to be withheld by the Borrowers with respect to any payments to be made to the
Assignee hereunder, (b) agrees to furnish (if it is organized under the laws of
any jurisdiction other than the United States or any State thereof) to the Agent
and the Borrowers prior to the time that the Agent is or the Borrowers are
required to make any payment of principal, interest or fees hereunder, duplicate
executed originals of either U.S. Internal Revenue Service Form W-8ECI or U.S.
Internal Revenue Service Form W-8BEN (wherein the Assignee claims entitlement to
the benefits of a tax treaty that provides for a complete exemption from U.S.
federal income withholding tax on all payments hereunder) and agrees to provide
new Forms W-8ECI or W-8BEN upon the expiration of any previously delivered form
or comparable statements in accordance with applicable U.S. law and regulations
and amendments thereto, duly executed and completed by the Assignee, and (c)
agrees to comply with all applicable U.S. laws and regulations with regard to
such withholding tax exemption.
8. Representations and Warranties.
(a) The Assignor represents and warrants that (i) it is the legal
and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any Lien or other adverse claim,
(ii) it is duly organized and existing and it has the full power and
authority to take, and has taken, all action necessary to execute and
deliver this Assignment and Acceptance and any other documents required or
permitted to be executed or delivered by it in connection with this
Assignment and Acceptance and to fulfill its obligations hereunder, (iii)
no notices to, or consents, authorizations or approvals of, any Person are
required (other than any already given or obtained) for its due execution,
delivery, and performance of this Assignment and Acceptance, and apart
from any agreements or undertakings or filings required by the Credit
Agreement, no further action by, or notice to, or filing with, any Person
is required of it for such execution, delivery, or performance, and (iv)
this Assignment and Acceptance has been duly executed and delivered by it
and constitutes the legal, valid, and binding obligation of the Assignor,
enforceable against the Assignor in accordance with the terms hereof,
subject, as to enforcement, to bankruptcy, insolvency, moratorium,
reorganization, and other laws of general application relating to or
affecting creditors' rights and to general equitable principles.
(b) The Assignor 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 or any other instrument or document
furnished pursuant thereto. The Assignor makes no representation or
warranty in connection with, and assumes no responsibility with respect
to, the solvency, financial condition, or statements of the Loan Parties,
or the performance or observance by the Loan Parties, of any of their
respective obligations under the Credit Agreement or any other instrument
or document furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is duly
organized and existing and it has full power and authority to take, and
has taken, all action necessary to execute and
ASSIGNMENT AND ACCEPTANCE AGREEMENT - Page 4
deliver this Assignment and Acceptance and any other documents required or
permitted to be executed or delivered by it in connection with this
Assignment and Acceptance, and to fulfill its obligations hereunder, (ii)
no notices to, or consents, authorizations, or approvals of, any Person
are required (other than any already given or obtained) for its due
execution, delivery, and performance of this Assignment and Acceptance,
and apart from any agreements or undertakings or filings required by the
Credit Agreement, no further action by, or notice to, or filing with, any
Person is required of the Assignee for such execution, delivery, or
performance, (iii) this Assignment and Acceptance has been duly executed
and delivered by the Assignee and constitutes the legal, valid, and
binding obligation of the Assignee, enforceable against the Assignee in
accordance with the terms hereof, subject, as to enforcement, to
bankruptcy, insolvency, moratorium, reorganization, and other laws of
general application relating to or affecting creditors' rights and to
general equitable principles, and (iv) it is an Eligible Assignee.
9. Further Assurances. The Assignor and the Assignee each hereby agree to
execute and deliver such other instruments, and take such other action, as
either party may reasonably request in connection with the transactions
contemplated by this Assignment and Acceptance, including the delivery of any
notices or other documents or instruments to the Loan Parties or the Agent,
which may be required in connection with the assignment and assumption
contemplated hereby.
10. Miscellaneous.
(a) Any amendment or waiver of any provision of this Assignment and
Acceptance shall be in writing and signed by the parties hereto. No
failure or delay by either party hereto in exercising any right, power, or
privilege hereunder shall operate as a waiver thereof and any waiver of
any breach of the provisions of this Assignment and Acceptance shall be
without prejudice to any rights with respect to any other or further
breach thereof.
(b) All payments made hereunder shall be made without any set-off or
counterclaim.
(c) The Assignor and the Assignee shall each pay its own costs and
expenses incurred in connection with the negotiation, preparation,
execution, and performance of this Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed
to constitute one and the same instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF TEXAS. The Assignor
and the Assignee each irrevocably submits to the non-exclusive
jurisdiction of any State or Federal court sitting in Texas over any suit,
action, or proceeding arising out of or relating to this Assignment and
Acceptance and irrevocably agrees that all claims in respect of such
action or proceeding may be heard and determined in such Texas State or
ASSIGNMENT AND ACCEPTANCE AGREEMENT - Page 5
Federal court. Each party to this Assignment and Acceptance hereby
irrevocably waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum to the maintenance of such action or
proceeding.
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE, THE CREDIT AGREEMENT, ANY
RELATED DOCUMENTS AND AGREEMENTS, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, OR STATEMENTS (WHETHER ORAL OR WRITTEN).
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed and delivered by their duly authorized
officers as of the date first above written.
ASSIGNOR:
[_________________]
By:_____________________________________
Name:___________________________________
Title:__________________________________
ASSIGNEE:
[_________________]
By:_____________________________________
Name:___________________________________
Title:__________________________________
ASSIGNMENT AND ACCEPTANCE AGREEMENT - Page 6
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
NOTICE OF ASSIGNMENT AND ACCEPTANCE
_______________, 20__
Bank of America, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Business Credit: URGENT
Re: EGL, Inc., et al
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of December 20, 2001 (as
amended, restated, or otherwise modified from time to time, the "Credit
Agreement") among EGL, Inc. and certain of its Subsidiaries party thereto, the
Lenders referred to therein, and Bank of America, N. A. , as administrative
agent for the Lenders (the "Agent"). Terms defined in the Credit Agreement are
used herein as therein defined.
1. We hereby give you notice of, and request your consent to, the
assignment by [__________________] (the "Assignor") to [__________________] (the
"Assignee") of ________ percent ([__]%) of the right, title, and interest of the
Assignor in and to the Credit Agreement (including the right, title, and
interest of the Assignor in and to the Commitment of the Assignor, all
outstanding Loans made by the Assignor, and the Assignor's participation in the
Letters of Credit and Credit Support pursuant to the Assignment and Acceptance
Agreement attached hereto (the "Assignment and Acceptance"). We understand and
agree that the Assignor's Commitment, as of [_______, 20__], is $[_______], the
aggregate amount of its outstanding Loans is $[_______], and its participation
in L/C Obligations (as defined in the Assignment ans Acceptance) is $[_______].
2. The Assignee agrees that, upon receiving the consent of the Agent [and,
if required by the Credit Agreement, EGL, Inc., as agent for itself and the
other Loan Parties], to such assignment, the Assignee will be bound by the terms
of the Credit Agreement as fully and to the same extent as if the Assignee were
the Lender originally holding such interest in the Credit Agreement.
NOTICE OF ASSIGNMENT AND ACCEPTANCE - Page 1
3. The following administrative details apply to the Assignee:
(A) Notice Address:
Assignee name:________________
Address:______________________
Attention:____________________
Telephone: (___)______________
Telecopier: (___)_____________
Telex (Answerback):___________
(B) Payment Instructions:
Account No.:__________________
At:___________________________
Reference:____________________
Attention:____________________
4. You are entitled to rely upon the representations, warranties, and
covenants of each of the Assignor and the Assignee contained in the Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Notice
of Assignment and Acceptance to be executed by their respective duly authorized
officials, officers, or agents as of the date first above mentioned.
Very truly yours,
ASSIGNOR:
By:_____________________________________
Name:___________________________________
Title:__________________________________
ASSIGNEE:
By:_____________________________________
Name:___________________________________
Title:__________________________________
NOTICE OF ASSIGNMENT AND ACCEPTANCE - Page 2
ACKNOWLEDGED AND CONSENTED TO:
AGENT:
BANK OF AMERICA, N. A.,
as Agent
By:____________________________
Name:__________________________
Title:_________________________
NOTICE OF ASSIGNMENT AND ACCEPTANCE - Page 3
EXHIBIT F
FORM OF COMPLIANCE CERTIFICATE
EXHIBIT F - Cover Page
COMPLIANCE CERTIFICATE
The undersigned, duly appointed and acting [_____________] of EGL, Inc.
(the "Parent"), being duly authorized, hereby delivers this Compliance
Certificate to the Agent, pursuant to Section 5.2(d) of the certain Credit
Agreement, dated as of December 20, 2001, among the Parent, each of the other
Subsidiaries of the Parent party thereto, the Lenders party thereto, and Bank of
America, N. A., in its capacity as administrative agent for the Lenders (the
"Agent"), as such agreement may be amended, restated, or otherwise modified from
time to time, reference to which hereby is made (the "Credit Agreement"). Terms
defined in the Credit Agreement, wherever used herein, shall have the same
meanings as are prescribed by the Credit Agreement.
1. The Parent hereby delivers to the Agent [check as applicable]:
| | the consolidated audited Fiscal Year end Financial Statements and
accountant's report required by Section 5.2(a), dated as of
[________, ____]; or
| | the unaudited month end or unaudited fiscal quarter end Financial
Statements, as applicable, required by Section 5.2(b), dated as of
[________, ____].
Such Financial Statements are complete and correct in all material respects and
have been prepared in accordance with GAAP (as applicable) applied consistently
throughout the periods reflected therein.
2. The undersigned represents and warrants to the Agent and the Lenders
that, except as may have been previously or concurrently disclosed to the Agent
and the Lenders in writing by the Parent, the representations and warranties
contained in Article 6 of the Credit Agreement and the other Loan Documents are
correct and complete in all material respects on and as of the date of this
Compliance Certificate as if made on and as of the date hereof (except to the
extent that such representations and warranties are expressly by their terms
made only as of the Closing Date or another specified date).
3. The undersigned represents and warrants to the Agent and the Lenders
that as of the date of this Compliance Certificate, except as previously or
concurrently disclosed to the Agent and the Lenders in writing by the Parent,
the Loan Parties are in compliance in all material respects with all of their
respective covenants and agreements in the Credit Agreement and the other Loan
Documents.
4. The undersigned hereby states that, to the best of his or her knowledge
and based upon an examination sufficient to enable an informed statement [check
as applicable]:
| | No Default or Event of Default exists as of the date hereof or
existed during the period covered by the Financial Statements
referenced in paragraph 1 of this Compliance Certificate.
COMPLIANCE CERTIFICATE - Page 1
| | One or more Defaults or Events of Default exist as of the date
hereof or existed during the period covered by the Financial
Statements referenced in paragraph 1 of this Compliance Certificate.
Included within Exhibit A attached hereto is a written description
specifying each such Default or Event of Default, its nature, when
it occurred, whether it is continuing as of the date hereof and the
steps being taken by the Parent and the other Loan Parties with
respect thereto. Except as so specified, no Default or Event of
Default exists as of the date hereof.
5. Exhibit B attached hereto sets forth the calculations necessary to
establish the status of compliance with the covenants contained in Section 7.22
("Capital Expenditures") and Section 7.23 ("Minimum Adjusted Tangible Net
Worth") of the Credit Agreement as of the effective date of the Financial
Statements referenced in paragraph 1 above.
6. Exhibit C attached hereto sets forth a description and analysis in
reasonable detail of all material trends, changes, and developments in each and
all Financial Statements and an explanation of the variances of the figures in
the corresponding budgets and Financial Statements for the preceding Fiscal
Year, as required by Section 5.2(d)(ii)(D) and Section 5.2(d)(ii)(E).
Date of execution of this Compliance Certificate: __________, ____.
EGL, INC., as agent for itself and the
other Loan Parties
By:_____________________________________
Name:___________________________________
Title:__________________________________
COMPLIANCE CERTIFICATE - Page 2
EXHIBIT A
to
COMPLIANCE CERTIFICATE
dated
______________, ____
The following is attached to and made a part of the above referenced Compliance
Certificate.
[specify Defaults or Events of Defaults]
EXHIBIT A - Defaults and Events of Default
EXHIBIT B
to
COMPLIANCE CERTIFICATE
dated
______________, ____
The following is attached to and made a part of the above referenced Compliance
Certificate.
[insert calculations]
EXHIBIT B - Calculations
EXHIBIT C
to
COMPLIANCE CERTIFICATE
dated
______________, ____
The following is attached to and made a part of the above referenced
Compliance Certificate.
[insert material trends, changes, and developments and an explanation of
variances, as required by paragraph 6]
EXHIBIT C - Material Trends, Changes, Developments, and Explanation of Variances