EXHIBIT 10.10
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CREDIT AGREEMENT
dated as of May 8, 1998
among
UNITED ROAD SERVICES, INC.,
VARIOUS FINANCIAL INSTITUTIONS
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
Arranged by BANCAMERICA XXXXXXXXX XXXXXXXX
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TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS.....................................................1
1.1 Definitions..................................................1
1.2 Other Interpretive Provisions...............................14
SECTION 2 COMMITMENTS OF THE BANKS; LETTER OF CREDIT,
BORROWING, CONVERSION AND CONTINUATION PROCEDURES..............15
2.1 Commitments.................................................15
2.1.1 Loan Commitment......................................15
2.1.2 L/C Commitment.......................................15
2.2 Loan Procedures.............................................16
2.2.1 Various Types of Loans...............................16
2.2.2 Borrowing Procedures.................................16
2.2.3 Conversion and Continuation Procedures...............17
2.3 Letter of Credit Procedures.................................18
2.3.1 L/C Applications.....................................18
2.3.2 Participation in Letters of Credit...................18
2.3.3 Reimbursement Obligations............................18
2.3.4 Limitation on Obligations of Issuing
Banks................................................19
2.3.5 Funding by Banks to Issuing Banks....................19
2.4 Commitments Several.........................................20
2.5 Certain Conditions..........................................20
SECTION 3 NOTES EVIDENCING LOANS.........................................20
3.1 Notes.......................................................20
3.2 Recordkeeping...............................................20
SECTION 4 INTEREST.......................................................21
4.1 Interest Rates..............................................21
4.2 Interest Payment Dates......................................21
4.3 Setting and Notice of Eurodollar Rates......................21
4.4 Computation of Interest.....................................21
SECTION 5 FEES...........................................................22
5.1 Non-Use Fee.................................................22
5.2 Letter of Credit Fees.......................................22
5.3 Arrangement and Agent's Fees................................22
5.4 Closing Fees................................................22
SECTION 6 REDUCTION AND TERMINATION OF THE COMMITMENTS;
PREPAYMENTS....................................................23
6.1 Reduction or Termination of the Commitments.................23
6.2 Voluntary Prepayments.......................................23
6.3 Mandatory Prepayments. .....................................23
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SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES................23
7.1 Making of Payments..........................................23
7.2 Application of Certain Payments.............................24
7.3 Due Date Extension..........................................24
7.4 Setoff......................................................24
7.5 Proration of Payments.......................................24
7.6 Taxes.......................................................24
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR
EURODOLLAR LOANS...............................................26
8.1 Increased Costs.............................................26
8.2 Basis for Determining Interest Rate Inadequate
or Unfair...................................................27
8.3 Changes in Law Rendering Eurodollar Loans Unlawful..........28
8.4 Funding Losses..............................................28
8.5 Right of Banks to Fund through Other Offices................28
8.6 Discretion of Banks as to Manner of Funding.................29
8.7 Mitigation of Circumstances; Replacement
of Affected Bank............................................29
8.8 Conclusiveness of Statements; Survival
of Provisions...............................................30
SECTION 9 WARRANTIES.....................................................30
9.1 Organization, etc...........................................30
9.2 Authorization; No Conflict..................................30
9.3 Validity and Binding Nature.................................30
9.4 Financial Condition.........................................31
9.5 No Material Adverse Change..................................31
9.6 Litigation and Contingent Liabilities.......................31
9.7 Ownership of Properties; Liens..............................31
9.8 Subsidiaries................................................31
9.9 Pension and Welfare Plans...................................32
9.10 Investment Company Act......................................32
9.11 Public Utility Holding Company Act..........................32
9.12 Regulation U................................................32
9.13 Taxes.......................................................32
9.14 Solvency, etc...............................................33
9.15 Environmental Matters.......................................33
9.16 Year 2000 Problem...........................................34
9.17 Copyrights, Patents, Trademarks and Licenses, etc...........35
9.18 Founding Companies Acquisition..............................35
9.19 Transactions with Affiliates................................36
9.20 Information.................................................36
SECTION 10 COVENANTS.....................................................36
10.1 Reports, Certificates and Other Information.................36
10.1.1 Audit Report........................................36
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10.1.2 Quarterly Reports....................................37
10.1.3 Monthly Reports......................................37
10.1.4 Borrowing Base Certificate...........................37
10.1.5 Compliance Certificates..............................37
10.1.6 Reports to SEC and to Shareholders...................38
10.1.7 Notice of Default, Litigation and
ERISA Matters..................................38
10.1.8 Subsidiaries.........................................39
10.1.9 Management Reports...................................39
10.1.10 Projections.........................................39
10.1.11 Contracts...........................................39
10.1.12 Fleet Audit Reports.................................39
10.1.13 Other Information...................................39
10.2 Books, Records and Inspections...............................39
10.3 Insurance....................................................40
10.4 Compliance with Laws; Payment of Taxes
and Liabilities..............................................40
10.5 Maintenance of Existence, etc................................40
10.6 Financial Covenants..........................................40
10.6.1 Minimum Consolidated Net Income......................40
10.6.2 Funded Debt to Funded Debt plus Net
Worth Ratio..........................................40
10.6.3 Funded Debt to EBITDA Ratio..........................41
10.6.4 Capital Expenditures.................................41
10.6.5 EBITR to Interest Expense plus
Rental Expense Ratio.................................41
10.7 Limitations on Debt.........................................41
10.8 Liens.......................................................42
10.9 Restricted Payments.........................................43
10.10 Mergers, Consolidations, Sales..............................43
10.11 Modification of Organizational Documents....................44
10.12 Use of Proceeds.............................................44
10.13 Further Assurances..........................................44
10.14 Transactions with Affiliates................................44
10.15 Employee Benefit Plans......................................44
10.16 Environmental Matters.......................................44
10.17 Unconditional Purchase Obligations..........................45
10.18 Inconsistent Agreements.....................................45
10.19 Business Activities.........................................45
10.20 Advances and Other Investments..............................45
10.21 Maintenance of Property.....................................46
10.22 Performance of Obligations..................................46
10.23 Leases......................................................47
SECTION 11 EFFECTIVENESS; CONDITIONS OF LENDING, ETC.....................47
11.1 Initial Credit Extensions....................................47
11.1.1 Notes................................................47
11.1.2 Resolutions..........................................48
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11.1.3 Consents, etc........................................48
11.1.4 Incumbency and Signature Certificates................48
11.1.5 Guaranty.............................................48
11.1.6 Security Agreement...................................48
11.1.7 Pledge Agreements....................................48
11.1.8 Opinion of Counsel for the Company
and the Guarantors...................................48
11.1.9 Borrowing Base Certificate...........................48
11.1.10 Other...............................................49
11.2 Conditions...................................................49
11.2.1 Compliance with Warranties,
No Default, etc......................................49
11.2.2 Confirmatory Certificate.............................50
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT............................50
12.1 Events of Default............................................50
12.1.1 Non-Payment of the Loans, etc........................50
12.1.2 Non-Payment of Other Debt............................50
12.1.3 Other Material Obligations...........................50
12.1.4 Bankruptcy, Insolvency, etc..........................51
12.1.5 Non-Compliance with Provisions of
This Agreement.......................................51
12.1.6 Warranties...........................................51
12.1.7 Pension Plans........................................51
12.1.8 Judgments............................................52
12.1.9 Invalidity of Guaranty, etc..........................52
12.1.10 Invalidity of Collateral Documents, etc.............52
12.1.11 Change in Control...................................52
12.2 Effect of Event of Default...................................53
SECTION 13 THE AGENT.....................................................53
13.1 Appointment and Authorization................................53
13.2 Delegation of Duties.........................................54
13.3 Liability of Agent...........................................54
13.4 Reliance by Agent............................................54
13.5 Notice of Default............................................55
13.6 Credit Decision..............................................55
13.7 Indemnification..............................................56
13.8 Agent in Individual Capacity.................................57
13.9 Successor Agent; Assignment of Agency........................57
13.10 Withholding Tax.............................................58
13.11 Collateral Matters..........................................60
SECTION 14 GENERAL.......................................................60
14.1 Waiver; Amendments...........................................60
14.2 Confirmations................................................61
14.3 Notices......................................................61
14.4 Computations.................................................61
14.5 Regulation U.................................................61
14.6 Costs, Expenses and Taxes....................................62
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14.7 Subsidiary References........................................62
14.8 Captions.....................................................62
14.9 Assignments; Participations..................................62
14.9.1 Assignments..........................................62
14.9.2 Participations.......................................64
14.10 Governing Law...............................................65
14.11 Counterparts................................................65
14.12 Successors and Assigns......................................65
14.13 Indemnification by the Company..............................65
14.14 Forum Selection and Consent to Jurisdiction.................66
14.15 Waiver of Jury Trial........................................67
SCHEDULE 1.1A Pricing Schedule
SCHEDULE 1.1B Debt to be Repaid
SCHEDULE 2.1 Banks and Percentages
SCHEDULE 2.1.2 Existing Letters of Credit
SCHEDULE 9.6 Litigation and Contingent Liabilities
SCHEDULE 9.8 Subsidiaries
SCHEDULE 9.15 Environmental Matters
SCHEDULE 10.7 Existing Debt
SCHEDULE 10.8 Existing Liens
SCHEDULE 12.1.11A Key Executives
SCHEDULE 12.1.11B Key Directors
SCHEDULE 14.3 Addresses for Notices
EXHIBIT A Form of Note
(Section 3.1)
EXHIBIT B Form of Compliance Certificate
(Section 10.1.3)
EXHIBIT C Form of Guaranty
(Section 1)
EXHIBIT D Form of Security Agreement
(Section 1)
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EXHIBIT E Form of Company Pledge Agreement
(Section 1)
EXHIBIT F Form of Subsidiary Pledge Agreement
(Section 11.1.7)
EXHIBIT G Form of Assignment Agreement
(Section 14.9)
EXHIBIT H Form of Borrowing Base Certificate
(Section 10.1.4)
EXHIBIT I Form of Notice of Borrowing
(Section 2.2.2)
Exhibit J Form of Notice of Conversion/Continuation
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CREDIT AGREEMENT
This CREDIT AGREEMENT, dated as of May 8, 1998 (this "Agreement"), is
entered into among UNITED ROAD SERVICES, INC., a Delaware corporation (the
"Company"), the financial institutions that are or may from time to time become
parties hereto (together with their respective successors and assigns, the
"Banks") and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION (in its
individual capacity, "BofA"), as agent for the Banks.
In consideration of the premises and the mutual agreements herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1 DEFINITIONS.
1.1 Definitions. When used herein the following terms shall have the
following meanings:
Account Debtor means the party who is obligated on or under any
Receivable.
Acquired Equipment means Eligible Equipment acquired by the Company
or any Subsidiary as a result of an acquisition permitted by Section 10.10.
Affected Bank means any Bank that has given notice to the Company
(which has not been rescinded) of (i) any obligation by the Company to pay any
amount pursuant to Section 7.6 or 8.1 or (ii) the occurrence of any
circumstances of the nature described in Section 8.2 or 8.3.
Affiliate of any Person means (i) any other Person which, directly or
indirectly, controls or is controlled by or is under common control with such
Person and (ii) any officer or director of such Person.
Agent means BofA in its capacity as agent for the Banks hereunder and
any successor thereto in such capacity.
Agent-Related Persons means BofA and any successor agent arising
under Section 13.9, together with their respective Affiliates (including, in the
case of BofA, the Arranger), and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
Agreement - see the Preamble.
Arranger means BancAmerica Xxxxxxxxx Xxxxxxxx, a Delaware
corporation.
Assignment Agreement - see Section 14.9.1.
Bank - see the Preamble.
Base Rate means at any time the greater of (a) the Federal Funds Rate
plus 0.5% and (b) the Reference Rate.
BofA - see the Preamble.
Borrowing Base means the sum of (a) 85% of Eligible Receivables; plus
(b) 60% of Eligible Inventory, provided that the amount determined pursuant to
this clause (b) shall not exceed $5,000,000; plus (c) 75% of the Equipment Value
of all Eligible Equipment; plus (d) the lesser of (i) the Overadvance Amount or
(ii) 50% of the sum of clauses (a), (b) and (c). For purposes of the foregoing,
the "Overadvance Amount" shall be (i) $7,000,000 during the period from the
Effective Date to Xxxxx 00, 0000, (xx) $3,000,000 during the period from April
30, 1999 to April 30, 2000, and (iii) zero thereafter; provided that the
Overadvance Amount set forth in clauses (i) and (ii) above shall be increased by
$1,000,000 on the date (if any) on which the Company acquires Keystone (or a
company which the Required Banks agree in writing is a satisfactory replacement
for Keystone).
Business Day means any day on which BofA is open for commercial
banking business in Chicago, New York and San Francisco and, in the case of a
Business Day which relates to a Eurodollar Loan, on which dealings are carried
on in the interbank eurodollar market.
Capital Expenditures means all expenditures which, in accordance with
GAAP, would be required to be capitalized and shown on the consolidated balance
sheet of the Company, but excluding expenditures made in connection with the
replacement, substitution or restoration of assets to the extent financed within
three months (i) from insurance proceeds (or other similar recoveries) paid on
account of the loss of or damage to the assets being replaced or restored or
(ii) with awards of compensation arising from the taking by eminent domain or
condemnation of the assets being replaced.
Capital Lease means, with respect to any Person, any lease of (or
other agreement conveying the right to use) any real or
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personal property by such Person that, in conformity with GAAP, is accounted for
as a capital lease on the balance sheet of such Person.
Cash Equivalent Investment means, at any time, (a) any evidence of
Debt, maturing not more than one year after such time, issued or guaranteed by
the United States Government or any agency thereof, (b) commercial paper,
maturing not more than one year from the date of issue, or corporate demand
notes, in each case (unless issued by a Bank or its holding company) rated at
least A-l by Standard & Poor's Ratings Group or P-l by Xxxxx'x Investors
Service, Inc., (c) any certificate of deposit (or time deposits represented by
such certificates of deposit) or bankers acceptance, maturing not more than one
year after such time, or overnight Federal Funds transactions that are issued or
sold by a commercial banking institution that is a member of the Federal Reserve
System and has a combined capital and surplus and undivided profits of not less
than $500,000,000, (d) any repurchase agreement entered into with any Bank (or
other commercial banking institution of the stature referred to in clause (c))
which (i) is secured by a fully perfected security interest in any obligation of
the type described in any of clauses (a) through (c) and (ii) has a market value
at the time such repurchase agreement is entered into of not less than 100% of
the repurchase obligation of such Bank (or other commercial banking institution)
thereunder and (e) investments in short-term asset management accounts offered
by any Bank for the purpose of investing in loans to any corporation (other than
the Company or an Affiliate of the Company), state or municipality, in each case
organized under the laws of any state of the United States or of the District of
Columbia.
CERCLA - see Section 9.15.
Code means the Internal Revenue Code of 1986, as amended.
Collateral Documents means the Company Pledge Agreement, each
Subsidiary Pledge Agreement, the Security Agreement and any other agreement
pursuant to which the Company or any Guarantor grants collateral to the Agent
for the benefit of the Banks.
Commitment Amount - see Section 2.1.1.
Commitments means the Loan Commitment and the L/C Commitment.
Company - see the Preamble.
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Company Pledge Agreement means a pledge agreement between the Company
and the Agent, substantially in the form of Exhibit E.
Computation Period means each period of four consecutive Fiscal
Quarters ending on the last day of a Fiscal Quarter.
Consolidated Net Income means, with respect to the Company and its
Subsidiaries for any period, the net income (or loss) of the Company and its
Subsidiaries for such period, excluding any extraordinary gains during such
period.
Controlled Group means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Company, are treated as a single employer under Section 414 of the Code or
Section 4001 of ERISA.
Debt of any Person means, without duplication, (a) all indebtedness
of such Person for borrowed money, whether or not evidenced by bonds,
debentures, notes or similar instruments, (b) all obligations of such Person as
lessee under Capital Leases which have been or should be recorded as liabilities
on a balance sheet of such Person, (c) all obligations of such Person to pay the
deferred purchase price of property or services (excluding trade accounts
payable in the ordinary course of business), (d) all indebtedness secured by a
Lien on the property of such Person, whether or not such indebtedness shall have
been assumed by such Person (it being understood that if such Person has not
assumed or otherwise become personally liable for any such indebtedness, the
amount of the Debt of such Person in connection therewith shall be limited to
the lesser of the face amount of such indebtedness or the fair market value of
all property of such Person securing such indebtedness), (e) all obligations,
contingent or otherwise, with respect to the face amount of all letters of
credit (whether or not drawn) and banker's acceptances issued for the account of
such Person (including the Letters of Credit), (f) net liabilities of such
Person under all Hedging Obligations and (g) all Suretyship Liabilities of such
Person.
Debt to be Repaid means the Debt of the Founding Companies, the
Company and its Subsidiaries set forth on Schedule 1.1B.
Disposal - see the definition of "Release".
Dollar and the sign "$" mean lawful money of the United States of
America.
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EBITDA means, for any period, Consolidated Net Income for such period
plus, to the extent deducted in determining such Consolidated Net Income,
Interest Expense, income tax expense, depreciation and amortization for such
period; provided that for purposes of calculating EBITDA for any period, the
consolidated net income of any Person acquired by the Company or any Subsidiary
during such period (plus, to the extent deducted in determining such
consolidated net income, interest expense, income tax expense, depreciation and
amortization of such Person) shall be included on a pro forma basis for such
period (assuming the consummation of each such acquisition and the incurrence or
assumption of any Debt in connection therewith occurred on the first day of such
period) in accordance with Article 11 of Regulation S-X of the SEC.
EBITR means, for any period, Consolidated Net Income for such period
plus Rental Expense and, to the extent deducted in determining such Consolidated
Net Income, Interest Expense and income tax expense.
Effective Date - see Section 11.1.
Eligible Equipment means all Equipment of the Company or any
Subsidiary which meets each of the following requirements: (a) it is in
marketable condition; (b) it is not obsolete; (c) it is owned solely by the
Company or a Subsidiary and is not subject to any Lien whatsoever other than
pursuant to the Security Agreement; (d) such Equipment is a motor vehicle or
other item subject to a certificate of title, the Agent's lien has been noted on
the certificate of title for such Equipment and such certificate of title is in
the Agent's possession; and (e) it is not Equipment which the Required Banks,
acting in their reasonable, good faith discretion, shall have notified the
Company in writing is not deemed to constitute Eligible Equipment. Any Equipment
which is at any time Eligible Equipment, but which subsequently fails to meet
any of the foregoing requirements, shall forthwith cease to be Eligible
Equipment.
Eligible Inventory means all Inventory of the Company or any
Subsidiary which meets each of the following requirements: (a) it is in
marketable condition; (b) it is not obsolete; (c) it is owned solely by the
Company or a Subsidiary and is not subject to any Lien whatsoever other than
pursuant to the Security Agreement; (d) it is finished goods or raw materials;
(e) it is located at real property which is owned or leased by the Company or a
Subsidiary; and (f) it is not Inventory which the Required Banks, acting in
their reasonable, good faith discretion, shall
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have notified the Company in writing is not deemed to constitute Eligible
Inventory. Any Inventory which is at any time Eligible Inventory, but which
subsequently fails to meet any of the foregoing requirements, shall forthwith
cease to be Eligible Inventory.
Eligible Receivable means a Receivable of the Company or any
Subsidiary which meets each of the following requirements: (a) if it arises from
the sale of goods, such goods have been shipped or delivered to the Account
Debtor under such Receivable; (b) it is a valid, legally enforceable obligation
of the Account Debtor thereunder, and is not subject to any offset, counterclaim
or other defense on the part of such Account Debtor of which the Company or a
Subsidiary has knowledge; (c) it is not subject to any Lien whatsoever other
than the security interest under the Security Agreement; (d)it is evidenced by
an invoice (dated not later than the date of shipment or performance rendered to
such Account Debtor), and is not evidenced by any instrument or chattel paper;
(e) it is not owing by any Account Debtor whose obligations the Required Banks,
acting in their reasonable, good faith discretion, shall have notified the
Company in writing are not deemed to constitute Eligible Receivables; (f) it is
not owing by an Account Debtor who, as of the computation date of the Borrowing
Base most recently received by the Banks, shall have failed to pay within 90
days of their due date more than 25% of the aggregate dollar amount of the
invoices of the Company evidencing all Receivables billed to such Account
Debtor; (g) it is not owing by an Account Debtor who is not a permanent resident
of or incorporated in any state of the United States or any province of Canada
in which the Personal Property Security Act is in effect (unless in the case of
an Account Debtor that is a resident of or incorporated in another province of
Canada, other appropriate steps have been taken to perfect and protect the
security interest of the Collateral Agent in such Receivable); (h) it has not
been outstanding for more than 90 days from the date of the invoice which
evidences such Receivable; (i) it is not owing by an Account Debtor which, to
the knowledge of the Company or the applicable Subsidiary, is subject to any
bankruptcy, insolvency or similar proceeding; and (j) it is not owing by an
Account Debtor which is an Affiliate of the Company or any Subsidiary or a
director, officer, employee or agent of the Company or any Subsidiary or any of
their Affiliates; provided, however, that a Receivable that fails to meet the
requirements of any of clauses (f), (g), (h) or (i) but (x) meets all of the
other foregoing requirements and (y) is insured by a creditworthy third-party,
shall be an Eligible Receivable to the extent it is so insured; provided,
further, that the aggregate amount of all Receivables which constitute Eligible
Receivables
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pursuant to the foregoing proviso shall not exceed the maximum amount of the
insurance available for the applicable receivables minus any deductible or self-
insured retention with respect to such insurance. A Receivable which is at any
time an Eligible Receivable, but which subsequently fails to meet any of the
foregoing requirements, shall forthwith cease to be an Eligible Receivable.
Environmental Claims means all claims, however asserted, by any
governmental, regulatory or judicial authority or other Person alleging
potential liability or responsibility for violation of any Environmental Law, or
for release or injury to the environment.
Environmental Laws means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any governmental authority, in each case
relating to environmental matters.
Equipment has the meaning assigned to such term in the Security
Agreement.
Equipment Value means (A) with respect to Existing Equipment, on the
Effective Date the Initial Equipment Value, and at any time thereafter the
Initial Equipment Value reduced by the product of 1.19% multiplied by the number
of full calendar months that have elapsed since the Effective Date; and (B) with
respect to any Acquired Equipment, Purchased Equipment or capital improvements
to Eligible Equipment, on the date such equipment or improvement is acquired or
purchased, the Initial Equipment Value, and at any time thereafter the Initial
Equipment Value reduced by the product of 1.19% multiplied by the number of full
calendar months that have elapsed since the date of acquisition of such
equipment or improvement. In no event shall the Specified Percentage for any
Equipment be less than zero.
ERISA means the Employee Retirement Income Security Act of 1974.
References to sections of ERISA also refer to any successor sections.
Eurocurrency Reserve Percentage means, with respect to any Eurodollar
Loan for any Interest Period, a percentage (expressed as a decimal) equal to the
daily average during such Interest Period of the percentage in effect on each
day of such Interest Period, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor), for determining the aggregate
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maximum reserve requirements applicable to "Eurocurrency Liabilities" pursuant
to Regulation D or any other then applicable regulation of such Board of
Governors which prescribes reserve requirements applicable to "Eurocurrency
Liabilities" as presently defined in Regulation D.
Eurodollar Loan means any Loan which bears interest at a rate
determined by reference to the Eurodollar Rate (Reserve Adjusted).
Eurodollar Margin - see Schedule 1.1A.
Eurodollar Office means with respect to any Bank the office or
offices of such Bank which shall be making or maintaining the Eurodollar Loans
of such Bank hereunder or such other office or offices through which such Bank
determines its Eurodollar Rate. A Eurodollar Office of any Bank may be, at the
option of such Bank, either a domestic or foreign office.
Eurodollar Rate means, with respect to any Eurodollar Loan for any
Interest Period, the rate per annum at which Dollar deposits in immediately
available funds are offered to the Eurodollar Office of BofA two Business Days
prior to the beginning of such Interest Period by major banks in the interbank
eurodollar market as at or about 10:00 A.M., Chicago time, for delivery on the
first day of such Interest Period, for the number of days comprised therein and
in an amount equal or comparable to the amount of the Eurodollar Loan of BofA
for such Interest Period.
Eurodollar Rate (Reserve Adjusted) means, with respect to any
Eurodollar Loan for any Interest Period, a rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined pursuant to the following
formula:
Eurodollar Rate = Eurodollar Rate
(Reserve Adjusted) ---------------
1-Eurocurrency
Reserve Percentage
Event of Default means any of the events described in Section 12.1.
Existing Equipment means Eligible Equipment owned by the Company or
any Subsidiary on the Effective Date.
Existing Letters of Credit means the letters of credit listed on
Schedule 2.1.2.
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Federal Funds Rate means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including any
such successor publication, "H.15(519)") on the preceding Business Day opposite
the caption "Federal Funds (Effective)"; or, if for any relevant day such rate
is not so published on any such preceding Business Day, the rate for such day
will be the arithmetic mean as determined by the Agent of the rates for the last
transaction in overnight Federal funds arranged prior to 9:00 a.m. (New York
City time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Agent.
Financial Letter of Credit means any Letter of Credit determined by
the applicable Issuing Bank to be a "financial guaranty-type Standby Letter of
Credit" as defined in footnote 13 to Appendix A to the Risk Based Capital
Guidelines issued by the Comptroller of the Currency (or in any successor
regulation, guideline or ruling by any applicable banking regulatory authority).
Fiscal Quarter means a fiscal quarter of a Fiscal Year.
Fiscal Year means the fiscal year of the Company and its
Subsidiaries, which period shall be the 12-month period ending on December 31 of
each year. References to a Fiscal Year with a number corresponding to any
calendar year (e.g., "Fiscal Year 1997") refer to the Fiscal Year ending on
December 31 of such calendar year.
Floating Rate Loan means any Loan which bears interest at or by
reference to the Base Rate.
Floating Rate Margin - see Schedule 1.1A.
Founding Companies means Northland Auto Transporters, Inc., Northland
Fleet Leasing Company, Falcon Towing & Auto Delivery, Inc., Xxxxx Auto Works,
Inc., Xxxxx Auto Brokers, Inc., Xxxxx- Xxxxxxxxxxx Enterprises, Inc., ASC
Transportation Services, Auto Service Corporation, Absolute Towing and
Transporting, Inc. and Silver State Tow & Recovery, Inc.
Founding Companies Acquisition means the acquisition of the Founding
Companies by the Company pursuant to the Founding Companies Acquisition
Documents.
Founding Companies Acquisition Documents means each Agreement and
Plan of Reorganization entered into by the Company
9
with each Founding Company, including all schedules and exhibits thereto, and
all other documents executed in connection with such Agreements and Plans of
Reorganization.
Funded Debt means all Debt of the Company and its Subsidiaries,
excluding (i) contingent obligations in respect of undrawn letters of credit and
Suretyship Liabilities (except, in each case, to the extent constituting
Suretyship Liabilities in respect of Debt of a Person other than the Company or
any Subsidiary), (ii) Hedging Obligations and (iii) Debt of the Company to
Subsidiaries and Debt of Subsidiaries to the Company or to other Subsidiaries.
Funded Debt to EBITDA Ratio means, as of the last day of any Fiscal
Quarter, the ratio of (i) Funded Debt as of the last day of such Fiscal Quarter
to (ii) EBITDA for the Computation Period ending on the last day of such Fiscal
Quarter.
GAAP means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
Group - see Section 2.2.1.
Guarantor means, on any day, each Subsidiary that has executed a
counterpart of the Guaranty on or prior to that day (or is required to execute a
counterpart of the Guaranty on that date).
Guaranty means a guaranty substantially in the form of Exhibit C.
Hazardous Substances - see Section 9.15.
Hedging Obligations means, with respect to any Person, all
liabilities of such Person under interest rate, currency and commodity swap
agreements, cap agreements and collar agreements, and all other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates, currency exchange rates or commodity prices.
Initial Equipment Value means (A) with respect to Existing Equipment
or Acquired Equipment, the value of such equipment as
10
determined from time to time as requested by the Agent in an analysis by
Winternitz, Inc. ("Winternitz") or another appraisal firm acceptable to the
Required Banks; and (B) with respect to Purchased Equipment or capital
improvements to Eligible Equipment, the cost of such equipment or improvement as
evidenced by an invoice or other documentation acceptable to the Agent or as
determined from time to time as requested by the Agent in an appraisal by an
appraisal firm acceptable to the Required Banks, it being understood that such
invoice or other documentation need not be provided unless requested by the
Agent and that capital improvements to Eligible Equipment shall only be included
upon the earlier of (Y) an aggregate of $100,000 being spent by the Company and
its Subsidiaries on capital improvements to Eligible Equipment since the last
date reported and (Z) the end of a Fiscal Quarter. The Initial Equipment Value
for Purchased Equipment may be increased to reflect purchases by the Company or
any Subsidiary of Eligible Equipment only at such times as the Company delivers
monthly borrowing base certificates pursuant to Section 10.1.4.
Interest Expense means for any period the consolidated interest
expense of the Company and its Subsidiaries for such period (including all
imputed interest on Capital Leases and before giving effect to any
capitalization of interest but excluding amortization of deferred financing
costs).
Interest Period means, as to any Eurodollar Loan, the period
commencing on the date such Loan is borrowed or continued as, or converted into,
a Eurodollar Loan and ending on the date one, two, three or six months
thereafter as selected by the Company pursuant to Section 2.2.2 or 2.2.3, as the
case may be; provided that:
(i) if any Interest Period would otherwise end on a day
that is not a Business Day, such Interest Period shall be extended to
the following Business Day unless the result of such extension would
be to carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the preceding Business
Day;
(ii) any Interest Period that begins on a day for which
there is no numerically corresponding day in the calendar month at
the end of such Interest Period shall end on the last Business Day of
the calendar month at the end of such Interest Period; and
(iii) the Company may not select any Interest Period which
would extend beyond the scheduled Termination Date.
11
Inventory means, at any time with respect to any Person, any goods
held for sale, or furnished or to be furnished by such Person under any contract
of service, or held by such Person as raw materials, work in process or
materials used or consumed in a business.
Investment means, relative to any Person, (a) any loan or advance
made by such Person to any other Person (excluding any commission, travel or
similar advances made to directors, officers and employees of the Company or any
of its Subsidiaries), (b) any Suretyship Liability of such Person, (c) any
ownership or similar interest held by such Person in any other Person and (d)
deposits and the like relating to prospective acquisitions of businesses.
Issuing Bank means BofA in its capacity as an issuer of Letters of
Credit hereunder and any other Bank which, with the written consent of the
Company and the Agent, is the issuer of one or more Letters of Credit hereunder.
Keystone means Keystone Towing, Inc.
L/C Application means, with respect to any request for the issuance
of a Letter of Credit, a letter of credit application in the form being used by
the applicable Issuing Bank at the time of such request for the type of letter
of credit requested.
L/C Commitment means the commitment of the Issuing Bank to issue, and
of each Bank to participate in, Letters of Credit pursuant to Section 2.1.2.
Letter of Credit - see Section 2.1.2.
Lien means, with respect to any Person, any interest granted by such
Person in any real or personal property, asset or other right owned or being
purchased or acquired by such Person which secures payment or performance of any
obligation and shall include any mortgage, lien, encumbrance, charge or other
security interest of any kind, whether arising by contract, as a matter of law,
by judicial process or otherwise.
Loan Commitment means the commitment of the Banks to make Loans
pursuant to Section 2.1.1.
Loan Documents means this Agreement, the Notes, the Guaranty, the L/C
Applications and the Collateral Documents.
Loans - see Section 2.1.1.
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Margin Stock means any "margin stock" as defined in Regulation U of
the Board of Governors of the Federal Reserve System.
Material Adverse Effect means (a) a material adverse change in, or a
material adverse effect upon, the financial condition, operations, assets,
business, properties or prospects of the Company and its Subsidiaries taken as a
whole, or (b) a material adverse effect upon any substantial portion of the
collateral under the Collateral Documents or upon the legality, validity,
binding effect or enforceability against the Company or any Guarantor of any
Loan Document.
Multiemployer Pension Plan means a multiemployer plan, as such term
is defined in Section 4001(a)(3) of ERISA, and to which the Company or any
member of the Controlled Group may have any liability.
Net Worth means the Company's consolidated stockholders' equity
(including preferred stock accounts).
Non-Financial Letter of Credit means any Letter of Credit other than
a Financial Letter of Credit.
Note - see Section 3.1.
Notice of Borrowing means a notice substantially in the Form of
Exhibit I.
Notice of Conversion/Continuation means a notice substantially in the
form of Exhibit J.
Operating Lease means any lease of (or other agreement conveying the
right to use) any real or personal property by the Company or any Subsidiary, as
lessee, other than any Capital Lease.
PBGC means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
Pension Plan means a "pension plan", as such term is defined in
Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
Multiemployer Pension Plan), and to which the Company or any member of the
Controlled Group may have any liability, including any liability by reason of
having been a substantial employer within the meaning of Section 4063 of ERISA
at any time during the preceding five years, or by reason of
13
being deemed to be a contributing sponsor under Section 4069 of ERISA.
Percentage means, with respect to any Bank, the percentage specified
opposite such Bank's name on Schedule 2.1 hereto, reduced (or increased) by
subsequent assignments pursuant to Section 14.9.1.
Person means any natural person, corporation, partnership, trust,
limited liability company, association, governmental authority or unit, or any
other entity, whether acting in an individual, fiduciary or other capacity.
Purchased Equipment means Eligible Equipment purchased or otherwise
acquired by the Company or any Subsidiary (other than as a result of an
acquisition permitted by Section 10.10) after the Effective Date or, with
respect to the Founding Companies, after the date of the appraisal performed by
Winternitz.
RCRA - see Section 9.15.
Receivable means, with respect to any Person, any right of such
Person to payment for goods sold or services rendered.
Reference Rate means, for any day, the rate of interest in effect for
such day as publicly announced from time to time by BofA in San Francisco,
California, as its "reference rate." (The "reference rate" is a rate set by BofA
based upon various factors, including BofA's costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced
rate.) Any change in the reference rate announced by BofA shall take effect at
the opening of business on the day specified in the public announcement of such
change.
Release has the meaning specified in CERCLA and the term "Disposal"
(or "Disposed") has the meaning specified in RCRA; provided that in the event
either CERCLA or RCRA is amended so as to broaden the meaning of any term
defined thereby, such broader meaning shall apply as of the effective date of
such amendment; and provided, further, that to the extent that the laws of a
state wherein any affected property lies establish a meaning for "Release" or
"Disposal" which is broader than is specified in either CERCLA or RCRA, such
broader meaning shall apply.
Rental Expense means for any period the consolidated rental expense
of the Company and its Subsidiaries for such period.
14
Required Banks means Banks having Percentages aggregating 66-2/3% or
more.
SEC means the Securities and Exchange Commission.
Security Agreement means a Security Agreement substantially in the
form of Exhibit D.
Senior Debt means all Debt of the Company and its Subsidiaries other
than Subordinated Debt.
Stated Amount means, with respect to any Letter of Credit at any date
of determination, the maximum aggregate amount available for drawing thereunder
at any time during the then ensuing term of such Letter of Credit under any and
all circumstances, plus the aggregate amount of all unreimbursed payments and
disbursements under such Letter of Credit.
Subordinated Debt means any unsecured indebtedness of the Company
which (x) is owed to Persons other than officers, employees, directors or
Affiliates of the Company, (y) has no amortization prior to December 31, 2001
and (z) has subordination terms, covenants, pricing and other terms applicable
to such indebtedness which have been approved in writing by the Required Banks.
Subsidiary means, with respect to any Person, a corporation of which
such Person and/or its other Subsidiaries own, directly or indirectly, such
number of outstanding shares as have more than 50% of the ordinary voting power
for the election of directors. Unless the context otherwise requires, each
reference to Subsidiaries herein shall be a reference to Subsidiaries of the
Company.
Subsidiary Pledge Agreement means each pledge agreement substantially
in the form of Exhibit F issued by any Subsidiary, whether pursuant to Section
11.1.7 or Section 10.14.
Suretyship Liability means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to or otherwise to invest in a
debtor, or otherwise to assure a creditor against loss) any indebtedness,
obligation or other liability of any other Person (other than by endorsements of
instruments in the course of collection), or guarantees the payment of dividends
or other distributions upon the shares of any other Person. The amount of any
Person's
15
obligation in respect of any Suretyship Liability shall (subject to any
limitation set forth therein) be deemed to be the principal amount of the debt,
obligation or other liability supported thereby.
Termination Date means the earlier to occur of (a) April 30, 2001, or
such later date to which the Termination Date may be extended at the request of
the Company and with the consent of each Bank or (b) such other date on which
the Commitments shall terminate pursuant to Section 6 or 12.
Type of Loan or Borrowing - see Section 2.2.1. The types of Loans or
borrowings under this Agreement are as follows: Floating Rate Loans or
borrowings and Eurodollar Loans or borrowings.
Unmatured Event of Default means any event that, if it continues
uncured, will, with lapse of time or notice or both, constitute an Event of
Default.
Welfare Plan means a "welfare plan", as such term is defined in
Section 3(1) of ERISA.
1.2 Other Interpretive Provisions. (a) The meanings of
defined terms are equally applicable to the singular and plural forms of the
defined terms.
(b) Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) (i) The term "including" is not limiting and means
"including without limitation."
(ii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from
and including"; the words "to" and "until" each mean "to but
excluding", and the word "through" means "to and including."
(d) Unless otherwise expressly provided herein, (i)
references to agreements (including this Agreement) and other contractual
instruments shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document, and (ii)
references to any statute or regulation are to be construed as including all
statutory and regulatory provisions consolidating, amending,
16
replacing, supplementing or interpreting such statute or regulation.
(e) This Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.
(f) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, the Company,
the Banks and the other parties thereto and are the products of all parties.
Accordingly, they shall not be construed against the Agent or the Banks merely
because of the Agent's or Banks' involvement in their preparation.
SECTION 2 COMMITMENTS OF THE BANKS; LETTER OF CREDIT,
BORROWING, CONVERSION AND CONTINUATION PROCEDURES.
2.1 Commitments. On and subject to the terms and conditions of this
Agreement, each of the Banks, severally and for itself alone, agrees to make
loans to, and to issue or participate in the issuance of letters of credit for
the account of, the Company as follows:
2.1.1 Loan Commitment. Each Bank will make loans on a revolving basis
("Loans") from time to time before the Termination Date in such Bank's
Percentage of such aggregate amounts as the Company may from time to time
request from all Banks; provided that the sum of (x) the aggregate outstanding
principal amount of all Loans plus (y) the aggregate Stated Amount of all
Letters of Credit shall not at any time exceed the lesser of (a) $50,000,000, as
such amount may be reduced from time to time pursuant to Section 6.1 (as so
reduced, the "Commitment Amount"), or (b) the Borrowing Base.
2.1.2 L/C Commitment. (a) The Issuing Banks will issue standby
letters of credit, in each case containing such terms and conditions as are
permitted by this Agreement and are reasonably satisfactory to the applicable
Issuing Bank (each, a "Letter of Credit" and, together with the Existing Letters
of Credit, the "Letters of Credit"), at the request of and for the account of
the Company or any Subsidiary from time to time before the Termination Date and
(b) as more fully set forth in Section 2.3.5, each Bank agrees to purchase a
participation in each such Letter of Credit; provided that the proposed Letter
of Credit shall not cause the aggregate Stated Amount of all Letters
17
of Credit at any time to exceed the lesser of (i) $1,000,000 and (ii) the
excess, if any, of the Commitment Amount over the sum of the aggregate principal
amount of all outstanding Loans plus the aggregate Stated Amount of all Letters
of Credit.
2.2 Loan Procedures.
2.2.1 Various Types of Loans. Each Loan shall be either a Floating
Rate Loan or a Eurodollar Loan (each a "type" of Loan), as the Company shall
specify in the related notice of borrowing or conversion pursuant to Section
2.2.2 or 2.2.3. Eurodollar Loans having the same Interest Period are sometimes
called a "Group" or collectively "Groups". Floating Rate Loans and Eurodollar
Loans may be outstanding at the same time, provided that (i) not more than seven
different Groups of Loans shall be outstanding at any one time and (ii) the
aggregate principal amount of each Group of Eurodollar Loans shall at all times
be at least $1,000,000 and an integral multiple of $100,000. All borrowings,
conversions and repayments of Loans shall be effected so that each Bank will
have a pro rata share (according to its Percentage) of all types and Groups of
Loans.
2.2.2 Borrowing Procedures. The Company shall give written notice
pursuant to a Notice of Borrowing or telephonic notice (followed immediately by
written confirmation thereof pursuant to a Notice of Borrowing) to the Agent of
each proposed borrowing not later than (a) in the case of a Floating Rate
borrowing, 10:00 A.M., Chicago time, on the proposed date of such borrowing, and
(b) in the case of a Eurodollar borrowing, 10:00 A.M., Chicago time, at least
three Business Days prior to the proposed date of such borrowing. Each such
notice shall be effective upon receipt by the Agent, shall be irrevocable, and
shall specify the date, amount and type of borrowing and, in the case of a
Eurodollar borrowing, the initial Interest Period therefor. Promptly upon
receipt of such notice, the Agent shall advise each Bank thereof. Not later than
1:00 p.m., Chicago time, on the date of a proposed borrowing, each Bank shall
provide the Agent at the office specified by the Agent with immediately
available funds covering such Bank's Percentage of such borrowing and, so long
as the Agent has not received written notice that the conditions precedent set
forth in Section 11 with respect to such borrowing have not been satisfied (and
does not have knowledge of any default in the payment of any principal, interest
or fees to be paid to the Agent for the account of the Banks), the Agent shall
pay over the requested amount to the Company on the requested borrowing date.
Each borrowing shall be on a Business Day. Each Floating Rate borrowing shall be
in an aggregate amount of at least $500,000 and an integral multiple of
$100,000.
18
2.2.3 Conversion and Continuation Procedures. (a) Subject to Section
2.2.1, the Company may, upon irrevocable written notice to the Agent in
accordance with clause (b) below:
(i) elect, as of any Business Day, to convert any
Loans (or any part thereof in an aggregate amount not less
than $1,000,000 or a higher integral multiple of $100,000)
into Loans of the other type; or
(ii) elect, as of the last day of the applicable
Interest Period, to continue any Eurodollar Loans having
Interest Periods expiring on such day (or any part thereof
in an aggregate amount not less than $1,000,000 or a higher
integral multiple of $100,000)
for a new Interest Period.
(b) The Company shall give written notice pursuant to
a Notice of Conversion/Continuation or telephonic notice (followed immediately
by written confirmation thereof pursuant to a Notice of Conversion/Continuation)
to the Agent of each proposed conversion or continuation not later than (i) in
the case of conversion into Base Rate Loans, 10:00 A.M., Chicago time, on the
proposed date of such conversion; and (ii) in the case of conversion into or
continuation of Eurodollar Loans, 10:00 A.M., Chicago time, at least three
Business Days prior to the proposed date of such conversion or continuation,
specifying in each case:
(i) the proposed date of conversion or
continuation;
(ii) the aggregate amount of Loans to be
converted or continued;
(iii) the type of Loans resulting from the
proposed conversion or continuation; and
(iv) in the case of conversion into, or
continuation of, Eurodollar Loans, the duration of the
requested Interest Period therefor.
(c) If upon the expiration of any Interest Period
applicable to Eurodollar Loans, the Company has failed to select timely a new
Interest Period to be applicable to such Eurodollar Loans, the Company shall be
deemed to have elected to convert such Eurodollar Loans into Base Rate Loans
effective on the last day of such Interest Period.
19
(d) The Agent will promptly notify each Bank of its receipt of
a notice of conversion or continuation pursuant to this Section 2.2.3 or, if no
timely notice is provided by the Company, of the details of any automatic
conversion.
(e) Any conversion of a Eurodollar Loan on a day other than the
last day of an Interest Period therefor shall be subject to Section 8.4.
2.3 Letter of Credit Procedures.
2.3.1 L/C Applications. The Company shall give notice to the Agent
and the applicable Issuing Bank of the proposed issuance of each Letter of
Credit on a Business Day which is at least three Business Days (or such lesser
number of days as the Agent and such Issuing Bank shall agree in any particular
instance) prior to the proposed date of issuance of such Letter of Credit. Each
such notice shall be accompanied by an L/C Application, duly executed by the
Company (together with any Subsidiary for the account of which the related
Letter of Credit is to be issued) and in all respects satisfactory to the Agent
and the applicable Issuing Bank, together with such other documentation as the
Agent or such Issuing Bank may request in support thereof, it being understood
that each L/C Application shall specify, among other things, the date on which
the proposed Letter of Credit is to be issued, the expiration date of such
Letter of Credit (which shall not be later than the Termination Date) and
whether such Letter of Credit is to be transferable in whole or in part. So long
as the applicable Issuing Bank has not received written notice that the
conditions precedent set forth in Section 11 with respect to the issuance of
such Letter of Credit have not been satisfied, such Issuing Bank shall issue
such Letter of Credit on the requested issuance date. Each Issuing Bank shall
promptly advise the Agent of the issuance of each Letter of Credit by such
Issuing Bank and of any amendment thereto, extension thereof or event or
circumstance changing the amount available for drawing thereunder.
2.3.2 Participation in Letters of Credit. Concurrently with the
issuance of each Letter of Credit (and with respect to each Existing Letter of
Credit, on the Effective Date), the applicable Issuing Bank shall be deemed to
have sold and transferred to each other Bank, and each other Bank shall be
deemed irrevocably and unconditionally to have purchased and received from such
Issuing Bank, without recourse or warranty, an undivided interest and
participation, to the extent of such other Bank's Percentage, in such Letter of
Credit and the Company's reimbursement obligations with respect thereto. For the
purposes
20
of this Agreement, the unparticipated portion of each Letter of Credit
shall be deemed to be the applicable Issuing Bank's "participation" therein.
Each Issuing Bank hereby agrees, upon request of the Agent or any Bank, to
deliver to such Bank a list of all outstanding Letters of Credit issued by such
Issuing Bank, together with such information related thereto as such Bank may
reasonably request.
2.3.3 Reimbursement Obligations. The Company hereby unconditionally
and irrevocably agrees to reimburse the applicable Issuing Bank for each payment
or disbursement made by such Issuing Bank under any Letter of Credit honoring
any demand for payment made by the beneficiary thereunder, in each case on the
date that such payment or disbursement is made. Any amount not reimbursed on the
date of such payment or disbursement shall bear interest from the date of such
payment or disbursement to the date that such Issuing Bank is reimbursed by the
Company therefor, payable on demand, at a rate per annum equal to the Base Rate
from time to time in effect plus the Floating Rate Margin from time to time in
effect plus, beginning on the three Business Day after receipt of notice from
the Issuing Bank of such payment or disbursement, 2%. The applicable Issuing
Bank shall notify the Company and the Agent whenever any demand for payment is
made under any Letter of Credit by the beneficiary thereunder; provided,
however, that the failure of such Issuing Bank to so notify the Company shall
not affect the rights of such Issuing Bank or the Banks in any manner
whatsoever.
2.3.4 Limitation on Obligations of Issuing Banks. In determining
whether to pay under any Letter of Credit, no Issuing Bank shall have any
obligation to the Company or any Bank other than to confirm that any documents
required to be delivered under such Letter of Credit appear to have been
delivered and appear to comply on their face with the requirements of such
Letter of Credit. Any action taken or omitted to be taken by an Issuing Bank
under or in connection with any Letter of Credit, if taken or omitted in the
absence of gross negligence and willful misconduct, shall not impose upon such
Issuing Bank any liability to the Company or any Bank and shall not reduce or
impair the Company's reimbursement obligations set forth in Section 2.3.3 or the
obligations of the Banks pursuant to Section 2.3.5.
2.3.5 Funding by Banks to Issuing Banks. If an Issuing Bank makes any
payment or disbursement under any Letter of Credit and the Company has not
reimbursed such Issuing Bank in full for such payment or disbursement by 11:00
A.M., Chicago time, on the date of such payment or disbursement, or if any
reimbursement received by such Issuing Bank from the Company is or must be
21
returned or rescinded upon or during any bankruptcy or reorganization of the
Company or otherwise, each other Bank shall be obligated to pay to the Agent for
the account of such Issuing Bank, in full or partial payment of the purchase
price of its participation in such Letter of Credit, its pro rata share
(according to its Percentage) of such payment or disbursement (but no such
payment shall diminish the obligations of the Company under Section 2.3.3), and
upon notice from the applicable Issuing Bank, the Agent shall promptly notify
each other Bank thereof. Each other Bank irrevocably and unconditionally agrees
to so pay to the Agent in immediately available funds for the applicable Issuing
Bank's account the amount of such other Bank's Percentage of such payment or
disbursement. If and to the extent any Bank shall not have made such amount
available to the Agent by 2:00 P.M., Chicago time, on the Business Day on which
such Bank receives notice from the Agent of such payment or disbursement (it
being understood that any such notice received after noon, Chicago time, on any
Business Day shall be deemed to have been received on the next following
Business Day), such Bank agrees to pay interest on such amount to the Agent for
the applicable Issuing Bank's account forthwith on demand for each day from the
date such amount was to have been delivered to the Agent to the date such amount
is paid, at a rate per annum equal to (a) for the first three days after demand,
the Federal Funds Rate from time to time in effect and (b) thereafter, the Base
Rate from time to time in effect. Any Bank's failure to make available to the
Agent its Percentage of any such payment or disbursement shall not relieve any
other Bank of its obligation hereunder to make available to the Agent such other
Bank's Percentage of such payment, but no Bank shall be responsible for the
failure of any other Bank to make available to the Agent such other Bank's
Percentage of any such payment or disbursement.
2.4 Commitments Several. The failure of any Bank to make a requested
Loan on any date shall not relieve any other Bank of its obligation to make a
Loan on such date, but no Bank shall be responsible for the failure of any other
Bank to make any Loan to be made by such other Bank.
2.5 Certain Conditions. Notwithstanding any other provision of this
Agreement, no Bank shall have an obligation to make any Loan, or to permit the
continuation of or any conversion into any Eurodollar Loan, and no Issuing Bank
shall have any obligation to issue any Letter of Credit, if an Event of Default
or Unmatured Event of Default exists.
SECTION 3 NOTES EVIDENCING LOANS.
22
3.1 Notes. The Loans of each Bank shall be evidenced by a promissory
note (each a "Note") substantially in the form set forth in Exhibit A, with
appropriate insertions, payable to the order of such Bank in an amount equal to
such Bank's Percentage of the Loan Commitment (or, if less, in the aggregate
unpaid principal amount of such Bank's Loans).
3.2 Recordkeeping. Each Bank shall record in its records, or at its
option on the schedule attached to its Note, the date and amount of each Loan
made by such Bank, each repayment or conversion thereof and, in the case of each
Eurodollar Loan, the dates on which each Interest Period for such Loan shall
begin and end. The aggregate unpaid principal amount so recorded shall be
rebuttable presumptive evidence of the principal amount owing and unpaid on such
Note. The failure to so record any such amount or any error in so recording any
such amount shall not, however, limit or otherwise affect the obligations of the
Company hereunder or under any Note to repay the principal amount of the Loans
evidenced by such Note together with all interest accruing thereon.
SECTION 4 INTEREST.
4.1 Interest Rates. The Company promises to pay interest on the
unpaid principal amount of each Loan for the period commencing on the date of
such Loan until such Loan is paid in full as follows:
(a) at all times while such Loan is a Floating Rate Loan,
at a rate per annum equal to the sum of the Base Rate from time to
time in effect plus the Floating Rate Margin from time to time in
effect; and
(b) at all times while such Loan is a Eurodollar Loan, at a
rate per annum equal to the sum of the Eurodollar Rate (Reserve
Adjusted) applicable to each Interest Period for such Loan plus the
Eurodollar Margin from time to time in effect;
provided, however, that at any time an Event of Default exists, the interest
rate applicable to each Loan shall be increased by 2% (200 basis points per
annum).
4.2 Interest Payment Dates. Accrued interest on each Floating Rate
Loan shall be payable in arrears on the last Business Day of each calendar month
and at maturity. Accrued interest on each Eurodollar Loan shall be payable on
the last day of each Interest Period relating to such Loan (and, in the case
23
of a Eurodollar Loan with a six-month Interest Period, on the three-month
anniversary of the first day of such Interest Period) and at maturity. After
maturity, accrued interest on all Loans shall be payable on demand.
4.3 Setting and Notice of Eurodollar Rates. The applicable Eurodollar
Rate for each Interest Period shall be determined by the Agent, and notice
thereof shall be given by the Agent promptly to the Company and each Bank. Each
determination of the applicable Eurodollar Rate by the Agent shall be conclusive
and binding upon the parties hereto, in the absence of demonstrable error. The
Agent shall, upon written request of the Company or any Bank, deliver to the
Company or such Bank a statement showing the computations used by the Agent in
determining any applicable Eurodollar Rate hereunder.
4.4 Computation of Interest. All determinations of interest for
Floating Rate Loans when the Base Rate is determined by the Reference Rate shall
be made on the basis of a year of 365 or 366 days, as the case may be, and the
actual number of days elapsed. All other computations of interest shall be
computed for the actual number of days elapsed on the basis of a year of 360
days. The applicable interest rate for each Floating Rate Loan shall change
simultaneously with each change in the Base Rate.
SECTION 5 FEES.
5.1 Non-Use Fee. The Company agrees to pay to the Agent for the
account of each Bank a non-use fee, for the period from the Effective Date to
the Termination Date, at the rate per annum in effect from time to time pursuant
to Schedule 1.1A of the daily average of the unused amount of such Bank's
Percentage of the Commitment Amount. For purposes of calculating usage under
this Section, the Commitment Amount shall be deemed used to the extent of the
aggregate principal amount of all outstanding Loans plus the undrawn amount of
all Letters of Credit. Such non-use fee shall be payable in arrears on the last
Business Day of each calendar quarter and on the Termination Date for any period
then ending for which such non-use fee shall not have theretofore been paid. The
non-use fee shall be computed for the actual number of days elapsed on the basis
of a year of 360 days.
5.2 Letter of Credit Fees. (a) The Company agrees to pay to the Agent
for the account of the Banks pro rata according to their respective Percentages
a letter of credit fee for each Letter of Credit in an amount equal to the rate
per annum in effect from time to time pursuant to Schedule 1.1A of the undrawn
24
amount of such Letter of Credit (computed for the actual number of days elapsed
on the basis of a year of 360 days); provided that the rate applicable to each
Letter of Credit shall be increased by 2% (200 basis points per annum)at any
time that an Event of Default exists. Such letter of credit fee shall be payable
in arrears on the last Business Day of each calendar quarter and on the
Termination Date for the period from the date of the issuance of each Letter of
Credit to the date such payment is due or, if earlier, the date on which such
Letter of Credit expired or was terminated.
(b) In addition, with respect to each Letter of Credit, the Company
agrees to pay to the applicable Issuing Bank, for its own account, (i) such fees
and expenses as such Issuing Bank customarily requires in connection with the
issuance, negotiation, processing and/or administration of letters of credit in
similar situations and (ii) a letter of credit fee in the amount separately
agreed to by the Company and such Issuing Bank.
5.3 Arrangement and Agent's Fees. The Company agrees to pay to the
Arranger and the Agent such arrangement and agent's fees as are mutually agreed
to from time to time by the Company and the Agent.
5.4 Closing Fees. On the Effective Date, the Company shall pay to the
Agent for the account of each Bank a closing fee in the amount previously agreed
with such Bank.
SECTION 6 REDUCTION AND TERMINATION OF THE COMMITMENTS;
PREPAYMENTS.
6.1 Reduction or Termination of the Commitments. The Company may from
time to time on at least five Business Days' prior written notice received by
the Agent (which shall promptly advise each Bank thereof) permanently reduce the
Commitment Amount to an amount not less than the sum of the aggregate unpaid
principal amount of the Loans and the aggregate Stated Amount of all Letters of
Credit. Any such reduction shall be in an amount not less than $5,000,000 or a
higher integral multiple of $1,000,000. The Company may at any time on like
notice terminate the Commitments upon payment in full of all Loans and all other
obligations of the Company hereunder and cash collateralization in full,
pursuant to documentation in form and substance reasonably satisfactory to the
Banks, of all obligations arising with respect to the Letters of Credit. All
reductions of the Commitment Amount shall reduce the Commitments pro rata among
the Banks according to their respective Percentages.
25
6.2 Voluntary Prepayments. The Company may from time to time prepay
the Loans in whole or in part, provided that (a) the Company shall give the
Agent (which shall promptly advise each Bank) notice thereof not later than
10:00 A.M. (Chicago time) on the day of such prepayment (which shall be a
Business Day) specifying the Loans to be prepaid and the date and amount of
prepayment,(b) each partial prepayment shall be in a principal amount of at
least $500,000 and an integral multiple of $100,000, or such lesser amount as
may be necessary to prepay in full all Loans outstanding, (c) any prepayment of
a Eurodollar Loan on a day other than the last day of an Interest Period
therefor shall be subject to Section 8.4, and (d) if any prepayment shall result
in the aggregate principal amount of a Group of Eurodollar Loans being less than
$1,000,000, such Eurodollar Loans shall be automatically converted into Floating
Rate Loans.
6.3 Mandatory Prepayments. If at any time (a) the sum of
(i) the aggregate principal amount of all outstanding Loans plus
(ii) the Stated Amount of all outstanding Letters of Credit exceeds (b) the
Borrowing Base, the Company will make an immediate repayment of Loans in an
amount equal to such excess (rounded upward, if necessary, to an integral
multiple of $100,000).
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.
7.1 Making of Payments. All payments of principal of or interest on
the Notes, and of all non-use fees and Letter of Credit fees, shall be made by
the Company to the Agent in immediately available funds at the office specified
by the Agent not later than noon, Chicago time, on the date due; and funds
received after that hour shall be deemed to have been received by the Agent on
the next following Business Day. The Agent shall promptly remit to each Bank or
other holder of a Note its share of all such payments received in collected
funds by the Agent for the account of such Bank or holder.
All payments under Section 8.1 shall be made by the Company directly
to the Bank entitled thereto.
7.2 Application of Certain Payments. Each payment of principal shall
be applied to such Loans as the Company shall direct by notice to be received by
the Agent on or before the date of such payment or, in the absence of such
notice, as the Agent shall determine in its discretion. Concurrently with each
remittance to any Bank of its share of any such payment, the
26
Agent shall advise such Bank as to the application of such payment.
7.3 Due Date Extension. If any payment of principal or interest with
respect to any of the Notes, or of non-use fees or Letter of Credit fees, falls
due on a day which is not a Business Day, then such due date shall be extended
to the immediately following Business Day (unless, in the case of a Eurodollar
Loan, such immediately following Business Day is the first Business Day of a
calendar month, in which case such date shall be the immediately preceding
Business Day) and, in the case of principal, additional interest shall accrue
and be payable for the period of any such extension.
7.4 Setoff. The Company agrees that the Agent and each Bank have all
rights of set-off and bankers' lien provided by applicable law, and in addition
thereto, the Company agrees that at any time any Event of Default exists, the
Agent and each Bank may apply to the payment of any obligations of the Company
hereunder, whether or not then due, any and all balances, credits, deposits,
accounts or moneys of the Company then or thereafter with the Agent or such
Bank.
7.5 Proration of Payments. If any Bank shall obtain any payment or
other recovery (whether voluntary, involuntary, by application of offset or
otherwise) on account of principal of or interest on any Note (or on account of
its participation in any Letter of Credit) in excess of its pro rata share of
payments and other recoveries obtained by all Banks on account of principal of
and interest on Notes (or such participation) then held by them, such Bank shall
purchase from the other Banks such participation in the Notes (or
sub-participation in Letters of Credit) held by them as shall be necessary to
cause such purchasing Bank to share the excess payment or other recovery ratably
with each of them; provided, however, that if all or any portion of the excess
payment or other recovery is thereafter recovered from such purchasing Bank, the
purchase shall be rescinded and the purchase price restored to the extent of
such recovery.
7.6 Taxes. All payments of principal of, and interest on, the Loans
and all other amounts payable hereunder shall be made free and clear of and
without deduction for any present or future income, excise, stamp or franchise
taxes and other taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing authority, but excluding franchise taxes and
taxes imposed on or measured by any Bank's net income or receipts (all
non-excluded items being called "Taxes"). If any withholding or deduction from
any payment to be made by the
27
Company hereunder is required in respect of any Taxes pursuant to any applicable
law, rule or regulation, then the Company will:
(a) pay directly to the relevant authority the full
amount required to be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or
other documentation satisfactory to the Agent evidencing such payment
to such authority; and
(c) pay to the Agent for the account of the Banks such
additional amount or amounts as is necessary to ensure that the net
amount actually received by each Bank will equal the full amount such
Bank would have received had no such withholding or deduction been
required.
Moreover, if any Taxes are directly asserted against the Agent or any Bank with
respect to any payment received by the Agent or such Bank hereunder, the Agent
or such Bank may pay such Taxes and the Company will promptly pay such
additional amounts (including any penalty, interest and expense) as is necessary
in order that the net amount received by such Person after the payment of such
Taxes (including any Taxes on such additional amount) shall equal the amount
such Person would have received had such Taxes not been asserted.
If the Company fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Agent, for the account of the
respective Banks, the required receipts or other required documentary evidence,
the Company shall indemnify the Banks for any incremental Taxes, interest or
penalties that may become payable by any Bank as a result of any such failure.
For purposes of this Section 7.6, a distribution hereunder by the Agent or any
Bank to or for the account of any Bank shall be deemed a payment by the Company.
Upon the request from time to time of the Company or the Agent, each
Bank that is organized under the laws of a jurisdiction other than the United
States of America shall execute and deliver to the Company and the Agent one or
more (as the Company or the Agent may reasonably request) United States Internal
Revenue Service Forms 4224 or Forms 1001 or such other forms or documents,
appropriately completed, as may be applicable to establish the extent, if any,
to which a payment to such Bank is exempt from withholding or deduction of
Taxes.
The obligations of the Company under this Section 7.6 are subject to
the limitation set out in Section 14.9.1.
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SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR
EURODOLLAR LOANS.
8.1 Increased Costs. (a) If, after the date hereof, the adoption of
any applicable law, rule or regulation, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or any Eurodollar Office of
such Bank) with any request or directive (whether or not having the force of
law) of any such authority, central bank or comparable agency
(A) shall subject any Bank (or any Eurodollar Office of
such Bank) to any tax, duty or other charge with respect to its
Eurodollar Loans, its Note or its obligation to make Eurodollar
Loans, or shall change the basis of taxation of payments to any Bank
of the principal of or interest on its Eurodollar Loans or any other
amounts due under this Agreement in respect of its Eurodollar Loans
or its obligation to make Eurodollar Loans (except for changes in the
rate of tax on the overall net income of such Bank or its Eurodollar
Office imposed by the jurisdiction in which such Bank's principal
executive office or Eurodollar Office is located); or
(B) shall impose, modify or deem applicable any reserve
(including any reserve imposed by the Board of Governors of the
Federal Reserve System, but excluding any reserve included in the
determination of interest rates pursuant to Section 4), special
deposit or similar requirement against assets of, deposits with or
for the account of, or credit extended by any Bank (or any Eurodollar
Office of such Bank); or
(C) shall impose on any Bank (or its Eurodollar Office) any
other condition affecting its Eurodollar Loans, its Note or its
obligation to make Eurodollar Loans;
and the result of any of the foregoing is to increase the cost to (or in the
case of Regulation D of the Board of Governors of the Federal Reserve System, to
impose a cost on) such Bank (or any Eurodollar Office of such Bank) of making or
maintaining any Eurodollar Loan, or to reduce the amount of any sum received or
receivable by such Bank (or its Eurodollar Office) under this Agreement or under
its Note with respect to any Eurodollar Loan, then within 10 days after demand
by such Bank (which demand shall be accompanied by a statement setting forth the
basis for such demand and a calculation of the amount thereof in reasonable
29
detail, a copy of which shall be furnished to the Agent), the Company shall pay
directly to such Bank such additional amount as will compensate such Bank for
such increased cost or such reduction.
(b) If any Bank shall reasonably determine that the adoption or
phase-in of any applicable law, rule or regulation regarding capital adequacy,
or any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Bank or
any Person controlling such Bank with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Bank's or such controlling Person's capital as a consequence of
such Bank's obligations hereunder (including such Bank's obligations under the
Loan Commitment or the L/C Commitment) or under any Letter of Credit to a level
below that which such Bank or such controlling Person could have achieved but
for such adoption, change or compliance (taking into consideration such Bank's
or such controlling Person's policies with respect to capital adequacy) by an
amount deemed by such Bank or such controlling Person to be material, then from
time to time, within 10 days after demand by such Bank (which demand shall be
accompanied by a statement setting forth the basis for such demand and a
calculation of the amount thereof in reasonable detail, a copy of which shall be
furnished to the Agent), the Company shall pay to such Bank such additional
amount or amounts as will compensate such Bank or such controlling Person for
such reduction.
8.2 Basis for Determining Interest Rate Inadequate or
Unfair. If with respect to any Interest Period:
(a) deposits in Dollars (in the applicable amounts) are not
being offered to the Agent in the interbank eurodollar market for
such Interest Period, or the Agent otherwise reasonably determines
(which determination, if made in good faith, shall be binding and
conclusive on the Company) that by reason of circumstances affecting
the interbank eurodollar market adequate and reasonable means do not
exist for ascertaining the applicable Eurodollar Rate; or
(b) Banks having an aggregate Percentage of 40% or more
advise the Agent that the Eurodollar Rate (Reserve Adjusted) as
determined by the Agent will not adequately and
30
fairly reflect the cost to such Banks of maintaining or funding such
Loans for such Interest Period (taking into account any amount to
which such Banks may be entitled under Section 8.1) or that the
making or funding of Eurodollar Loans has become impracticable as a
result of an event occurring after the date of this Agreement which
in the opinion of such Banks materially affects such Loans;
then the Agent shall promptly notify the other parties thereof and, so long as
such circumstances shall continue, (i) no Bank shall be under any obligation to
make or convert into Eurodollar Loans and (ii) on the last day of the current
Interest Period for each Eurodollar Loan, such Loan shall, unless then repaid in
full, automatically convert to a Floating Rate Loan.
8.3 Changes in Law Rendering Eurodollar Loans Unlawful. In
--------------------------------------------------
the event that any change in (including the adoption of any new) applicable laws
or regulations, or any change in the interpretation of applicable laws or
regulations by any governmental or other regulatory body charged with the
administration thereof, should make it (or in the good faith judgment of any
Bank cause a substantial question as to whether it is) unlawful for any Bank to
make, maintain or fund Eurodollar Loans, then such Bank shall promptly notify
each of the other parties hereto and, so long as such circumstances shall
continue, (a) such Bank shall have no obligation to make or convert into
Eurodollar Loans (but shall make Floating Rate Loans concurrently with the
making of or conversion into Eurodollar Loans by the Banks which are not so
affected, in each case in an amount equal to such Bank's pro rata share of all
Eurodollar Loans which would be made or converted into at such time in the
absence of such circumstances) and (b) on the last day of the current Interest
Period for each Eurodollar Loan of such Bank (or, in any event, on such earlier
date as may be required by the relevant law, regulation or interpretation), such
Eurodollar Loan shall, unless then repaid in full, automatically convert to a
Floating Rate Loan. Each Floating Rate Loan made by a Bank which, but for the
circumstances described in the foregoing sentence, would be a Eurodollar Loan
(an "Affected Loan") shall remain outstanding for the same period as the Group
of Eurodollar Loans of which such Affected Loan would be a part absent such
circumstances.
8.4 Funding Losses. The Company hereby agrees that upon demand by any
Bank (which demand shall be accompanied by a statement setting forth the basis
for the amount being claimed, a copy of which shall be furnished to the Agent),
the Company will indemnify such Bank against any net loss or expense which such
Bank may sustain or incur (including any net loss or expense
31
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Bank to fund or maintain any Eurodollar Loan), as reasonably
determined by such Bank, as a result of (a) any payment, prepayment or
conversion of any Eurodollar Loan of such Bank on a date other than the last day
of an Interest Period for such Loan (including any conversion pursuant to
Section 8.3) or (b) any failure of the Company to borrow or convert any Loan on
a date specified therefor in a notice of borrowing or conversion pursuant to
this Agreement. For this purpose, all notices to the Agent pursuant to this
Agreement shall be deemed to be irrevocable.
8.5 Right of Banks to Fund through Other Offices. Each Bank may, if
it so elects, fulfill its commitment as to any Eurodollar Loan by causing a
foreign branch or affiliate of such Bank to make such Loan, provided that in
such event for the purposes of this Agreement such Loan shall be deemed to have
been made by such Bank and the obligation of the Company to repay such Loan
shall nevertheless be to such Bank and shall be deemed held by it, to the extent
of such Loan, for the account of such branch or affiliate.
8.6 Discretion of Banks as to Manner of Funding. Notwithstanding any
provision of this Agreement to the contrary, each Bank shall be entitled to fund
and maintain its funding of all or any part of its Loans in any manner it sees
fit, it being understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if such Bank had actually funded and
maintained each Eurodollar Loan during each Interest Period for such Loan
through the purchase of deposits having a maturity corresponding to such
Interest Period and bearing an interest rate equal to the Eurodollar Rate for
such Interest Period.
8.7 Mitigation of Circumstances; Replacement of Affected Bank. (a)
Each Bank shall promptly notify the Company and the Agent of any event of which
it has knowledge which will result in, and will use reasonable commercial
efforts available to it (and not, in such Bank's good faith judgment, otherwise
disadvantageous to such Bank) to mitigate or avoid, (i) any obligation by the
Company to pay any amount pursuant to Section 7.6 or 8.1 or (ii) the occurrence
of any circumstances of the nature described in Section 8.2 or 8.3 (and, if any
Bank has given notice of any such event described in clause (i) or (ii) above
and thereafter such event ceases to exist, such Bank shall promptly so notify
the Company and the Agent). Without limiting the foregoing, each Bank will
designate a different funding office if such designation will avoid (or reduce
the cost to the
32
Company of) any event described in clause (i) or (ii) of the preceding sentence
and such designation will not, in such Bank's sole judgment, be otherwise
disadvantageous to such Bank.
(b) At any time any Bank is an Affected Bank, the Company may replace
such Affected Bank as a party to this Agreement with one or more other bank(s)
or financial institution(s) reasonably satisfactory to the Agent (and upon
notice from the Company such Affected Bank shall assign pursuant to an
Assignment Agreement, and without recourse or warranty, its Commitment, its
Loans, its Note, its participation in Letters of Credit, and all of its other
rights and obligations hereunder to such replacement bank(s) or other financial
institution(s) for a purchase price equal to the sum of the principal amount of
the Loans so assigned, all accrued and unpaid interest thereon, its ratable
share of all accrued and unpaid non-use fees and Letter of Credit fees, any
amounts payable under Section 8.4 as a result of such Bank receiving payment of
any Eurodollar Loan prior to the end of an Interest Period therefor and all
other obligations owed to such Affected Bank hereunder).
8.8 Conclusiveness of Statements; Survival of Provisions.
Determinations and statements of any Bank pursuant to Section 8.1, 8.2, 8.3 or
8.4 shall be conclusive absent demonstrable error. Banks may use reasonable
averaging and attribution methods in determining compensation under Sections 8.1
and 8.4, and the provisions of such Sections shall survive repayment of the
Loans, cancellation of the Notes, cancellation or expiration of the Letters of
Credit and any termination of this Agreement.
SECTION 9 WARRANTIES.
To induce the Agent and the Banks to enter into this Agreement and to
induce the Banks to make Loans and issue or purchase participations in Letters
of Credit hereunder, the Company warrants to the Agent and the Banks that:
9.1 Organization, etc. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware;
each Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation; and the Company and
each Subsidiary is duly qualified to do business in each jurisdiction where the
nature of its business makes such qualification necessary (except in those
instances in which the failure to be qualified or in good standing does not have
a Material Adverse Effect) and has full power and authority to own its property
and conduct its business as presently conducted by it.
33
9.2 Authorization; No Conflict. The execution and delivery by the
Company of this Agreement and each other Loan Document to which it is a party,
the borrowings hereunder, the execution and delivery by each Guarantor of each
Loan Document to which it is a party and the performance by each of the Company
and each Guarantor of its obligations under each Loan Document to which it is a
party are within the corporate powers of the Company and each Guarantor, have
been duly authorized by all necessary corporate action on the part of the
Company and each Guarantor (including any necessary shareholder action), have
received all necessary governmental approval (if any shall be required), and do
not and will not (a) violate any provision of law or any order, decree or
judgment of any court or other government agency which is binding on the Company
or any Guarantor, (b) contravene or conflict with, or result in a breach of, any
provision of the Certificate of Incorporation, By-Laws or other organizational
documents of the Company or any Guarantor or of any agreement, indenture,
instrument or other document which is binding on the Company, any Guarantor or
any other Subsidiary or (c) result in, or require, the creation or imposition of
any Lien on any property of the Company, any Guarantor or any other Subsidiary
(other than Liens arising under the Loan Documents).
9.3 Validity and Binding Nature. Each of this Agreement and each
other Loan Document to which the Company is a party is the legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms; and each Loan Document to which any Guarantor is a party is, or
upon the execution and delivery thereof by such Guarantor will be, the legal,
valid and binding obligation of such Guarantor, enforceable against such
Guarantor in accordance with its terms.
9.4 Financial Condition. The financial statements of the Company and
its Subsidiaries incorporated in Amendment No. 1 to the form S-1 Registration
Statement filed on April 3, 1998, copies of which have been furnished to each
Bank:
(i) were prepared in accordance with GAAP
consistently applied throughout the periods covered thereby, except
as otherwise expressly noted therein (subject, in the case of the
unaudited financial statements, to the absence of footnotes and to
customary year-end audit adjustments); and
(ii) fairly present in all material respects the
financial condition of the Company and its Subsidiaries as of the
dates thereof and the results of operations for the periods covered
thereby.
34
9.5 No Material Adverse Change. As of the Effective Date, there has
been no material adverse change in the financial condition, operations, assets,
business, properties or prospects of the Company or any Subsidiary since the
date of the applicable financial statements referred to in Section 9.4 and since
the Effective Date there has been no material adverse change in the financial
condition, operations, assets, business, properties or prospects of the Company
and its Subsidiaries taken as a whole.
9.6 Litigation and Contingent Liabilities. No litigation (including
derivative actions), arbitration proceeding, labor controversy or governmental
investigation or proceeding is pending or, to the Company's knowledge,
threatened against the Company or any Subsidiary which might reasonably be
expected to have a Material Adverse Effect, except as set forth in Schedule 9.6.
Other than any liability incident to such litigation or proceedings, neither the
Company nor any Subsidiary has any material contingent liabilities not listed in
such Schedule 9.6.
9.7 Ownership of Properties; Liens. Each of the Company and each
Subsidiary owns good and marketable title to all of its properties and assets,
real and personal, tangible and intangible, of any nature whatsoever (including
patents, trademarks, trade names, service marks and copyrights), free and clear
of all Liens, charges and material claims (including material infringement
claims with respect to patents, trademarks, copyrights and the like) except as
permitted pursuant to Section 10.8.
9.8 Subsidiaries. As of the Effective Date, the Company has no
Subsidiaries except those listed in Schedule 9.8.
9.9 Pension and Welfare Plans. (a) During the twelve-
consecutive-month period prior to the date of the execution and delivery of this
Agreement or the making of any Loan hereunder, (i) no steps have been taken to
terminate any Pension Plan and (ii) no contribution failure has occurred with
respect to any Pension Plan sufficient to give rise to a lien under Section
302(f) of ERISA. No condition exists or event or transaction has occurred with
respect to any Pension Plan which could result in the incurrence by the Company
of any material liability, fine or penalty. The Company has no contingent
liability with respect to any post-retirement benefit under a Welfare Plan,
other than liability for continuation coverage described in Part 6 of Subtitle B
of Title I of ERISA.
(b) All contributions (if any) have been made to any Multiemployer
Pension Plan that are required to be made by the
35
Company or any other member of the Controlled Group under the terms of the plan
or of any collective bargaining agreement or by applicable law; neither the
Company nor any member of the Controlled Group has withdrawn or partially
withdrawn from any Multiemployer Pension Plan, incurred any withdrawal liability
with respect to any such plan, received notice of any claim or demand for
withdrawal liability or partial withdrawal liability from any such plan, and no
condition has occurred which, if continued, might result in a withdrawal or
partial withdrawal from any such plan; and neither the Company nor any member of
the Controlled Group has received any notice that any Multiemployer Pension Plan
is in reorganization, that increased contributions may be required to avoid a
reduction in plan benefits or the imposition of any excise tax, that any such
plan is or has been funded at a rate less than that required under Section 412
of the Code, that any such plan is or may be terminated, or that any such plan
is or may become insolvent.
9.10 Investment Company Act. Neither the Company nor any Subsidiary
is an "investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940.
9.11 Public Utility Holding Company Act. Neither the Company nor any
Subsidiary is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935.
9.12 Regulation U. The Company is not engaged principally, or as one
of its important activities, in the business of extending credit for the purpose
of purchasing or carrying Margin Stock.
9.13 Taxes. Each of the Company and each Subsidiary has filed all tax
returns and reports required by law to have been filed by it and has paid all
taxes and governmental charges thereby shown to be owing, except any such taxes
or charges which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books.
9.14 Solvency, etc. On the Effective Date (or, in the case of any
Person which becomes a Guarantor after the Effective Date, on the date such
Person becomes a Guarantor), and immediately prior to and after giving effect to
the issuance of each Letter of Credit and each borrowing hereunder and the use
of the
36
proceeds thereof, (a) each of the Company's and each Guarantor's assets will
exceed its liabilities and (b) each of the Company and each Guarantor will be
solvent, will be able to pay its debts as they mature, will own property with
fair saleable value greater than the amount required to pay its debts and will
have capital sufficient to carry on its business as then constituted.
9.15 Environmental Matters.
(a) No Violations. Except as set forth on Schedule 9.15,
neither the Company nor any Subsidiary, nor any operator of the Company's or any
Subsidiary's properties, is in violation, or alleged violation, of any judgment,
decree, order, law, permit, license, rule or regulation pertaining to
environmental matters, including those arising under the Resource Conservation
and Recovery Act ("RCRA"), the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 or any other Environmental Law which (i) in any
single case, requires expenditures in any three-year period of $500,000 or more
by the Company and its Subsidiaries in penalties and/or for investigative,
removal or remedial actions or (ii) individually or in the aggregate otherwise
might reasonably be expected to have a Material Adverse Effect.
(b) Notices. Except as set forth on Schedule 9.15, neither
the Company nor any Subsidiary has received notice from any third party,
including any Federal, state or local governmental authority: (a) that any one
of them has been identified by the U.S. Environmental Protection Agency as a
potentially responsible party under CERCLA with respect to a site listed on the
National Priorities List, 40 C.F.R. Part 000 Xxxxxxxx X; (b) that any hazardous
waste, as defined by 42 U.S.C. ss.6903(5), any hazardous substance as defined by
42 U.S.C. ss.9601(14), any pollutant or contaminant as defined by 42 U.S.C.
ss.9601(33) or any toxic substance, oil or hazardous material or other chemical
or substance regulated by any Environmental Law, excluding household hazardous
waste (all of the foregoing, "Hazardous Substances"), which any one of them has
generated, transported or disposed of has been found at any site at which a
Federal, state or local agency or other third party has conducted a remedial
investigation, removal or other response action pursuant to any Environmental
Law; (c) that the Company or any Subsidiary must conduct a remedial
investigation, removal, response action or other activity pursuant to any
Environmental Law; or (d) of any Environmental Claim.
37
(c) Handling of Hazardous Substances. Except as set forth on
Schedule 9.15, (i) no portion of any real property or other assets owned, leased
or operated by the Company or any Subsidiary has been used for the handling,
processing, storage or disposal of Hazardous Substances except in accordance in
all material respects with applicable Environmental Laws; and no underground
tank or other underground storage receptacle for Hazardous Substances is located
on such properties; (ii) in the course of any activities conducted by the
Company, any Subsidiary or the operators of any real property owned, leased or
operated by the Company or any Subsidiary, no Hazardous Substances have been
generated or are being used on such properties except in accordance in all
material respects with applicable Environmental Laws; (iii) there have been no
Releases or threatened Releases of Hazardous Substances on, upon, into or from
any real property or other assets owned, leased or operated by the Company or
any Subsidiary, which Releases singly or in the aggregate might reasonably be
expected to have a material adverse effect on the value of such real property or
assets; (iv) to the Company's actual knowledge, there have been no Releases on,
upon, from or into any real property in the vicinity of any real property or
other assets owned, leased or operated by the Company or any Subsidiary which,
through soil or groundwater contamination, may have come to be located on, and
which might reasonably be expected to have a material adverse effect on the
value of, any real property or other assets owned, leased or operated by the
Company or any Subsidiary; and (v) any Hazardous Substances generated by the
Company and its Subsidiaries have been transported offsite only by properly
licensed carriers and delivered only to treatment or disposal facilities
maintaining valid permits as required under applicable Environmental Laws, which
transporters and facilities have been and are, to the best of the Company's
knowledge, operating in compliance with such permits and applicable
Environmental Laws.
(d) Investigations. Except as set forth on Schedule 9.15, the
Company and its Subsidiaries have taken all reasonable steps to investigate the
past and present condition and usage of any real property owned, leased or
operated by the Company and its Subsidiaries and the operations conducted by the
Company and its Subsidiaries with regard to environmental matters.
9.16 Year 2000 Problem. The Company and its Subsidiaries have
reviewed the areas within their business and operations which could be adversely
affected by, and have developed or are developing a program to address on a
timely basis, the "Year 2000 Problem" (that is, the risk that computer
applications used by the Company and its Subsidiaries may be unable to recognize
and
38
perform properly date-sensitive functions involving certain dates prior to and
any date after December 31, 1999). Based on such review and program, the Company
reasonably believes that the "Year 2000 Problem" will not have a Material
Adverse Effect.
9.17 Copyrights, Patents, Trademarks and Licenses, etc. The
Company and its Subsidiaries own or are licensed or otherwise have the right to
use all of the patents, trademarks, service marks, trade names, copyrights,
contractual franchises, authorizations and other rights that are reasonably
necessary for the operation of their respective businesses, without conflict
with the rights of any other Person. No slogan or other advertising device,
product, process, method, substance, part or other material now employed, or now
contemplated to be employed, by the Company or any Subsidiary infringes upon any
rights held by any other Person. No claim or litigation regarding any of the
foregoing is pending or, to the knowledge of the Company, threatened, and no
patent, invention, device, application, principle or any statute, law, rule,
regulation, standard or code is pending or, to the knowledge of the Company,
proposed, which, in either case, could reasonably be expected to have a Material
Adverse Effect.
9.18 Founding Companies Acquisition.(a) The Founding Companies
Acquisition Documents constitute the purchase agreements for the Founding
Companies Acquisition (including all amendments thereto) as in effect on the
Effective Date.
(b) The representations and warranties made by the Company
and, to the best of the Company's knowledge, by the Founding Companies contained
in the Founding Companies Acquisition Documents (i) were true and correct in all
material respects when made, (ii) are true and correct in all material respects
on the date hereof, and (iii) will be true and correct in all material respects
as of the Effective Date (except, in the case of clauses (ii) and (iii), to the
extent such representations and warranties relate solely to an earlier date, in
which case they were true and correct to all material respects as of such
earlier dates) .
(c) The Founding Companies Acquisition complies in all
material respects with all applicable legal requirements, and all necessary
governmental, regulatory, shareholder and other consents and approvals required
for the consummation of the Founding Companies Acquisition have been, or prior
to the consummation thereof will be, duly obtained and in full force and effect.
39
(d) The execution and delivery by the Company of the Founding
Companies Acquisition Documents, and the consummation by the Company of the
Founding Companies Acquisition, will not violate any requirement of law, or
result in a breach of, or constitute a default under, or require any consent
which will not be obtained for, any material agreement or indenture, or any
order or decree, affecting the Company, or, to the best of the Company's
knowledge, the Founding Companies.
9.19 Transactions with Affiliates. Neither the Company nor
any Subsidiary has entered into or participated in any agreements or
transactions of any kind with any Affiliates of the Company except agreements or
transactions entered into in the ordinary course of business on an arms-length
basis.
9.20 Information. All information heretofore or contemporaneously
herewith furnished in writing by the Company or any Subsidiary to any Bank for
purposes of or in connection with this Agreement and the transactions
contemplated hereby is, and all written information hereafter furnished by or on
behalf of the Company or any Subsidiary to any Bank pursuant hereto or in
connection herewith will be, true and accurate in every material respect on the
date as of which such information is dated or certified, and none of such
information is or will be incomplete by omitting to state any material fact
necessary to make such information not misleading in light of the circumstances
under which made (it being recognized by the Agent and the Banks that (a) any
projections and forecasts provided by the Company are based on good faith
estimates and assumptions believed by the Company to be reasonable as of the
date of the applicable projections or assumptions and that actual results during
the period or periods covered by any such projections and forecasts may differ
from projected or forecasted results and (b) any information provided by the
Company or any Subsidiary with respect to any Person or assets acquired or to be
acquired by the Company or any Subsidiary shall, for all periods prior to the
date of such acquisition, be limited to the knowledge of the Company or the
acquiring Subsidiary after reasonable inquiry).
SECTION 10 COVENANTS.
Until the expiration or termination of the Commitments and thereafter
until all obligations of the Company hereunder and under the other Loan
Documents are paid in full and all Letters of Credit have been terminated, the
Company agrees that, unless at any time the Required Banks shall otherwise
expressly consent in writing, it will:
40
10.1 Reports, Certificates and Other Information. Furnish to the
Agent and each Bank:
10.1.1 Audit Report. Promptly when available and in any event within
90 days after the close of each Fiscal Year: (a) a copy of the annual audit
report of the Company and its Subsidiaries for such Fiscal Year, including
therein consolidated balance sheets of the Company and its Subsidiaries as of
the end of such Fiscal Year and consolidated statements of earnings and cash
flow of the Company and its Subsidiaries for such Fiscal Year certified without
qualification by independent auditors of recognized standing selected by the
Company and reasonably acceptable to the Required Banks, together with a written
statement from such accountants to the effect that in making the examination
necessary for the signing of such annual audit report by such accountants,
nothing came to their attention that caused them to believe that the Company was
not in compliance with any provision of Section 10.6, 10.7 or 10.9 of this
Agreement insofar as such provision relates to accounting matters or, if
something has come to their attention that caused them to believe that the
Company was not in compliance with any such provision, describing such non-
compliance in reasonable detail (it being understood that any such audit is not
directed primarily toward obtaining knowledge of such non-compliance); and (b)
consolidating balance sheets of the Company and its Subsidiaries as of the end
of such Fiscal Year and a consolidating statement of earnings for the Company
and its Subsidiaries for such Fiscal Year, certified by the Chief Financial
Officer, the Vice President, Finance, Controller or Treasurer of the Company.
10.1.2 Quarterly Reports. Promptly when available and in any event
within 45 days after the end of each Fiscal Quarter (except the last Fiscal
Quarter) of each Fiscal Year, consolidated and consolidating balance sheets of
the Company and its Subsidiaries as of the end of such Fiscal Quarter, together
with consolidated and consolidating statements of earnings and a consolidated
statement of cash flows for such Fiscal Quarter and for the period beginning
with the first day of such Fiscal Year and ending on the last day of such Fiscal
Quarter, certified by the Chief Financial Officer, the Vice President, Finance,
Controller or Treasurer of the Company.
10.1.3 Monthly Reports. Promptly when available and in any event
within 30 days after the end of each of the first two months of each Fiscal
Quarter, balance sheets of the Company and its Subsidiaries as of the end of
such month, together with statements of earnings for such month and for the
period beginning with the first day of the Fiscal Year and ending on the last
day of such
41
month, certified by the Chief Financial Officer, the Vice President, Finance,
Controller or Treasurer of the Company.
10.1.4 Borrowing Base Certificate. Within 30 days after the end of
each month, a borrowing base certificate substantially in the form of Exhibit H,
together with an aging of Receivables and a report of sales and other
dispositions of Equipment specifying Equipment by equipment number, location,
vehicle identification number and a brief description.
10.1.5 Compliance Certificates. Contemporaneously with the furnishing
of a copy of each annual audit report pursuant to Section 10.1.1 and of each set
of quarterly statements pursuant to Section 10.1.2, a duly completed compliance
certificate in the form of Exhibit B, with appropriate insertions, dated the
date of such annual report or such quarterly statements and signed by the Chief
Financial Officer, the Vice President, Finance, Controller or Treasurer of the
Company, containing a computation of each of the financial ratios and
restrictions set forth in Section 10.6 and to the effect that such officer has
not become aware of any Event of Default or Unmatured Event of Default that has
occurred and is continuing or, if there is any such event, describing it and the
steps, if any, being taken to cure it.
10.1.6 Reports to SEC and to Shareholders. Promptly upon the filing
or sending thereof, copies of all regular, periodic or special reports of the
Company or any Subsidiary filed with the SEC (excluding exhibits thereto,
provided that the Company shall promptly deliver any such exhibit to the Agent
or any Bank upon request therefor); copies of all registration statements of the
Company or any Subsidiary filed with the SEC (other than on Form S-8); and
copies of all proxy statements or other communications made to security holders
generally concerning material developments in the business of the Company or any
Subsidiary.
10.1.7 Notice of Default, Litigation and ERISA Matters. Promptly upon
becoming aware of any of the following, written notice describing the same and
the steps being taken by the Company or the Subsidiary affected thereby with
respect thereto:
(a) the occurrence of an Event of Default or an
Unmatured Event of Default;
(b) any litigation, arbitration or governmental
investigation or proceeding not previously disclosed by the Company
to the Banks which has been instituted or, to the knowledge of the
Company, is threatened against the Company or any Subsidiary or to
which any of the properties of any
42
thereof is subject which, if adversely determined, might reasonably
be expected to have a Material Adverse Effect;
(c) the institution of any steps by any member of the
Controlled Group or any other Person to terminate any Pension Plan,
or the failure of any member of the Controlled Group to make a
required contribution to any Pension Plan (if such failure is
sufficient to give rise to a lien under Section 302(f) of ERISA) or
to any Multiemployer Pension Plan, or the taking of any action with
respect to a Pension Plan which could result in the requirement that
the Company furnish a bond or other security to the PBGC or such
Pension Plan, or the occurrence of any event with respect to any
Pension Plan or Multiemployer Pension Plan which could result in the
incurrence by any member of the Controlled Group of any material
liability, fine or penalty (including any claim or demand for
withdrawal liability or partial withdrawal from any Multiemployer
Pension Plan), or any material increase in the contingent liability
of the Company with respect to any post-retirement Welfare Plan
benefit, or any notice that any Multiemployer Pension Plan is in
reorganization, that increased contributions may be required to avoid
a reduction in plan benefits or the imposition of an excise tax, that
any such plan is or has been funded at a rate less than that required
under Section 412 of the Code, that any such plan is or may be
terminated, or that any such plan is or may become insolvent;
(d) any cancellation or material change in any insurance
maintained by the Company or any Subsidiary;
(e) any event (including (i) any violation of any
Environmental Law or the assertion of any Environmental Claim or (ii)
the enactment or effectiveness of any law, rule or regulation) which
might reasonably be expected to have a Material Adverse Effect; or
(f) any setoff, claims, withholdings or other defenses to
which any of the Collateral, or the Banks' rights with respect to the
Collateral, are subject.
10.1.8 Subsidiaries. Promptly upon any change in the list of its
Subsidiaries, a written report of such change.
10.1.9 Management Reports. Promptly upon the request of the Agent or
any Bank, copies of all detailed financial and management reports submitted to
the Company by independent
43
auditors in connection with each annual or interim audit made by such auditors
of the books of the Company.
10.1.10 Projections. As soon as practicable and in any event within
60 days after the commencement of each Fiscal Year, financial projections for
the Company and its Subsidiaries for such Fiscal Year prepared in a manner
consistent with those projections delivered by the Company to the Banks prior to
the Effective Date or otherwise in a manner reasonably satisfactory to the
Agent.
10.1.11 Contracts. As soon as practicable after becoming aware of the
event and in any event within 30 days of such event, written notice of any
termination by a customer of a material contract with a Subsidiary (with
materiality being measured at the Subsidiary level).
10.1.12 Fleet Audit Reports. From time to time as requested by the
Agent, a written report by appraisers acceptable to the Agent of an audit and
appraisal of the Equipment of the Company and its Subsidiaries.
10.1.13 Other Information. From time to time such other information
concerning the Company and its Subsidiaries as any Bank or the Agent may
reasonably request.
10.2 Books, Records and Inspections. Keep, and cause each Subsidiary
to keep, its books and records in accordance with sound business practices
sufficient to allow the preparation of financial statements in accordance with
GAAP; permit, and cause each Subsidiary to permit, any Bank or the Agent or any
representative thereof to inspect the properties and operations of the Company
and of such Subsidiary; and permit, and cause each Subsidiary to permit, at any
reasonable time and with reasonable notice (or at any time without notice if an
Event of Default exists), any Bank or the Agent or any representative thereof to
visit any or all of its offices, to discuss its financial matters with its
officers and its independent auditors (and the Company hereby authorizes such
independent auditors to discuss such financial matters with any Bank or the
Agent or any representative thereof, provided that so long as no Event of
Default exists, a representative of the Company shall be present at any such
discussions), and to examine (and, at the expense of the Company or the
applicable Subsidiary, photocopy extracts from) any of its books or other
corporate records.
10.3 Insurance. Maintain, and cause each Subsidiary to maintain, with
responsible insurance companies, such insurance as
44
may be required by any law or governmental regulation or court decree or order
applicable to it and such other insurance, to such extent and against such
hazards and liabilities, as is customarily maintained by companies similarly
situated and that is acceptable to the Agent; and, on each anniversary of the
Effective Date and from time to time upon request of the Agent or any Bank,
furnish to the Agent or such Bank a certificate setting forth in reasonable
detail the nature and extent of all insurance maintained by the Company and its
Subsidiaries.
10.4 Compliance with Laws; Payment of Taxes and Liabilities. (a)
Comply, and cause each Subsidiary to comply, in all material respects with all
applicable laws (including Environmental Laws), rules, regulations, decrees,
orders, judgments, licenses and permits; and (b) pay, and cause each Subsidiary
to pay, prior to delinquency, all taxes and other governmental charges against
it or any of its property, as well as claims of any kind which, if unpaid, might
become a Lien on any of its property; provided, however, that the foregoing
shall not require the Company or any Subsidiary to pay any such tax or charge so
long as it shall contest the validity thereof in good faith by appropriate
proceedings and shall set aside on its books adequate reserves with respect
thereto in accordance with GAAP.
10.5 Maintenance of Existence, etc. Maintain and preserve, and
(subject to Section 10.11) cause each Subsidiary to maintain and preserve, (a)
its existence and good standing in the jurisdiction of its incorporation and (b)
its qualification and good standing as a foreign corporation in each
jurisdiction where the nature of its business makes such qualification necessary
(except in those instances in which the failure to be qualified or in good
standing does not have a Material Adverse Effect).
10.6 Financial Covenants.
10.6.1 Minimum Consolidated Net Income. Not permit its Consolidated
Net Income as of the last day of any Fiscal Quarter to be less than zero.
10.6.2 Funded Debt to Funded Debt plus Net Worth Ratio. Not permit
the ratio of (a) Funded Debt to (b) the sum of Funded Debt plus Net Worth as of
the last day of any Fiscal Quarter to exceed 0.50 to 1.0.
10.6.3 Funded Debt to EBITDA Ratio. Not permit the Funded Debt to
EBITDA Ratio as of the last day of any Fiscal Quarter to exceed the applicable
ratio set forth below:
45
FISCAL FUNDED DEBT TO
QUARTER ENDING: EBITDA RATIO
6/30/98 through 6/30/99 2.75 to 1.0
9/30/99 and thereafter 2.50 to 1.0.
10.6.4 Capital Expenditures. The Company will not permit the
aggregate amount of all Capital Expenditures made by the Company and its
Subsidiaries in any Fiscal Year (excluding Capital Expenditures for management
information systems made during the first 18 months following the Effective Date
in an aggregate amount not exceeding $2,500,000) to exceed 100% of consolidated
depreciation of machinery and equipment in such Fiscal Year.
10.6.5 EBITR to Interest Expense plus Rental Expense Ratio. Not
permit the ratio of EBITR to Interest Expense plus Rental Expense to be less
than 2.0 to 1.0 as of the last day of any Fiscal Quarter.
10.7 Limitations on Debt. Not, and not permit any Subsidiary to,
create, incur, assume or suffer to exist any Debt, except:
(a) obligations in respect of the Loans, the L/C
Applications and the Letters of Credit;
(b) unsecured Debt of the Company which represents all or part of the
purchase price payable in connection with a transaction permitted by
Section 10.10(c); provided that the aggregate principal amount of all
such unsecured Debt shall not at any time exceed $2,500,000;
(c) Debt secured by Liens permitted by subsection 10.8(c) or (d), and
refinancings of any such Debt so long as the terms applicable to such
refinanced Debt are no less favorable to the Company or the
applicable Subsidiary than the terms in effect immediately prior to
such refinancing, provided that the aggregate amount of all such Debt
at any time outstanding shall not exceed $4,500,000;
(d) Debt of Subsidiaries owed to the Company;
(e) unsecured Debt of the Company to Subsidiaries;
(f) Subordinated Debt;
46
(g) other Debt outstanding on the date hereof and listed in Schedule
10.7; and
(h) Debt to be Repaid (provided that all such Debt is repaid on or
before the Effective Date).
10.8 Liens. Not, and not permit any Subsidiary to, create or permit
to exist any Lien on any of its real or personal properties, assets or rights of
whatsoever nature (whether now owned or hereafter acquired), except:
(a) Liens for taxes or other governmental charges not at the time
delinquent or thereafter payable without penalty or being contested
in good faith by appropriate proceedings and, in each case, for which
it maintains adequate reserves;
(b) Liens arising in the ordinary course of business (such as (i)
Liens of carriers, warehousemen, mechanics and materialmen and other
similar Liens imposed by law and (ii) Liens incurred in connection
with worker's compensation, unemployment compensation and other types
of social security (excluding Liens arising under ERISA) or in
connection with surety bonds, bids, performance bonds and similar
obligations) for sums not overdue or being contested in good faith by
appropriate proceedings and not involving any deposits or advances or
borrowed money or the deferred purchase price of property or
services, and, in each case, for which it maintains adequate
reserves;
(c) Liens identified in Schedule 10.8;
(d) subject to the limitation set forth in Section 10.7(c),(i) Liens
arising in connection with Capital Leases (and attaching only to the
property being leased), (ii) Liens existing on property at the time
of the acquisition thereof by the Company or any Subsidiary (and not
created in contemplation of such acquisition) and (iii) Liens that
constitute purchase money security interests on any property securing
debt incurred for the purpose of financing all or any part of the
cost of acquiring such property, provided that any such Lien attaches
to such property within 60 days of the acquisition thereof and such
Lien attaches solely to the property so acquired;
(e) attachments, appeal bonds, judgments and other similar Liens, for
sums not exceeding $250,000 arising in connection with court
proceedings, provided the execution or other enforcement of such
Liens is effectively stayed and the
47
claims secured thereby are being actively contested in good faith and
by appropriate proceedings;
(f) easements, rights of way, restrictions, minor defects or
irregularities in title and other similar Liens not interfering in
any material respect with the ordinary conduct of the business of the
Company or any Subsidiary;
(g) Liens in favor of the Agent arising under the Loan Documents; and
(h) Liens securing Debt to be Repaid (provided that all such Liens
are released on or before the Effective Date).
10.9 Restricted Payments. Not, and not permit any Subsidiary to, (a)
declare or pay any dividends on any of its capital stock (other than stock
dividends), (b) purchase or redeem any such stock or any warrants, units,
options or other rights in respect of such stock, (c) make any other
distribution to shareholders, (d) prepay, purchase, defease or redeem any
Subordinated Debt or (e) set aside funds for any of the foregoing; provided that
any Subsidiary may declare and pay dividends to the Company or to any other
wholly-owned Subsidiary.
10.10 Mergers, Consolidations, Sales. Not, and not permit any
Subsidiary to, be a party to any merger or consolidation, or purchase or
otherwise acquire all or substantially all of the assets or any stock of any
class of, or any partnership or joint venture interest in, any other Person, or
sell, transfer, convey or lease all or any substantial part of its assets, or
sell or assign with or without recourse any receivables, except for (a) any such
merger or consolidation, sale, transfer, conveyance, lease or assignment of or
by any wholly-owned Subsidiary into the Company or into, with or to any other
wholly-owned Subsidiary; (b) any such purchase or other acquisition by the
Company or any wholly-owned Subsidiary of the assets or stock of any wholly-
owned Subsidiary; (c) any such purchase or other acquisition by the Company or
any wholly-owned Subsidiary of the assets or stock of any other Person where (1)
such assets (in the case of an asset purchase) are for use, or such Person (in
the case of a stock purchase) is engaged, solely in providing towing services
and/or vehicle transport; (2) immediately before or after giving effect to such
purchase or acquisition, no Event of Default or Unmatured Event of Default shall
have occurred and be continuing; (3) either (i) (x) the aggregate consideration
to be paid by the Company and its Subsidiaries (including any Debt assumed or
issued in connection therewith, the amount thereof to be calculated in
accordance with GAAP) in connection with such
48
purchase or other acquisition (or any series of related acquisitions) is not
greater than $5,000,000 and (y) the aggregate consideration to be paid in cash
by the Company and its Subsidiaries in connection with such purchase or
acquisition (or any series of related acquisitions) is not greater than
$2,500,000, (ii) immediately after giving effect to such purchase or
acquisition, the Funded Debt to EBITDA Ratio is less than 1.0 to 1.0 or (iii)
the Required Lenders have consented to such purchase or acquisition; (4) the
Company is in pro forma compliance with all the financial ratios and
restrictions set forth in Section 10.6; and (5) such Person (or its board of
directors or similar body) has approved such acquisition or other purchase; and
(d) sales and dispositions of assets (including the stock of Subsidiaries) so
long as the net book value of all assets sold or otherwise disposed of in any
Fiscal Year does not exceed 5% of the aggregate net book value of all assets of
the Company and its Subsidiaries.
10.11 Modification of Organizational Documents. Not permit the
Certificate of Incorporation, By-Laws or other organizational documents of the
Company or any Subsidiary to be amended or modified in any way which might
reasonably be expected to materially adversely affect the interests of the
Banks.
10.12 Use of Proceeds. Use the proceeds of the Loans solely to
finance the Company's working capital, for acquisitions permitted by Section
10.10, for Capital Expenditures and for other general corporate purposes,
including the payment of Debt to be Repaid; and not use or permit any proceeds
of any Loan to be used, either directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of "purchasing or carrying" any Margin Stock.
10.13 Further Assurances. Take, and cause each Subsidiary to take,
such actions as are necessary, or as the Agent or the Required Banks may
reasonably request, from time to time (including the execution and delivery of
guaranties, security agreements, pledge agreements, financing statements and
other documents, the filing or recording of any of the foregoing, and the
delivery of stock certificates and other collateral with respect to which
perfection is obtained by possession) to ensure that (i) the obligations of the
Company hereunder and under the other Loan Documents are secured by
substantially all of the assets of the Company and guaranteed by all of the
Subsidiaries (including, promptly upon the acquisition or creation thereof, any
Subsidiary acquired or created after the date hereof) by execution of a
counterpart of the Guaranty and (ii) the
49
obligations of each Guarantor under the Guaranty are secured by substantially
all of the assets of such Guarantor.
10.14 Transactions with Affiliates. Not, and not permit any
Subsidiary to, enter into, or cause, suffer or permit to exist any transaction,
arrangement or contract with any of its other Affiliates (other than the Company
and its Subsidiaries) which is on terms which are less favorable than are
obtainable from any Person which is not one of its Affiliates.
10.15 Employee Benefit Plans. Maintain, and cause each Subsidiary to
maintain, each Pension Plan in substantial compliance with all applicable
requirements of law and regulations.
10.16 Environmental Matters. (a) If any material Release or Disposal
of Hazardous Substances shall occur or shall have occurred on any real property
or any other assets owned, leased or operated by the Company or any Subsidiary,
the Company shall, or shall cause the applicable Subsidiary to, cause the prompt
containment and removal of such Hazardous Substances and the remediation of such
real property or other assets as necessary to comply in all material respects
with all Environmental Laws and to preserve the value of such real property or
other assets. Without limiting the generality of the foregoing, the Company
shall, and shall cause each Subsidiary to, comply in a reasonable and
cost-effective manner with any valid Federal or state judicial or administrative
order requiring the performance at any real property owned, leased or operated)
of the Company or any Subsidiary of activities in response to the Release or
threatened Release of a Hazardous Substance except for the period of time that
the Company or such Subsidiary is diligently and in good faith contesting such
order.
(b) To the extent that the transportation of "hazardous
waste" as defined by RCRA is permitted by this Agreement, the Company shall, and
shall cause its Subsidiaries to, dispose of such hazardous waste only at
licensed disposal facilities operating, to the best of the Company's or such
Subsidiary's knowledge after reasonable inquiry, in compliance with
Environmental Laws.
10.17 Unconditional Purchase Obligations. Not, and not permit any
Subsidiary to, enter into or be a party to any contract for the purchase of
materials, supplies or other property or services, if such contract requires
that payment be made by it regardless of whether or not delivery is ever made of
such materials, supplies or other property or services; provided that the
foregoing shall not prohibit the Company or any
50
Subsidiary from entering into options for the purchase of particular assets or
businesses.
10.18 Inconsistent Agreements. Not, and not permit any Subsidiary to,
enter into any agreement containing any provision which (a) would be violated or
breached by any borrowing by the Company hereunder or by the performance by the
Company or any Subsidiary of any of its obligations hereunder or under any other
Loan Document or (b) would prohibit the Company or any Subsidiary from granting
to the Agent, for the benefit of the Banks, a Lien on any of its assets.
10.19 Business Activities. Not, and not permit any Subsidiary to,
engage in any line of business other than the towing service and vehicle
transport businesses and businesses which are reasonably related thereto.
10.20 Advances and Other Investments. Not, and not permit any
Subsidiary to, make, incur, assume or suffer to exist any Investment in any
other Person, except (without duplication) the following:
(a) equity Investments existing on the Effective Date in wholly-owned
Subsidiaries identified in Schedule 9.8;
(b) equity Investments in Subsidiaries acquired after the Effective
Date in transactions permitted as acquisitions of stock or assets
pursuant to Section 10.10;
(c) in the ordinary course of business, contributions by the Company
to the capital of any of its Subsidiaries, or by any such Subsidiary
to the capital of any of its Subsidiaries;
(d) in the ordinary course of business, Investments by the Company in
any Subsidiary or by any of the Subsidiaries in the Company, by way
of intercompany loans, advances or guaranties, all to the extent
permitted by Section 10.7;
(e) Suretyship Liabilities permitted by Section 10.7;
(f) good faith deposits made in connection with prospective
acquisitions of stock or assets permitted by Section 10.10;
(g) loans to officers and employees not exceeding (i) $100,000 in the
aggregate to any single individual or (ii) $250,000 in the aggregate
for all such individuals;
(h) Cash Equivalent Investments; and
51
(i) bank deposits in the ordinary course of business; provided that
the aggregate amount of all such deposits (excluding amounts in
payroll accounts or for accounts payable, in each case to the extent
that checks have been issued to third parties) which are maintained
with any bank other than the Agent shall not at any time exceed (x)
in the case of such deposits with any single bank, $100,000 for three
consecutive Business Days and (y) in the case of all such deposits,
$2,500,000 for three consecutive Business Days;
provided, however, that no Investment otherwise permitted by clause (b), (c),
(d), (e), (f) or (g) shall be permitted to be made if, immediately before or
after giving effect thereto, any Event of Default or Unmatured Event of Default
shall have occurred and be continuing.
10.21 Maintenance of Property. The Company shall, and shall cause
each Subsidiary to, maintain and preserve all its property which is used or
useful in its business in good working order and condition, ordinary wear and
tear excepted.
10.22 Performance of Obligations. The Company shall, and shall cause
each Subsidiary to, pay and discharge as the same shall become due and payable,
all their respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets; and
(b) all lawful claims which, if unpaid, would by law become a Lien
upon its property; unless, in each case, the same are being contested
in good faith by appropriate proceedings and adequate reserves in
accordance with GAAP are being maintained by the Company or such
Subsidiary.
10.23 Leases. Enter into, and cause each Subsidiary to enter into,
leases acceptable to the Agent with respect to any real property used by the
Company or any Subsidiary in the conduct of its business.
SECTION 11 EFFECTIVENESS; CONDITIONS OF LENDING, ETC.
The obligation of each Bank to make its Loans and of any Issuing Bank
to issue Letters of Credit is subject to the following conditions precedent:
11.1 Initial Credit Extensions. The obligation of each Bank to make
its initial Loan and of any Issuing Bank to issue
52
any Letter of Credit, whichever first occurs, is, in addition to the conditions
precedent specified in Section 11.2, subject to the conditions precedent (and
the date on which all such conditions precedent have been satisfied or waived in
writing by the Banks is called the "Effective Date") that (a) the Agent shall
have received all amounts which are then due and payable pursuant to Section 5
and (to the extent billed) Section 14.6, (b) the Agent shall have received
evidence, reasonably satisfactory to the Agent (i) of the completion of an
initial equity offering by the Company producing gross proceeds of at least
$50,000,000, (ii) that the Founding Companies Acquisition has been (or
concurrently with the initial borrowing will be) consummated on terms and
conditions set forth in the Founding Companies Acquisition Documents, without
giving effect to any amendment or other modification thereto or waiver
thereunder unless consented to by the Banks, (iii) that all Debt to be Repaid
has been (or concurrently with the making of the initial Loans will be) paid in
full and all Liens securing such Debt have been (or concurrently with the making
of the initial Loans will be) terminated, and (iv) that the Company and its
Subsidiaries leases the real property necessary to operate the Founding
Companies pursuant to leases acceptable to the Agent, (c) Winternitz shall have
completed a review of the Equipment of the Founding Companies, (d) the Effective
Date shall occur on or before June 15, 1998 and (e) all of the following, each
duly executed and dated the Effective Date (or such other date as shall be
satisfactory to the Agent), in form and substance satisfactory to the Agent, and
each (except for the Notes, of which only the originals shall be signed) in
sufficient number of signed counterparts to provide one for each Bank:
11.1.1 Notes. The Notes.
11.1.2 Resolutions. Certified copies of resolutions of the Board of
Directors of the Company authorizing or ratifying the execution, delivery and
performance by the Company of this Agreement, the Notes and the other Loan
Documents to which the Company is a party; and certified copies of resolutions
of the Board of Directors of each Subsidiary (if any) which is to execute and
deliver any document pursuant to Section 11.1.5, 11.1.6 or 11.1.7 authorizing or
ratifying the execution, delivery and performance by such Subsidiary of each
Loan Document to which such Subsidiary is a party.
11.1.3 Consents, etc. Certified copies of all documents evidencing
any necessary corporate action, consents and governmental approvals (if any)
required for the execution, delivery and performance by the Company and each
Subsidiary of the documents referred to in this Section 11.
53
11.1.4 Incumbency and Signature Certificates. A certificate of the
Secretary or an Assistant Secretary of the Company and each Subsidiary of the
Company as of the Effective Date certifying the names of the officer or officers
of such entity authorized to sign the Loan Documents to which such entity is a
party, together with a sample of the true signature of each such officer (it
being understood that the Agent and each Bank may conclusively rely on each such
certificate until formally advised by a like certificate of any changes
therein).
11.1.5 Guaranty. The Guaranty executed by each Subsidiary as of the
Effective Date.
11.1.6 Security Agreement. The Security Agreement executed by the
Company and each Subsidiary (if any) as of the Effective Date, together with
evidence, satisfactory to the Agent, that all filings necessary to perfect the
Agent's Lien on any collateral granted under the Security Agreement have been
duly made and are in full force and effect.
11.1.7 Pledge Agreements. The Company Pledge Agreement and, with
respect to any Subsidiary that as of the Effective Date has one or more
Subsidiaries, a Subsidiary Pledge Agreement, in each case together with all
stock certificates, stock powers and other items required to be delivered in
connection therewith.
11.1.8 Opinion of Counsel for the Company and the Guarantors. The
opinion of Xxxxxxx & Xxxxxxx, counsel to the Company and the Guarantors.
11.1.9 Borrowing Base Certificate. A borrowing base certificate
substantially in the form of Exhibit H, together with an aging of Receivables
and specifying Equipment by equipment number, location, vehicle identification
number and a brief description.
11.1.10 Other. Such other documents as the Agent or any Bank may
reasonably request.
11.2 Conditions. The obligation (a) of each Bank to make each Loan
and (b) of each Issuing Bank to issue each Letter of Credit is subject to the
following further conditions precedent that:
11.2.1 Compliance with Warranties, No Default, etc. Both
before and after giving effect to any borrowing and the issuance of any Letter
of Credit (but, if any Event of Default of the nature referred to in Section
12.1.2 shall have occurred with respect to any other Debt, without giving effect
to the
54
application, directly or indirectly, of the proceeds thereof) the following
statements shall be true and correct:
(a) the representations and warranties of the Company and
the Guarantors set forth in this Agreement (excluding Section 9.6)
and the other Loan Documents shall be true and correct in all
material respects with the same effect as if then made (except to the
extent stated to relate to an earlier date, in which case such
representations and warranties shall be true and correct in all
material respects as of such earlier date);
(b) except as disclosed by the Company to the Agent and the
Banks pursuant to Section 9.6,
(i) no litigation (including derivative actions),
arbitration proceeding, labor controversy or governmental
investigation or proceeding shall be pending or, to the
knowledge of the Company, threatened against the Company or
any of its Subsidiaries which might reasonably be expected
to have a Material Adverse Effect or which purports to
affect the legality, validity or enforceability of this
Agreement, the Notes or any other Loan Document; and
(ii) no development shall have occurred in any
litigation (including derivative actions), arbitration
proceeding, labor controversy or governmental investigation
or proceeding disclosed pursuant to Section 9.6 which might
reasonably be expected to have a Material Adverse Effect;
and
(c) no Event of Default or Unmatured Event of Default shall
have then occurred and be continuing, and neither the Company nor any
of its Subsidiaries shall be in violation of any law or governmental
regulation or court order or decree where such violation or
violations singly or in the aggregate might reasonably be expected to
have a Material Adverse Effect; and
(d) there shall have been no change in the operations,
financial condition or prospects of the Company and its Subsidiaries
or in the market for syndicated loans that might reasonably be
expected to have a Material Adverse Effect.
11.2.2 Confirmatory Certificate. If requested by the Agent
or any Bank, the Agent shall have received (in sufficient
55
counterparts to provide one to each Bank) a certificate dated the date of such
requested Loan or Letter of Credit and signed by a duly authorized
representative of the Company as to the matters set out in Section 11.2.1 (it
being understood that each request by the Company for the making of a Loan or
the issuance of a Letter of Credit shall be deemed to constitute a warranty by
the Company that the conditions precedent set forth in Section 11.2.1 will be
satisfied at the time of the making of such Loan or the issuance of such Letter
of Credit), together with such other documents as the Agent or any Bank may
reasonably request in support thereof.
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT.
12.1 Events of Default. Each of the following shall constitute an
Event of Default under this Agreement:
12.1.1 Non-Payment of the Loans, etc. Default in the payment when due
of the principal of any Loan; or default, and continuance thereof for five days,
in the payment when due of any interest, fee, reimbursement obligation with
respect to any Letter of Credit or other amount payable by the Company hereunder
or under any other Loan Document.
12.1.2 Non-Payment of Other Debt. Any default shall occur under the
terms applicable to any Debt of the Company or any Subsidiary in an aggregate
amount (for all such Debt so affected) exceeding $250,000 and such default shall
(a) consist of the failure to pay such Debt when due (subject to any applicable
grace period), whether by acceleration or otherwise, or (b) accelerate the
maturity of such Debt or permit the holder or holders thereof, or any trustee or
agent for such holder or holders, to cause such Debt to become due and payable
prior to its expressed maturity.
12.1.3 Other Material Obligations. Default in the payment when due,
or in the performance or observance of, any material obligation of, or condition
agreed to by, the Company or any Subsidiary with respect to any material
purchase or lease of goods or services where such default, singly or in the
aggregate with other such defaults might reasonably be expected to have a
Material Adverse Effect (except only to the extent that the existence of any
such default is being contested by the Company or such Subsidiary in good faith
and by appropriate proceedings and appropriate reserves have been made in
respect of such default).
12.1.4 Bankruptcy, Insolvency, etc. The Company or any Subsidiary
becomes insolvent or generally fails to pay, or admits
56
in writing its inability or refusal to pay, debts as they become due; or the
Company or any Subsidiary applies for, consents to, or acquiesces in the
appointment of a trustee, receiver or other custodian for the Company or such
Subsidiary or any property thereof, or makes a general assignment for the
benefit of creditors; or, in the absence of such application, consent or
acquiescence, a trustee, receiver or other custodian is appointed for the
Company or any Subsidiary or for a substantial part of the property of any
thereof and is not discharged within 60 days; or any bankruptcy, reorganization,
debt arrangement, or other case or proceeding under any bankruptcy or insolvency
law, or any dissolution or liquidation proceeding (except the voluntary
dissolution, not under any bankruptcy or insolvency law, of a Subsidiary), is
commenced in respect of the Company or any Subsidiary, and if such case or
proceeding is not commenced by the Company or such Subsidiary, it is consented
to or acquiesced in by the Company or such Subsidiary, or remains for 60 days
undismissed; or the Company or any Subsidiary takes any corporate action to
authorize, or in furtherance of, any of the foregoing.
12.1.5 Non-Compliance with Provisions of This Agreement. (a) Failure
by the Company to comply with or to perform any covenant set forth in Sections
10.6 through 10.11, 10.14 or 10.17 through 10.20; or (b) failure by the Company
to comply with or to perform any other provision of this Agreement (and not
constituting an Event of Default under any of the other provisions of this
Section 12) and continuance of such failure described in this clause (b) for 30
days (or, in the case of Section 10.13, five Business Days) after notice thereof
to the Company from the Agent, any Bank or the holder of any Note.
12.1.6 Warranties. Any warranty made by the Company herein is
breached or is false or misleading in any material respect, or any schedule,
certificate, financial statement, report, notice or other writing furnished by
the Company to the Agent or any Bank in connection herewith is false or
misleading in any material respect on the date as of which the facts therein set
forth are stated or certified.
12.1.7 Pension Plans. (i) Institution of any steps by the Company or
any other Person to terminate a Pension Plan if as a result of such termination
the Company could be required to make a contribution to such Pension Plan, or
could incur a liability or obligation to such Pension Plan, in excess of
$250,000; (ii) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under section 302(f) of ERISA; or (iii) there
shall occur any withdrawal or partial withdrawal from a Multiemployer Pension
Plan and the withdrawal liability (without unaccrued interest) to Multiemployer
Pension Plans as a
57
result of such withdrawal (including any outstanding withdrawal liability that
the Company and the Controlled Group have incurred on the date of such
withdrawal) exceeds $250,000.
12.1.8 Judgments. Final judgments which exceed an aggregate of
$250,000 shall be rendered against the Company, or any Subsidiary and shall not
have been paid, discharged or vacated or had execution thereof stayed pending
appeal within 30 days after entry or filing of such judgments.
12.1.9 Invalidity of Guaranty, etc. The Guaranty shall cease to be in
full force and effect with respect to any Guarantor, any Guarantor shall fail
(subject to any applicable grace period) to comply with or to perform any
applicable provision of the Guaranty, or any Guarantor (or any Person by,
through or on behalf of such Guarantor) shall contest in any manner the
validity, binding nature or enforceability of the Guaranty with respect to such
Guarantor.
12.1.10 Invalidity of Collateral Documents, etc. Any Collateral
Document shall cease to be in full force and effect with respect to the Company
or any Guarantor, the Company or any Guarantor shall fail (subject to any
applicable grace period) to comply with or to perform any applicable provision
of any Collateral Document to which such entity is a party, or the Company or
any Guarantor (or any Person by, through or on behalf of the Company or such
Guarantor) shall contest in any manner the validity, binding nature or
enforceability of any Collateral Document.
12.1.11 Change in Control. (a) Any Person or group of Persons (within
the meaning of Section 13 or 14 of the Securities Exchange Act of 1934, but
excluding the executive managers of the Company as of the Effective Date) shall
acquire beneficial ownership (within the meaning of Rule 13d-3 promulgated under
such Act) of 30% or more of the outstanding shares of common stock of the
Company; (b) during any 24-month period, individuals who at the beginning of
such period constituted the Company's Board of Directors (together with any new
directors whose election by the Company's Board of Directors or whose nomination
for election by the Company's shareholders was approved by a vote of at least
two-thirds of the directors who either were directors at beginning of such
period or whose election or nomination was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the Company; (c) a
period of 60 consecutive days shall have elapsed during which any of the
individuals named in Schedule 12.1.11A shall have ceased to hold executive
offices with the Company at least equal in seniority to such individual's
present offices, as set out in such Schedule
58
12.1.11, excluding any such individual who has been replaced by another
individual or individuals reasonably satisfactory to the Required Banks (it
being understood that any such replacement individual shall be deemed added to
Schedule 12.1.11 on the date of approval thereof by the Required Banks); or (d)
a period of 60 consecutive days shall have elapsed during which all of the
individuals named in Schedule 12.1.11B shall have ceased to be members of the
Company's Board of Directors.
12.2 Effect of Event of Default. If any Event of Default described in
Section 12.1.4 shall occur, the Commitments (if they have not theretofore
terminated) shall immediately terminate and the Notes and all other obligations
hereunder shall become immediately due and payable and the Company shall become
immediately obligated to deliver to the Agent cash collateral in an amount equal
to the outstanding face amount of all Letters of Credit, all without
presentment, demand, protest or notice of any kind; and, if any other Event of
Default shall occur and be continuing, the Agent (upon written request of the
Required Banks) shall declare the Commitments (if they have not theretofore
terminated) to be terminated and/or declare all Notes and all other obligations
hereunder to be due and payable and/or demand that the Company immediately
deliver to the Agent cash collateral in amount equal to the outstanding face
amount of all Letters of Credit, whereupon the Commitments (if they have not
theretofore terminated) shall immediately terminate and/or all Notes and all
other obligations hereunder shall become immediately due and payable and/or the
Company shall immediately become obligated to deliver to the Agent cash
collateral in an amount equal to the face amount of all Letters of Credit, all
without presentment, demand, protest or notice of any kind. The Agent shall
promptly advise the Company of any such declaration, but failure to do so shall
not impair the effect of such declaration. Notwithstanding the foregoing, the
effect as an Event of Default of any event described in Section 12.1.1 or
Section 12.1.4 may be waived by the written concurrence of all of the Banks, and
the effect as an Event of Default of any other event described in this Section
12 may be waived by the written concurrence of the Required Banks. Any cash
collateral delivered hereunder shall be held by the Agent (without liability for
interest thereon) and applied to obligations arising in connection with any
drawing under a Letter of Credit. After the expiration or termination of all
Letters of Credit, such cash collateral shall be applied by the Agent to any
remaining obligations hereunder and any excess shall be delivered to the Company
or as a court of competent jurisdiction may elect.
59
SECTION 13 THE AGENT.
13.1 Appointment and Authorization. (a) Each Bank hereby irrevocably
(subject to Section 13.9) appoints, designates and authorizes the Agent to take
such action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent.
(b) Each Issuing Bank shall act on behalf of the Banks with respect
to any Letters of Credit issued by it and the documents associated therewith.
Each Issuing Bank shall have all of the benefits and immunities (i) provided to
the Agent in this Section 13 with respect to any acts taken or omissions
suffered by such Issuing Bank in connection with Letters of Credit issued by it
or proposed to be issued by it and the applications and agreements for letters
of credit pertaining to such Letters of Credit as fully as if the term "Agent",
as used in this Section 13, included such Issuing Bank with respect to such acts
or omissions and (ii) as additionally provided in this Agreement with respect to
the Issuing Banks.
13.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
13.3 Liability of Agent. None of the Agent-Related Persons shall (i)
be liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Banks for any recital,
statement, representation or warranty made by the Company or any Subsidiary or
Affiliate of the Company, or any officer thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
60
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Company or any other party to
any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Bank to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of the Company or any of the Company's
Subsidiaries or Affiliates.
13.4 Reliance by Agent. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to the Company), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Banks as it deems appropriate
and, if it so requests, confirmation from the Banks of their obligation to
indemnify the Agent against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Required Banks and such request and any action taken
or failure to act pursuant thereto shall be binding upon all of the Banks.
13.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Event of Default or Unmatured Event
of Default except with respect to defaults in the payment of principal, interest
and fees required to be paid to the Agent for the account of the Banks, unless
the Agent shall have received written notice from a Bank or the Company
referring to this Agreement, describing such Event of Default or Unmatured Event
of Default and stating that such notice is a "notice of default". The Agent will
notify the Banks of its receipt of any such notice. The Agent shall take such
action with respect to such Event of Default or Unmatured Event of Default as
may be requested by the Required Banks in accordance with Section 12; provided,
however, that unless and
61
until the Agent has received any such request, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Event of Default or Unmatured Event of Default as it shall deem
advisable or in the best interest of the Banks.
13.6 Credit Decision. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereafter taken, including any review of the affairs of the
Company and its Subsidiaries, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Bank. Each Bank represents to the
Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Company and its Subsidiaries, and all applicable bank regulatory laws relating
to the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Company hereunder. Each Bank also
represents that it will, independently and without reliance upon any Agent-
Related Person and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigations as it deems necessary to inform
itself as to the business, prospects, operations, property, financial and other
condition and creditworthiness of the Company. Except for notices, reports and
other documents expressly herein required to be furnished to the Banks by the
Agent, the Agent shall not have any duty or responsibility to provide any Bank
with any credit or other information concerning the business, prospects,
operations, property, financial or other condition or creditworthiness of the
Company which may come into the possession of any of the Agent-Related Persons.
13.7 Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Banks shall indemnify upon demand the Agent-Related
Persons (to the extent not reimbursed by or on behalf of the Company and without
limiting the obligation of the Company to do so), pro rata, from and against any
and all Indemnified Liabilities; provided, however, that no Bank shall be liable
for any payment to the Agent-Related Person of any portion of the Indemnified
Liabilities resulting solely from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Bank shall reimburse the
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including reasonable fees of attorneys
62
for the Agent (including the allocable costs of internal legal services and all
disbursements of internal counsel)) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that the Agent is not reimbursed for such expenses by or on behalf
of the Company. The undertaking in this Section shall survive repayment of the
Loans, cancellation of the Notes, any foreclosure under, or any modification,
release or discharge of, any or all of the Collateral Documents, any termination
of this Agreement and the resignation or replacement of the Agent.
For the purposes of this Section 13.7, "Indemnified Liabilities"
shall mean: any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses and disbursements (including
reasonable fees of attorneys for the Agent (including the allocable costs of
internal legal services and all disbursements of internal counsel)) of any kind
or nature whatsoever which may at any time (including at any time following
repayment of the Loan and the termination, resignation or replacement of the
Agent or the replacement of any Bank) be imposed on, incurred by or asserted
against any Agent-Related Person in any way relating to or arising out of this
Agreement or any document contemplated by or referred to herein, or the
transactions contemplated hereby, or any action taken or omitted by any such
Person under or in connection with any of the foregoing, including with respect
to any investigation, litigation or proceeding (including (a) any case, action
or proceeding before any court or other governmental authority relating to
bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the benefit
of creditors, composition, marshalling of assets for creditors, or other,
similar arrangement in respect of its creditors generally or any substantial
portion of its creditors; undertaken under U.S. Federal, state or foreign law,
including the Bankruptcy Code, and including any appellate proceeding) related
to or arising out of this Agreement or the Commitments or the use of the
proceeds thereof, whether or not any Agent-Related Person, any Bank or any of
their respective officers, directors, employees, counsel, agents or
13.8 Agent in Individual Capacity. BofA and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally
63
engage in any kind of banking, trust, financial advisory, underwriting or other
business with the Company and its Subsidiaries and Affiliates as though BofA
were not the Agent hereunder and without notice to or consent of the Banks. The
Banks acknowledge that, pursuant to such activities, BofA or its Affiliates may
receive information regarding the Company or its Affiliates (including
information that may be subject to confidentiality obligations in favor of the
Company or such Subsidiary) and acknowledge that the Agent shall be under no
obligation to provide such information to them. With respect to their Loans,
BofA and its Affiliates shall have the same rights and powers under this
Agreement as any other Bank and may exercise the same as though BofA were not
the Agent, and the terms "Bank" and "Banks" include BofA and its Affiliates, to
the extent applicable, in their individual capacities.
13.9 Successor Agent; Assignment of Agency. The Agent may, and at the
request of the Required Banks shall, resign as Agent upon 30 days' notice to the
Banks. If the Agent resigns under this Agreement, the Required Banks shall, with
(so long as no Event of Default exists) the consent of the Company (which shall
not be unreasonably withheld or delayed), appoint from among the Banks a
successor agent for the Banks. If no successor agent is appointed prior to the
effective date of the resignation of the Agent, the Agent may appoint, after
consulting with the Banks and the Company, a successor agent from among the
Banks. Upon the acceptance of its appointment as successor agent hereunder, such
successor agent shall succeed to all the rights, powers and duties of the
retiring Agent and the term "Agent" shall mean such successor agent, and the
retiring Agent's appointment, powers and duties as Agent shall be terminated.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Section 13 and Sections 14.6 and 14.13 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement. If no successor agent has accepted appointment as Agent by the date
which is 30 days following a retiring Agent's notice of resignation, the
retiring Agent's resignation shall nevertheless thereupon become effective and
the Banks shall perform all of the duties of the Agent hereunder until such
time, if any, as the Required Banks appoint a successor agent as provided for
above. Notwithstanding the foregoing, however, BofA may not be removed as the
Agent at the request of the Required Banks unless BofA shall also simultaneously
be replaced as an "Issuing Bank" hereunder pursuant to documentation in form and
substance reasonably satisfactory to BofA.
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13.10 Withholding Tax.
(a) If any Bank is a "foreign corporation, partnership or
trust" within the meaning of the Code and such Bank claims exemption
from, or a reduction of, U.S. withholding tax under Sections 1441 or
1442 of the Code, such Bank agrees to deliver to the Agent:
(i) if such Bank claims an exemption from, or a
reduction of, withholding tax under a United States tax
treaty, properly completed Internal Revenue Service ("IRS")
Forms 1001 and W-8 before the payment of any interest in
the first calendar year and before the payment of any
interest in each third succeeding calendar year during
which interest may be paid under this Agreement;
(ii) if such Bank claims that interest paid under
this Agreement is exempt from United States withholding tax
because it is effectively connected with a United States
trade or business of such Bank, two properly completed and
executed copies of IRS Form 4224 before the payment of any
interest is due in the first taxable year of such Bank and
in each succeeding taxable year of such Bank during which
interest may be paid under this Agreement, and IRS Form
W-9; and
(iii) such other form or forms as may be required
under the Code or other laws of the United States as a
condition to exemption from, or reduction of, United States
withholding tax. Such Bank agrees to promptly notify the
Agent of any change in circumstances which would modify or
render invalid any claimed exemption or reduction.
(b) If any Bank claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS
Form 1001 and such Bank sells, assigns, grants a participation in, or
otherwise transfers all or part of the obligations of the Company to
such Bank, such Bank agrees to notify the Agent of the percentage
amount in which it is no longer the beneficial owner of such
obligations of the Company hereunder. To the extent of such
percentage amount, the Agent will treat such Bank's IRS Form 1001 as
no longer valid.
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(c) If any Bank claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Agent sells,
assigns, grants a participation in, or otherwise transfers all or
part of the obligations of the Company to such Bank hereunder, such
Bank agrees to undertake sole responsibility for complying with the
withholding tax requirements imposed by Sections 1441 and 1442 of the
Code.
(d) If any Bank is entitled to a reduction in the
applicable withholding tax, the Agent may withhold from any interest
payment to such Bank an amount equivalent to the applicable
withholding tax after taking into account such reduction. If the
forms or other documentation required by subsection (a) of this
Section are not delivered to the Agent, then the Agent may withhold
from any interest payment to such Bank not providing such forms or
other documentation an amount equivalent to the applicable
withholding tax.
(e) If the IRS or any other governmental authority of the
United States or any other jurisdiction asserts a claim that the
Agent did not properly withhold tax from amounts paid to or for the
account of any Bank (because the appropriate form was not delivered
or was not properly executed, or because such Bank failed to notify
the Agent of a change in circumstances which rendered the exemption
from, or reduction of, withholding tax ineffective, or for any other
reason) such Bank shall indemnify the Agent fully for all amounts
paid, directly or indirectly, by the Agent as tax or otherwise,
including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to the Agent under this
Section, together with all costs and expenses (including reasonable
fees of attorneys for the Agent (including the allocable costs of
internal legal services and all disbursements of internal counsel)).
The obligation of the Banks under this subsection shall survive the
repayment of the Loans, cancellation of the Notes, any termination of
this Agreement and the resignation or replacement of the Agent.
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13.11 Collateral Matters. The Banks irrevocably authorize the Agent,
at its option and in its discretion, to release any Lien granted to or held by
the Agent under any Collateral Document (i) upon termination of the Commitments
and payment in full of all Loans and all other obligations of the Company
hereunder and the expiration or termination of all Letters of Credit; (ii)
constituting property sold or to be sold or disposed of as part of or in
connection with any disposition permitted hereunder; or (iii) subject to Section
14.1, if approved, authorized or ratified in writing by the Required Banks. Upon
request by the Agent at any time, the Banks will confirm in writing the Agent's
authority to release particular types or items of collateral pursuant to this
Section 13.11.
SECTION 14 GENERAL.
14.1 Waiver; Amendments. No delay on the part of the Agent, any Bank
or any other holder of a Note in the exercise of any right, power or remedy
shall operate as a waiver thereof, nor shall any single or partial exercise by
any of them of any right, power or remedy preclude other or further exercise
thereof, or the exercise of any other right, power or remedy. No amendment,
modification or waiver of, or consent with respect to, any provision of this
Agreement or the Notes shall in any event be effective unless the same shall be
in writing and signed and delivered by Banks having an aggregate Percentage of
not less than the aggregate Percentage expressly designated herein with respect
thereto or, in the absence of such designation as to any provision of this
Agreement or the Notes, by the Required Banks, and then any such amendment,
modification, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. No amendment, modification, waiver
or consent shall change the Percentage of any Bank without the consent of such
Bank. No amendment, modification, waiver or consent shall (i) extend or increase
the amount of the Commitments, (ii) extend the date for payment of any principal
of or interest on the Loans or any fees payable hereunder, (iii) reduce the
principal amount of any Loan, the rate of interest thereon or any fees payable
hereunder, (iv) release the Guaranty (other than with respect to a Guarantor
which ceases to be a Subsidiary as a result of a transaction permitted
hereunder) or all or any substantial part of the collateral granted under the
Collateral Documents or (v) reduce the aggregate Percentage required to effect
an amendment, modification, waiver or consent without, in each case, the consent
of all Banks. No provisions of Section 13 or other provision of this Agreement
affecting the Agent in its capacity as such shall be amended, modified or waived
without the consent of the Agent. No provision of this Agreement relating to the
rights or duties of an Issuing Bank in
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its capacity as such shall be amended, modified or waived without the consent of
such Issuing Bank.
14.2 Confirmations. The Company and each holder of a Note agree from
time to time, upon written request received by it from the other, to confirm to
the other in writing (with a copy of each such confirmation to the Agent) the
aggregate unpaid principal amount of the Loans then outstanding under such Note.
14.3 Notices. Except as otherwise provided in Section 2.2, all
notices hereunder shall be in writing (including facsimile transmission) and
shall be sent to the applicable party at its address shown on Schedule 14.3 or
at such other address as such party may, by written notice received by the other
parties, have designated as its address for such purpose. Notices sent by
facsimile transmission shall be deemed to have been given when sent; notices
sent by mail shall be deemed to have been given three Business Days after the
date when sent by registered or certified mail, postage prepaid; and notices
sent by hand delivery or overnight courier service shall be deemed to have been
given when received. For purposes of Section 2.2, the Agent shall be entitled to
rely on telephonic instructions from any person that the Agent in good faith
believes is an authorized officer or employee of the Company, and the Company
shall hold the Agent and each Bank harmless from any loss, cost or expense
resulting from any such reliance.
14.4 Computations. Where the character or amount of any asset or
liability or item of income or expense is required to be determined, or any
consolidation or other accounting computation is required to be made, for the
purpose of this Agreement, such determination or calculation shall, to the
extent applicable and except as otherwise specified in this Agreement, be made
in accordance with GAAP, consistently applied; provided that if the Company
notifies the Agent that the Company wishes to amend any covenant in Section 10
to eliminate or to take into account the effect of any change in GAAP on the
operation of such covenant (or if the Agent notifies the Company that the
Required Banks wish to amend Section 10 for such purpose), then the Company's
compliance with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner satisfactory to
the Company and the Required Banks.
14.5 Regulation U. Each Bank represents that it in good faith is not
relying, either directly or indirectly, upon any Margin Stock as collateral
security for the extension or maintenance by it of any credit provided for in
this Agreement.
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14.6 Costs, Expenses and Taxes. The Company agrees to pay on demand
all reasonable out-of-pocket costs and expenses of Agent-Related Persons
(including the reasonable accounting fees, appraisal fees and fees and charges
of counsel for the Agent- Related Persons and of local counsel, if any, who may
be retained by said counsel) in connection with the preparation, execution,
delivery and administration of this Agreement, the other Loan Documents and all
other documents provided for herein or delivered or to be delivered hereunder or
in connection herewith (including any amendments, supplements or waivers to any
Loan Documents), and all reasonable out-of-pocket costs and expenses (including
reasonable accounting fees, appraisal fees and attorneys' fees, court costs and
other legal expenses and allocated costs of staff counsel) incurred by the
Agent-Related Persons and each Bank after an Event of Default in connection with
the enforcement of this Agreement, the other Loan Documents or any such other
documents. Each Bank agrees to reimburse the Agent for such Bank's pro rata
share (based on its respective Percentage) of any such costs and expenses of the
Agent not paid by the Company. In addition, the Company agrees to pay, and to
save the Agent and the Banks harmless from all liability for, (a) any stamp or
other taxes (excluding income taxes and franchise taxes based on net income)
which may be payable in connection with the execution and delivery of this
Agreement, the borrowings hereunder, the issuance of the Notes or the execution
and delivery of any other Loan Document or any other document provided for
herein or delivered or to be delivered hereunder or in connection herewith and
(b) any fees of the Company's auditors in connection with any reasonable
exercise by the Agent and the Banks of their rights pursuant to Section 10.2.
All obligations provided for in this Section 14.6 shall survive repayment of the
Loans, cancellation of the Notes and any termination of this Agreement.
14.7 Subsidiary References. The provisions of this Agreement relating
to Subsidiaries shall apply only during such times as the Company has one or
more Subsidiaries.
14.8 Captions. Section captions used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
14.9 Assignments; Participations.
14.9.1 Assignments. Any Bank may, with the prior written consents of
the Company and the Agent (which consents shall not be unreasonably delayed or
withheld), at any time assign and delegate to one or more commercial banks or
other Persons (any Person to whom such an assignment and delegation is to be
made being herein called an "Assignee"), all or any fraction of such
69
Bank's Loans and Commitments (which assignment and delegation shall be of a
constant, and not a varying, percentage of all the assigning Bank's Loans and
Commitments) in a minimum aggregate amount equal to the lesser of (i) the
assigning Bank's remaining aggregate Commitments and (ii) $5,000,000; provided,
however, that (a) no assignment and delegation may be made to any Person if, at
the time of such assignment and delegation, the Company would be obligated to
pay any greater amount under Section 7.6 or Section 8 to the Assignee than the
Company is then obligated to pay to the assigning Bank under such Sections (and
if any assignment is made in violation of the foregoing, the Company will not be
required to pay the incremental amounts) and (b) the Company and the Agent shall
be entitled to continue to deal solely and directly with such Bank in connection
with the interests so assigned and delegated to an Assignee until the date when
all of the following conditions shall have been met:
(x) five Business Days (or such lesser period of time as
the Agent and the assigning Bank shall agree) shall have passed after
written notice of such assignment and delegation, together with
payment instructions, addresses and related information with respect
to such Assignee, shall have been given to the Company and the Agent
by such assigning Bank and the Assignee,
(y) the assigning Bank and the Assignee shall have executed
and delivered to the Company and the Agent an assignment agreement
substantially in the form of Exhibit G (an "Assignment Agreement"),
together with any documents required to be delivered thereunder,
which Assignment Agreement shall have been accepted by the Agent, and
(z) the assigning Bank or the Assignee shall have paid the
Agent a processing fee of $3,500.
From and after the date on which the conditions described above have been met,
(x) such Assignee shall be deemed automatically to have become a party hereto
and, to the extent that rights and obligations hereunder have been assigned and
delegated to such Assignee pursuant to such Assignment Agreement, shall have the
rights and obligations of a Bank hereunder, and (y) the assigning Bank, to the
extent that rights and obligations hereunder have been assigned and delegated by
it pursuant to such Assignment Agreement, shall be released from its obligations
hereunder. Within five Business Days after effectiveness of any assignment and
delegation, the Company shall execute and deliver to the Agent (for delivery to
the Assignee and the Assignor, as applicable) a new Note in the principal amount
of the Assignee's Loan Commitment and, if the assigning Bank has retained a Loan
Commitment hereunder, a replacement Note in the principal amount
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of the Loan Commitment retained by the assigning Bank (such Note to be in
exchange for, but not in payment of, the predecessor Note held by such assigning
Bank). Each such Note shall be dated the effective date of such assignment. The
assigning Bank shall xxxx the predecessor Note "exchanged" and deliver it to the
Company. Accrued interest on that part of the predecessor Note being assigned
shall be paid as provided in the Assignment Agreement. Accrued interest and fees
on that part of the predecessor Note not being assigned shall be paid to the
assigning Bank. Accrued interest and accrued fees shall be paid at the same time
or times provided in the predecessor Note and in this Agreement. Any attempted
assignment and delegation not made in accordance with this Section 14.9.1 shall
be null and void.
Notwithstanding the foregoing provisions of this Section 14.9.1 or
any other provision of this Agreement, any Bank may at any time assign all or
any portion of its Loans and its Note to a Federal Reserve Bank (but no such
assignment shall release any Bank from any of its obligations hereunder).
14.9.2 Participations. Any Bank may at any time sell to one or more
commercial banks or other Persons participating interests in any Loan owing to
such Bank, the Note held by such Bank, the Commitments of such Bank, the direct
or participation interest of such Bank in any Letter of Credit or any other
interest of such Bank hereunder (any Person purchasing any such participating
interest being herein called a "Participant"); provided that any Bank selling
any such participating interest shall give notice thereof to the Company. In the
event of a sale by a Bank of a participating interest to a Participant, (x) such
Bank shall remain the holder of its Note for all purposes of this Agreement, (y)
the Company and the Agent shall continue to deal solely and directly with such
Bank in connection with such Bank's rights and obligations hereunder and (z) all
amounts payable by the Company shall be determined as if such Bank had not sold
such participation and shall be paid directly to such Bank. No Participant
(other than a Participant which (i) is an affiliate of the participating Bank
and (ii) holds a 100% participation in the interests of such Bank hereunder)
shall have any direct or indirect voting rights hereunder except with respect to
any of the events (excluding the events described in clause (v) thereof)
described in the third to last sentence of Section 14.1. Each Bank agrees to
incorporate the requirements of the preceding sentence into each participation
agreement which such Bank enters into with any Participant. The Company agrees
that if amounts outstanding under this Agreement and the Notes are due and
payable (as a result of acceleration or otherwise), each Participant shall be
deemed to have the right of setoff in respect of its participating interest in
amounts owing under this Agreement, any Note and with respect to any Letter of
Credit to
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the same extent as if the amount of its participating interest were owing
directly to it as a Bank under this Agreement or such Note; provided that such
right of setoff shall be subject to the obligation of each Participant to share
with the Banks, and the Banks agree to share with each Participant, as provided
in Section 7.5. The Company also agrees that each Participant shall be entitled
to the benefits of Section 7.6 and Section 8 as if it were a Bank (provided that
no Participant shall receive any greater compensation pursuant to Section 7.6 or
Section 8 than would have been paid to the participating Bank if no
participation had been sold).
14.10 Governing Law. This Agreement and each Note shall be a contract
made under and governed by the internal laws of the State of Illinois. Whenever
possible each provision of this Agreement shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement. All obligations of the Company and rights of the Agent, the Banks and
any other holder of a Note expressed herein or in any other Loan Document shall
be in addition to and not in limitation of those provided by applicable law.
14.11 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement. When
counterparts executed by all of the parties hereto shall have been lodged with
the Agent (or, in the case of any Bank as to which an executed counterpart shall
not have been so lodged, the Agent shall have received confirmation from such
Bank of execution of a counterpart hereof by such Bank), this Agreement shall
become effective as of the date hereof, and at such time the Agent shall notify
the Company and each Bank.
14.12 Successors and Assigns. This Agreement shall be binding upon
the Company, the Banks and the Agent and their respective successors and
assigns, and shall inure to the benefit of the Company, the Banks and the Agent
and the successors and assigns of the Banks and the Agent.
14.13 Indemnification by the Company.
(a) In consideration of the execution and delivery of this Agreement
by the Agent and the Banks and the agreement to extend the Commitments provided
hereunder, the Company hereby agrees to
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indemnify, exonerate and hold the Agent, each Bank and each of the officers,
directors, employees, Affiliates and agents of the Agent and each Bank (each a
"Bank Party") free and harmless from and against any and all actions, causes of
action, suits, losses, liabilities, damages and expenses, including reasonable
attorneys' fees and charges and allocated costs of staff counsel (collectively,
for purposes of this Section 14.13, called the "Indemnified Liabilities"),
incurred by the Bank Parties or any of them as a result of, or arising out of,
or relating to (i) any tender offer, merger, purchase of stock, purchase of
assets or other similar transaction financed or proposed to be financed in whole
or in part, directly or indirectly, with the proceeds of any of the Loans, (ii)
the use, handling, release, emission, discharge, transportation, storage,
treatment or disposal of any hazardous substance at any property owned or leased
by the Company or any Subsidiary, (iii) any violation of any Environmental Laws
with respect to conditions at any property owned or leased by the Company or any
Subsidiary or the operations conducted thereon, (iv) the investigation, cleanup
or remediation of offsite locations at which the Company or any Subsidiary or
their respective predecessors are alleged to have directly or indirectly
disposed of hazardous substances or (v) the execution, delivery, performance or
enforcement of this Agreement or any other Loan Document by any of the Bank
Parties, except for any such Indemnified Liabilities arising on account of any
such Bank Party's gross negligence or willful misconduct. If and to the extent
that the foregoing undertaking may be unenforceable for any reason, the Company
hereby agrees to make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities which is permissible under applicable
law. Nothing set forth above shall be construed to relieve any Bank Party from
any obligation it may have under this Agreement.
(b) All obligations provided for in this Section 14.13 shall survive
repayment of the Loans, cancellation of the Notes, any foreclosure under, or any
modification, release or discharge of any or all of the Collateral Documents and
any termination of this Agreement.
14.14 FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE
COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE
AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE
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FOUND. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION
OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS
SET FORTH ABOVE. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR
WITHOUT THE STATE OF ILLINOIS. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY
SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE COMPANY HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, THE COMPANY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
14.15 WAIVER OF JURY TRIAL. EACH OF THE COMPANY, THE AGENT AND EACH
BANK HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN
DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING
FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING,
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.
Delivered at Chicago, Illinois, as of the day and year first above written.
UNITED ROAD SERVICES, INC.
By
--------------------------------------
Title
---------------------------------
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BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By
--------------------------------------
Title
-----------------------------------
BANK OF AMERICA NATIONAL TRUST AND
SAVING ASSOCIATION, as Issuing Bank and
as a Bank
By
--------------------------------------
Title
-----------------------------------
BANKBOSTON, N.A., as a Bank
By
--------------------------------------
Title
-----------------------------------
COMERICA BANK, as a Bank
By
--------------------------------------
Title
-----------------------------------
FLEET NATIONAL BANK, as a Bank
By
--------------------------------------
Title
-----------------------------------
75
