Exhibit 99.1
EXECUTION COPY
dated as of
June 27, 2008
among
LANDSTAR SYSTEM HOLDINGS, INC.,
LANDSTAR SYSTEM, INC.,
the Subsidiaries of the
Borrower signatories hereto,
the Several Lenders
from time to time parties hereto,
BANK OF AMERICA, N.A.,
BRANCH BANKING & TRUST CO.,
SUNTRUST BANK
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Co-Syndication Agents, and
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
X.X. XXXXXX SECURITIES INC.,
as Sole Lead Arranger and Sole Bookrunner
TABLE OF CONTENTS
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Page |
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ARTICLE I. |
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DEFINITIONS |
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1 |
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Section 1.1. |
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Defined Terms |
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1 |
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Section 1.2. |
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Other Definitional Provisions |
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17 |
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Section 1.3. |
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Accounting Terms; GAAP |
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18 |
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Section 1.4. |
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Foreign Currency Calculations |
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18 |
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ARTICLE II. |
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AMOUNT AND TERMS OF COMMITMENTS |
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18 |
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Section 2.1. |
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Revolving Credit Commitments |
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18 |
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Section 2.2. |
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Procedure for Revolving Credit Borrowings |
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19 |
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Section 2.3. |
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Commitment Fee |
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19 |
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Section 2.4. |
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Optional Termination or Reduction of Commitments |
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20 |
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Section 2.5. |
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Swing Line Commitments |
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20 |
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Section 2.6. |
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Conversion and Continuation Options |
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21 |
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Section 2.7. |
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Minimum Amounts and Maximum Number of Borrowings |
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22 |
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Section 2.8. |
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Repayment of Loans; Prepayments; Evidence of Debt |
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22 |
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Section 2.9. |
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Interest Rates and Payment Dates |
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24 |
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Section 2.10. |
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Computation of Interest and Fees |
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25 |
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Section 2.11. |
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Inability to Determine Interest Rate |
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25 |
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Section 2.12. |
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Pro Rata Treatment and Payments |
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26 |
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Section 2.13. |
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Illegality |
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27 |
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Section 2.14. |
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Requirements of Law |
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27 |
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Section 2.15. |
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Taxes |
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29 |
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Section 2.16. |
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Indemnity |
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31 |
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Section 2.17. |
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Certain Exclusions |
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31 |
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Section 2.18. |
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Replacement of Lender |
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32 |
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Section 2.19. |
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Increase in Commitments; Additional Lenders |
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32 |
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Section 2.20. |
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Determination of Dollar Amounts |
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33 |
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Section 2.21. |
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Market Disruption |
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33 |
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Section 2.22. |
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Judgment Currency |
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34 |
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ARTICLE III. |
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LETTERS OF CREDIT |
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34 |
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Section 3.1. |
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L/C Commitment |
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34 |
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Section 3.2. |
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Procedure for Issuance of Letters of Credit |
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35 |
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Section 3.3. |
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Fees, Commissions and Other Charges |
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35 |
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Section 3.4. |
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L/C Participations |
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36 |
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Section 3.5. |
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Reimbursement Obligation |
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37 |
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Section 3.6. |
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Obligations Absolute |
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37 |
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Section 3.7. |
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Letter of Credit Payments |
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38 |
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Page |
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Section 3.8. |
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Application |
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38 |
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Section 3.9. |
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Existing Letters of Credit. |
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38 |
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ARTICLE IV. |
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REPRESENTATIONS AND WARRANTIES |
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38 |
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Section 4.1. |
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Financial Condition |
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38 |
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Section 4.2. |
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No Change |
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39 |
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Section 4.3. |
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Corporate Existence; Compliance with Law |
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39 |
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Section 4.4. |
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Organizational Power; Authorization; Enforceable Obligations |
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39 |
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Section 4.5. |
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No Legal Bar |
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39 |
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Section 4.6. |
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No Material Litigation |
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40 |
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Section 4.7. |
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No Default |
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40 |
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Section 4.8. |
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Ownership of Property; Liens |
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40 |
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Section 4.9. |
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Intellectual Property |
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40 |
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Section 4.10. |
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No Burdensome Restrictions |
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40 |
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Section 4.11. |
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Taxes |
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40 |
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Section 4.12. |
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Federal Regulations |
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40 |
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Section 4.13. |
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ERISA |
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41 |
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Section 4.14. |
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Investment Company Act; Other Regulations |
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41 |
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Section 4.15. |
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Subsidiaries |
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41 |
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Section 4.16. |
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Purpose of Loans |
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41 |
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Section 4.17. |
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Environmental Matters |
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41 |
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ARTICLE V. |
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CONDITIONS PRECEDENT |
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42 |
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Section 5.1. |
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Conditions to Effectiveness |
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42 |
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Section 5.2. |
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Conditions to Each Extension of Credit |
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45 |
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ARTICLE VI. |
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AFFIRMATIVE COVENANTS |
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45 |
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Section 6.1. |
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Financial Statements |
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45 |
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Section 6.2. |
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Certificates; Other Information |
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46 |
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Section 6.3. |
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Payment of Obligations |
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46 |
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Section 6.4. |
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Conduct of Business and Maintenance of Existence |
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46 |
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Section 6.5. |
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Maintenance of Property; Insurance |
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47 |
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Section 6.6. |
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Inspection of Property; Books and Records; Discussions |
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47 |
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Section 6.7. |
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Notices |
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47 |
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Section 6.8. |
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Environmental Laws |
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48 |
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Section 6.9. |
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Additional Subsidiaries |
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48 |
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ARTICLE VII. |
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NEGATIVE COVENANTS |
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48 |
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Section 7.1. |
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Financial Condition Covenants |
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49 |
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Section 7.2. |
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Limitation on Indebtedness |
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49 |
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Section 7.3. |
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Limitation on Liens |
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51 |
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Section 7.4. |
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Limitation on Guarantee Obligations |
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53 |
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Page |
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Section 7.5. |
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Limitation on Fundamental Changes |
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53 |
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Section 7.6. |
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Limitation on Sale of Assets |
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54 |
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Section 7.7. |
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Limitation on Leases |
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54 |
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Section 7.8. |
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Limitation on Dividends |
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55 |
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Section 7.9. |
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[Reserved] |
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56 |
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Section 7.10. |
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Limitation on Investments, Loans and Advances |
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56 |
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Section 7.11. |
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Limitation on Optional Payments and Modifications of Debt Instruments |
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58 |
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Section 7.12. |
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Limitation on Transactions with Affiliates |
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58 |
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Section 7.13. |
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Limitation on Sales and Leasebacks |
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58 |
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Section 7.14. |
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Limitation on Changes in Fiscal Year |
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58 |
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Section 7.15. |
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Limitation on Negative Pledge Clauses |
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58 |
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Section 7.16. |
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Limitation on Lines of Business |
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59 |
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ARTICLE VIII. |
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EVENTS OF DEFAULT |
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59 |
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ARTICLE IX. |
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THE ADMINISTRATIVE AGENT |
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62 |
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Section 9.1. |
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Appointment |
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62 |
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Section 9.2. |
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Delegation of Duties |
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62 |
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Section 9.3. |
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Exculpatory Provisions |
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62 |
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Section 9.4. |
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Reliance by Administrative Agent |
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62 |
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Section 9.5. |
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Notice of Default |
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63 |
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Section 9.6. |
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Non-Reliance on Administrative Agent and Other Lenders |
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63 |
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Section 9.7. |
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Indemnification |
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63 |
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Section 9.8. |
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Administrative Agent in Its Individual Capacity |
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64 |
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Section 9.9. |
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Successor Administrative Agent |
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64 |
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ARTICLE X. |
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MISCELLANEOUS |
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64 |
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Section 10.1. |
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Amendments and Waivers |
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64 |
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Section 10.2. |
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Notices |
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65 |
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Section 10.3. |
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No Waiver; Cumulative Remedies |
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66 |
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Section 10.4. |
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Survival of Representations and Warranties |
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66 |
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Section 10.5. |
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Payment of Expenses and Taxes |
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66 |
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Section 10.6. |
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Successors and Assigns; Participations and Assignments |
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67 |
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Section 10.7. |
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Adjustments; Set-off |
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69 |
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Section 10.8. |
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Counterparts; Effectiveness |
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70 |
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Section 10.9. |
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Severability |
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70 |
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Section 10.10. |
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Integration |
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70 |
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Section 10.11. |
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GOVERNING LAW |
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70 |
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Section 10.12. |
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Submission To Jurisdiction |
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70 |
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Section 10.13. |
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Waivers |
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70 |
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Section 10.14. |
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Acknowledgements |
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71 |
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Section 10.15. |
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WAIVERS OF JURY TRIAL |
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71 |
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Section 10.16. |
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Confidentiality |
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71 |
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Section 10.17. |
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USA PATRIOT Act |
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71 |
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Section 10.18. |
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Foreign Assets Control Regulations, Etc. |
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72 |
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Section 10.19. |
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Exchange Rates |
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72 |
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Section 10.20. |
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Currency Conversion |
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72 |
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Section 10.21. |
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No Margin Stock Collateral |
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73 |
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Section 10.22. |
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Termination of Commitments under Existing Credit Agreement |
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73 |
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iii
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SCHEDULES |
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Schedule 1.1(a)
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Commitments |
Schedule 1.1(b)
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Subsidiary Guarantors |
Schedule 1.1(c)
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Pricing Grid |
Schedule 1.1(d)
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Mandatory Costs |
Schedule 3.9
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Existing Letters of Credit |
Schedule 4.15
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Subsidiaries |
Schedule 4.17
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Environmental Matters |
Schedule 7.2
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Existing Indebtedness |
Schedule 7.3
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Existing Liens |
Schedule 7.4
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Existing Guarantee Obligations |
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EXHIBITS |
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Exhibit A
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Form of Revolving Credit Note |
Exhibit B
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Form of Swing Line Note |
Exhibit C-1
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Form of Parent Guarantee |
Exhibit C-2
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Form of Subsidiaries Guarantee |
Exhibit C-3
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Form of L/C Guarantee |
Exhibit D
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Form of Closing Certificate |
Exhibit E-1
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Form of Opinion of Debevoise & Xxxxxxxx LLP |
Exhibit E-2
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Form of Opinion of Borrower’s General Counsel |
Exhibit E-3
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Form of Opinion of Xxxxxx and Calder |
Exhibit F
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Form of Assignment and Acceptance |
iv
CREDIT AGREEMENT, dated as of June 27, 2008, among LANDSTAR SYSTEM HOLDINGS, INC., a Delaware
corporation (the “
Borrower”), LANDSTAR SYSTEM, INC., a Delaware corporation (the
“
Parent”), the Subsidiaries of the Borrower that are signatories hereto (such Subsidiaries,
collectively, the “
Subsidiary Guarantors”), the several banks and other financial
institutions from time to time parties to this Agreement (such banks and other financial
institutions, collectively, the “
Lenders”), JPMORGAN CHASE BANK, N.A. (“
JPMCB”),
as administrative agent for the Lenders hereunder (in such capacity, the “
Administrative
Agent”) and as issuer of the Letters of Credit as provided herein (in such capacity, the
“
Issuing Lender”), and BANK OF AMERICA, N.A., BRANCH BANKING & TRUST CO., SUNTRUST BANK and
WACHOVIA BANK, NATIONAL ASSOCIATION, as co-syndication agents for the Lenders hereunder (in such
capacity, the “
Syndication Agents”).
The parties hereto hereby agree as follows:
ARTICLE I. DEFINITIONS
Section 1.1. Defined Terms. As used in this Agreement, the following terms shall have the
following meanings:
“
ABR”: for any day, a rate per annum (rounded upwards, if necessary, to the next 1/16
of 1%) equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof: “
Prime Rate”
shall mean the rate of interest per annum publicly announced from time to time by JPMCB as its
prime rate in effect at its principal office in
New York City (the Prime Rate not being intended to
be the lowest rate of interest charged by JPMCB in connection with extensions of credit to
debtors); and “
Federal Funds Effective Rate” shall mean, for any day, the weighted average
of the rates on overnight federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of
New York, or, if such rate is not so published for any day which is a Business Day,
the average of the quotations for the day of such transactions received by the Administrative Agent
from three federal funds brokers of recognized standing selected by it. If for any reason the
Administrative Agent shall have determined (which determination shall be conclusive absent manifest
error) that it is unable to ascertain the Federal Funds Effective Rate, for any reason, including
the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance
with the terms thereof, the ABR shall be determined without regard to clause (b) of the first
sentence of this definition until the circumstances giving rise to such inability no longer exist.
Any change in the ABR due to a change in the Prime Rate or the Federal Funds Effective Rate shall
be effective as of the opening of business on the effective day of such change in the Prime Rate or
the Federal Funds Effective Rate, respectively.
“ABR Borrowing”: a Revolving Credit Borrowing comprised of ABR Loans made pursuant to
Section 2.2, or converted to ABR Loans pursuant to Section 2.6, or a Swing Line Borrowing made
pursuant to Section 2.5.
“ABR Loans”: Loans the rate of interest applicable to which is based upon the ABR.
“Account Receivable Indebtedness”: any obligation arising in connection with a
Permitted Receivables Transaction (including, without limitation, any such obligation that may not
be reflected in financial statements). To the extent a Permitted Receivables Transaction is
outstanding and is accounted for as a sale of accounts receivable under GAAP, Account Receivable
Indebtedness shall also include the additional Indebtedness, determined on a consolidated basis,
which would have been outstanding had such Permitted Receivables Transaction been accounted for as
a borrowing, and the discount rate in such Permitted Receivables Transaction shall be treated as
interest.
1
“Administrative Agent”: collectively, JPMCB, in its capacity as administrative agent
for the Lenders hereunder, and any Affiliates of JPMCB as may be designated in writing by it to the
Borrower and the Lenders as performing duties of such Administrative Agent with respect to the
Eurocurrency Loans and Letters of Credit denominated in any Foreign Currencies, and any successor
Administrative Agent appointed pursuant to Section 9.9.
“Administrative Questionnaire” means, with respect to each Lender, an administrative
questionnaire in the form prepared by the Administrative Agent and submitted to the Administrative
Agent duly completed by such Lender.
“Affiliate”: as to any Person, any other Person (other than a Subsidiary) which,
directly or indirectly, is in control of, is controlled by, or is under common control with, such
Person. For purposes of this definition, “control” of a Person means the power, directly or
indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the
election of directors of such Person or (b) direct or cause the direction of the management and
policies of such Person, whether by contract or otherwise.
“Agreed Currencies”: (i) Dollars, (ii) euro, (iii) Pounds Sterling, (iv) Canadian
Dollars, and (v) any other Foreign Currency agreed to by the Administrative Agent and each of the
Lenders; provided that, in the case of any Eurocurrency Borrowing or Letter of Credit to be
denominated in any Foreign Currency, such currency at the time is freely available, freely
transferable and freely convertible into Dollars, and dealings in deposits in such currency are
carried on in the London or other applicable interbank market.
“
Agreement”: this
Credit Agreement, as amended, supplemented or otherwise modified
from time to time.
“Applicable Margin”: for each Type of Loan on any date during any fiscal quarter of
the Parent, the rate per annum for such Type of Loan set forth in Schedule 1.1(c) based on
the Leverage Ratio as of the end of the preceding fiscal quarter of the Parent.
“Applicable Payment Office”: the office of the Administrative Agent specified in
Section 10.2 or, in the case of Eurocurrency Borrowings and Letters of Credit denominated in any
Foreign Currencies, the applicable Eurocurrency Payment Office.
“Application”: an application, in such form as the Issuing Lender may specify from
time to time, requesting the Issuing Lender to open a Letter of Credit.
“Approximate Equivalent Amount”: with respect to any Foreign Currency and a
corresponding amount of Dollars, the Dollar Equivalent amount of such Foreign Currency with respect
to such amount of Dollars on or as of such date, rounded to the nearest amount of such Foreign
Currency as determined by the Administrative Agent from time to time based upon the spot rate
quoted by its foreign exchange trading desk.
“Assignee”: as defined in Section 10.6(c).
“Available Revolving Credit Commitment”: as to any Lender at any time, an amount
equal to the excess, if any, of (a) the amount of such Lender’s Revolving Credit Commitment over
(b) the Dollar Equivalent amount of such Lender’s then Outstanding Revolving Extensions of Credit.
“Borrower”: as defined in the preamble hereto.
2
“Borrowing”: a Revolving Credit Borrowing (which may be either a Eurocurrency
Borrowing or an ABR Borrowing) or Swing Line Borrowing, as the case may be.
“Borrowing Date”: any Business Day specified in a notice pursuant to Section 2.2 or
2.5 as a date on which the Borrower requests the Lenders to fund a Borrowing hereunder.
“Borrowing Notice”: as defined in Section 2.2(a).
“Business”: as defined in Section 4.17.
“
Business Day”: a day other than a Saturday, Sunday or other day on which commercial
banks in
New York City are authorized or required by law to close;
provided that, when used
in connection with a Eurocurrency Loan or a Letter of Credit denominated in a Foreign Currency, the
term “Business Day” shall also exclude (x) any day on which banks are not open for dealings in the
Foreign Currency applicable to such Eurocurrency Loan or Letter of Credit in the London interbank
market (and, if the Eurocurrency Loan or the Letter of Credit which are the subject of a drawing,
payment, reimbursement or rate selection is denominated in euros, a day upon which TARGET is not
open for business), and (y) any day on which banks are not open for dealings in the Foreign
Currency in the jurisdiction of the Eurocurrency Payment Office applicable to such Eurocurrency
Loan or Letter of Credit or of the principal financial center of the country of such Foreign
Currency.
“Canadian Dollars”: the lawful currency of Canada.
“Capital Stock”: any and all shares, interests, participations or other equivalents
(however designated) of capital stock of a corporation, any and all equivalent ownership interests
in a limited liability company, partnership, or other Person (other than a corporation), and any
and all warrants or options to purchase any of the foregoing.
“Cash Equivalents”: (a) securities with maturities of one year or less from the date
of acquisition issued or fully guaranteed or insured by the United States Government or any agency
thereof; (b) certificates of deposit, time deposits, eurodollar time deposits, overnight bank
deposits, bankers’ acceptances and repurchase agreements having maturities of one year or less from
the date of acquisition issued by any Lender or by any commercial bank organized under the laws of
the United States of America or any state thereof having combined capital and surplus of not less
than $100,000,000; (c) commercial paper of an issuer rated at least A-1 by Standard & Poor’s
Corporation or P-1 by Xxxxx’x Investors Service, Inc., or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies cease publishing
ratings of investments, and, in either case, maturing within six months from the date of
acquisition; (d) commercial paper of any Lender or an affiliate of any Lender rated at least A-2 by
Standard & Poor’s Corporation or P-2 by Xxxxx’x Investors Service, Inc., or carrying an equivalent
rating by a nationally recognized rating agency, if both of the two named rating agencies cease
publishing ratings of investments, and, in either case, maturing within six months from the date of
acquisition; (e) shares of money market mutual funds that invest solely in instruments described in
the foregoing clauses (a) through (d) and that are rated AA or better by Standard & Poor’s
Corporation or Aa2 by Xxxxx’x Investors Service, Inc.; and (f) marketable direct general
obligations issued by any state, county or municipality, or any agency or instrumentality of any
thereof, with maturities of one year or less from the date of acquisition and that are rated AA- or
better by Standard & Poor’s Corporation or Aa3 by Xxxxx’x Investors Service, Inc.
“Closing Date”: the date on which the conditions precedent set forth in Section 5.1
shall be satisfied.
3
“Code”: the Internal Revenue Code of 1986, as amended from time to time.
“Commitment Fee Rate”: on any date during any fiscal quarter of the Parent, the rate
per annum set forth in Schedule 1.1(c) under the column heading “Commitment Fee Rate”
opposite the row heading describing the Leverage Ratio as of the end of the preceding fiscal
quarter of the Parent.
“Commodity Price Protection Agreement”: any futures agreement or commodity price
protection agreement or other commodity hedge arrangement entered into in the ordinary course of
business by the Borrower or any of its Subsidiaries in order to protect them against fluctuations
in fuel prices.
“Commonly Controlled Entity”: an entity, whether or not incorporated, which is under
common control with the Borrower within the meaning of Section 4001 of ERISA or is part of a group
which includes the Borrower and which is treated as a single employer under Section 414 of the
Code.
“Computation Date”: as defined in Section 2.20.
“Consolidated EBITDA”: for any period, Consolidated Net Income of the Parent and its
Subsidiaries for such period plus, without duplication and to the extent reflected as a charge or
expense in the calculation of such Consolidated Net Income for such period, the sum of (i) total
income tax expense, (ii) interest expense, amortization or writeoff of debt discount and debt
issuance costs and commissions, discounts and other fees and charges associated with Indebtedness
(including the Loans), (iii) depreciation and amortization expense, (iv) amortization of
intangibles (including, but not limited to, goodwill) and organization costs, (v) any non-cash
expenses and charges, (vi) any non-cash loss associated with the sale or write-down of assets not
in the ordinary course, (vii) any extraordinary or non-recurring expenses or losses (including,
without limitation, losses on sales of assets outside of the ordinary course of business and in
respect of Permitted Receivables Transactions, whether or not such losses are otherwise includable
as a separate item in the statement of such Consolidated Net Income for such period) and (viii) any
charges relating to expensing employee stock options or other stock based compensation and minus
any extraordinary or non-recurring income or gains (including, whether or not otherwise includable
as a separate item in the statement of such Consolidated Net Income for such period, gains on the
sales of assets outside of the ordinary course of business and in respect of Permitted Receivables
Transactions).
“Consolidated Interest Expense”: for any period, the consolidated amount of interest
expense of the Parent and its Subsidiaries with respect to such period, determined on a
consolidated basis in accordance with GAAP (but excluding for purposes of calculating the amount of
such interest expense for any such period the effect of any interest income for such period)
including, without limitation, the interest component of payments made under Financing Leases and
the discount rate in any Permitted Receivables Transaction, as such consolidated amount is
increased or decreased, as the case may be, to give effect to any costs or benefits arising under
any Interest Rate Protection Agreements during such period.
“Consolidated Lease Expense”: for any period, the aggregate rental expenses of the
Parent and its Subsidiaries, determined on a consolidated basis in accordance with GAAP, payable in
respect of such period under leases (other than Financing Leases) for real and/or personal property
(net of income from subleases thereof); provided that, for the purposes of Section 7.7,
“Consolidated Lease Expense” shall not include (i) payments to independent contractors based on a
percentage of revenue generated or on miles driven in connection with the transportation of freight
using tractors and/or containers and/or trailing equipment provided by such independent contractors
and (ii) payments to warehousemen in connection with the provision to the Parent and its
Subsidiaries of warehouse capacity and related warehouse services, to the extent that such payments
are required to be paid by, and are billed to, customers of the Parent and its Subsidiaries.
4
“Consolidated Net Income”: for any period, the consolidated net income (or loss) of
the Parent and its Subsidiaries, determined on a consolidated basis in accordance with GAAP;
provided that, there shall be excluded the income (or deficit) of any other Person (other
than a Subsidiary) in which the Parent or any of its Subsidiaries has an ownership interest, except
to the extent that any such income is actually received by the Parent or such Subsidiary in the
form of dividends or similar distributions.
“Consolidated Net Worth”: at any date, an amount equal to (x) Consolidated Total
Assets as at such date, minus (y) Consolidated Total Liabilities as at such date.
“Consolidated Total Assets”: at any date, the amount, computed in accordance with
GAAP, of the total assets of the Parent and its consolidated Subsidiaries as at such date.
“Consolidated Total Liabilities”: at any date, the amount, computed in accordance
with GAAP, of the total liabilities of the Parent and its consolidated Subsidiaries as at such
date.
“Contractual Obligation”: as to any Person, any provision of any security issued by
such Person or of any agreement, instrument or other undertaking to which such Person is a party or
by which it or any of its property is bound.
“Country Risk Event”: means:
(i) any law, action or failure to act by any Governmental Authority in any country asserting
jurisdiction over the Letter of Credit beneficiary which has the effect of:
(a) changing the obligations of the Issuing Lender or the Lenders under the relevant Letter
of Credit, this Agreement or any of the other Loan Documents as originally agreed or otherwise
creating any additional liability, cost or expense to the Issuing Lender, the Lenders or the
Administrative Agent from that which exists on the Effective Date,
(b) changing the ownership or control by such Letter of Credit beneficiary of its business,
or
(c) preventing or restricting the conversion into or transfer of the applicable Agreed
Currency;
(ii) force majeure; or
(iii) any similar event outside the control of the Administrative Agent and the Issuing
Lender;
which, in relation to (i), (ii) and (iii), directly or indirectly, prevents or restricts the
payment or transfer of any amounts owing under the relevant Letter of Credit in the applicable
Agreed Currency into an account designated by the Administrative Agent or the Issuing Lender and
freely available to the Administrative Agent or the Issuing Lender.
“Default”: any of the events specified in Article VIII, whether or not any
requirement for the giving of notice, the lapse of time, or both, or any other condition, has been
satisfied.
“Dollar Equivalent”: as of any date of determination (i) with respect to any amount
in Dollars, such amount, and (ii) with respect to any amount in any currency other than Dollars,
the equivalent in Dollars of such amount, determined by the Administrative Agent using the
applicable Exchange Rate
with respect to such currency at the time in effect pursuant to Section 10.19 or as otherwise
expressly provided herein.
5
“Dollars” and “$”: dollars in lawful currency of the United States of
America.
“Domestic Subsidiary”: any Subsidiary that is organized under the laws of one of the
fifty states of the United States or the District of Columbia.
“Environmental Laws”: any and all foreign, Federal, state, local or municipal laws,
rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental
Authority or other Requirements of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of the environment, as now or may at any
time hereafter be in effect.
“EMU Legislation”: the legislative measures of the European Union for the
introduction of, changeover to or operation of the Euro in one or more member states.
“ERISA”: the Employee Retirement Income Security Act of 1974, as amended from time to
time.
“EU”: the European Union.
“euro” and/or “EUR”: the single currency of the participating member states
of the European Union as constituted by the Treaty on European Union and as referred to in the EMU
Legislation for the introduction of, changeover to or operation of the euro in one or more member
states.
“Eurocurrency”: when used in reference to a currency, an Agreed Currency, and when
used in reference to any Loan whether such Loan is bearing interest at a rate determined by
reference to the Eurocurrency Rate.
“Eurocurrency Base Rate”: with respect to each day during each Interest Period
pertaining to a Eurocurrency Loan, (a) if denominated in any currency other than euro, the rate per
annum determined by the Administrative Agent at approximately 11:00 a.m., London time, on the
Quotation Day for such Interest Period by reference to the British Bankers’ Association Interest
Settlement Rates for deposits in the currency of such Eurocurrency Loan (as reflected on the
applicable Reuters Screen LIBOR 01 Page or any successor or substitute page reflecting such rates),
for a period equal to such Interest Period; or (b) if denominated in euro, the rate per annum
determined by the Administrative Agent at approximately 11:00 a.m., Brussels time, on the Quotation
Day for such Interest Period, by reference to the Banking Federation of the European Union for
deposits in euro (as reflected on the applicable Moneyline Telerate Service Page 248-249 or any
successor or substitute page reflecting such rates), for a period equal to such Interest Period;
provided that, to the extent that an interest rate is not ascertainable pursuant to the
foregoing provisions of this definition, the “Eurocurrency Base Rate” shall be the average (rounded
upward, if necessary, to the next 1/100 of 1%) of the respective interest rates per annum at which
deposits in the currency of such Eurocurrency Loan (based on the amount of the Eurocurrency Loan of
the Administrative Agent, in its capacity as a Lender, included in the related Eurocurrency
Borrowing) are offered for such Interest Period to major banks in the London or other applicable
offshore interbank market by the principal office of the Administrative Agent in such offshore
interbank market at approximately (i) 11:00 a.m., London time, on the Quotation Day for such
Interest Period if such Eurocurrency Loan is denominated in any currency other than euro or (ii)
11:00 a.m., Brussels time, on the Quotation Day for such Interest Period if such Eurocurrency Loan
is denominated in euro.
6
“Eurocurrency Borrowing”: a Revolving Credit Borrowing comprised of Eurocurrency
Loans made pursuant to Section 2.2, or continued as, or converted to, Eurocurrency Loans pursuant
to Section 2.6.
“Eurocurrency Payment Office”: for each Eurocurrency Borrowing or Letter of Credit
denominated in a Foreign Currency, the office, branch, affiliate or correspondent bank of the
Administrative Agent for funding and/or payment of such Eurocurrency Borrowing or Letter of Credit
as specified in writing by the Administrative Agent to the Borrower and each Lender from time to
time in writing by the Administrative Agent to such Persons.
“Eurocurrency Loans”: Loans the rate of interest applicable to which is based upon
the Eurocurrency Rate.
“Eurocurrency Rate”: with respect to each day during each Interest Period pertaining
to a Eurocurrency Loan, a rate per annum determined for such day in accordance with the following
formula (rounded upward to the nearest 1/100th of 1%):
Eurocurrency Base Rate
1.00 - Eurocurrency Reserve Requirements
“Eurocurrency Reserve Requirements”: for any day as applied to a Eurocurrency Loan,
the aggregate (without duplication) of the rates (expressed as a decimal fraction) for the maximum
reserve, liquid asset, fees or similar requirements (including any marginal, special, emergency or
supplemental reserves or other requirements) established by any Governmental Authority for any
category of deposits or liabilities customarily used to fund loans in such currency, expressed in
the case of each such requirement as a decimal as may be applicable to any Lender (without
duplication of any amounts constituting Mandatory Costs or other amounts payable pursuant to
Section 2.9(d) or (e)). Such reserve percentages shall, in the case of Dollar denominated Loans,
include those imposed pursuant to Regulation D of the Board of Governors of the Federal Reserve
System. Eurocurrency Loans shall be deemed to be subject to such reserve, liquid asset or similar
requirements without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under any applicable law, rule or regulation, including
Regulation D. The Eurocurrency Reserve Requirements shall be adjusted automatically on and as of
the effective date of any change in any reserve, liquid asset or similar requirement, and the
Administrative Agent shall notify the Borrower promptly of any such adjustment.
“Event of Default”: any of the events specified in Article VIII, provided that any
requirement for the giving of notice, the lapse of time, or both, or any other condition, has been
satisfied.
“Exchange Rate”: on any day, for purposes of determining the Dollar Equivalent of any
other currency, the rate at which such other currency may be exchanged into Dollars at the time of
determination on such day calculated on the basis of the arithmetical mean of the buy and sell spot
rates of exchange into Dollars as set forth on such date on the applicable Reuters currency page at
or about 11:00 a.m., London time; provided, that if such rate is not then available on such
currency page, then such calculation shall be made on the basis of the arithmetical mean of the buy
and sell spot rates of exchange that the Administrative Agent offers to buy and sell such currency
on the London or other applicable interbank market at 11:00 a.m., Local Time in such interbank
market, on or as of the most recent Computation Date or upon the occurrence of an Event of Default
as described in paragraph (f) of Article VIII; provided further, that the
Administrative Agent may obtain such rates from another financial institution designated by the
Administrative Agent if its foreign exchange trading desk does not have spot buy and sell rates for
such currency.
7
“Exchange Rate Protection Agreement”: any currency exchange rate cap agreement, swap
agreement, forward or futures agreement, or other currency exchange rate hedge arrangement entered
into by the Borrower or any Subsidiary in order to protect the Borrower or any Subsidiary, as the
case may be, against fluctuations in currency exchange rates.
“
Existing Credit Agreement”: that certain Fourth Amended and Restated
Credit
Agreement dated as of July 8, 2004 among the Borrower, the Parent, the subsidiaries of the Borrower
party thereto, the lenders party thereto, and JPMCB, as administrative agent for such lenders.
“
Existing Letters of Credit”: the letters of credit issued by JPMCB pursuant to the
Existing
Credit Agreement and outstanding on the Closing Date, as described on
Schedule
3.9.
“Financing Lease”: any lease of property, real or personal, the obligations of the
lessee in respect of which are required in accordance with GAAP to be capitalized on a balance
sheet of the lessee.
“Financing Vehicle”: any direct or indirect wholly-owned Subsidiary of the Parent
formed for the sole purpose of engaging in the Operator Financing Program, and which engages in no
business activities other than those related to the Operator Financing Program.
“Fixed Charge Coverage Ratio: as defined in Section 7.1(b).
“Foreign Currencies”: all Agreed Currencies other than Dollars.
“Foreign Currency Sublimit”: means $75,000,000.
“Foreign Subsidiary”: any Subsidiary that is organized under the laws of a
jurisdiction other than one of the fifty states of the United States or the District of Columbia.
“GAAP”: generally accepted accounting principles in the United States of America in
effect from time to time; provided that, for purposes of determining compliance with the
covenants set forth in Sections 7.1, 7.7 and 7.9, “GAAP” means such generally accepted accounting
principles as utilized in preparing the audited financial statements delivered pursuant to the
first sentence of Section 4.1.
“Governmental Authority”: any nation or government, any state or other political
subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
“Guarantee Obligation”: as to any Person (the “guaranteeing person”), any
obligation of (a) the guaranteeing person or (b) another Person (including, without limitation, any
bank under any letter of credit) to induce the creation of which the guaranteeing person has issued
a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or in effect
guaranteeing any Indebtedness, leases, dividends or other obligations (the “primary
obligations”) of any other third Person (the “primary obligor”) in any manner, whether
directly or indirectly, including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any property constituting
direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or
payment of any such primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring the owner of
8
any
such primary obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation
against loss in respect thereof; provided, however, that the term Guarantee
Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of
(a) an amount equal to the stated or determinable amount of the primary obligation in respect of
which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing
person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation,
unless such primary obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall
be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as
determined by the Borrower in good faith.
“Guarantees”: the collective reference to the Parent Guarantee, the Subsidiaries
Guarantee and the L/C Guarantee.
“Guarantor”: any Person delivering a Guarantee pursuant to this Agreement.
“IFRS”: means International Financial Reporting Standards and applicable accounting
requirements published by the International Accounting Standards Board, as in effect from time to
time.
“Indebtedness”: of any Person (the “Debtor”) at any date, without
duplication, (a) all indebtedness of the Debtor for borrowed money or for the deferred purchase
price of property or services (other than current trade liabilities, accrued compensation and other
liabilities, costs or fees incurred in the ordinary course of business and payable in accordance
with customary practices), (b) any other indebtedness of such Debtor which is evidenced by a note,
bond, debenture or similar instrument, (c) all obligations of such Debtor under Financing Leases,
(d) all obligations of such Debtor in respect of acceptances issued or created for the account of
such Debtor, (e) all liabilities of any other Person or Persons secured by any Lien on any property
owned by the Debtor even though the Debtor has not assumed or otherwise become liable for the
payment thereof, (f) all Account Receivable Indebtedness of such Debtor, (g) obligations of the
Debtor under any conditional sale or other title retention agreements relating to property acquired
by the Debtor, (h) all net amounts that would be payable by the Debtor under any Interest Rate
Protection Agreement if such Interest Rate Protection Agreement were to be terminated as of the
date of any determination of Indebtedness, (i) off-balance sheet liability of the Debtor retained
in connection with synthetic leases and sale-leaseback transactions and other similar obligations
of the Debtor with respect to other transactions that are the functional equivalent of borrowings
but are not recognized as liabilities on the Debtor’s consolidated balance sheet prepared in
accordance with GAAP, and (j) all Guarantee Obligations of obligations otherwise constituting
Indebtedness as herein defined. The Indebtedness of any Debtor shall include the Indebtedness of
any partnership in which the Debtor is a general partner.
“Insolvency”: with respect to any Multiemployer Plan, the condition that such Plan is
insolvent within the meaning of Section 4245 of ERISA.
“Insolvent”: pertaining to a condition of Insolvency.
“Insurance Subsidiary”: one or more wholly owned corporate Subsidiaries of the
Borrower organized under the insurance laws of the Cayman Islands for the purpose of engaging in
the Insurance Subsidiary Business.
9
“Insurance Subsidiary Business”: the business of (x) providing insurance or
reinsurance to (a) the Borrower, its Subsidiaries and/or independent contractors doing business
with the Borrower and/or any of its Subsidiaries and/or (b) any other Persons principally engaged
in trucking or a similar business, including independent contractors who do not do business with
the Borrower and/or any of its Subsidiaries, and/or (y) providing other reinsurance to other
Persons.
“Interest Payment Date”: (a) as to any ABR Loan, the last day of each March, June,
September and December to occur while such Loan is outstanding, (b) as to any Eurocurrency Loan
having an Interest Period of three months or less, the last day of such Interest Period, (c) as to
any Eurocurrency Loan having an Interest Period longer than three months, each day which is three
months, or a whole multiple thereof, after the first day of such Interest Period and the last day
of such Interest Period, (d) as to any Swing Line Loan, the day such Swing Line Loan is required to
be repaid, and (e) as to all Loans, the Termination Date.
“Interest Period”: with respect to any Eurocurrency Loan:
(i) initially, the period commencing on the borrowing or conversion date, as the case
may be, with respect to such Eurocurrency Loan and ending seven or fourteen days, or one,
two, three, six or, if available, twelve months thereafter, as selected by the Borrower in
its notice of borrowing or notice of conversion, as the case may be, given with respect
thereto; and
(ii) thereafter, each period commencing on the last day of the next preceding Interest
Period applicable to such Eurocurrency Loan and ending one, two, three, six or, if
available, twelve months thereafter, as selected by the Borrower by irrevocable notice to
the Administrative Agent in accordance with Section 2.6;
provided that, all of the foregoing provisions relating to Interest Periods are
subject to the following:
(1) if any Interest Period pertaining to a Eurocurrency Loan would otherwise end on a
day that is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to carry such Interest
Period into another calendar month in which event such Interest Period shall end on the
immediately preceding Business Day;
(2) any Interest Period that would otherwise extend beyond the Termination Date shall
end on the Termination Date, as the case may be; and
(3) any Interest Period pertaining to a Eurocurrency Loan that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period) shall end on the
last Business Day of a calendar month.
“Interest Rate Protection Agreement”: any interest rate cap agreement or interest
rate swap agreement or other interest rate hedge arrangement entered into by the Borrower or any
Subsidiary in order to protect the Borrower or such Subsidiary, as the case may be, against
fluctuations in interest rates in respect of any obligations.
“Investment Grade”: a rating of BBB or higher from Standard & Poor’s Corporation and
Baa or higher from Xxxxx’x Investors Service, Inc.
10
“Issuing Lender”: JPMCB and any other Lender approved by the Administrative Agent and
the Borrower as the issuer of any Letter of Credit hereunder, in each case, in its capacity as
issuer of any Letter of Credit.
“ISP”: International Standby Practices 1998 (International Chamber of Commerce
Publication Number 590) and any subsequent revision thereof adhered to by JPMorgan Chase Bank, N.A.
“JPMCB”: as defined in the preamble hereto.
“L/C Commitment”: $75,000,000.
“L/C Fee”: on any date of determination for any Letter of Credit, the rate per annum
equal to the Applicable Margin for Eurocurrency Loans in effect on such date multiplied by the
average daily aggregate Dollar Equivalent amount available to be drawn under such Letter of Credit
during the period for which such determination is made.
“L/C Fee Payment Date”: the last day of each March, June, September and December, and
with respect to each Letter of Credit, the date of expiration or cancellation of such Letter of
Credit.
“L/C Guarantee”: the Guarantee to be executed and delivered by the Parent,
substantially in the form of Exhibit C-3, as the same may be amended, supplemented or
otherwise modified from time to time.
“L/C Obligations”: at any time, an amount equal to the sum of (a) the aggregate
Dollar Equivalent amount of the then undrawn and unexpired amount of the then outstanding Letters
of Credit and (b) the aggregate Dollar Equivalent amount of all unpaid Reimbursement Obligations.
“L/C Participants”: the collective reference to all the Lenders other than the
Issuing Lender.
“Lender Affiliate”: (a) with respect to any Lender, (i) an Affiliate of such Lender
or (ii) any entity (whether a corporation, partnership, trust or otherwise) that is engaged in
making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit
in the ordinary course of its business and is administered or managed by a Lender or an Affiliate
of such Lender and (b) any Person (other than a natural person) that is engaged in making,
purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary
course of its business and that is administered or managed by (i) a Lender, (ii) an Affiliate of a
Lender or (iii) an entity or an Affiliate of an entity that administers or manages a Lender.
“Lenders”: as defined in the preamble hereto.
“Lending Office” means the “Lending Office” of such Lender (or an Affiliate of such
Lender) designated for each Type and/or currency of Loan or Letter of Credit in the Administrative
Questionnaire submitted by such Lender or such other office of such Lender (or an Affiliate of such
Lender) as such Lender may from time to time specify to the Administrative Agent and the Borrower
as the office by which its Loans and Letters of Credit of such Type and/or currency are to be made
and maintained.
“Letters of Credit”: as defined in Section 3.1(a).
“Leverage Ratio”: as defined in Section 7.1(a).
11
“Lien”: any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge or other security interest or any preference,
priority or other security agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention agreement and any
Financing Lease having substantially the same economic effect as any of the foregoing).
“Loan”: any loan made by any Lender pursuant to this Agreement, which loan may be
outstanding as a Revolving Credit Loan (as either an ABR Loan or a Eurocurrency Loan) or a Swing
Line Loan.
“Loan Documents”: this Agreement, the Notes, if any, the Guarantees, the
Applications, if any, and the Pledge Agreements, if any.
“Loan Parties”: the Parent, the Borrower and each Subsidiary of the Borrower which is
a party to a Loan Document.
“Local Time”: as defined in Section 1.2(f).
“Mandatory Costs”: in relation to any Eurocurrency Loans, any addition to the
interest rate determined in accordance with Schedule 1.1(d).
“Material Adverse Effect”: a material adverse effect on (a) the business, operations,
property or condition (financial or otherwise) of the Parent and its Subsidiaries taken as a whole
or (b) the validity or enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Administrative Agent or the Lenders hereunder or thereunder.
“Material Environmental Amount”: an amount payable by the Borrower and/or its
Subsidiaries for remedial costs, compliance costs, compensatory damages, punitive damages, fines,
penalties or any combination thereof, which, after deducting the portion thereof, if any, that is
covered by insurance (with respect to which coverage the Lenders shall have been provided evidence
of such coverage), is equal to at least $10,000,000.
“Materials of Environmental Concern”: any gasoline or petroleum (including crude oil
or any fraction thereof) or petroleum products or any hazardous or toxic substances, materials or
wastes, defined or regulated as such in or under any Environmental Law, including, without
limitation, asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
“Multiemployer Plan”: a Plan which is a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
“Non-Excluded Taxes”: as defined in Section 2.15.
“Notes”: the collective reference to any promissory notes evidencing Revolving Credit
Loans and Swing Line Loans substantially in the forms of Exhibit A and Exhibit B,
respectively.
“Offshore Joint Venture”: any Subsidiary Guarantor, all of the Capital Stock of which
is at all times owned directly or indirectly by the Insurance Subsidiary and one or more of the
Parent or the Borrower, formed under the laws of any jurisdiction other than the United States or
any political subdivision thereof for the sole purpose of making Permitted Insurance Company
Investments.
12
“Operator Financing Program”: a program pursuant to which the Operator Financing
Subsidiary or the Financing Vehicle, as the case may be, may provide financing to independent
contractors doing business with the Borrower and its Subsidiaries to enable such independent
contractors to purchase tractors, trailers and related transportation equipment expected to be used
in connection with the business of the Borrower and its Subsidiaries.
“Operator Financing Subsidiary”: Landstar Contractor Financing, Inc.
“Outstanding Permitted Line of Credit Indebtedness”: at any time, the aggregate
principal amount of Indebtedness incurred under unsecured (or, to the extent permitted by Section
7.3(m), secured) lines of credit not extended pursuant to this Agreement.
“Outstanding Revolving Extensions of Credit”: as to any Lender at any time, an amount
equal to the sum of (a) the Dollar Equivalent amount of such Lender’s Revolving Credit Percentage
of the aggregate principal amount of all Revolving Credit Loans then outstanding, (b) the Dollar
Equivalent amount of such Lender’s Revolving Credit Percentage of all L/C Obligations then
outstanding, and (c) such Lender’s Revolving Credit Percentage of all Swing Line Loans then
outstanding.
“Overnight Foreign Currency Rate”: means, for any amount payable in a Foreign
Currency, the rate of interest per annum as determined by the Administrative Agent at which
overnight or weekend deposits in the relevant currency (or if such amount due remains unpaid for
more than three Business Days, then for such other relevant period of time) for delivery in
immediately available and freely transferable funds would be offered by the Administrative Agent to
major banks in the applicable interbank market upon request of such major banks for the relevant
currency as determined above and in an amount comparable to the unpaid principal amount of the
related payment.
“Parent”: as defined in the preamble hereto.
“Parent Guarantee”: the Guarantee to be executed and delivered by the Parent,
substantially in the form of Exhibit C-1, as the same may be amended, supplemented or
otherwise modified from time to time.
“Participant”: as defined in Section 10.6(b).
“Participating Member State” means a member state of the European Communities that
adopts or has adopted the euro as its lawful currency under the legislation of the European Union
for European Monetary Union.
“PBGC”: the Pension Benefit Guaranty Corporation established pursuant to Subtitle A
of Title IV of ERISA.
“Percentage-Based Leases”: those tractor, trailer and related equipment leases where
rent is based on a percentage of the revenues derived from such equipment.
“Permitted Acquisition”: any acquisition described in Section 7.10(g) which satisfies
all of the terms and conditions set forth therein.
“Permitted Insurance Company Investments”: any investments (i) in Cash Equivalents
(provided that for this purpose investments of the type described in clause (e) of the definition
of Cash Equivalents need not be rated), (ii) in preferred equity securities of any corporation
provided that (A) at the time any such investment is made, such investment is rated either (x) one,
two or three by the Securities Valuation
13
Office of the National Association of Insurance
Commissioners or (y) Investment Grade and (B) immediately after giving effect to any such
investment, the aggregate amount of all investments made in reliance on this clause (ii) shall not
exceed 20% of the Insurance Subsidiary’s and the Offshore Joint Venture’s combined total assets at
the time such investment is made, (iii) constituting loans and advances to the Parent, Borrower or
any of its Subsidiaries, (iv) constituting the acquisition of loans made by the Operator Financing
Subsidiary or the Financing Vehicle, as the case may be, in an aggregate amount not to exceed at
any time 25% of the Insurance Subsidiary’s total assets at the time such investment is made, (v) in
tractors, trailers and other fixed assets used in the operations of the Borrower and its
Subsidiaries
provided that the Insurance Subsidiary leases such assets to one or more of the Borrower’s
Subsidiaries and (vi) in obligations which, at the time the investment in question is made, are
rated either (X) one, two or three by the Securities Valuation Office of the National Association
of Insurance Commissioners or (Y) Investment Grade.
“Permitted Receivables Transaction”: any sale or sales of, and/or securitization of,
or transfer of, any accounts receivable and related records, collateral and rights of the Borrower
and/or any of its Subsidiaries (the “Receivables”) pursuant to which (a) the Receivables SPV
realizes aggregate net proceeds of not more than $75,000,000 at any one time outstanding,
including, without limitation, any revolving purchase(s) of Receivables where the maximum aggregate
uncollected purchase price (exclusive of any deferred purchase price) for such Receivables at any
time outstanding does not exceed $75,000,000, (b) the Receivables shall be transferred or sold to
the Receivables SPV at fair market value or at a market discount, and shall not exceed the greater
of (i) $100,000,000 in the aggregate or (ii) the Receivables of Landstar Ranger, Inc. at the time
such transfer or sale, as the case may be, takes place and (c) obligations arising therefrom shall
be non-recourse to the Borrower and its Subsidiaries (other than the Receivables SPV).
“Permitted Specified Additional Debt”: unsecured (or, to the extent permitted by
Section 7.3(m), secured) Indebtedness issued by the Borrower which is payable with interest and
fees at rates consistent with those prevailing in the relevant market at the time of issuance (as
determined in good faith by the Borrower) and (i) no part of the principal of which is scheduled to
be paid (whether by way of mandatory sinking fund, mandatory redemption, mandatory prepayment or
otherwise) prior to June , 2013, and (ii) the other terms and conditions of which,
taken as a whole, including, without limitation, the covenants, default provisions and
representations and warranties, are not more restrictive than the terms and conditions of this
Agreement (as determined in good faith by the Borrower).
“Person”: an individual, partnership, limited liability company, corporation,
business trust, joint stock company, trust, unincorporated association, joint venture, Governmental
Authority or other entity of whatever nature.
“Plan”: at a particular time, any employee benefit plan which is covered by ERISA and
in respect of which the Borrower or a Commonly Controlled Entity is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to be) an “employer” as
defined in Section 3(5) of ERISA.
“Pledge Agreement”: any pledge agreement in a form reasonably acceptable to the
Administrative Agent, executed by the Borrower and/or any other Loan Party in favor of the
Administrative Agent for the benefit of the Lenders, pursuant to which such Loan Party or Loan
Parties shall pledge the Capital Stock of their Foreign Subsidiaries in accordance with Section
6.9.
“Pounds Sterling”: the lawful currency of the United Kingdom.
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“Quotation Day”: with respect to any Eurocurrency Borrowing and any Interest Period,
(i) in the case of a Eurocurrency Borrowing denominated in Dollars or euro, two (2) Business Days
prior to the commencement of such Interest Period, and (ii) in the case of a Eurocurrency Borrowing
denominated in any Foreign Currency other than euro, the day on which it is market practice in the
relevant interbank market for major banks to give quotations for deposits in the currency of such
Borrowing for delivery on the first day of such Interest Period (and if such quotations would
normally be given by major banks on more than one day, the Quotation Day will be the last of such
days).
“Receivables SPV”: any one or more direct or indirect wholly-owned Subsidiary of the
Parent formed for the sole purpose of engaging in Permitted Receivables Transactions, and which
engages in no business activities other than those related to Permitted Receivables Transactions.
“Reference Banks” means JPMorgan Chase Bank, N.A. and Bank of America, N.A. or if any
such Lender assigns all of its Commitment and the Loans owing to it in accordance with Section
10.6, such other Lender as may be designated by the Administrative Agent and approved by the
Borrower (such approval not to be unreasonably withheld).
“Refunded Swing Line Loans”: as defined in Section 2.5(b).
“Register”: as defined in Section 10.6(d).
“Regulation U”: Regulation U of the Board of Governors of the Federal Reserve System
as in effect from time to time.
“Reimbursement Obligation”: the obligation of the Borrower or the applicable
Subsidiary Guarantor to reimburse the Issuing Lender pursuant to Section 3.5 for any amounts drawn
under Letters of Credit.
“Reorganization”: with respect to any Multiemployer Plan, the condition that such
plan is in reorganization within the meaning of Section 4241 of ERISA.
“Reportable Event”: any of the events set forth in Section 4043(b) of ERISA, other
than those events as to which the thirty day notice period is waived under subsections .13, .14,
.16, .18, .19 or .20 of PBGC Reg. Section 2615.
“Required Lenders”: at any time, Lenders having Revolving Credit Percentages which
total in the aggregate at least 51%.
“Requirement of Law”: as to any Person, the certificate or articles of incorporation
and by-laws, partnership agreement, limited liability company agreement, or other applicable
organizational or governing documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in each case applicable
to and binding upon such Person or any of its property or to which such Person or any of its
property is subject.
“Reset Date”: as defined in Section 10.19(a).
“Responsible Officer”: the Chief Executive Officer, the President, the Vice President
and Treasurer or any other Vice President of the Borrower or, with respect to financial matters,
the Chief Financial Officer or the Controller of the Borrower.
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“Revolving Credit Borrowing”: Revolving Credit Loans of the same Type and currency
that are made, converted or continued simultaneously of the same day and, in the case of
Eurocurrency Loans, as to which a single Interest Period is in effect.
“Revolving Credit Commitment”: as to any Lender, the obligation of such Lender to
make Revolving Credit Loans (including Revolving Credit Loans in connection with Section 2.5(b)) to
the Borrower, and to issue or participate in Letters of Credit issued on behalf of the Borrower or
any Subsidiary Guarantor hereunder, in an aggregate principal amount at any one time outstanding
not to exceed the amount set forth under the heading “Revolving Credit Commitment” opposite such
Lender’s
name on Schedule 1.1(a), as such amount may be increased or reduced from time to time
in accordance with the provisions of this Agreement.
“Revolving Credit Commitment Period”: the period from and including the Closing Date,
to but not including the Termination Date then in effect, or such earlier date on which the
Revolving Credit Commitments shall terminate as provided herein.
“Revolving Credit Loans”: as defined in Section 2.1(a).
“Revolving Credit Percentage”: as to any Lender at any time, the percentage which
such Lender’s Revolving Credit Commitment then constitutes of the aggregate Revolving Credit
Commitments (or, at any time after the Revolving Credit Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such Lender’s Outstanding
Revolving Extensions of Credit then outstanding constitutes of the aggregate principal amount of
the Outstanding Revolving Extensions of Credit of all Lenders then outstanding).
“Short Term Leases”: leases (other than Financing Leases and Percentage-Based Leases)
to which the Parent or any of its Subsidiaries is a party for tractors, trailers and related
equipment expiring twelve months or less after the date thereof.
“Single Employer Plan”: any Plan which is covered by Title IV of ERISA, but which is
not a Multiemployer Plan.
“Subsidiaries Guarantee”: the Guarantee to be executed and delivered by each
Subsidiary Guarantor, substantially in the form of Exhibit C-2, as the same may be amended,
supplemented or otherwise modified from time to time.
“Subsidiary Guarantors”: the Subsidiaries of the Borrower listed on Schedule
1.1(b) hereto, the Insurance Subsidiary, the Offshore Joint Venture and each other Subsidiary
which shall become a party to the Subsidiaries Guarantee subsequent to the Closing Date, excluding,
in all cases, the Operator Financing Subsidiary and the Financing Vehicle. Notwithstanding the
foregoing, neither the Landstar Scholarship Fund nor the BCO Benevolence Fund shall be a Subsidiary
Guarantor.
“Subsidiary”: as to any Person, a corporation, partnership or other entity of which
shares of stock or other ownership interests having ordinary voting power (other than stock or such
other ownership interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Borrower.
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“Swing Line Borrowing”: a borrowing of a Swing Line Loan made by the Borrower from
the Swing Line Lender pursuant to Section 2.5.
“Swing Line Lender”: JPMCB or any other Lender approved by the Administrative Agent
and the Borrower to make Swing Line Loans to the Borrower pursuant to Section 2.5.
“Swing Line Loan”: as defined in Section 2.5(a).
“Termination Date”: June 27, 2013.
“TARGET”: the Trans-European Automated Real-time Gross Settlement Express Transfer
(TARGET) payment system (or, if such payment system ceases to be operative, such other payment
system (if any) reasonably determined by the Administrative Agent to be a suitable replacement) for
the settlement of payments in euro.
“Total Indebtedness”: at any date, consolidated Indebtedness of the Parent and its
Subsidiaries, as at such date, determined on a consolidated basis in accordance with GAAP, plus to
the extent not otherwise included, Account Receivable Indebtedness; provided that, for
purposes of the definition of “Total Indebtedness”, the term “Indebtedness” shall not include the
items set forth in clauses (g), (h) and (i) in the definition of the term “Indebtedness”, but shall
include Guarantee Obligations described in clause (j) of such definition to the extent such
Guarantee Obligations relate to primary obligations of the types described in clauses (a) through
(f) of such definition.
“Transferee”: as defined in Section 10.6(f).
“Type”: as to any Loan, its nature as an ABR Loan or a Eurocurrency Loan.
“UCP”: the Uniform Customs and Practice for Documentary Credits (2007 Revision),
International Chamber of Commerce Publication No. 600, as the same may be amended or superseded
from time to time.
Section 1.2. Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in this Agreement shall have the
defined meanings when used in the other Loan Documents or any certificate or other document made or
delivered pursuant hereto.
(b) As used herein and in the other Loan Documents, and any certificate or other document made
or delivered pursuant hereto, accounting terms relating to the Borrower and its Subsidiaries not
defined in Section 1.1 and accounting terms partly defined in Section 1.1, to the extent not
defined, shall have the respective meanings given to them under GAAP.
(c) The words “hereof’ “herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section, subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) The word “including” when used in this Agreement means including, without limitation.
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(e) The meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.
(f) Unless otherwise specified, all references to times of day in this Agreement shall be
deemed to refer to
New York City time, except that references herein to “
Local Time” with
respect to any Eurocurrency Borrowing or Letter of Credit denominated in a Foreign Currency shall
be deemed to refer to local time at the applicable Eurocurrency Payment Office in respect of such
Eurocurrency Borrowing or Letter of Credit.
Section 1.3. Accounting Terms; GAAP. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time; provided that, if the Borrower notifies the Administrative
Agent that the Borrower requests an amendment to any provision hereof to (i) eliminate the effect
of any change occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the Borrower that the Required
Lenders request an amendment to any provision hereof for such purpose) or (ii) to modify any
provision hereof to reflect the Borrower’s adoption of IFRS, regardless of whether any such notice
is given before or after such change in GAAP, in the application thereof or such adoption, then
such provision shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith.
Section 1.4. Foreign Currency Calculations. For purposes of any determination of
amounts specified in Article VII or Article VIII, all amounts incurred, outstanding or proposed to
be incurred or outstanding in currencies other than Dollars shall be translated into Dollars in
accordance with GAAP on the date of such determination.
ARTICLE II. AMOUNT AND TERMS OF COMMITMENTS
Section 2.1. Revolving Credit Commitments.
(a) Subject to the terms and conditions hereof, each Lender severally agrees to make revolving
credit loans (“Revolving Credit Loans”) to the Borrower from time to time during the
Revolving Credit Commitment Period in an aggregate principal amount at any one time outstanding,
when added to (i) such Lender’s Revolving Credit Percentage of the then outstanding L/C Obligations
and (ii) such Lender’s Revolving Credit Percentage of all Swing Line Loans then outstanding (net of
the portion, if any, of the proceeds of such Revolving Credit Loans that are applied at the time
they are made to repay such Swing Line Loans) not to exceed the Dollar Equivalent amount of such
Lender’s Revolving Credit Commitment. During the Revolving Credit Commitment Period, the Borrower
may use the Revolving Credit Commitments by borrowing, prepaying the Revolving Credit Loans in
whole or in part, and reborrowing, all in accordance with the terms and conditions hereof. The
failure of any Lender to make any Revolving Credit Loan required to be made by it shall not relieve
any other Lender of its obligations hereunder; provided that, no Lender shall be
responsible for any other Lender’s failure to make Revolving Credit Loans as required.
(b) Each Revolving Credit Borrowing shall be comprised of (i) Eurocurrency Loans, or (ii) ABR
Loans, as determined by the Borrower and notified to the Administrative Agent in accordance with
Sections 2.2 and 2.6; provided that, no Eurocurrency Borrowing shall be made after the day
that is seven days prior to the Termination Date. Funding of each Revolving Credit Borrowing shall
be made in the Agreed Currency specified by the Borrower in the Borrowing Notice with respect to
such Revolving Credit Borrowing; provided that, no Revolving Credit Borrowing may be
requested in a Foreign Currency if the aggregate Dollar Equivalent amount of all outstanding
Eurocurrency Borrowings denominated in Foreign Currencies (including the Eurocurrency Borrowing
then being requested) and the Dollar Equivalent amount of all L/C Obligations denominated in
Foreign Currencies that are then outstanding would exceed the Foreign Currency Sublimit; and
provided further that funding of each ABR Borrowing shall only be made in Dollars.
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Section 2.2. Procedure for Revolving Credit Borrowings.
(a) The Borrower may borrow under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day; provided that, the Borrower shall give the
Administrative Agent irrevocable notice of each requested Revolving Credit Borrowing (each a
“Borrowing Notice”), specifying (i) the amount to be borrowed, (ii) the requested Borrowing
Date, (iii)
whether the Borrowing is to be comprised of Eurocurrency Loans or ABR Loans, and (iv) if a
Eurocurrency Borrowing, the currency of such Eurocurrency Borrowing and the length of the initial
Interest Period therefor. Any such Borrowing Notice given with respect to a Eurocurrency Borrowing
denominated in a Foreign Currency must be in writing; any such Borrowing Notice given with respect
to a Revolving Credit Borrowing denominated in Dollars, if given by means other than written
notice, shall be promptly confirmed in writing by the Borrower. Each ABR Borrowing and each
Eurocurrency Borrowing denominated in Dollars shall be in a minimum amount of $1,000,000 and a
whole multiple of $100,000. Each Eurocurrency Borrowing denominated in a Foreign Currency shall be
in a minimum amount in such Foreign Currency that is the Approximate Equivalent Amount of
$1,000,000 and a whole multiple in such Foreign Currency that is the Approximate Equivalent Amount
of $100,000.
(b) Borrowing Notices pursuant to Section 2.2(a) must be received by the Administrative Agent
by the following applicable dates and times: (i) for ABR Borrowings, not later than 12:30 p.m. one
Business Day prior to the requested Borrowing Date, (ii) for Eurocurrency Borrowings denominated in
Dollars, not later than 12:30 p.m. three Business Days prior to the requested Borrowing Date, and
(iii) for Eurocurrency Borrowings denominated in a Foreign Currency, not later than 11:00 a.m.
Local Time four Business Days prior to the requested Borrowing Date.
(c) Upon receipt of any Borrowing Notice from the Borrower, the Administrative Agent shall
promptly notify each Lender thereof. Each Lender will make the amount of its Revolving Credit
Percentage of each Borrowing available to the Administrative Agent for the account of the Borrower
at the Applicable Payment Office prior to 1:00 p.m. (Local Time, in the case of Eurocurrency Loans
being funded in a Foreign Currency) on the Borrowing Date requested by the Borrower in funds
immediately available and in the applicable currency. Each Lender at its option may make any
Eurocurrency Loan by causing any domestic or, if such Loan is denominated in a Foreign Currency,
foreign branch or Affiliate of such Lender to make such Eurocurrency Loan (and in the case of an
Affiliate, the provisions of Sections 2.13 through 2.18 shall apply to such Affiliate to the same
extent as to such Lender); provided that, any exercise of such option shall not affect the
obligation of the Borrower to repay such Eurocurrency Loan in accordance with the terms of this
Agreement. Such Borrowing will then be made available to the Borrower by the Administrative Agent
crediting the account of the Borrower with the aggregate of the amounts made available to the
Administrative Agent by the Lenders and in like funds as received by the Administrative Agent.
Section 2.3. Commitment Fee. The Borrower agrees to pay to the Administrative Agent for the
account of each Lender a commitment fee for the period from and including the first day of the
Revolving Credit Commitment Period to the Termination Date, computed at the Commitment Fee Rate on
the average daily amount of the Available Revolving Credit Commitment of such Lender during the
period for which payment is made, payable quarterly in arrears on the last day of each March, June,
September and December and on the Termination Date, or on such earlier date as the Revolving Credit
Commitments shall terminate as provided herein, commencing on the first of such dates to occur
after the date hereof; provided, however, that for purposes of this Section 2.3
only, such Lender’s (including the Swing Line Lender’s) Revolving Credit Percentage of any
outstanding Swing Line Loans shall be excluded in the calculation of such Lender’s Available
Revolving Credit Commitment.
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Section 2.4. Optional Termination or Reduction of Commitments. The Borrower shall have the
right, upon not less than three Business Days’ prior written notice to the Administrative Agent, to
terminate the Revolving Credit Commitments or, from time to time, to reduce the amount of the
Revolving Credit Commitments; provided that, no such termination or reduction of the
Revolving Credit Commitments shall be permitted if, after giving effect thereto and to any
prepayments of the Revolving Credit Loans and the Swing Line Loans made on the effective date
thereof, the Outstanding Revolving Extensions of Credit of all Lenders would exceed the Revolving
Credit Commitments of all Lenders in
effect after such requested reduction. Any such reduction shall be in an amount equal to
$1,000,000 or a whole multiple thereof and shall reduce permanently the Revolving Credit
Commitments then in effect.
Section 2.5. Swing Line Commitments.
(a) Subject to the terms and conditions hereof and provided no Default or Event of Default
shall have occurred and be continuing, the Swing Line Lender agrees to make swing line loans
(individually, a “Swing Line Loan”, and collectively, the “Swing Line Loans”)
available to the Borrower from time to time during the Revolving Credit Commitment Period in an
aggregate principal amount at any one time outstanding not to exceed $25,000,000; provided
that, the Swing Line Lender shall have no obligation to and shall not issue any Swing Line Loan if,
after giving effect to such issuance, the Outstanding Revolving Extensions of Credit of all Lenders
would exceed the Revolving Credit Commitments of all Lenders then in effect. Amounts borrowed by
the Borrower under this Section 2.5 may be repaid and, through but excluding the Termination Date,
reborrowed. All Swing Line Loans shall be made as ABR Loans and shall not be entitled to be
converted into Eurocurrency Loans. Each Swing Line Borrowing shall be in an amount equal to
$100,000 or a whole multiple of $100,000 in excess thereof. The Borrower shall give the Swing Line
Lender irrevocable notice (which notice must be received by the Swing Line Lender prior to 12:00
Noon, on the requested Borrowing Date) specifying the Borrowing Date and the amount of the
requested Swing Line Loan. Each such notice given by means other than written notice shall be
promptly confirmed in writing by the Borrower. The proceeds of each Swing Line Loan will be made
available by the Swing Line Lender to the Borrower by crediting the account of the Borrower with
such proceeds.
(b) The Swing Line Lender at any time in its sole and absolute discretion, may, and on each
Monday (or if such day is not a Business Day, the next Business Day) shall, on behalf of the
Borrower (which hereby irrevocably directs the Swing Line Lender to act on its behalf) request
prior to 12:00 Noon that each Lender, including the Swing Line Lender, make a Revolving Credit Loan
in an amount equal to such Lender’s Revolving Credit Percentage of the amount of the Swing Line
Loans (the “Refunded Swing Line Loans”) outstanding on the date such notice is given.
Unless any of the events described in paragraph (f) of Article 8 shall have occurred (in which
event the procedures of paragraph (c) of this Section 2.5 shall apply), each Lender shall make the
proceeds of its Revolving Credit Loan available to the Administrative Agent for the account of the
Swing Line Lender prior to 2:00 P.M. in funds immediately available on the date such notice is
given. The proceeds of such Revolving Credit Loans shall be immediately applied to repay the
Refunded Swing Line Loans. Each Revolving Credit Loan made pursuant to this Section 2.5(b) shall
be an ABR Loan.
(c) If prior to the making of the Revolving Credit Loans pursuant to Section 2.5(b) one of the
events described in paragraph (f) of Article 8 shall have occurred, each Lender will on the date
such Revolving Credit Loans were to have been made, purchase an undivided participating interest in
the Refunded Swing Line Loan in an amount equal to its Revolving Credit Percentage of such Refunded
Swing Line Loan. Each Lender will immediately transfer to the Swing Line Lender, in immediately
available funds, the amount of its participation and upon receipt thereof the Swing Line Lender
will grant to such Lender a Swing Line Loan participation as of the date of receipt of such funds
and in such amount.
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(d) Whenever, at any time after the Swing Line Lender has received from any Lender such
Lender’s participating interest in a Refunded Swing Line Loan, the Swing Line Lender receives any
payment on account thereof, the Swing Line Lender will distribute to such Lender its participating
interest in such amount (appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender’s participating interest was outstanding and funded);
provided, however, that in the event that such payment received by the Swing Line
Lender is required to be returned, such Lender will return to the Swing Line Lender any portion thereof previously
distributed to it.
(e) Each Lender’s obligation to purchase participating interests pursuant to this Section 2.5
shall be absolute and unconditional and shall not be affected by any circumstance, including,
without limitation, (i) any set-off, counterclaim, recoupment, defense or other right which such
Lender or the Borrower may have against the Swing Line Lender, the Borrower or anyone else for any
reason whatsoever; (ii) the occurrence or continuance of a Default or Event of Default; (iii) any
adverse change in the condition (financial or otherwise) of the Borrower; (iv) any breach of this
Agreement by the Borrower or any other Lender; or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
Section 2.6. Conversion and Continuation Options.
(a) The Borrower may elect from time to time to convert Eurocurrency Borrowings denominated in
Dollars to ABR Borrowings by giving the Administrative Agent irrevocable notice of such election;
provided that, any such conversion of such Eurocurrency Borrowings may only be made on the
last day of an Interest Period with respect thereto (or on any other day if the conversion referred
to herein is accompanied by all amounts payable by the Borrower pursuant to Section 2.16). The
Borrower may elect from time to time to convert Revolving Credit Borrowings that are comprised of
ABR Loans to Eurocurrency Borrowings denominated in Dollars by giving the Administrative Agent
irrevocable notice of such election. Notices of conversion pursuant to this Section 2.6(a) must be
received by the Administrative Agent not later than 12:30 p.m. three Business Days prior to the
requested effective date of such conversion (which must be a Business Day) and shall specify (i)
the amount of the Revolving Credit Borrowing to be converted, and (ii) if the Revolving Credit
Borrowing is to be converted into Eurocurrency Loans, the initial Interest Period to be applicable
thereto. Any such notice given by means other than written notice shall be promptly confirmed in
writing by the Borrower. Upon receipt of any such notice the Administrative Agent shall promptly
notify each Lender thereof. All or any part of outstanding Eurocurrency Borrowings and ABR
Borrowings may be converted as provided herein; provided that (i) no Borrowings may be
converted into Eurocurrency Borrowings when any Event of Default has occurred and is continuing,
and the Administrative Agent has, or the Required Lenders have, determined that such a conversion
is not appropriate, (ii) no Borrowings may be converted into Eurocurrency Borrowings after the date
that is seven days prior to the Termination Date, and (iii) no Swing Line Loan may be converted
into Eurocurrency Loans.
(b) Any Eurocurrency Borrowing in any Agreed Currency may be continued as a Eurocurrency
Borrowing in such Agreed Currency upon the expiration of the then current Interest Period with
respect thereto. Notices of continuation pursuant to this Section 2.6(b) must be received by the
Administrative Agent by the following applicable times and dates: (i) for Eurocurrency Borrowings
denominated in Dollars, not later than 12:30 p.m. three Business Days prior to the requested
effective date of such continuation (which must be a Business Day), and (ii) for Eurocurrency
Borrowings denominated in a Foreign Currency, not later than 11:00 a.m. Local Time four Business
Days prior to the requested effective date (which must be a Business Day). Such notices of
continuation must specify the amount and the Agreed Currency of the Revolving Credit Borrowing
being continued, and the Interest Period applicable upon such continuation. Any such notice given
with respect to a Revolving Credit Borrowing denominated in a Foreign Currency must be in writing;
any such notice given with respect to a Revolving Credit Borrowing denominated in Dollars, if given
by means other than written notice, shall be promptly confirmed in writing by the Borrower. Upon
receipt of any such notice, the Administrative Agent shall promptly notify each Lender thereof.
All or any part of outstanding Eurocurrency Borrowings may be continued as provided herein;
provided that, no Eurocurrency Borrowings may be continued as such (i) when any Event of
Default has occurred and is continuing and the Administrative Agent has, or the
Required Lenders have, determined that such a continuation is not appropriate or (ii) after
the date that is seven days prior to the Termination Date.
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(c) If the Borrower shall fail to give timely notice of conversion or continuation as provided
in Section 2.6(a) or (b) with respect to any Eurocurrency Borrowing denominated in Dollars prior to
the expiration of the applicable Interest Period, or if such conversion or continuation is not
permitted by the terms of Section 2.6(a) or (b), then such Eurocurrency Borrowing shall be
automatically converted to an ABR Borrowing on the last day of such then expiring Interest Period.
If the Borrower shall fail to give timely notice of continuation as provided in Section 2.6(b) with
respect to any Eurocurrency Borrowing denominated in a Foreign Currency prior to the expiration of
the applicable Interest Period, or if such continuation is not permitted by the terms of Section
2.6(b), then such Eurocurrency Borrowing shall be continued in the same Foreign Currency and in the
same amount as a Eurocurrency Borrowing having an Interest Period of one month.
Section 2.7. Minimum Amounts and Maximum Number of Borrowings. All Borrowings, all
conversions and continuations of Borrowings, and all selections of Interest Periods hereunder shall
be in such amounts and be made pursuant to such elections so that, after giving effect thereto, (a)
each Eurocurrency Borrowing denominated in Dollars shall be in a minimum amount of $1,000,000 and a
whole multiple of $100,000, (b) each Eurocurrency Borrowing denominated in a Foreign Currency shall
be in a minimum amount in such Foreign Currency that is the Approximate Equivalent Amount of
$1,000,000 and a whole multiple in such Foreign Currency that is the Approximate Equivalent Amount
of $100,000, and (c) there shall be no more than (x) ten (10) Eurocurrency Borrowings denominated
in Dollars outstanding at any time, or (y) five (5) Eurocurrency Borrowings denominated in Foreign
Currencies outstanding at any time.
Section 2.8. Repayment of Loans; Prepayments; Evidence of Debt.
(a) The Borrower hereby unconditionally promises to pay (i) to the Administrative Agent for
the account of each Lender the then unpaid principal amount of each Revolving Loan on the
Termination Date, (ii) to the Swing Line Lender the then unpaid principal amount of any Swing Line
Loan as provided in Section 2.5 and on the Termination Date; provided that, on each date
that a Revolving Credit Borrowing is made, the Borrower shall repay all Swing Line Loans then
outstanding. All such payments shall be made together with any and all accrued and unpaid interest
and fees thereon, and any other amounts owing hereunder.
(b) If at any time (i) the Dollar Equivalent amount of the Outstanding Revolving Extensions of
Credit of all Lenders exceeds the Revolving Credit Commitments of all Lenders then in effect, or
(ii) other than solely as a result of fluctuations in currency exchange rates, the Dollar
Equivalent amount of the Outstanding Revolving Extensions of Credit of all Lenders that are
denominated in Foreign Currencies (calculated as of the most recent Computation Date) exceeds the
Foreign Currency Sublimit, or (iii) solely as a result of fluctuations in currency exchange rates,
the Dollar Equivalent amount of the Outstanding Revolving Extensions of Credit of all Lenders that
are denominated in Foreign Currencies (calculated as of the most recent Computation Date) exceeds
105% of the Foreign Currency Sublimit, the Borrower shall, promptly after receipt of written notice
from the Administrative Agent, repay Borrowings or, if no Borrowings are then outstanding, cash
collateralize the L/C Obligations in an account with the Administrative Agent in the manner
provided in Article VIII, in an aggregate principal amount sufficient to eliminate any such excess.
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(c) The Borrower may prepay any Borrowing in whole or in part at any time, subject to the
terms of this paragraph (c). In each such event, the Borrower shall notify the Administrative
Agent in writing (with respect to any Eurocurrency Borrowing denominated in a Foreign Currency) or
by telephone (with respect to any Eurocurrency Borrowing denominated in Dollars, and promptly
confirmed in writing) of any prepayment hereunder (i) in the case of prepayment of a Eurocurrency
Borrowing denominated in Dollars, not later than 12:30 p.m. three Business Days before the date of
prepayment, (ii) in the case of a Eurocurrency Borrowing denominated in a Foreign Currency, 11:00
a.m. Local Time four Business Days before the date of prepayment, (iii) in the case of prepayment
of an ABR Borrowing, not later than 12:30 p.m. one Business Day before the date of prepayment or
(iv) in the case of prepayment of a Swing Line Loan, not later than 12:00 noon on the date of
prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the
Type and principal amount of each Borrowing or portion thereof to be prepaid. Promptly following
receipt of any such notice, the Administrative Agent shall advise the applicable Lenders of the
contents thereof. Each partial prepayment of any Borrowing pursuant to this paragraph (c) shall be
in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as
provided in Section 2.2 or 2.5, as applicable. Each prepayment of a Revolving Credit Borrowing
shall be applied ratably to the Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest and by any amounts required to be paid pursuant to Section 2.16.
(d) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such
Lender, including the amounts of principal and interest payable and paid to such Lender from time
to time hereunder.
(e) The Administrative Agent shall maintain accounts in which it shall record (i) the amount
and currency of each Borrowing made hereunder, the Type thereof and the Interest Period applicable
thereto, (ii) the amount of any principal or interest due and payable or to become due and payable
from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.
(f) The entries made in the accounts maintained pursuant to paragraph (d) or (e) of this
Section shall be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided that, the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in any manner affect
the obligation of the Borrower to repay all Loans in accordance with the terms of this Agreement.
(g) Any Lender may request that Loans made by it be evidenced by a Note, substantially in the
form of Exhibit A or Exhibit B hereto, as applicable, and the Borrower shall
execute and deliver to such Lender a Note payable to the order of such Lender (or, if requested by
such Lender, to such Lender and its registered assigns). Thereafter, the Loans evidenced by such
Note and interest thereon shall at all times (including after assignment pursuant to Section 10.6)
be represented by one or more Notes in such form payable to the order of the payee named therein
(or, if such Note is a registered Note, to such payee and its registered assigns).
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Section 2.9. Interest Rates and Payment Dates.
(a) Each Eurocurrency Borrowing shall bear interest for each day during each Interest Period
with respect thereto at a rate per annum equal to the Eurocurrency Rate determined for such day
plus the Applicable Margin for Eurocurrency Loans.
(b) Each ABR Borrowing shall bear interest for each day at a rate per annum equal to the ABR
determined for such day plus the Applicable Margin for ABR Loans.
(c) If all or a portion of (i) the principal amount of any Borrowing, (ii) any interest
payable thereon or (iii) any commitment fee or other amount payable hereunder shall not be paid
when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall
bear interest at a rate per annum which is (x) in the case of overdue principal, the rate that
would otherwise be applicable thereto pursuant to the foregoing provisions of this paragraph (c)
plus 2% per annum or (y) in the case of overdue interest, commitment fee or other amount, the rate
described in paragraph (b) of this Section plus 2% per annum, in each case from the date of such
non-payment until such amount is paid in full (as well after as before judgment).
(d) If and so long as any Lender is required to make special deposits to maintain reserve
asset ratios or to pay fees, in each case in respect of such Lender’s Eurocurrency Loans in any
currency other than Dollars, the Administrative Agent may require the Borrower to pay, for the
account of such Lender, contemporaneously with each payment of interest on each of such Loans,
additional interest on such Loan at a rate per annum equal to the Mandatory Costs as may be
applicable thereto and calculated in accordance with the formula and in the manner set forth in
Exhibit 2.9 hereto.
(e) If and so long as any Lender is required to comply with reserve assets, liquidity, cash
margin or other requirements of any monetary or other authority (but excluding requirements
reflected in the Eurocurrency Reserve Requirements or the Mandatory Costs) in respect of any of
such Lender’s Eurocurrency Loans in any currency other than Dollars, such Lender may require the
Borrower to pay, contemporaneously with each payment of interest on each of such Loans subject to
such requirements, additional interest on such Loan at a rate per annum specified by such Lender to
be the cost to such Lender of complying with such requirements in relation to such Loan.
(f) Any additional interest owed pursuant to paragraph (d) or (e) above shall be determined by
the Administrative Agent and notified to the Borrower in the form of a certificate setting forth
such additional interest at least five Business Days before each date on which interest is payable
for the relevant Loan, and such additional interest so notified to the Borrower by the
Administrative Agent shall be payable to the Administrative Agent for the account of the respective
Lender on each date on which interest is payable for such Loan.
(g) Failure or delay on the party of any Lender on any occasion to demand additional interest
pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such
additional interest on any subsequent occasion.
(h) Interest shall be payable in arrears on each Interest Payment Date; provided that,
interest accruing pursuant to Section 2.9(c) shall be payable from time to time on demand.
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Section 2.10. Computation of Interest and Fees.
(a) Interest, commitment fees, and Letter of Credit commissions and fees shall be calculated
on the basis of a 360-day year for the actual days elapsed, except that interest whenever it is
calculated on the basis of the ABR (based on the Prime Rate), or in respect of a Eurocurrency Loan
denominated in Pounds Sterling, shall be calculated on the basis of a 365- (or 366-, as the case
may be) day year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the Lenders of each determination of a Eurocurrency Rate. Any
change in the interest rate on a Loan resulting from a change in the ABR or the Eurocurrency
Reserve Requirements shall become effective as of the opening of business on the day on which such
change becomes effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the Lenders of the effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative Agent pursuant to any
provision of this Agreement shall be conclusive and binding on the Borrower in the absence of
manifest error. The Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in determining any
interest rate pursuant to Section 2.9(a).
Section 2.11. Inability to Determine Interest Rate. If prior to the first day of any Interest
Period for a Eurocurrency Borrowing:
(a) the Administrative Agent shall have determined (which determination shall be conclusive
and binding upon the Borrower) that, by reason of any changes arising on or after the date hereof
affecting the applicable interbank Eurocurrency market, adequate and reasonable means do not exist
for ascertaining the applicable Eurocurrency Rate for such Eurocurrency Borrowing for such Interest
Period, or
(b) the Administrative Agent shall have received notice from the Required Lenders that, by
reason of any changes arising on or after the date hereof affecting the applicable interbank
Eurocurrency market, the applicable Eurocurrency Rate determined or to be determined for such
Eurocurrency Borrowing for such Interest Period will not adequately and fairly reflect the cost to
such Lenders (as conclusively certified by such Lenders) of making or maintaining their affected
Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof confirmed in writing to
the Borrower and the Lenders as soon as practicable thereafter, and in any case at least one
Business Day prior to the first day of such Interest Period. If such notice is given, (x) any
Eurocurrency Borrowing denominated in Dollars requested to be made on the first day of such
Interest Period shall be made as ABR Loans in Dollars, (y) any Borrowing that was to have been
converted or continued on the first day of such Interest Period to a Eurocurrency Borrowing
denominated in Dollars shall be converted to or continued as an ABR Borrowing in Dollars and (z)
any Eurocurrency Borrowing denominated in a Foreign Currency that has been requested to be made or
continued on the first day of such Interest Period shall not be made, or if already then
outstanding, shall not be continued but instead shall be repaid in full on such day. Until such
notice has been withdrawn by the Administrative Agent, no further Eurocurrency Borrowing in any
affected Agreed Currency shall be made or continued as such, nor shall the Borrower have the right
to convert any Borrowing to a Eurocurrency Borrowing in any affected Agreed Currency.
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Section 2.12. Pro Rata Treatment and Payments.
(a) Revolving Credit Borrowings and each payment by the Borrower on account of any commitment
fee in respect of the Revolving Credit Commitments hereunder shall be made pro rata according to
the respective Revolving Credit Percentages of the Lenders. Each payment (including each
prepayment) by the Borrower on account of principal of any Borrowings shall be made first to the
repayment of Swing Line Loans before any payment may be made on account of the principal of the
Revolving Credit Borrowings. Subject to the immediately foregoing sentence, each payment
(including each prepayment) by the Borrower on account of the principal of and interest on the
Revolving Credit Borrowings shall be made pro rata according to the respective outstanding
principal amounts of the Revolving Credit Borrowings then held by the Lenders. All payments
(including prepayments) to be made by the Borrower hereunder, whether on account of principal,
interest, fees, Letter of Credit commissions or otherwise, shall be made without set off or
counterclaim and shall be made prior to 1:00 P.M. (or, in the case of Eurocurrency Borrowings
denominated in Foreign Currencies, 1:00 p.m. Local Time) on the due date thereof to the
Administrative Agent, for the account of the Lenders, at the Applicable Payment Office in
immediately available funds. If the Borrower does not, or is unable for any reason to, effect
payment of a Eurocurrency Borrowing to the Lenders in the applicable Foreign Currency, or if the
Borrower shall default in the payment when due of any payment in such Foreign Currency, the Lenders
may, at their option, require such payment to be made to the Lenders in the Dollar Equivalent
amount of such Foreign Currency determined in accordance with Section 10.19. With respect to any
amount due and payable in any Foreign Currency, the Borrower agrees to hold the Lenders harmless
from any losses, if any, that are incurred by the Lenders arising from any change in the value of
Dollars in relation to such currency between the date such payment became due and the date of
actual payment thereof. The Administrative Agent shall distribute such payments to the Lenders
promptly upon receipt in like funds as received. If any payment hereunder (other than payments on
Eurocurrency Borrowings) becomes due and payable on a day other than a Business Day, such payment
shall be extended to the next succeeding Business Day, and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such extension. If any
payment on a Eurocurrency Borrowing becomes due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which event such payment
shall be made on the immediately preceding Business Day.
(b) Unless the Administrative Agent shall have been notified in writing by any Lender prior to
a Borrowing that such Lender will not make the amount that would constitute its Revolving Credit
Percentage of such Borrowing available to the Administrative Agent in the Agreed Currency, the
Administrative Agent may assume that such Lender is making such amount available in the applicable
Agreed Currency to the Administrative Agent, and the Administrative Agent may, in reliance upon
such assumption, make available to the Borrower a corresponding amount. If such corresponding
amount is not in fact made available to the Administrative Agent by such Lender on the date of such
Borrowing, the Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender together with interest at the greater of the Federal Funds Rate or a rate
determined by the Administrative Agent in accordance with banking industry rules on interbank
compensation, including, without limitation, the Overnight Foreign Currency Rate in the case of
Loans denominated in a Foreign Currency until the second Business Day after such demand, and
thereafter at the greater of the ABR (in the case of any Borrowing denominated in Dollars), or a
rate determined by the Administrative Agent in accordance with banking industry rules on interbank
compensation including, without limitation, the Overnight Foreign Currency Rate (in the case of any
Borrowing denominated in a Foreign Currency). A certificate of the Administrative Agent submitted
to any Lender with respect to any amounts owing under this subsection shall be conclusive in the
absence of manifest error. If such Lender’s Revolving Credit Percentage of such Borrowing is not
made available to the Administrative Agent in the Agreed
Currency by such Lender within two Business Days of such Borrowing Date, the Administrative
Agent shall also be entitled to recover such amount from the Borrower on demand, together with
interest thereon at the rate per annum then applicable to ABR Borrowings hereunder (in the case of
any Borrowing denominated in Dollars), or at the rate per annum then applicable to Eurocurrency
Borrowings in the applicable Foreign Currency having an Interest Period of one month (in the case
of any Borrowing denominated in a Foreign Currency). Nothing contained in this Section 2.12(b)
shall relieve any Lender that has failed to make available its Revolving Credit Percentage of any
Borrowing hereunder from its obligation to do so in accordance with the terms hereof.
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Section 2.13. Illegality. Notwithstanding any other provision herein, if the adoption of or
any change in any Requirement of Law (other than the certificate of incorporation, by-laws or other
organizational or governing documents with respect to any Lender) or in the interpretation or
application thereof occurring after the date hereof shall make it unlawful for any Lender to make
or maintain Eurocurrency Loans as contemplated by this Agreement or to fund any Eurocurrency Loans
in any requested Agreed Currency, (a) such Lender shall forthwith give telephonic or telecopy
notice of such circumstances, confirmed in writing, to the Borrower (which notice shall be
withdrawn by such Lender when such Lender shall reasonably determine that it shall no longer be
illegal for such Lender to make or maintain such Eurocurrency Loans or to convert ABR Loans to such
Eurocurrency Loans), (b) the commitment of such Lender hereunder to make such Eurocurrency Loans,
continue such Eurocurrency Loans as such and convert ABR Loans to such Eurocurrency Loans shall
forthwith be cancelled and, until such time as it shall no longer be unlawful for such Lender to
make or maintain such Eurocurrency Loans, when such a Eurocurrency Loan is requested, such Lender
shall then have a commitment only to make an ABR Loan in Dollars or a Eurocurrency Loan in another
Agreed Currency otherwise permitted to be made, and (c) such Eurocurrency Loans then outstanding,
if any, shall be converted automatically to ABR Loans in Dollars on the respective last days of the
then current Interest Periods with respect to such Eurocurrency Loans or within such earlier period
as required by law. If any such conversion of a Eurocurrency Loan occurs on a day which is not the
last day of the then current Interest Period with respect thereto, the Borrower shall pay to such
Lender such amounts, if any, as may be required pursuant to Section 2.16. Notwithstanding the
foregoing, the affected Lender shall, prior to giving such notice to the Administrative Agent,
designate a different applicable lending office if such designation would avoid the need for giving
such notice and if such designation would not otherwise be disadvantageous to such Lender in the
good faith exercise of its discretion.
Section 2.14. Requirements of Law.
(a) If the adoption of or any change in any Requirement of Law (other than the certificate of
incorporation, by-laws or other organizational or governing documents with respect to any Lender)
or in the interpretation or application thereof occurring after the date on which any Lender
becomes a Lender or compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority, in each case, made
subsequent to the date hereof:
(i) shall subject such Lender to any tax of any kind whatsoever with respect to this
Agreement, any Letter of Credit, any Application or any Eurocurrency Loan made by it, or
change the basis of taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes as defined in Section 2.15 (including Non-Excluded Taxes imposed solely
by reason of any failure of such Lender to comply with its obligations under Section 2.15(b)
or 2.15(c)) and changes in respect of taxes on or measured by the overall net income of such
Lender or any applicable lending office, branch or affiliate thereof (or changes in any
franchise, capital, branch profits, excise, doing business or net worth taxes or similar
taxes imposed in lieu of such net income taxes) (“Net Income Taxes”) imposed by a
jurisdiction as a result of a present or
former connection between such jurisdiction, any political subdivision or any taxing
authority thereof or therein, and such Lender, or any applicable lending office, branch or
affiliate thereof (other than a connection arising solely from such Lender having executed,
delivered or performed its obligations, or received payment under or enforced, this
Agreement or any other Loan Document);
27
(ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory
loan or similar requirement against assets held by, deposits or other liabilities in or for
the account of, advances, loans or other extensions of credit by, or any other acquisition
of funds by, any office of such Lender which is not otherwise included in the determination
of the Eurocurrency Rate or in Section 2.9 hereunder; or
(iii) shall impose on such Lender any other condition (excluding the imposition of any
tax);
and the result of any of the foregoing is to increase the cost to such Lender, by an amount which
such Lender deems to be material, of making, converting into, continuing or maintaining
Eurocurrency Loans or issuing or participating in Letters of Credit, or to reduce any amount
receivable hereunder in respect thereof, then, in any such case, upon notice to the Borrower from
such Lender through the Administrative Agent in accordance herewith, the Borrower shall promptly
pay such Lender, upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable with respect to such Eurocurrency Loans or Letters
of Credit; provided that, in any such case, the Borrower may elect to convert Eurocurrency
Loans made by such Lender hereunder to ABR Loans in Dollars by giving the Administrative Agent at
least two Business Days’ notice of such election, in which case the Borrower shall promptly pay to
such Lender, upon demand, without duplication, amounts theretofore required to be paid to such
Lender pursuant to this Section 2.14(a) and such amounts, if any, as may be required pursuant to
Section 2.16. If any Lender becomes entitled to claim any additional amounts pursuant to this
Section, it shall promptly give notice to the Borrower, through the Administrative Agent,
certifying that (x) one of the events described in this paragraph (a) has occurred and the nature
of such event, (y) the increased cost or reduced amount resulting from such event and (z) the
additional amounts demanded by such Lender and a reasonably detailed explanation of the calculation
thereof. A certificate as to any additional amounts payable pursuant to this subsection submitted
by such Lender, through the Administrative Agent, to the Borrower shall be conclusive in the
absence of manifest error. This covenant shall survive the termination of this Agreement and the
payment of the Loans, L/C Obligations, and all other amounts payable hereunder.
(b) If any Lender shall have determined that the adoption of or any change in any Requirement
of Law regarding capital adequacy or in the interpretation or application thereof or compliance by
such Lender or any company controlling such Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) from any Governmental Authority, in each case,
made subsequent to the date hereof (or, in the case of any Lender that becomes a Lender subsequent
to the date hereof, subsequent to the date on which such Lender becomes a Lender) does or shall
have the effect of reducing the rate of return on such Lender’s or such company’s capital as a
consequence of its obligations hereunder or under or in respect of any Letter of Credit to a level
below that which such Lender or such company could have achieved but for such change or compliance
(taking into consideration such Lender’s or such company’s policies with respect to capital
adequacy) by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the Administrative Agent) of a written
request therefor certifying that (x) one of the events described in this paragraph (b) has occurred
and the nature of such event (in reasonable detail), (y) the reduced rate of return on such
Lender’s or such company’s capital resulting from such event and (z) the additional amounts
demanded by such Lender and a reasonably detailed explanation of
the calculation thereof, the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction.
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(c) Each Lender which becomes entitled to claim any amounts pursuant to this Section 2.14
agrees, upon the request of the Borrower, to use its best efforts to take steps reasonably
available to it and acceptable to the Borrower, including designating an alternative lending office
or booking the affected Loan through another branch or affiliate, if by doing so any such
additional amounts will be avoided or materially reduced; provided that, taking such steps
results in no additional costs to such Lender (other than costs that are paid by the Borrower) and
is not otherwise materially disadvantageous to such Lender, in such Lender’s sole discretion
determined in good faith.
Section 2.15. Taxes.
(a) All payments made by the Borrower under this Agreement (or by any Guarantor under any
Guarantee) shall be made free and clear of, and without deduction or withholding for or on account
of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by
any Governmental Authority, excluding any Net Income Taxes and any such items imposed on the
Administrative Agent or any Lender as a result of a present or former connection between the
Administrative Agent, such Lender, or any applicable lending office, branch or affiliate thereof,
and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision
or taxing authority thereof or therein (other than any such connection arising solely from the
Administrative Agent or such Lender having executed, delivered or performed its obligations or
received a payment under, or enforced, this Agreement or any other Loan Document)
(“Non-Excluded Taxes”). If any Non-Excluded Taxes are required to be withheld from any
amounts payable to the Administrative Agent or any Lender hereunder or under any other Loan
Document, the amounts so payable to the Administrative Agent or such Lender shall be increased to
the extent necessary to yield to the Administrative Agent or such Lender (after payment of all
Non-Excluded Taxes) interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement, provided, however, that the Borrower shall be entitled, to the
extent required by law, to deduct and withhold any Non-Excluded Taxes and shall not be required to
increase any such amounts payable to the Administrative Agent or any Lender if the Administrative
Agent or such Lender or, to the extent that the Lender has transferred a Participation to any
Participant, such Participant, fails to comply with the requirements of paragraph (b) of this
Section. Whenever any Non-Excluded Taxes are payable by the Borrower, as promptly as possible
thereafter the Borrower shall send to the Administrative Agent for its own account or for the
account of such Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay any Non-Excluded
Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent
the required receipts or other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or penalties that may
become payable by the Administrative Agent or any Lender as a result of any such failure, except in
the case in which such failure of the Borrower is due to a Lender’s failure to fully comply with
requirements set forth in paragraph (b) of this subsection. The agreements in this subsection
shall survive the termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
(b) (i) The Administrative Agent and each Lender that is organized under the laws of
the United States of America or a state thereof shall deliver to the Borrower and the
Administrative Agent two duly completed copies of Internal Revenue Service Form W-9 or a
successor thereto;
(ii) Each Lender that is not organized under the laws of the United States of America
or a state thereof shall:
(A) on or before the first day upon which a payment is made hereunder to such
Lender, deliver to the Borrower and the Administrative Agent two duly completed
copies of United States Internal Revenue Service Form W-8BEN or W-8ECI, or successor
applicable form, as the case may be;
29
(B) deliver to the Borrower and the Administrative Agent two further copies of
any such form or certification on or before the date that any such form,
certification or statement expires or becomes obsolete and after the occurrence of
any event requiring a change in the most recent form previously delivered by it to
the Borrower; and
(C) obtain such extensions of time for filing and complete such forms,
certifications or statements as may reasonably be requested by the Borrower or the
Administrative Agent;
unless in any such case any change in treaty, law or regulation, or the application or
interpretation thereof, has occurred after the date on which such Person became a Lender
hereunder which renders all such forms inapplicable or which would prevent such Lender from
duly completing and delivering any such form with respect to it and such Lender so advises
the Borrower and the Administrative Agent. Each time such Lender is required to deliver a
form, certificate or statement under this clause (ii), such Lender shall certify on such
Form W-8BEN or W-8ECI, as the case may be, or successor applicable form, and as may
otherwise be required under applicable law, that (A) it is entitled to receive payments
under this Agreement or any other Loan Document without deduction or withholding of any
United States federal income taxes and (B) it is entitled to an exemption from United States
backup withholding tax.
(iii) Each Person that shall become a Lender or a Participant pursuant to Section 10.6
shall, upon the effectiveness of the related transfer, be required to provide all of the
forms, certifications and statements required pursuant to this paragraph (b), provided that
in the case of a Participant the obligations of such Participant pursuant to this subsection
shall be determined as if such Participant were a Lender except that such Participant shall
furnish all such required forms, certifications and statements to the Administrative Agent
and to the Lender from which the related participation shall have been purchased.
(c) Upon the request, and at the expense, of the Borrower, the Administrative Agent, each
Lender to which the Borrower is required to pay any additional amount pursuant to Section
2.14(a)(i) or 2.15, and any Participant in respect of whose participation such payment is required,
shall take reasonable steps to (i) afford the Borrower the opportunity to contest, and (ii)
cooperate with the Borrower in contesting, the imposition of any taxes giving rise to such
requirement to pay. The Administrative Agent and each Lender to which the Borrower is required to
pay any additional amount pursuant to Section 2.14(a)(i) or 2.15 agrees, upon the request of the
Borrower, to use its best efforts to take steps reasonably available to it and acceptable to the
Borrower, including designating an alternative lending office or booking the affected Loan through
another branch or an affiliate, if by doing so any such additional amounts will be avoided or
materially reduced, provided that taking such steps results in no additional costs to such Lender
(other than costs that are paid by the Borrower) and is not otherwise materially disadvantageous to
such Lender, in such Lender’s sole discretion determined in good faith.
(d) If, under Section 2.15(b), a Lender or Participant fails to timely provide, or provides an
incorrect, form, certificate or statement (or fails to timely provide a correct form, certificate
or statement after the existing form, certificate or statement expires, becomes obsolete, or
is rendered incorrect by the occurrence of any event) and, as a result thereof, the Borrower fails
to withhold or deduct tax, such Lender or Participant shall indemnify the Borrower against any
liability arising from such failure in excess of the amount the Borrower would have been required
to pay such Lender or Participant as an additional amount pursuant to this Agreement had such form,
certificate or statement been correct or duly or timely provided, as the case may be.
30
(e) If a Lender or the Administrative Agent receives a refund attributable to taxes for which
the Borrower has made additional payments under Section 2.14(a)(1) or 2.15, which refund in the
sole, good faith judgment of such Lender or Administrative Agent is allocable to such payments, the
Administrative Agent or such Lender, as the case may be, shall timely pay such refund (together
with any interest thereto received from the relevant taxing authority) to the Borrower, net of all
reasonable out-of-pocket expenses of such Lender or Administrative Agent; provided,
however, that the Borrower shall promptly return such refund (free of all Non-Excluded
Taxes) to the Administrative Agent or the relevant Lender, as the case may be, upon receipt of
written notice that such refund is required to be repaid to the relevant taxing authority.
Section 2.16. Indemnity. The Borrower agrees to indemnify each Lender and to hold each Lender
harmless from any loss or expense which such Lender may sustain or incur as a consequence of (a)
default by the Borrower in making a borrowing of, conversion into or continuation of Eurocurrency
Loans after the Borrower has given a notice requesting the same in accordance with the provisions
of this Agreement, (b) default by the Borrower in making any prepayment after the Borrower has
given a notice thereof in accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurocurrency Loans or a conversion of Eurocurrency Loans to ABR Loans on a day which
is not the last day of an Interest Period with respect thereto. Such indemnification may include,
in the case of any event described in clause (a) or (c) of the next preceding sentence, an amount
equal to the excess, if any, of (i) the amount of interest which would have accrued on the amount
so prepaid, or not so borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of such Interest
Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would
have commenced on the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, the Applicable Margin included therein, if any)
over (ii) the amount of interest (as reasonably determined by such Lender) which would have accrued
to such Lender on such amount by placing such amount on deposit for a comparable period with
leading banks in the applicable interbank Eurocurrency market. If any Lender becomes entitled to
claim any amounts under the indemnity contained in this Section 2.16, it shall provide prompt
notice thereof to the Borrower, through the Administrative Agent, stating (x) that one or more of
the events described in clause (a), (b), or (c) has occurred and describing in reasonable detail
the nature of such event or events, (y) as to the amount of the loss or expense sustained or
incurred by such Lender as a consequence thereof and (z) as to the amount for which such Lender
seeks indemnification hereunder and a reasonably detailed explanation of the calculation thereof.
This covenant shall survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
Section 2.17. Certain Exclusions.
(a) If a Lender changes its applicable lending office (unless required to do so by a
Governmental Authority or other regulatory authority) and the effect of that change, as of the date
of the change, is to cause the Borrower to become obligated to pay any additional amount under
Section 2.9(d) or (e), 2.14 or 2.15, the Borrower shall not be obligated to pay such additional
amount.
(b) If, as a result of an assignment pursuant to Section 10.6(c), the Borrower would,
immediately upon the effectiveness of such assignment, be obligated to pay an additional amount
under Section 2.9(d) or (e), 2.14 or 2.15, the Borrower shall not be obligated to pay such
additional amount.
(c) For purposes of Sections 2.14 and 2.15, the entry into force and implementation of any
treaty between the United States and another country that has been signed as of the date hereof but
has not yet been ratified shall not be treated as a change in treaty, law, regulation or
application or interpretation thereof.
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Section 2.18. Replacement of Lender. If the Borrower becomes obligated to pay additional
amounts described in Section 2.9(d) or (e), 2.14 or 2.15 as a result of any condition described in
such Section and payment of such amount is demanded by any Lender, then the Borrower may, on ten
Business Days’ prior written notice to the Administrative Agent and such Lender, cause such Lender
to (and such Lender shall) assign pursuant to Section 10.6(c) all of its rights and obligations
under this Agreement to a Lender or other entity selected by the Borrower and acceptable to the
Administrative Agent and the Issuing Lender for a purchase price equal to the outstanding principal
amount of such Lender’s Loans and all accrued interest, commitment fees, Letter of Credit
commissions, and other fees and amounts then due to such Lender hereunder, together with all losses
and expenses of the types referred to in Section 2.16 payable with respect thereto.
Section 2.19. Increase in Commitments; Additional Lenders.
(a) So long as no Default or Event of Default has occurred and is continuing, on not more than
four occasions after the Closing Date and on each occasion for an amount not less than $10,000,000,
the Borrower may, upon at least five (5) Business Days prior written notice to the Administrative
Agent (which shall promptly provide a copy of such notice to each Lender), propose to increase the
Revolving Credit Commitments by an aggregate amount for all such occasions not to exceed
$100,000,000 (the amount of any such increase, the “Additional Commitment Amount”). No
Lender (or any successor thereto) shall have any obligation to increase its Revolving Credit
Commitment or its other obligations under this Agreement and the other Loan Documents, and any
decision by a Lender to increase its Revolving Credit Commitment shall be made in its sole
discretion independently from any other Lender.
(b) In any such notice given by the Borrower pursuant to Section 2.19(a), the Borrower shall
designate one or more banks or other financial institutions (which may be, but need not be, one or
more of the existing Lenders) which at the time agree to, in the case of any such Person that is an
existing Lender, increase its Revolving Credit Commitment, and in the case of any other such Person
(an “Additional Lender”), become a party to this Agreement; provided,
however, that any prospective Additional Lender must be acceptable to the Administrative
Agent and the Issuing Lender as determined by each of them acting in good faith. The sum of the
increases in the Revolving Credit Commitments of the existing Lenders pursuant to this paragraph
(b) plus the Revolving Credit Commitments of the Additional Lenders shall not in the aggregate
exceed the unsubscribed amount of the Additional Commitment Amount.
(c) An increase in the aggregate amount of the Revolving Credit Commitments pursuant to this
Section 2.19 shall become effective upon the receipt by the Administrative Agent of a supplement or
joinder in form and substance reasonably satisfactory to the Administrative Agent executed by the
Borrower, by each Additional Lender and by each other Lender whose Revolving Credit Commitment is
to be increased, setting forth the new Revolving Credit Commitments of such Lenders and setting
forth the agreement of each Additional Lender to become a party to this Agreement and to be bound
by all the terms and provisions hereof, together with such Notes as may be requested by any
existing Lenders or Additional Lenders to evidence any increased or new Revolving Credit
Commitments, and such evidence of appropriate organizational authorization on the part of the
Borrower and such opinions of counsel for the Borrower with respect to the increase in the
Revolving Credit Commitments as the Administrative Agent may reasonably request.
(d) Upon the acceptance of any such supplement or joinder by the Administrative Agent,
Schedule 1.1(a) shall automatically be deemed amended to reflect the Revolving Credit
Commitments of all Lenders after giving effect to any Additional Lenders and any additions and
increases in the Revolving Credit Commitments. The Administrative Agent may, on behalf of the
existing Lenders not increasing their respective Revolving Credit Commitments and without further
consent or authorization, enter into any such joinder or supplement or amendments to any other Loan
Documents for purposes of giving effect to such additional and increased Revolving Credit
Commitments.
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(e) Upon any increase in the aggregate amount of the Revolving Credit Commitments pursuant to
this Section 2.19 that is not pro rata among all existing Lenders, (x) the Borrower shall prepay
all outstanding Revolving Credit Borrowings in their entirety and, to the extent the Borrower
elects to do so and subject to the conditions specified in Section 5.2, the Borrower shall reborrow
Revolving Credit Loans from the Lenders (including any Additional Lenders) in proportion to their
respective Revolving Credit Commitments after giving effect to such increase, and (y) effective
upon such increase, the amount of the participations held by each Lender in each Letter of Credit
and all L/C Obligations then outstanding shall be adjusted automatically such that, after giving
effect to such adjustments, the Lenders (including any Additional Lenders) shall hold
participations in each such Letter of Credit and all L/C Obligations in proportion to their
respective Revolving Credit Commitments after giving effect to such increase. In connection with
any prepayment of Revolving Credit Borrowings pursuant to this Section 2.19(e) on the effective
date of an increase of the Revolving Credit Commitments, the Borrower shall pay all accrued and
unpaid interest, fees, and Letter of Credit commissions in respect of such Revolving Credit
Borrowings prepaid or deemed prepaid pursuant to this Section 2.19(e) and any outstanding Letters
of Credit and L/C Obligations for which participations therein are deemed adjusted pursuant to this
Section 2.19(e), together with any amounts due pursuant to Section 2.16 in respect of such
prepayment.
Section 2.20. Determination of Dollar Amounts. The Administrative Agent will determine the
Dollar Equivalent amount of each of the following to the extent denominated in a Foreign Currency:
(a) each Eurocurrency Borrowing as of the date three Business Days prior to the date of such
Borrowing or, if applicable, the date of conversion/continuation of any Revolving Credit Borrowing
as a Eurocurrency Borrowing,
(b) the L/C Obligations as of the date of each request for the issuance, increase, renewal or
extension of any Letter of Credit; and
(c) all Outstanding Revolving Extensions of Credit of the Lenders on and as of the last
Business Day of each calendar month and, during the continuation of an Event of Default, on any
other Business Day (but not more frequently than once each week) elected by the Administrative
Agent in its discretion or upon instruction by the Required Lenders.
Each day upon or as of which the Administrative Agent determines Dollar Equivalent amounts as
described in the preceding clauses (a), (b) and (c) is herein described as a “Computation
Date” with respect to such amounts, and the Administrative Agent shall notify the Borrower of
all such determinations and related computations on such Computation Date.
Section 2.21. Market Disruption. Notwithstanding the satisfaction of all applicable
conditions referred to in Articles II, III, and V, with respect to any Borrowing or Letter of
Credit to be denominated in any Foreign Currency, if (i) there shall occur on or prior to the date
of such Borrowing or Letter of Credit any change in national or international financial, political
or economic conditions or currency exchange rates or exchange controls which would, in the
reasonable opinion of the Administrative Agent or the Issuing Lender make it impracticable for the
Borrowing or Letter of Credit to be denominated in the Foreign Currency specified by the Borrower
or (ii) in the reasonable opinion of the Administrative Agent or the Issuing Lender a Dollar
Equivalent amount of such Foreign Currency is not
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readily calculable, then the Administrative Agent
shall forthwith give notice thereof to the Borrower, the Lenders and the Issuing Lender, as
applicable, and (a) if a Borrowing, such Borrowing shall not be denominated in such Foreign
Currency but shall be made on the requested date in Dollars, in an aggregate principal amount equal
to the Dollar Equivalent amount (rounded up to the nearest $100,000) of the aggregate principal
amount specified in the related request as ABR Loans, unless the Borrower notifies the
Administrative Agent prior to such Borrowing that (x) it elects not to borrow on such date or (y)
it elects to borrow on such date in a different Agreed Currency, as the case may be, in which the
denomination of such Loans would in the reasonable opinion of the Administrative Agent and the
Lenders be practicable and in an aggregate principal amount equal to the Dollar Equivalent amount
of the aggregate principal amount specified in the related request, and (b) if a Letter of Credit,
such Letter of Credit shall not be issued in such Foreign Currency, but shall be issued in Dollars
in a face amount equal to the Dollar Equivalent amount of the face amount specified in the related
request or Application for such Letter of Credit (rounded up to the nearest $100,000), unless the
Borrower notifies the Administrative Agent prior to the issuance of such Letter of Credit that (I)
it elects not to request the issuance of such Letter of Credit on such date or (II) it elects to
have such Letter of Credit issued on such date in a different Agreed Currency, as the case may be,
in which the denomination of such Letter of Credit would in the reasonable opinion of the Issuing
Lender, the Administrative Agent and the Lenders be practicable and in face amount equal to the
Dollar Equivalent amount of the face amount specified in the related request or Application for
such Letter of Credit, as the case may be.
Section 2.22. Judgment Currency. If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder in Foreign Currency expressed to be payable herein (the
“
specified currency “) into another currency, the parties hereto agree, to the fullest
extent that they may effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent could purchase the specified
currency with such other currency at the Administrative Agent’s main
New York City office on the
Business Day preceding that on which final, non-appealable judgment is given. The obligations of
each Loan Party in respect of any sum due to any Lender or the Administrative Agent hereunder
shall, notwithstanding any judgment in a currency other than the specified currency, be discharged
only to the extent that on the Business Day following receipt by such Lender or the Administrative
Agent (as the case may be) of any sum adjudged to be so due in such other currency such Lender or
the Administrative Agent (as the case may be) may in accordance with normal, reasonable banking
procedures purchase the specified currency with such other currency. If the amount of the specified
currency so purchased is less than the sum originally due to such Lender or the Administrative
Agent, as the case may be, in the specified currency, each Loan Party agrees, to the fullest extent
that it may effectively do so, as a separate obligation and notwithstanding any such judgment, to
indemnify such Lender or the Administrative Agent, as the case may be, against such loss, and if
the amount of the specified currency so purchased exceeds (a) the sum originally due to any Lender
or the Administrative Agent, as the case may be, in the specified currency and (b) any amounts
shared with other Lenders as a result of allocations of such excess as a disproportionate payment
to such Lender, such Lender or the Administrative Agent, as the case may be, agrees to remit such
excess to the applicable Loan Party.
ARTICLE III. LETTERS OF CREDIT
Section 3.1. L/C Commitment.
(a) Subject to the terms and conditions hereof, the Issuing Lender, in reliance on the
agreements of the other Lenders set forth in Section 3.4(a), agrees to issue standby and commercial
letters of credit (“Letters of Credit”) for the account of the Borrower or any Subsidiary
Guarantor on any Business Day during the Revolving Credit Commitment Period in such form as may be
approved from time to time by the Issuing Lender; provided that, the Issuing Lender shall
have no obligation to and shall
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not issue any Letter of Credit if, after giving effect to such
issuance, (i) the L/C Obligations would exceed the L/C Commitment, (ii) the Outstanding Revolving
Extensions of Credit of all Lenders denominated in Foreign Currencies would exceed the Foreign
Currency Sublimit, or (iii) any Lender’s Outstanding Revolving Extensions of Credit would exceed
such Lender’s Revolving Credit Commitment then in effect. Each Letter of Credit shall (i) be a
standby or commercial letter of credit denominated in an Agreed Currency and issued to support
obligations of the Borrower or the respective Subsidiary Guarantor and its respective Subsidiaries,
contingent or otherwise, arising in the ordinary course of business, and (ii) expire no later than
the earlier of (x) one year after the date of issuance, and (y) five (5) Business Days prior to the
Termination Date; provided, that any Letter of Credit with a one-year tenor may provide for
renewal thereof for additional one-year periods (but in no event for a period expiring after the
date specified in the preceding clause (y)).
(b) Each Letter of Credit shall be subject to the UCP or the ISP, as applicable, and, to the
extent not inconsistent therewith, the laws of the State of
New York.
(c) The Issuing Lender shall not at any time be obligated to issue any Letter of Credit
hereunder if such issuance would conflict with, or cause the Issuing Lender or any L/C Participant
to exceed any limits imposed by, any applicable Requirement of Law, or otherwise subject it to a
Country Risk Event.
Section 3.2. Procedure for Issuance of Letters of Credit. The Borrower or any Subsidiary
Guarantor may from time to time request that the Issuing Lender issue a Letter of Credit
denominated in an Agreed Currency by delivering to the Issuing Lender at its address for notices
specified herein an Application therefor, completed to the reasonable satisfaction of the Issuing
Lender, and such other certificates, documents and other papers and information as the Issuing
Lender may reasonably request. Upon receipt of any fully completed Application, the Issuing Lender
will process such Application and the certificates, documents and other papers and information
delivered to it in connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby (but in no event shall the Issuing Lender be
required to issue any Letter of Credit earlier than three Business Days after its receipt of the
fully completed Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of Credit to the
beneficiary thereof or as otherwise may be agreed by the Issuing Lender and the Borrower or the
respective Subsidiary Guarantor. The Issuing Lender shall furnish a copy of such Letter of Credit
to the Borrower and/or to the respective Subsidiary Guarantor promptly following the issuance
thereof, and shall notify the Lenders of the issuance thereof.
Section 3.3. Fees, Commissions and Other Charges.
(a) The Borrower or the respective Subsidiary Guarantor shall pay (i) to the Administrative
Agent, for the account of the Issuing Lender and the L/C Participants, a commission with respect to
each outstanding Letter of Credit, computed for the period from the Closing Date (in the case of
the first such payment) or the date on which the last such payment was due (in all other cases) to
the date
upon which such payment is due hereunder, in each case equal to the L/C Fee, payable to the
Issuing Lender and the L/C Participants to be shared ratably among them in accordance with their
respective Revolving Credit Percentages, and (ii) to the Issuing Lender, a commission with respect
to each Letter of Credit, computed for the period from the Closing Date (in the case of the first
such payment) or the date on which the last such payment was due (in all other cases) to the date
upon which such payment is due hereunder at the rate of 0.10% per annum of the average daily
aggregate Dollar Equivalent amount available to be drawn under such Letter of Credit during the
period for which such fee is calculated, payable to the Issuing Lender. Such commissions shall be
payable in arrears on each L/C Fee Payment Date and shall be nonrefundable.
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(b) In addition to the foregoing fees and commissions, the Borrower or the respective
Subsidiary Guarantor shall pay or reimburse the Issuing Lender for such normal and customary costs
and expenses as are incurred or charged by the Issuing Lender in issuing, effecting payment under,
amending or otherwise administering any Letter of Credit.
(c) The Administrative Agent shall, promptly following its receipt thereof, distribute to the
Issuing Lender and the L/C Participants all fees and commissions received by the Administrative
Agent for their respective accounts pursuant to this Section.
Section 3.4. L/C Participations.
(a) The Issuing Lender irrevocably agrees to grant and hereby grants to each L/C Participant,
and, to induce the Issuing Lender to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase, and hereby accepts and purchases from the Issuing
Lender, on the terms and conditions hereinafter stated, for such L/C Participant’s own account and
risk, an undivided interest equal to such L/C Participant’s Revolving Credit Percentage in the
Issuing Lender’s obligations and rights under each Letter of Credit issued hereunder and the amount
of each drawing paid by the Issuing Lender thereunder. Each L/C Participant unconditionally and
irrevocably agrees with the Issuing Lender that, if any amount is paid under any Letter of Credit
for which the Issuing Lender is not reimbursed in full by the Borrower or the respective Subsidiary
Guarantor in accordance with the terms of this Agreement, such L/C Participant shall pay to the
Administrative Agent for the account of the Issuing Lender upon demand at the Administrative
Agent’s Applicable Payment Office an amount equal to such L/C Participant’s Revolving Credit
Percentage of the amount of such drawing, or any part thereof, which is not so reimbursed. Any
demand pursuant to the preceding sentence received after 2:00 P.M. on any Business Day shall be
deemed to have been received on the next succeeding Business Day.
(b) If any amount required to be paid by any L/C Participant for the account of the Issuing
Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion of any payment made by the
Issuing Lender under any Letter of Credit is paid to the Issuing Lender within two Business Days
after the date such payment is due, such L/C Participant shall pay to the Issuing Lender on demand
an amount equal to the product of (i) such amount, times (ii) the daily average Federal funds rate
(or, in the case of a Letter of Credit denominated in a Foreign Currency, at the applicable
Overnight Foreign Currency Rate), as quoted by the Issuing Lender, during the period from and
including the date such payment is required to the date on which such payment is immediately
available to the Issuing Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If any such amount
required to be paid by any L/C Participant pursuant to Section 3.4(a) is not in fact made available
to the Issuing Lender by such L/C Participant within three Business Days after the date such
payment is due, the Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, the amount of such payment in the applicable Agreed Currency or, if so elected by the
Issuing Lender, the Dollar Equivalent of such amount, in either case with interest thereon
calculated from such due date at the rate per annum then applicable to Eurocurrency Borrowings
hereunder in the applicable
Foreign Currency having an Interest Period of one month or, if the Issuing Lender has elected
to receive the Dollar Equivalent of such amount, the rate per annum then applicable to ABR
Borrowings hereunder. A certificate of the Issuing Lender submitted to any L/C Participant with
respect to any amounts owing under this Section shall be conclusive in the absence of manifest
error.
(c) Whenever, at any time after the Issuing Lender has made payment under any Letter of Credit
and any L/C Participant has paid its pro rata share of such payment in accordance with Section
3.4(a), the Issuing Lender receives any payment related to such Letter of Credit (whether directly
from the Borrower or the respective Subsidiary Guarantor or otherwise, including proceeds of
collateral applied thereto by the Issuing Lender), or any payment of interest on account thereof,
the Issuing Lender will as soon as practicable distribute to such L/C Participant its pro rata
share thereof; provided, however, that in the event that any such payment received
by the Issuing Lender shall be required to be returned by the Issuing Lender, such L/C Participant
shall return to the Issuing Lender the portion thereof previously distributed by the Issuing Lender
to it.
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Section 3.5. Reimbursement Obligation. The Borrower or the Subsidiary Guarantor agrees to
reimburse the Issuing Lender on each date on which the Issuing Lender notifies the Borrower or the
respective Subsidiary Guarantor of the date and amount of a drawing under any Letter of Credit that
has been paid by the Issuing Lender in an amount equal to (a) the amount of the drawing so paid and
(b) any taxes, fees, charges or other costs or expenses reasonably incurred by the Issuing Lender
in connection with any payment made by the Issuing Lender under, or with respect to, such Letter of
Credit. Each such payment shall be made to the Administrative Agent for the account of the Issuing
Lender at the Applicable Payment Office in immediately available funds in the Agreed Currency in
which the Letter of Credit was denominated. Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this Section from the date such amounts become payable
(whether at stated maturity, by acceleration or otherwise) until the next Business Day following
the date of such notice, at the ABR then in effect (in the case of amounts payable in Dollars) or
at the rate per annum then applicable hereunder to Eurocurrency Borrowings in the applicable
Foreign Currency having an Interest Period of one month (in the case of amounts payable in Foreign
Currencies), and from such Business Day until payment in full at the rate which would be payable on
any outstanding ABR Borrowings that were then overdue (in the case of amounts payable in Dollars)
or at the rate then applicable to Eurocurrency Borrowings in the applicable Foreign Currency having
an Interest Period of one month that were then overdue (in the case of amounts payable in Foreign
Currencies). Notwithstanding anything herein to the contrary, the Borrower shall have joint and
several liability with the respective Subsidiary Guarantor for all L/C Obligations of such
Subsidiary Guarantor.
Section 3.6. Obligations Absolute. The Borrower’s and the respective Subsidiary Guarantor’s
obligations under this Article III shall be absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or defense to payment which the
Borrower and the respective Subsidiary Guarantor may have or have had against the Issuing Lender or
any beneficiary of a Letter of Credit. The Borrower and the respective Subsidiary Guarantor also
agree with the Issuing Lender that the Issuing Lender shall not be responsible for, and the
Borrower’s and the respective Subsidiary Guarantor’s L/C Obligations under Section 3.5 shall not be
affected by, among other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower or the respective Subsidiary Guarantor and any beneficiary of
any Letter of Credit or any other party to which such Letter of Credit may be transferred or any
claims whatsoever of the Borrower or the respective Subsidiary Guarantor against any beneficiary of
such Letter of Credit or any such transferee provided that this paragraph shall not relieve the
Issuing Lender of any liability resulting from the gross negligence or willful misconduct of the
Issuing Lender, or otherwise affect any defenses or other right that the Borrower may have as a
result of any such gross negligence or willful misconduct. The Issuing
Lender shall not be liable for any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in connection with any Letter
of Credit, except for errors or omissions caused by the Issuing Lender’s gross negligence or
willful misconduct. The Borrower and the respective Subsidiary Guarantor agree that any action
taken or omitted by the Issuing Lender under or in connection with any Letter of Credit or the
related drafts or documents, if done in the absence of gross negligence of willful misconduct and
in accordance with the standards or care specified in the ISP or UCP, as applicable, shall be
binding on the Borrower and on the respective Subsidiary Guarantor and shall not result in any
liability of the Issuing Lender to the Borrower or the respective Subsidiary Guarantor.
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Section 3.7. Letter of Credit Payments. If any draw shall be made under any Letter of Credit,
the Issuing Lender shall promptly notify the Borrower or the respective Subsidiary Guarantor of the
date and amount thereof. The responsibility of the Issuing Lender to the Borrower or the
respective Subsidiary Guarantor in connection with any such draw under any Letter of Credit shall,
in addition to any payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including any draft) delivered under such Letter of Credit in
connection with such presentment are in conformity with such Letter of Credit.
Section 3.8. Application. To the extent that any provision of any Application related to any
Letter of Credit is inconsistent with the provisions of this Agreement, the provisions of this
Agreement shall apply.
Section 3.9. Existing Letters of Credit. For all purposes of this Agreement, each of the
Existing Letters of Credit shall be deemed to have been issued by the Issuing Lender on the Closing
Date pursuant to the provisions of this Agreement and shall be subject to, and governed by, all
terms and conditions of this Agreement, including without limitation, Sections 3.3 and 3.4, on and
after the Closing Date.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this Agreement and to make
the Loans and issue or participate in the Letters of Credit, the Borrower hereby represents and
warrants to the Administrative Agent and each Lender that:
Section 4.1. Financial Condition. The consolidated balance sheet of the Parent and its
consolidated Subsidiaries as at December 29, 2007 and the related consolidated statements of income
and of cash flows for the fiscal year ended on such date, reported on by KPMG LLP copies of which
have heretofore been furnished to each Lender, present fairly the consolidated financial condition
of the Parent and its consolidated Subsidiaries as at such date, and the consolidated results of
their operations and their consolidated cash flows for the fiscal year then ended. All such
financial statements, including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved (except as approved by
such accountants and as disclosed therein). The unaudited consolidated balance sheet of the Parent
and its consolidated Subsidiaries as at March 29, 2008 and the related unaudited consolidated
statements of income and of cash flows for the fiscal quarter ended on such date, certified by a
Responsible Officer, copies of which have heretofore been furnished to each Lender, have been
prepared in accordance with GAAP (except as permitted by Form 10-Q under the Securities and
Exchange Act of 1934, as amended) applied consistently throughout the periods involved, and present
fairly the consolidated financial condition of the Parent and its consolidated Subsidiaries as at
such date, and the consolidated results of their operations and their consolidated cash flows for
the fiscal quarter then ended (subject to normal year-end audit adjustments). Neither the Parent
nor any of its consolidated Subsidiaries had, at March 29, 2008, any material Guarantee Obligation,
contingent liability
or liability for taxes, or any long-term lease or unusual forward or long-term commitment,
including, without limitation, any interest rate or foreign currency swap or exchange transaction,
which is not reflected in the foregoing statements or in the notes thereto. During the period from
March 29, 2008 to and including the Closing Date, there has been no sale, transfer or other
disposition by the Parent or any of its consolidated Subsidiaries of any material part of its
business or property and no purchase or other acquisition of any business or property (including
any capital stock of any other Person) material in relation to the consolidated financial condition
of the Parent and its consolidated Subsidiaries at March 29, 2008.
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Section 4.2. No Change. Since March 29, 2008 (a) there has been no development or event which
has had or could reasonably be expected to have a Material Adverse Effect and (b) except as
permitted by Section 7.8 of this Agreement or Section 7.8 of the Existing
Credit Agreement, no
dividends or other distributions have been declared, paid or made upon the Capital Stock of the
Borrower or the Parent nor has any of the Capital Stock of the Borrower or the Parent been
redeemed, retired, purchased or otherwise acquired for value by the Borrower or any of its
Subsidiaries.
Section 4.3. Corporate Existence; Compliance with Law. Each of the Parent and its
Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization under the name (as of the date hereof) set forth in its respective
signature line hereto, (b) has the corporate power and authority to own and operate its property,
to lease the property it operates as lessee and to conduct the business in which it is currently
engaged, (c) is duly qualified as a foreign corporation and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct of its business
requires such qualification, except where the failure to so qualify, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect and (d) is in
compliance with all Requirements of Law except to the extent that the failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 4.4. Organizational Power; Authorization; Enforceable Obligations. Each Loan Party
has the corporate or other applicable organizational power and authority to make, deliver and
perform the Loan Documents to which it is a party and, in the case of the Borrower, to borrow
hereunder, and has taken all corporate or other applicable organizational action necessary to be
taken by it to authorize the execution, delivery and performance of the Loan Documents to which it
is a party and in the case of the Borrower, to authorize the Borrowings on the terms and conditions
of this Agreement, the Applications and the other Loan Documents. No consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental Authority or any other
Person is required to be made or obtained by the Borrower or any other Loan Party in connection
with the Borrowings hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any other Loan Documents, except (a) consents and filings which
will have been obtained or made and will be in full force and effect on the Closing Date and (b)
such consents and filings which, individually or in the aggregate, if not obtained, could not
reasonably be expected to have a Material Adverse Effect. This Agreement has been, and, as of the
Closing Date, each other Loan Document will be, duly executed and delivered on behalf of each Loan
Party thereto. This Agreement constitutes, and each other Loan Document when executed and
delivered will constitute, a legal, valid and binding obligation of each Loan Party thereto,
enforceable against such Loan Party in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
Section 4.5. No Legal Bar. The execution, delivery and performance of the Loan Documents, the
Borrowings hereunder and the use of the proceeds thereof will not violate any
Requirement of Law or Contractual Obligation of the Parent or of any of its Subsidiaries and
will not result in, or require, the creation or imposition of any Lien on any of its or their
respective properties or revenues pursuant to any such Requirement of Law or Contractual Obligation
(it being understood that the use of the proceeds of the Borrowings to provide a portion of the
funds necessary to purchase any asset with respect to which the remainder of the purchase price is
financed by Indebtedness permitted under Sections 7.2(c), 7.2(e) or 7.2(r) that is secured by a
Lien on such asset permitted by Sections 7.3(g) or 7.3(h) does not constitute the use of the
proceeds of a Borrowing resulting in the creation or imposition of any Lien for purposes of this
Section).
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Section 4.6. No Material Litigation. Except as may be disclosed in the Parent’s report on
Form 10-Q filed with the Securities and Exchange Commission for the period ended March 29, 2008, no
litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is
pending or, to the knowledge of the Borrower, threatened by or against the Parent or any of its
Subsidiaries or against any of its or their respective properties or revenues (a) with respect to
any of the Loan Documents or any of the transactions contemplated hereby or thereby, or (b) which
could reasonably be expected to have a Material Adverse Effect.
Section 4.7. No Default. Neither the Parent nor any of its Subsidiaries is in default under
or with respect to any of its Contractual Obligations in any respect which could reasonably be
expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is
continuing.
Section 4.8. Ownership of Property; Liens. Each of the Parent and its Subsidiaries has good
record and marketable title in fee simple to, or a valid leasehold interest in, all its real
property, and good title to, or a valid leasehold interest in, all its other property, and none of
such property is subject to any Lien except as permitted by Section 7.3.
Section 4.9. Intellectual Property. The Parent and each of its Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, technology, know-how and processes
necessary for the conduct of its business as currently conducted except for those the failure to
own or license which could not reasonably be expected to have a Material Adverse Effect (the
“Intellectual Property”). No claim has been asserted and is pending by any Person
challenging or questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does the Borrower know of any valid basis for
any such claim except for any such claim which could not reasonably be expected to have a Material
Adverse Effect. The use of such Intellectual Property by the Parent and its Subsidiaries does not
infringe on the rights of any Person, except for such claims and infringements that, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
Section 4.10. No Burdensome Restrictions. No Requirement of Law or Contractual Obligation of
the Parent or any of its Subsidiaries could reasonably be expected to have a Material Adverse
Effect.
Section 4.11. Taxes. Each of the Parent and its Subsidiaries has filed or caused to be filed
all Federal and other material tax returns which, to the knowledge of the Parent or the Borrower,
are required to be filed and has paid all taxes shown to be due and payable on said returns or on
any assessments (of which notice has been received by it) made against it or any of its property
and all other material taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which reserves in conformity
with GAAP have been provided on the books of the Parent or its Subsidiaries, as the case may be);
no material tax Lien has been filed, and, to the
knowledge of the Parent or the Borrower, no claim is being asserted, with respect to any such
tax, fee or other charge.
Section 4.12. Federal Regulations. No part of the proceeds of any Loans will be used for
“purchasing” or “carrying” any “margin stock” within the respective meanings of each of the quoted
terms under Regulation U of the Board of Governors of the Federal Reserve System as now and from
time to time hereafter in effect or for any purpose which violates the provisions of the
regulations of such Board of Governors.
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Section 4.13. ERISA. Neither a Reportable Event nor an “accumulated funding deficiency”
(within the meaning of Section 412 of the Code or Section 302 of ERISA) has occurred during the
five-year period prior to the date on which this representation is made or deemed made with respect
to any Plan, no Plan has failed to satisfy the minimum funding standard applicable to such Plan (as
determined pursuant to Section 412 of the Code and Section 302 of ERISA) for any plan year during
such period, and each Single Employer Plan, and, to the knowledge of the Borrower, each
Multiemployer Plan, has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred other than a standard
termination pursuant to Section 4041(b) of ERISA, and no Lien in favor of the PBGC or a Plan has
arisen, during such five-year period. The present value of all accrued benefits under each Single
Employer Plan (based on those assumptions used to find such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed made, exceed the
value of the assets of such Plan allocable to such accrued benefits. Neither the Borrower nor any
Commonly Controlled Entity would become subject to any liability under ERISA if the Borrower or any
such Commonly Controlled Entity were to withdraw completely from all Multiemployer Plans as of the
valuation date most closely preceding the date on which this representation is made or deemed made,
which (in the aggregate with the liabilities which have been incurred with respect to all such
withdrawals which have occurred since the Closing Date) would exceed $10,000,000. No such
Multiemployer Plan is in Reorganization or Insolvent. Neither the Borrower nor any Commonly
Controlled Entity has or could have any obligation to contribute to, or any liability with respect
to, any Plan, program or arrangement providing for post-retirement welfare benefits, except as may
be required pursuant to Section 4980B of the Code or Section 601 of ERISA.
Section 4.14. Investment Company Act; Other Regulations. The Borrower is not an “investment
company”, or a company “controlled” by an “investment company”, within the meaning of the
Investment Company Act of 1940, as amended. The Borrower is not subject to regulation under any
Federal or State statute or regulation which limits its ability to incur Indebtedness.
Section 4.15. Subsidiaries. The Subsidiaries listed on Schedule 4.15 hereto
constitute all the Subsidiaries of the Borrower and the Parent at the date hereof.
Section 4.16. Purpose of Loans. The proceeds of the Revolving Credit Borrowings shall be used
by the Borrower to repay indebtedness outstanding under the Existing
Credit Agreement and to
provide funding for the general corporate purposes of the Borrower and the Subsidiary Guarantors,
including working capital.
Section 4.17. Environmental Matters. To the knowledge of the Borrower, each of the
representations and warranties set forth in paragraphs (a) through (f) of this Section is true and
correct, except to the extent that such failures to be so true and correct are disclosed in
Schedule 4.17 hereto:
(a) The facilities and properties owned, leased or operated by the Parent or any of its
Subsidiaries (the “Properties”) do not contain, and have not previously contained, any
Materials of Environmental Concern in amounts or concentrations which (i) constitute or constituted
a violation of, or (ii) could reasonably be expected to give rise to liability under, any Environmental Law
except in either case insofar as such violation or liability, or any aggregation thereof, is not
reasonably likely to result in the payment of a Material Environmental Amount.
(b) The Properties and all operations at the Properties are in compliance, and have in the
last 5 years been in compliance, in all material respects with all applicable Environmental Laws,
and there is no contamination at, under or about the Properties or violation of any Environmental
Law with respect to the Properties or the business operated by the Parent or any of its
Subsidiaries (the “Business”) which could reasonably be expected to materially interfere
with the continued operation of, or materially impair the fair saleable value of, the Properties
taken as a whole.
41
(c) Neither the Parent nor any of its Subsidiaries has received any notice of violation,
alleged violation, non-compliance, liability or potential liability regarding environmental matters
or compliance with Environmental Laws with regard to any of the Properties or the Business, nor
does the Parent or the Borrower have knowledge or reason to believe that any such notice will be
received or is being threatened except insofar as such notice or threatened notice, or any
aggregation thereof, does not involve a matter or matters that is or are reasonably likely to
result in the payment of a Material Environmental Amount.
(d) Materials of Environmental Concern have not been transported or disposed of from the
Properties in violation of, or in a manner or to a location which could reasonably be expected to
give rise to liability under, any Environmental Law, nor have any Materials of Environmental
Concern been generated, treated, stored or disposed of at, on or under any of the Properties in
violation of, or in a manner that could reasonably be expected to give rise to liability under, any
applicable Environmental Law except insofar as any such violation or liability referred to in this
paragraph, or any aggregation thereof, is not reasonably likely to result in the payment of a
Material Environmental Amount.
(e) No judicial proceeding or governmental or administrative action is pending or, to the
knowledge of the Parent or the Borrower, threatened, under any Environmental Law to which the
Parent or any of its Subsidiaries is or will be named as a party with respect to the Properties or
the Business, nor are there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the Business except insofar as such proceeding,
action, decree, order or other requirement, or any aggregation thereof, is not reasonably likely to
result in the payment of a material Environmental Amount.
(f) There has been no release or threat of release of Materials of Environmental Concern at or
from the Properties, or arising from or related to the operations of the Parent or any of its
Subsidiaries in connection with the Properties or otherwise in connection with the Business, in
violation of or in amounts or in a manner that could reasonably be expected to give rise to
liability under Environmental Laws except insofar as any such violation or liability referred to in
this paragraph, or any aggregation thereof, is not reasonably likely to result in the payment of a
Material Environmental Amount.
ARTICLE V. CONDITIONS PRECEDENT
Section 5.1. Conditions to Effectiveness. This Agreement shall become effective on the date
upon which the following conditions precedent shall have been satisfied (or waived by the Lenders):
(a) Loan Documents. The Administrative Agent shall have received (i) this Agreement,
executed and delivered by duly authorized officers of the Borrower, the Parent, and the Subsidiary
Guarantors, with a counterpart for each Lender, (ii) each of the Notes in favor of the various
Lenders requesting the same, each executed and delivered by a duly authorized officer of the
Borrower, with one original of each Note and (iii) each of the Guarantees, each executed and
delivered by duly authorized officers of the parties thereto, with a counterpart or a conformed
copy for each Lender.
(b) Borrowing Certificate. The Administrative Agent shall have received a certificate
of the Borrower, dated the Closing Date, substantially in the form of Exhibit D, with
appropriate insertions and attachments, reasonably satisfactory in form and substance to the
Administrative Agent, executed by the President or any Vice President and the Secretary or any
Assistant Secretary of the Borrower.
42
(c) Corporate Proceedings of the Borrower. The Administrative Agent shall have
received a copy of the resolutions, in form and substance reasonably satisfactory to the
Administrative Agent, of the Board of Directors of the Borrower authorizing (i) the execution,
delivery and performance of this Agreement and the other Loan Documents to which it is a party and
(ii) the Borrowings contemplated hereunder, certified by the Secretary or an Assistant Secretary of
the Borrower as of the Closing Date, which certificate shall be in form and substance reasonably
satisfactory to the Administrative Agent and shall state that the resolutions thereby certified
have not been amended, modified, revoked or rescinded.
(d) Borrower Incumbency Certificate. The Administrative Agent shall have received a
certificate of the Borrower, dated the Closing Date, as to the incumbency and signature of the
officers of the Borrower executing any Loan Document reasonably satisfactory in form and substance
to the Administrative Agent, executed by the President or any Vice President and the Secretary or
any Assistant Secretary of the Borrower.
(e) Corporate Proceedings of the Parent. The Administrative Agent shall have received
a copy of the resolutions, in form and substance reasonably satisfactory to the Administrative
Agent, of the Board of Directors of the Parent authorizing the execution, delivery and performance
of this Agreement and the other Loan Documents to which the Parent is a party, certified by the
Secretary or an Assistant Secretary of the Parent as of the Closing Date, which certificate shall
be in form and substance reasonably satisfactory to the Administrative Agent and shall state that
the resolutions thereby certified have not been amended, modified, revoked or rescinded.
(f) Parent Incumbency Certificate. The Administrative Agent shall have received a
certificate of the Parent, dated the Closing Date, as to the incumbency and signature of the
officers of the Parent executing this Agreement and any other Loan Document reasonably satisfactory
in form and substance to the Administrative Agent, executed by the President or any Vice President
and the Secretary or any Assistant Secretary of the Parent.
(g) Corporate or Other Organizational Proceedings of Subsidiary Guarantors. The
Administrative Agent shall have received a copy of the resolutions or consents, as applicable, in
form and substance reasonably satisfactory to the Administrative Agent, of the Board of Directors
or other managing board or comparable body of each Subsidiary Guarantor authorizing the execution,
delivery and performance of the Loan Documents to which it is a party, certified by the Secretary
or an Assistant Secretary or other authorized representatives of each such Subsidiary Guarantor as
of the Closing Date, which certificate shall be in form and substance reasonably satisfactory to
the Administrative Agent and shall state that the resolutions or consents, as applicable, thereby
certified have not been amended, modified, revoked or rescinded.
(h) Subsidiary Guarantor Incumbency Certificates. The Administrative Agent shall have
received a certificate of each Subsidiary Guarantor, dated the Closing Date, as to the incumbency
and signature of the officers or other authorized representatives of such Subsidiary Guarantors,
reasonably satisfactory in form and substance to the Administrative Agent, executed by the
President or any Vice President and the Secretary or any Assistant Secretary or other authorized
representatives of each such Subsidiary Guarantor.
43
(i) Corporate and Other Organizational Documents. The Administrative Agent shall have
received true and complete copies of the certificate or articles of incorporation, by-laws, limited
liability company or partnership agreement, or other organizational documents of each Loan Party,
certified as of the Closing Date as complete and correct copies thereof by the Secretary or an
Assistant Secretary or other authorized representative of such Loan Party.
(j) Fees. The Administrative Agent and the Lenders shall have received the fees to be
received on the Closing Date as separately agreed between the Administrative Agent and the
Borrower.
(k) Legal Opinions. The Administrative Agent shall have received the following
executed legal opinions addressed to the Administrative Agent and the Lenders:
(i) the executed legal opinion of Debevoise & Xxxxxxxx LLP,
New York counsel to the
Borrower and the other Loan Parties, substantially in the form of
Exhibit E-1;
(ii) the executed legal opinion of Xxxxxxx Xxxxxxx, general counsel of the Borrower,
substantially in the form of Exhibit E-2; and
(iii) the executed legal opinion of [Xxxxxx and Xxxxxx], Cayman Islands counsel to the
Borrower and certain other Loan Parties, substantially in the form of Exhibit E-3.
Each such legal opinion shall cover such other matters incident to the transactions contemplated by
this Agreement as the Administrative Agent may reasonably require.
(l) Insurance. The Administrative Agent shall have received evidence reasonably
satisfactory to it as to the adequacy of the insurance program of the Loan Parties and that each
Loan Party has obtained the insurance coverage required by Section 6.5 hereof.
(m)
Existing Credit Agreement. The loans outstanding under the Existing Credit
Agreement on the Closing Date prior to giving effect to this Agreement, and all interest, fees and
other amounts payable under the Existing Credit Agreement (including, without limitation, amounts
due under Section 2.16 of the Existing Credit Agreement) shall have been paid in full and all
commitments of the lenders thereunder shall have been terminated simultaneously with the
effectiveness of this Agreement.
(n) Closing Certificate. The Administrative Agent shall have received a certificate,
substantially in the form of Exhibit D dated the Closing Date and signed by the President
or a Financial Officer of the Borrower, confirming compliance with the conditions set forth in
Section 5.2.
(o) Financial Statements. The Borrower shall have delivered to the Administrative
Agent and the Lenders, to the extent not publicly available, (i) the Parent’s audited annual
financial statements for the years ended December 31, 2005, December 30, 2006 and December 29,
2007, (ii) the Parent’s unaudited quarterly financial statements for the fiscal quarter ended March
29, 2008, and (iii) consolidated financial projections for the Parent for a five-year period.
(p) Consents, etc. The Administrative Agent shall have received copies of any
consents, approvals, authorizations, registrations, or filings required to be made or obtained by
any of the Loan Parties in connection with the transactions contemplated by this Agreement.
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Section 5.2. Conditions to Each Extension of Credit. The agreement of each Lender to make any
Loans, and of the Issuing Lender to issue, renew, extend or increase any Letter of Credit, on the
Closing Date or on any subsequent date, is subject to the satisfaction of the following conditions
precedent:
(a) Representations and Warranties. Each of the representations and warranties made
by the Loan Parties in or pursuant to the Loan Documents shall be true and correct in all material
respects on and as of such date as if made on and as of such date (or, if stated to relate to an
earlier date, as of such earlier date).
(b) No Default. No Default or Event of Default shall have occurred and be continuing
on such date or after giving effect to the Loans requested to be made and/or Letters of Credit
requested to be issued, increased or renewed on such date.
Each Borrowing and each issuance, renewal, extension or increase of a Letter of Credit by or for
the account of the Borrower or any Subsidiary Guarantor hereunder shall constitute a representation
and warranty by the Borrower as of the date of such Loan or issuance, renewal, extension or
increase of such Letter of Credit that the conditions contained in this Section 5.2 have been
satisfied.
ARTICLE VI. AFFIRMATIVE COVENANTS
Each of the Parent and the Borrower hereby agrees that, so long as any Revolving Credit
Commitments remain in effect, any Letter of Credit remains outstanding, or any Loan, L/C
Obligations or any other amount is owing to any Lender, the Issuing Lender or the Administrative
Agent hereunder, the Parent and the Borrower shall and, in the case of the agreements set forth in
Sections 6.3, 6.4, 6.5, 6.6 and 6.8, shall cause each of its Subsidiaries to:
Section 6.1. Financial Statements. Furnish to each Lender:
(a) as soon as available, but in any event within 70 days (or in the case of consolidating
statements, 75 days) after the end of each fiscal year of the Parent, a copy of the consolidated
balance sheet and consolidating balance sheet information of the Parent and its consolidated
Subsidiaries as at the end of such year, the related consolidated statements of income and changes
in shareholders equity and of cash flows for such year and the related consolidating statements of
income and of cash flows information for such year, setting forth in the case of the consolidated
balance sheets, consolidated statements of income and consolidated statements of cash flows,
comparative figures for the previous year, reported on, in the case of the consolidated financial
statements, without a “going concern” or like qualification or exception, or qualification arising
out of the scope of the audit, by KPMG LLP or other independent certified public accountants of
nationally recognized standing; and
(b) as soon as available, but in any event not later than 40 days (or in the case of
consolidating statements, 45 days) after the end of each of the first three quarterly periods of
each fiscal year of the Parent, a copy of the unaudited consolidated balance sheet and
consolidating balance sheet information of the Parent and its consolidated Subsidiaries as at the
end of such quarter, the related unaudited consolidated statements of income and changes in
shareholders equity and of cash flows of the Parent and its consolidated Subsidiaries for such
quarter and the related consolidating statements of income and of cash flows information for such
year and the portion of the fiscal year through the end of
such quarter, setting forth in the case of the consolidated balance sheets, consolidated
statements of income and consolidated statements of cash flows, comparative figures for the
previous year, certified by a Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments);
45
all such financial statements shall be complete and correct in all material respects and shall be
prepared in reasonable detail and in accordance with GAAP (except, in the case of the financial
statements referred to in subparagraph (b), such financial statements need not contain footnotes)
applied consistently throughout the periods reflected therein and with prior periods (except as
approved by such accountants or officer, as the case may be, and disclosed therein).
Section 6.2. Certificates; Other Information. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements referred to in Sections 6.1(a)
and 6.1(b), a certificate of a Responsible Officer stating that, to the best of such Officer’s
knowledge, each of the Parent and the Borrower during such period has observed or performed all of
its covenants and other agreements, and satisfied every condition, contained in this Agreement and
the other Loan Documents to which it is a party to be observed, performed or satisfied by it, and
that such Officer has obtained no knowledge of any Default or Event of Default except as specified
in such certificate, and setting forth in reasonable detail computations of compliance with the
provisions of Section 7.1 (including, without limitation, any reconciliation of such financial
statements with generally accepted accounting principles as utilized in preparing the audited
financial statements delivered pursuant to the first sentence of Section 4.1);
(b) within five days after the same are sent, copies of all financial statements and reports
which the Parent or the Borrower sends to its stockholders, and within five days after the same are
filed, copies of all financial statements and reports which the Parent or the Borrower may make to,
or file with, the Securities and Exchange Commission or any successor or analogous Governmental
Authority; and
(c) promptly, such additional financial and other information as the Administrative Agent may
from time to time reasonably request.
Section 6.3. Payment of Obligations. Pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all its material obligations of
whatever nature, except where the amount or validity thereof is currently being contested in good
faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have
been provided on the books of the Parent or its Subsidiaries, as the case may be.
Section 6.4. Conduct of Business and Maintenance of Existence. Continue to engage in business
of the same general type as now conducted by it (except that the Insurance Subsidiary shall be
permitted to engage in the Insurance Subsidiary Business, Parent, the Borrower, the Subsidiaries
and the Receivables SPV shall be permitted to engage in Permitted Receivables Transactions and the
Borrower and its Subsidiaries, including the Operator Financing Subsidiary and the Financing
Vehicle, as the case may be, shall be permitted to engage in the Operator Financing Program and the
various other activities related thereto, in each case, subject to the applicable terms and
conditions of Article VII) and preserve, renew and keep in full force and effect its corporate
existence and take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business except as otherwise permitted pursuant
to Section 7.5; and comply with all Contractual Obligations and Requirements of Law except to the
extent that failure to comply therewith could not, in the aggregate, be reasonably expected to have
a Material Adverse Effect.
46
Section 6.5. Maintenance of Property; Insurance. Keep all property useful and necessary in
its business in good working order and condition; maintain with financially sound and reputable
insurance companies insurance on all its property in at least such amounts (not less than
$35,000,000 per occurrence in the case of comprehensive general liability and automobile liability)
and against at least such risks (but including in any event public liability) as are usually
insured against in the same general area by companies engaged in the same or a similar business,
including, without limitation, insurance covering comprehensive general liability, automobile
liability, workers’ compensation claims and employer’s liability, provided that the Parent, the
Borrower and any Subsidiary may self-insure against any risk required to be insured pursuant to
this Section 6.5 in an aggregate amount of up to $10,000,000 per occurrence and provided further
that in the event that the Parent or any of its Subsidiaries self-insures against any risks
required to be insured against pursuant to this Section 6.5 in an aggregate amount in excess of
$10,000,000 per occurrence, such self-insurance shall be in amounts satisfactory to the
Administrative Agent; and furnish to each Lender, upon written request, full information as to the
insurance carried.
Section 6.6. Inspection of Property; Books and Records; Discussions. Keep proper books of
records and account in which full, true and correct entries in conformity with GAAP and all
Requirements of Law shall be made of all dealings and transactions in relation to its business and
activities; and permit representatives of the Administrative Agent (acting on its own or at the
request of any Lender) to visit and inspect any of its properties and examine and make abstracts
from any of its books and records at any reasonable time and as often as may reasonably be
requested and to discuss the business, operations, properties and financial and other condition of
the Parent and its Subsidiaries with officers and employees of the Parent and its Subsidiaries and
with its independent certified public accountants.
Section 6.7. Notices. Promptly give notice to the Administrative Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any material Contractual Obligation of the
Parent or any of its Subsidiaries or (ii) litigation, investigation or proceeding which may exist
at any time between the Parent or any of its Subsidiaries and any Governmental Authority, which in
the case of clause (i) or (ii) immediately above, if not cured or if adversely determined, as the
case may be, could reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Parent or any of its Subsidiaries in which (i)
the amount involved is $10,000,000 or more and not covered by insurance or (ii) in which injunctive
or similar relief is sought;
(d) the following events, as soon as possible and in any event within 30 days after the Parent
or the Borrower knows or has reason to know thereof: (i) the occurrence or expected occurrence of
any Reportable Event with respect to any Plan; a failure to make any required contribution to a
Plan which failure is sufficient to result in the imposition of a Lien on any property of the
Borrower pursuant to Section 302(f) or 303(k) of ERISA or Section 412(n) or 430(k) of the Code, the
creation of any Lien in favor of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or
the taking of any other action by the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the terminating, Reorganization or
Insolvency of, any Plan or Multiemployer Plan other than a standard termination pursuant to Section
4041(b) of ERISA; and
(e) any development or event which could reasonably be expected by the Parent or any of its
Subsidiaries to have a Material Adverse Effect.
47
Each notice pursuant to this subsection shall be accompanied by a statement of a Responsible
Officer setting forth details of the occurrence referred to therein and stating what action the
Borrower proposes to take with respect thereto.
Section 6.8. Environmental Laws.
(a) Comply with, and ensure compliance by all tenants, subtenants, agents and subcontractors,
if any, with, all applicable Environmental Laws and obtain and comply in all material respects with
and maintain, and ensure that all tenants, subtenants, agents and subcontractors obtain and comply
in all material respects with and maintain, any and all licenses, approvals, notifications,
registrations or permits required by applicable Environmental Laws except to the extent that
failure to do so could not be reasonably expected to have a Material Adverse Effect.
(b) Conduct and complete all investigations, studies, sampling and testing, and all remedial,
removal and other actions required under Environmental Laws and promptly comply in all material
respects with all lawful orders and directives of all Governmental Authorities regarding
Environmental Laws except to the extent that the same are being contested in good faith by
appropriate proceedings and the pendency of such proceedings could not be reasonably expected to
have a Material Adverse Effect.
Section 6.9. Additional Subsidiaries. Cause each Subsidiary (other than any Receivables SPV)
created after the Closing Date and into which the Loan Parties have made Investments equal to or
greater than $5,000,000 in the aggregate, to promptly execute a supplement pursuant to which such
Subsidiary becomes a party to the Subsidiaries Guarantee. Notwithstanding the foregoing, no such
supplement shall be required to be executed by any Foreign Subsidiary where the Guarantee
Obligations of such Foreign Subsidiary arising under the Subsidiaries Guarantee would, in the
reasonable judgment of the Borrower, have adverse tax consequences to the Borrower or the Parent;
provided, however, that in lieu of providing such supplement, the relevant Loan
Party shall promptly execute and deliver to the Administrative Agent a Pledge Agreement pursuant to
which such Loan Party shall grant to the Administrative Agent, for the benefit of the Lenders, a
first-priority, perfected pledge and security interest in all voting and non-voting Capital Stock
(or, to the extent such pledge and security interest in respect of all such Capital Stock would, in
the reasonable judgment of the Borrower, have adverse tax consequences to the Borrower or the
Parent, then such pledge and security interest shall be limited to the maximum percentage of voting
and/or nonvoting Capital Stock that would not result in such adverse tax consequences) held by such
Loan Party in any Foreign Subsidiary created after the Closing Date and into which the Loan Parties
have made Investments equal to or greater than $5,000,000 in the aggregate. Any such supplement or
Pledge Agreement shall be accompanied by evidence of organizational authorization for the execution
and delivery thereof, and opinions of counsel for the respective Loan Parties that are parties
thereto with respect to the authorization, execution, and enforceability thereof, all in form and
substance reasonably satisfactory to the Administrative Agent.
ARTICLE VII. NEGATIVE COVENANTS
Each of the Parent and the Borrower hereby agrees that, so long as any Revolving Credit
Commitments remain in effect, any Letter of Credit remains outstanding, or any Loans, L/C
Obligations or other amounts are owing to any Lender, the Issuing Lender, or the Administrative
Agent hereunder, each of the Parent and the Borrower shall not, and shall not permit any of its
Subsidiaries (other than in the case of Section 7.8) to, directly or indirectly:
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Section 7.1. Financial Condition Covenants.
(a) Total Indebtedness to Consolidated EBITDA. Permit the ratio (the “Leverage
Ratio”) of (i) Total Indebtedness as of the last day of any fiscal quarter of the Parent, to
(ii) Consolidated EBITDA for the period of four consecutive fiscal quarters of the Parent then
ended, to be greater than 3.00 to 1.00.
(b) Fixed Charge Coverage. Permit as of the last day of any fiscal quarter of the
Parent, the ratio (the “Fixed Charge Coverage Ratio”) of (i) Consolidated EBITDA for the
period of four consecutive fiscal quarters then ended, minus the amount of expenditures
during such period in respect of the purchase or other acquisition of fixed or capital assets that
are not made with Indebtedness described in Section 7.2(c) to (ii) the sum of Consolidated Interest
Expense for such period, plus all principal installments due during such period with
respect to Financing Leases, to be less than 2.00 to 1.00.
Section 7.2. Limitation on Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness of the Parent and any of its Subsidiaries under this Agreement and the other
Loan Documents;
(b) Indebtedness of the Borrower to any Subsidiary and of any Subsidiary Guarantor to the
Borrower or any other Subsidiary;
(c) Indebtedness of the Borrower and any of its Subsidiaries incurred to finance any
acquisition of fixed or capital assets (whether pursuant to a loan, a Financing Lease or
otherwise); provided that, the principal amount of such Indebtedness does not exceed the
aggregate purchase price of such property at the time it was acquired, and renewals, extensions and
refinancings of such Indebtedness, provided that the amount of such Indebtedness outstanding at the
time of such renewal, extension or refinancing is not increased;
(d) Indebtedness outstanding on the date hereof and listed on Schedule 7.2 and
renewals, extensions and refinancings thereof; provided that, the amount of such
Indebtedness outstanding at the time of such renewal, extension or refinancing is not increased;
(e) Indebtedness of a Person that becomes a Subsidiary of the Borrower after the date hereof,
Indebtedness secured by property or assets acquired by any Subsidiary after the date hereof,
Indebtedness assumed in connection with acquisitions of assets permitted by Section 7.10(g) and any
Indebtedness incurred to refinance any such Indebtedness previously referred to in this Section
7.2(e); provided that, (i) such Indebtedness existed at the time such Person became a
Subsidiary or such property or assets were acquired, as the case may be, and was not created in
anticipation thereof or such Indebtedness is created to refinance any such existing Indebtedness
and does not increase the outstanding principal amount thereof, (ii) any such refinanced
Indebtedness is payable with interest and fees at rates consistent with those prevailing in the
relevant market at the time of issuance (as determined in good faith by the Borrower), (iii) the
other terms and conditions of any such refinanced Indebtedness referred to in this paragraph, taken
as a whole, including, without limitation, the covenants, default provisions and representations
and warranties, are not more restrictive than the terms and conditions of this Agreement (as
determined in good faith by the Borrower); provided that, nothing in this Section 7.2(e)
shall be deemed to prevent such Indebtedness from being secured by Liens permitted by Section
7.3(g), and (iv) immediately after giving effect to the acquisition of such Person, property or
assets or such refinancing, as the case may be, no Default or Event of Default shall have occurred
and be continuing;
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(f) Indebtedness of the Parent, the Borrower or any Subsidiary under any Interest Rate
Protection Agreement, Commodity Price Protection Agreement or Exchange Rate Protection Agreement
permitted pursuant to Section 7.10;
(g) Indebtedness of the Parent to the Borrower or any of its Subsidiaries incurred to
purchase, repurchase, redeem or retire the Parent’s Capital Stock, which Indebtedness is incurred
when no Default or Event of Default has occurred and is continuing or would result therefrom and
such purchase, repurchase, redemption or retirement is made in compliance with Section 7.8(h);
(h) so long as no Default or Event of Default shall have occurred and be continuing,
Indebtedness of the Parent to the Borrower or any of its Subsidiaries incurred to cover reasonable
and necessary expenses incurred by the Parent in connection with registration, public offerings and
exchange listing of securities;
(i) Indebtedness of the Parent to the Borrower and its Subsidiaries in an amount sufficient to
pay tax liabilities of the Parent which are paid in cash by the Parent to any taxing authority and
which are attributable to income, business, properties or activities of, or distribution of
earnings by, the Parent or its Subsidiaries; provided that, the Parent shall repay such
Indebtedness upon receipt of any refunds of such tax payments in an amount equal to such refunds;
(j) Indebtedness of the Parent to the Borrower and its Subsidiaries (in addition to
Indebtedness otherwise permitted by this Section 7.2) incurred to pay expenses in the ordinary
course of business;
(k) Indebtedness of the Parent to the Borrower and its Subsidiaries incurred to pay premiums
to insurance companies for directors’ and officers’ insurance with respect to the Parent;
(l) Indebtedness of the Parent to the Borrower and its Subsidiaries incurred to pay for the
printing and distribution of financial reports of the Parent, proxy solicitations and other
communications with shareholders of the Parent and for filings with the Securities and Exchange
Commission and costs directly related to the annual meeting of shareholders of the Parent;
(m) Indebtedness of the Parent to the Borrower and its Subsidiaries incurred to pay directors’
fees and expenses to directors of the Parent;
(n) Indebtedness of the Parent to the Borrower and its Subsidiaries incurred to pay fees owed
by the Parent to its transfer agent;
(o) Indebtedness of the Parent to the Borrower and its Subsidiaries, the proceeds of which are
used to pay fees to the Parent’s independent auditors, tax advisors and outside attorneys in the
ordinary course of business;
(p) Indebtedness incurred to exercise purchase options under leases (other than Financing
Leases and Short Term Leases) for tractors, trailers and related equipment which leases are assumed
or acquired subsequent to the Closing Date in connection with Permitted Acquisitions;
provided that, (i) such Indebtedness is payable with interest and fees at rates consistent
with those prevailing in the relevant market at the time of issuance (as determined in good faith
by the Borrower), (ii) the other terms and conditions of such Indebtedness, taken as a whole,
including, without limitation, the covenants, default provisions and representations and
warranties, are not more restrictive than the terms and conditions of this Agreement (as determined
in good faith by the Borrower); provided that, nothing in this clause shall be deemed to
prevent such Indebtedness from being secured by Liens permitted by Section
7.3(h), and (iii) immediately after giving effect to the exercise of such purchase option, no
Default or Event of Default shall have occurred and be continuing;
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(q) Account Receivable Indebtedness of the Parent or any of its Subsidiaries not exceeding
$75,000,000 in an aggregate principal amount at any one time outstanding;
(r) Indebtedness of any Receivables SPV arising out of any investment in such Receivables SPV
made by the Parent, the Borrower or any Subsidiary of the Borrower in accordance with Section
7.10(q);
(s) Indebtedness of any Subsidiary that is not a Loan Party to any Loan Party incurred in
connection with a loan, advance or investment permitted by Section 7.10(r);
(t) Indebtedness of the Insurance Subsidiary with respect to letters of credit issued for its
account and secured by Liens as permitted in Section 7.3(k);
(u) Guarantee Obligations constituting Indebtedness that are otherwise permitted in Section
7.4;
(v) Indebtedness in the form of lease liabilities under sale and leaseback transactions
permitted by Section 7.13; and
(w) Outstanding Permitted Line of Credit Indebtedness, Permitted Specified Additional Debt,
and other unsecured (or, to the extent permitted by Section 7.3(m), secured) Indebtedness of the
Parent or any of its Subsidiaries not described in clauses (a) through (v) above; provided
that, after giving effect to any such Indebtedness pursuant to this clause (w), the Borrower shall
be in compliance, on a pro forma basis, with the Leverage Ratio specified in Section 7.1(a)
(calculated as at the end of the most recently ended fiscal quarter of the Parent for which
financial statements have been delivered pursuant to Section 6.1 as if such Indebtedness had been
incurred on the first day of the four fiscal quarter period ended with such most recently ended
fiscal quarter).
Section 7.3. Limitation on Liens. Create, incur, assume or suffer to exist any Lien upon any
of its property, assets or revenues, whether now owned or hereafter acquired, except for:
(a) Liens for taxes which are not yet due or which are being contested in good faith by
appropriate proceedings or with respect to which the failure to pay could not reasonably be
expected to have a Material Adverse Effect, provided that adequate reserves with respect thereto
are maintained on the books of the Borrower or its Subsidiaries, as the case may be, in conformity
with GAAP;
(b) carriers’ warehousemen’s, mechanics’ materialmen’s, repairmen’s, supplier’s, or other
Liens arising in the ordinary course of business which are not overdue for a period of more than 60
days or which are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers’ compensation, unemployment insurance and
other social security legislation and deposits securing liability to insurance carriers under
insurance or self-insurance arrangements;
(d) deposits to secure the performance of bids, trade contracts (other than for borrowed
money), leases, statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
51
(e) easements, rights-of-way, restrictions and other similar encumbrances incurred in the
ordinary course of business which, in the aggregate, are not substantial in amount and which do not
in any case materially detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the Borrower or such Subsidiary;
(f) Liens in existence on the date hereof listed on Schedule 7.3, securing
Indebtedness permitted by Section 7.2(d); provided that, no such Lien is spread to cover
any additional property after the Closing Date and that the amount of Indebtedness secured thereby
is not increased;
(g) Liens securing Indebtedness of the Borrower and its Subsidiaries permitted by Section
7.2(c) incurred to finance or refinance the acquisition of fixed or capital assets, provided that
(i) such Liens shall be created substantially simultaneously with the acquisition or refinancing of
such fixed or capital assets, (ii) such Liens do not at any time encumber any property other than
the property financed or refinanced by such Indebtedness, (iii) the amount of Indebtedness secured
thereby is not increased and (iv) the principal amount of Indebtedness secured by any such Lien
shall at no time exceed the aggregate purchase price of such property at the time it was acquired;
(h) Liens securing Indebtedness permitted by Sections 7.2(e) and (p) on the property or assets
of a corporation which becomes a Subsidiary after the date hereof, on property or assets acquired
by any Subsidiary after the date hereof, on assets acquired as permitted by Section 7.10(g) and on
assets previously the subject of leases referred to in Section 7.2(p); provided that, (i)
such Liens existed at the time such corporation became a Subsidiary or such property or assets were
acquired, as the case may be, and were not created in anticipation thereof or, as the case may be,
are created at the time such Indebtedness is assumed or created, (ii) no such Lien is spread to
cover any additional property or assets, and (iii) the amount of Indebtedness secured thereby is
not increased;
(i) Liens of landlords or of mortgagees of landlords arising solely by operation of law, on
fixtures located on premises leased in the ordinary course of business, provided that the rental
payments secured thereby are not yet due;
(j) any attachment, judgment or similar Lien, unless the writ or judgment or other process it
secures shall not, within 60 days after the entry thereof, have been discharged or execution
thereof stayed pending appeal, or shall not have been discharged within 60 days after the
expiration of any such stay;
(k) Liens on the property or assets of the Insurance Subsidiary securing the payment of claims
in the aggregate amount of not more than $75,000,000;
(l) Liens securing Account Receivable Indebtedness of the Borrower and its Subsidiaries
permitted by Section 7.2(q); provided that, such Liens attach only to the accounts
receivable that are the subject of such Indebtedness and to the stock of the Receivables SPV; and
(m) Liens securing any Indebtedness permitted by Section 7.2(w) in an aggregate amount not to
exceed $175,000,000; provided that, pari passu Liens on the assets subject thereto are also
created to secure the obligations and liabilities of the Loan Parties hereunder and under the other
Loan Documents, so that such Indebtedness is secured equally and ratably with the Loans, the L/C
Obligations, and other obligations and liabilities of the Loan Parties under this Agreement and the
other Loan Documents.
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Section 7.4. Limitation on Guarantee Obligations. Create, incur, assume or suffer to exist
any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the date hereof and listed on Schedule 7.4;
(b) the Guarantees and Reimbursement Obligations;
(c) Guarantee Obligations entered into in the ordinary course of business of any obligations
(including Financing Leases and operating leases) of the Borrower or any Subsidiary Guarantor;
(d) Guarantee Obligations of the Borrower and any of its Subsidiaries of loans or advances to
employees for moving, relocation, travel and entertainment expenses, drawing accounts and similar
expenditures made in the ordinary course of business and in an aggregate amount not exceeding, when
added to loans and advances at any time outstanding pursuant to Section 7.10(c), $10,000,000
outstanding at such time;
(e) Guarantee Obligations in respect of Interest Rate Protection Agreements, Commodities Price
Protection Agreements and Exchange Rate Protection Agreements to the extent permitted pursuant to
Section 7.10;
(f) Guarantee Obligations of the Parent, the Borrower or any Subsidiary of the Parent in
respect of loans made pursuant to the Operator Financing Program which are sold as permitted under
Section 7.6(g); provided that, such Guarantee Obligations do not, in the aggregate, exceed
$50,000,000 at any one time outstanding;
(g) Guarantee Obligations of the Parent of the performance of obligations of the Borrower or
any of its Subsidiaries under Contractual Obligations in existence at the time of any Permitted
Acquisition and not created in anticipation thereof under which the Borrower or such Subsidiary
becomes obligated as a result of such Permitted Acquisition;
(h) Guarantee Obligations relating to obligations of any kind of the Borrower, the Parent, or
any of the Parent’s Subsidiaries that are not prohibited by this Agreement;
(i) Guarantee Obligations of the Insurance Subsidiary relating to letters of credit issued for
the payment of insurance claims; and
(j) other Guarantee Obligations incurred after the date hereof in an aggregate amount not to
exceed $10,000,000 at any one time outstanding.
Section 7.5. Limitation on Fundamental Changes. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution),
or convey, sell, lease, assign, transfer or otherwise dispose of, all or substantially all of its
property, business or assets, or make any material change in its present method of conducting
business, except:
(a) any Subsidiary of the Borrower may be merged or consolidated with or into the Borrower
(provided that the Borrower shall be the continuing or surviving corporation) or with or into any
one or more wholly owned Subsidiaries of the Borrower (provided that the wholly owned Subsidiary or
Subsidiaries shall be the continuing or surviving corporation and provided, further, that if any of
such Subsidiaries is a Subsidiary Guarantor, the surviving corporation shall be a Subsidiary
Guarantor);
53
(b) any wholly owned Subsidiary may sell, lease, transfer or otherwise dispose of any or all
of its assets (upon voluntary liquidation or otherwise) to the Borrower or any other wholly owned
Subsidiary of the Borrower; and
(c) the Parent may be merged or consolidated with or into the Borrower or the Borrower may be
merged or consolidated with or into the Parent (provided that if the Parent shall be the continuing
or surviving corporation, it shall have assumed all of the Borrower’s obligations hereunder
pursuant to an agreement satisfactory in form and substance to the Administrative Agent).
Section 7.6. Limitation on Sale of Assets. Convey, sell, lease, assign, transfer or otherwise
dispose of any of its property, business or assets (including, without limitation, receivables and
leasehold interests), whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary’s Capital Stock to any Person other than the Borrower
or any wholly owned Subsidiary, except:
(a) the sale or other disposition of obsolete or worn out property in the ordinary course of
business;
(b) the sale or other disposition of any property in the ordinary course of business, provided
that (other than inventory and other than dispositions permitted by Section 7.6(a) or (d)) the
aggregate book value of all assets so sold or disposed of in any period of twelve consecutive
months shall not exceed 10% of Consolidated Total Assets of the Borrower and its Subsidiaries as at
the beginning of such twelve-month period;
(c) the sale of inventory in the ordinary course of business;
(d) the sale or discount without recourse of accounts receivable which are overdue for more
than 60 days arising in the ordinary course of business in connection with the compromise or
collection thereof;
(e) as permitted by Section 7.5(b);
(f) the sale, lease, assignment, transfer or other disposition of accounts receivable in
connection with any Account Receivable Indebtedness permitted pursuant to Section 7.2(q);
(g) the sale (without recourse to the Operator Financing Subsidiary or the Financing Vehicle,
as the case may be) of loans made pursuant to the Operator Financing Program by the Operator
Financing Subsidiary or the Financing Vehicle, as the case may be, to Persons other than the Parent
and its Subsidiaries or to the Insurance Subsidiary or the Offshore Joint Venture to the extent
(and only to the extent) such purchase by the Insurance Subsidiary or the Offshore Joint Venture,
as the case may be, would constitute a Permitted Insurance Company Investment;
(h) the sale of the real property referred to in clause (ii) to the proviso to Section 7.13;
and
(i) the sale and leaseback of all, or any portion, of the real and personal property of the
Borrower and its Subsidiaries referred to in clauses (i) and (ii) of Section 7.13.
Section 7.7. Limitation on Leases. Permit (a) Consolidated Lease Expense (other than under
leases for tractors, trailers, containers and related equipment) for any fiscal year of the
Borrower to exceed $40,000,000 or (b) Consolidated Lease Expense with respect to Short Term
Leases in any fiscal year of the Borrower to exceed $40,000,000.
54
Section 7.8. Limitation on Dividends. Declare or pay any dividend (other than dividends
payable solely in common stock of the Borrower or the Parent) on, or make any payment on account
of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of, any shares of any class of Capital Stock of the
Borrower or the Parent, whether now or hereafter outstanding, or make any other distribution in
respect thereof, either directly or indirectly, whether in cash or property or in obligations of
the Parent, the Borrower or any Subsidiary except that:
(a) the Borrower may pay cash dividends to the Parent in an amount sufficient to pay tax
liabilities of the Parent which are paid in cash by the Parent to any taxing authority and which
are attributable to income, business, properties or activities of or distribution of earnings by,
the Parent or its Subsidiaries; provided that, the Parent shall contribute to the Borrower
the amount of any refunds of such tax payments upon receipt thereof;
(b) the Borrower may pay cash dividends to the Parent to enable the Parent to pay premiums to
insurance companies for directors’ and officers’ insurance with respect to the Parent;
(c) the Borrower may pay cash dividends to the Parent to enable the Parent to pay for the
printing and distribution of financial reports of the Parent, proxy solicitations and other
communications with shareholders of the Parent and for filings with the Securities and Exchange
Commission and costs directly related to the annual meeting of shareholders of the Parent;
(d) the Borrower may pay cash dividends to the Parent to enable the Parent to pay directors’
fees and expenses to directors of the Parent;
(e) the Borrower may pay cash dividends to the Parent to enable the Parent to pay fees owed by
the Parent to its transfer agent;
(f) the Borrower may pay cash dividends to the Parent to pay fees to the Parent’s independent
auditors, tax advisors and outside attorneys in the ordinary course of business;
(g) the Borrower may pay cash dividends to the Parent to pay obligations of the Parent
incurred under any Interest Rate Protection Agreement or Commodity Price Protection Agreement
permitted pursuant to Section 7.10(l); and
(h) so long as no Default or Event of Default shall have occurred and be continuing or would
result therefrom, the Borrower may purchase, repurchase, redeem or retire any share of its Capital
Stock and/or pay cash dividends to the Parent in addition to the cash dividends described in the
preceding clauses (a) through (g), and the Parent may purchase, repurchase, redeem or retire any
share of its Capital Stock and/or pay cash dividends to its shareholders; provided that, if
after giving effect to any payments to be made in any fiscal quarter of the Parent to effect such
purchase, repurchase, redemption or retirement of shares of Capital Stock, and/or payments of cash
dividends, pursuant to this clause (h), the Leverage Ratio would be greater than 2.50 to 1.00 on a
pro forma basis as at the end of the most recently ended Fiscal Quarter of the Parent for which
financial statements have been delivered pursuant to Section 6.1, then the aggregate of all such
payments that may be made in such fiscal quarter, when taken together with all such payments made
in the three immediately preceding fiscal quarters, shall not exceed an amount equal to ten percent
(10%) of Consolidated Net Worth (as at the end of the then most recent fiscal quarter for which
financial statements have been delivered pursuant to Section 6.1).
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Section 7.9. [Reserved].
Section 7.10. Limitation on Investments, Loans and Advances. Make any advance, loan,
extension of credit or capital contribution to, or purchase any stock, bonds, notes, debentures or
other securities of or any assets constituting a business unit of, or make any other investment in,
any Person, except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents, investments by the Insurance Subsidiary in Permitted
Insurance Company Investments and investments by the Offshore Joint Venture in Permitted Insurance
Company Investments;
(c) loans and advances to employees of the Borrower or its Subsidiaries for travel,
entertainment and relocation expenses in the ordinary course of business in an aggregate amount for
the Borrower and its Subsidiaries not to exceed, when added to Guarantee Obligations at any time
outstanding pursuant to Section 7.4(d), $10,000,000 outstanding at such time;
(d) investments by the Parent in the Borrower or any Subsidiary Guarantor, investments by the
Borrower in any Subsidiary Guarantor and investments by any Subsidiary in the Borrower or in any
Subsidiary Guarantor;
(e) investments, loans and advances (excluding those permitted by Section 7.10(l)) to any
independent contractor, including any sales agents or capacity providers, performing services for
Parent or any of its Subsidiaries not to exceed $30,000,000 in the aggregate for the Parent and its
Subsidiaries at any time outstanding and maturing not later than ten years after the incurrence
thereof (it being understood that the repayment thereof may be forgiven if certain performance
targets or other specified conditions are met by the relevant contractor);
(f) short term loans (excluding those permitted by Section 7.10(1)) and compensation advances
to any independent contractor performing services for it or for any of its agents made in the
ordinary course of business that do not exceed the projected revenues to be paid to such
independent contractor within two months of such loans or advances, and in the case of loans, which
mature not later than two months after the making of such loans;
(g) any acquisition of all or a portion of the assets or Capital Stock of any Person that
constitutes a business engaged primarily in the same business in which the Borrower and its
Subsidiaries are engaged on the date of this Agreement or a business that is directly related
thereto; provided that, (i) neither the Borrower nor any Subsidiary shall make an offer to
purchase more than 10% of the Capital Stock of such Person in connection with any such acquisition
unless such transaction has been approved by a majority of the board of directors of such Person
(or such offer is made subject to approval by a majority of the board of directors) or such
transaction has been approved by all of the Lenders; (ii) the requirements of Section 7.1 would be
satisfied by the Parent and its Subsidiaries on a pro forma combined basis as at the end of the
most recently ended fiscal quarter of the Parent for which financial statements have been delivered
pursuant to Section 6.1 if each such acquisition had been completed on or prior to the first day of
the four fiscal quarter period ended with such most recently ended fiscal quarter (excluding in
such pro forma calculation any extraordinary or non-recurring items related to such acquisition);
and (iii) if after giving effect to such acquisition, the Leverage Ratio would be greater than 2.50
to 1.00 on a pro forma combined basis (calculated in a manner consistent with that provided in the
preceding clause (ii)), then the purchase price (including the amount of any deferred purchase
price, and all amounts applied within one year of the consummation of such acquisitions to the
refinancing of any Financing Leases to
which such assets or Persons are subject on the respective dates of consummation of such
acquisitions, other than Indebtedness so applied to such refinancing) paid for all such
acquisitions shall not exceed $50,000,000 in the aggregate in all fiscal quarters during which such
greater Leverage Ratio exists;
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(h) investments in notes and other securities received in the settlement of overdue debts and
accounts payable in the ordinary course of business and for amounts which, individually or in the
aggregate, do not exceed $10,000,000 at any time outstanding;
(i) investments by the Borrower or any of its Subsidiaries in Commodity Price Protection
Agreements, Exchange Rate Protection Agreements, and Interest Rate Protection Agreements;
provided that, such investments in such Commodity Price Protection Agreements are made
solely for the purpose of hedging purchase prices of fuel and not for speculation;
(j) investments of the Borrower or any Subsidiary in the Parent that constitute Indebtedness
of the Parent pursuant to paragraphs (g) though (o) of Section 7.2.
(k) investments, loans and advances by the Borrower in an amount not to exceed $10,000,000 in
the aggregate in partnerships, limited liability companies, and other business organizations that
do not constitute Subsidiaries or joint ventures in which the Parent, the Borrower, or any of their
Subsidiaries is a participant;
(l) investments, loans and/or advances by the Borrower in or to the Operator Financing
Subsidiary or the Financing Vehicle, as the case may be, in an aggregate amount not to exceed
$10,000,000 at any one time outstanding, the proceeds of which shall be used by the Operator
Financing Subsidiary or the Financing Vehicle, as the case may be, to make loans to independent
contractors pursuant to the Operator Financing Program;
(m) loans by the Operator Financing Subsidiary or the Financing Vehicle, as the case may be,
to independent contractors to finance such contractor’s acquisition of tractors, trailers, and
related transportation equipment;
(n) other investments not to exceed $5,000,000 at any one time outstanding;
(o) loans to its employees for the purpose of exercising employee stock options to purchase
common stock of the Parent, which loans may be non-recourse;
(p) loans to its employees to purchase common stock of the Parent, which loans may be
non-recourse, provided all such loans may not exceed $5,000,000 at any one time outstanding;
(q) the formation and funding of Receivables SPVs to engage in Permitted Receivables
Transactions including, without limitation, investments in and loans to any Receivables SPVs in
connection with a Permitted Receivables Transaction, provided that the Receivables SPV shall not
have cash in excess of $5,000,000 for more than a 30 day period at any time; and
(r) loans or advances to, or other investments in, Subsidiaries that are not Loan Parties and
to joint ventures in which the Parent, the Borrower or any of their Subsidiaries is a participant;
provided that, all such loans, advances, or other investments may not exceed $50,000,000 at
any one time outstanding.
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Section 7.11. Limitation on Optional Payments and Modifications of Debt Instruments. (a) Make
any optional payment or prepayment on or redemption of any Indebtedness
(other than (i) the Loans, (ii) Indebtedness incurred pursuant to Section 7.2(c), (iii)
Financing Leases that are refinanced with Indebtedness incurred pursuant to Section 7.2(c)) and
(iv) any Account Receivable Indebtedness permitted pursuant to Section 7.2(q)), or (b) amend,
modify or change, or consent or agree to any amendment, modification or change to any of the terms
relating to the payment or prepayment or principal of or interest on any such Indebtedness (other
than any such amendment, modification or change which would extend the maturity or reduce the
amount of any payment of principal thereof or which would reduce the rate or extend the date for
payment of interest thereon).
Section 7.12. Limitation on Transactions with Affiliates. Enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of property or the rendering
of any service, with any Affiliate (other than the Parent, the Borrower or any Subsidiary) unless
such transaction is (a) otherwise permitted under this Agreement, (b) in the ordinary course of the
Parent’s, the Borrower’s or such Subsidiary’s business and (c) upon fair and reasonable terms no
less favorable to the Parent, the Borrower or such Subsidiary, as the case may be, than it would
obtain in a comparable arm’s length transaction with a Person which is not an Affiliate.
Section 7.13. Limitation on Sales and Leasebacks. Enter into any arrangement with any Person
providing for the leasing by the Borrower or any Subsidiary of real or personal property which has
been or is to be sold or transferred by the Borrower or such Subsidiary to such Person or to any
other Person to whom funds have been or are to be advanced by such Person on the security of such
property or rental obligations of the Borrower or such Subsidiary, except with respect to any such
transactions which shall not have an aggregate fair market value in excess of $20,000,000 during
the term of this Agreement; provided, however, that, in addition to the foregoing
the Borrower may enter into such arrangements with respect to (i) the headquarters facility in
Jacksonville, Florida, for aggregate consideration of up to $30,000,000 and (ii) real and personal
property located or to be constructed adjacent to such headquarters facility, as identified by the
Borrower to the Administrative Agent prior to the date hereof, for aggregate consideration of
$30,000,000.
Section 7.14. Limitation on Changes in Fiscal Year. Permit the fiscal year of the Borrower or
the Parent to end on a day other than the last Saturday in December.
Section 7.15. Limitation on Negative Pledge Clauses.
(a) Enter into with any Person any agreement which prohibits or limits the ability of the
Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist any Lien upon any
of its property, assets or revenues, whether now owned or hereafter acquired, other than (A) this
Agreement, (B) any such agreement with respect to (i) any Account Receivable Indebtedness permitted
pursuant to Section 7.2(q), (ii) any industrial revenue bonds, (iii) any purchase money mortgages
and (iv) any Financing Leases permitted by this Agreement (in which cases, any prohibition or
limitation shall be effective only against the assets financed thereby) and (C) any such agreement
in respect of Permitted Specified Additional Debt or Outstanding Permitted Line of Credit
Indebtedness, as the case may be, but only to the extent that such Indebtedness is permitted
pursuant to Section 7.2 and such agreements comply with Section 7.15(b); or
(b) enter into any agreement with respect to Permitted Specified Additional Debt or
Outstanding Permitted Line of Credit Indebtedness, as the case may be, that prohibits or limits the
ability of the Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, to
secure the obligations of the Borrower to the Administrative Agent or any Lender hereunder or under
the other Loan Documents (including, without limitation, any advances or extensions of credit made
hereunder prior to or subsequent to the creation of such Lien) or to secure any Loan Party’s
obligations to the Administrative Agent or any
Lender under any Loan Document to which it is a party; provided that, the Borrower may
enter into any such agreement which would permit any such Lien but only to the extent that the
Permitted Specified Additional Debt and/or Outstanding Permitted Line of Credit Indebtedness, as
the case may be, will be equally and ratably secured with any and all other obligations which are
secured in connection with the creation of such Lien.
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Section 7.16. Limitation on Lines of Business. Enter into any business, either directly or
through any Subsidiary, except for those businesses in which the Borrower and its Subsidiaries are
engaged on the date of this Agreement or which are directly related thereto (including purchasing
and selling of tractors, trailers, containers and related transportation equipment, operating the
Operator Financing Program, warehousing, logistics, brokerage, freight forwarding (including by
ocean shipment), common carriage, contract carriage, dispatching, transportation out-sourcing
services, intermodal or air freight business, surface expedited business, consulting on
transportation matters, and truck stops operated primarily to service vehicles operated by or for
the Borrower and its Subsidiaries); provided that, subject to the other provisions of this
Agreement, the foregoing shall not prohibit the Borrower or any Subsidiary from entering into the
partnership or joint venture permitted pursuant to Section 7.10(k); and provided,
further, that the Insurance Subsidiary shall be permitted to engage in the Insurance
Subsidiary Business, so long as (i) in the case of insurance for independent contractors, the
premiums charged by the Insurance Subsidiary in connection therewith are consistent in all material
respects with those prevailing in the industry for similar risks (based on the good faith judgment
of the Insurance Subsidiary) and (ii) of the total insurance premiums received by the Insurance
Subsidiary during any period of four consecutive fiscal quarters (inclusive of any reinsurance
premiums), (A) no more than one-third of such total premiums may derive from insurance or
reinsurance provided by the Insurance Subsidiary in reliance on clause (x) (b) of the definition of
Insurance Subsidiary Business, (B) no more than one-third of such total premiums may derive from
reinsurance provided by the Insurance Subsidiary in reliance on clause (y) of the definition of
Insurance Subsidiary Business and (C) no more than one-half of such total premiums may derive from
the sum of the premiums described in subclauses (A) and (B) above.
ARTICLE VIII. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan or the Borrower shall fail to pay
any Reimbursement Obligation when due in accordance with the terms thereof or hereof; or the
Borrower shall fail to pay any interest on any Loan, or the Borrower shall fail to pay any other
amount payable hereunder, within five days after any such interest or other amount becomes due in
accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by the Borrower or any other Loan Party
herein or in any other Loan Document or which is contained in any certificate, document or
financial or other statement furnished by it at any time under or in connection with this Agreement
or any such other Loan Document shall prove to have been incorrect in any material respect on or as
of the date made or deemed made; or
(c) The Borrower or any other Loan Party shall default in the observance or performance of any
agreement contained in Section 6.9 or Article VII of this Agreement, Section 10 of the Parent
Guarantee (to the extent such Section incorporates by reference the covenants contained in Section
6.9 or Article VII hereof), Section 11 of the Subsidiaries Guarantee (to the extent such Section
incorporates by reference the covenants contained in Section 6.9 or Article VII hereof) or Section
10 of the L/C Guarantee (to the extent such Section incorporates by reference the covenants
contained in Section 6.9 or Article VII hereof); or
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(d) The Borrower or any other Loan Party shall default in the observance or performance of any
other agreement contained in this Agreement or any other Loan Document (other than as provided in
paragraphs (a) through (c) of this Section), and such default shall continue unremedied for a
period of 30 days; or
(e) The Parent, the Borrower or any of its Subsidiaries shall (i) default in any payment of
principal of or interest of any Indebtedness (other than the Loans) or in the payment of any
Guarantee Obligation, the aggregate principal amount of which exceeds $25,000,000, beyond the
period of grace (not to exceed 30 days), if any, provided in the instrument or agreement under
which such Indebtedness or Guarantee Obligation was created; or (ii) default in the observance or
performance of any other agreement or condition relating to any such Indebtedness or Guarantee
Obligation or contained in any instrument or agreement evidencing, securing or relating thereto, or
any other event shall occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Guarantee Obligation (or a trustee or agent on behalf of such holder or
holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or such Guarantee Obligation to become
payable; or
(f) (i) The Parent, the Borrower or any of its Subsidiaries shall commence any case,
proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have
an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B) seeking
appointment of a receiver, trustee, custodian, conservator or other similar official for it or for
all or any substantial part of its assets, or the Parent, the Borrower or any of its Subsidiaries
shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced
against the Parent, the Borrower or any of its Subsidiaries any case, proceeding or other action of
a nature referred to in clause (i) above which (A) results in the entry of an order for relief or
any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a
period of 60 days; or (iii) there shall be commenced against the Parent, the Borrower or any of its
Subsidiaries any case, proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of its assets which
results in the entry of an order for any such relief which shall not have been vacated, discharged,
or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) the Parent, the
Borrower or any of its Subsidiaries shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or
(iii) above; or (v) the Parent, the Borrower or any of its Subsidiaries shall generally not, or
shall be unable to, or shall admit in writing its inability to, pay its debts as they become due;
or
(g) (i) Any Person shall engage in any “prohibited transaction” (as defined in Section 406 of
ERISA or Section 4975 of the Code) involving any Plan, (ii) any “accumulated funding deficiency”
(as defined in Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan
or any Plan shall have failed to satisfy the minimum funding standard applicable to the Plan (as
determined pursuant to Section 412 of the Code and Section 302 of ERISA) for a plan year, or any
Lien in favor of the PBGC or a Plan shall arise on the assets of the Borrower or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is reasonably likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title
IV of ERISA, (v) the Borrower or any Commonly Controlled Entity shall incur, or is reasonably
likely to incur, any liability in connection with a withdrawal from, or the
Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other similar event or
condition shall occur or exist with respect to a Plan; and in each case in clauses (i) through (vi)
above, such event or condition, together with all other such events or conditions, if any, would
reasonably be expected to subject the Borrower, or any Commonly Controlled Entity to any tax,
penalty or other liabilities in an aggregate amount in excess of $10,000,000; or
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(h) One or more judgments or decrees shall be entered against the Parent, the Borrower or any
of its Subsidiaries involving in the aggregate a liability (not paid or fully covered by insurance)
of $10,000,000 or more, and all such judgments or decrees shall not have been vacated, discharged,
stayed or bonded pending appeal within 60 days from the entry thereof; or
(i) Any Guarantee shall cease, for any reason, to be in full force and effect or any Guarantor
shall so assert in writing; or
(j) (i) The Parent shall cease to own, free and clear of any Liens, 100% of the Capital Stock
of the Borrower or (ii) any Person or “group” (within the meaning of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended) (A) shall have acquired beneficial ownership of 25% or
more of any outstanding class of Capital Stock having ordinary voting power in the election of
directors of the Parent or (B) shall obtain the power (whether or not exercised) to elect a
majority of the Parent’s directors or (iii) the Board of Directors of the Parent shall not consist
of a majority of Continuing Directors; as used in this paragraph “Continuing Directors” shall mean
the directors of the Parent on the Closing Date and each other director, if such other director’s
nomination for election to the Board of Directors of the Parent is recommended by a majority of the
then Continuing Directors;
then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or
(ii) of paragraph (f) above with respect to the Borrower, automatically the Commitments shall
immediately terminate and the Loans hereunder (with accrued interest thereon) and all other amounts
owing under this Agreement and the other Loan Documents (including, without limitation, all amounts
of L/C Obligations, which shall be applied as set forth in the next succeeding paragraph, whether
or not the beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be taken: (i) with the
consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the Borrower declare the Commitments to be
terminated forthwith, whereupon the Commitments shall immediately terminate; and (ii) with the
consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the Borrower, declare the Loans hereunder
(with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan
Documents (including, without limitation, all amounts of L/C Obligations, which shall be applied as
set forth in the next succeeding paragraph, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required thereunder) to be due and
payable forthwith, whereupon the same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which presentment for honor shall not
have occurred at the time of an acceleration pursuant to the preceding paragraph, the Borrower
shall at such time deposit in a cash collateral account opened by the Administrative Agent an
amount equal to the aggregate then undrawn and unexpired amount of such Letters of Credit. Amounts
held in such cash collateral account shall be applied by the Administrative Agent to the payment of
drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters of
Credit shall have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents. After all such Letters
of Credit shall have expired or been fully drawn upon, all Reimbursement Obligations shall have
been satisfied and all other obligations of the Borrower
hereunder and under the other Loan Documents shall have been paid in full, the balance, if
any, in such cash collateral account shall be returned to the Borrower.
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Except as expressly provided above in this Article VIII, presentment, demand, protest and all
other notices of any kind are hereby expressly waived.
ARTICLE IX. THE ADMINISTRATIVE AGENT
Section 9.1. Appointment. Each Lender hereby irrevocably designates and appoints JPMCB as the
Administrative Agent of such Lender under this Agreement and the other Loan Documents, and each
such Lender irrevocably authorizes JPMCB, as the Administrative Agent for such Lender, to take such
action on its behalf under the provisions of this Agreement and the other Loan Documents and to
exercise such powers and perform such duties as are expressly delegated to the Administrative Agent
by the terms of this Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the Administrative Agent.
Section 9.2. Delegation of Duties. The Administrative Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents, sub-agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of
any agents, sub-agents, or attorneys in-fact selected by it with reasonable care.
Section 9.3. Exculpatory Provisions. Neither the Administrative Agent nor any of its
officers, directors, employees, agents, sub-agents, attorneys-in-fact or Affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or any other Loan Document (except for its or such Person’s own
gross negligence or willful misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrower or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate, report, statement or
other document referred to or provided for in, or received by the Administrative Agent under or in
connection with, this Agreement or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of the Borrower to perform its obligations hereunder or thereunder.
The Administrative Agent shall not be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or records of the
Borrower.
Section 9.4. Reliance by Administrative Agent. The Administrative Agent shall be entitled to
rely, and shall be fully protected in relying, upon any instrument, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent may deem and treat the payee of any
Note as the owner
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thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive
such advice or concurrence of the Required Lenders as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement and the other Loan Documents in accordance with a request of the Required
Lenders, and such request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders and all future holders of the Loans.
Section 9.5. Notice of Default. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or the Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a “notice of default”.
In the event that the Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders. The Administrative Agent shall take such action with respect
to such Default or Event of Default as shall be reasonably directed by the Required Lenders;
provided that unless and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
Section 9.6. Non-Reliance on Administrative Agent and Other Lenders. Each Lender expressly
acknowledges that neither the Administrative Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates has made any representations or warranties to it and that
no act by the Administrative Agent hereinafter taken, including any review of the affairs of the
Borrower, shall be deemed to constitute any representation or warranty by the Administrative Agent
to any Lender. Each Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and creditworthiness of the Borrower
and made its own decision to make its Loans hereunder and enter into this Agreement. Each Lender
also represents that it will, independently and without reliance upon the Administrative Agent or
any other Lender, and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Loan Documents, and to make such investigation as it
deems necessary to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower which may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents, sub-agents,
attorneys-in-fact or Affiliates.
Section 9.7. Indemnification. The Lenders agree to indemnify the Administrative Agent in its
capacity as such (to the extent not reimbursed by the Borrower and without limiting the obligation
of the Borrower to do so), ratably according to their respective Revolving Credit Percentages in
effect on the date on which indemnification is sought under this subsection (or, if indemnification
is sought after the date upon which the Revolving Credit Commitments shall have terminated and the
Loans shall have been paid in full, ratably in accordance with their Revolving Credit Percentages
immediately prior to such date), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time
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(whether before or after the payment of the Loans) be imposed on,
incurred by or asserted against the Administrative Agent in any way relating to or arising out of
this Agreement, any of the other Loan Documents or any documents contemplated by or referred to
herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Administrative Agent
under or in connection with any of the foregoing; provided that, no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting solely from the
Administrative Agent’s gross negligence or willful misconduct. The agreements in this Section
shall survive the payment of the Loans and all other amounts payable hereunder.
Section 9.8. Administrative Agent in Its Individual Capacity. The Administrative Agent and
its Affiliates may make loans to, accept deposits from and generally engage in any kind of business
with the Borrower as though the Administrative Agent were not the Administrative Agent hereunder
and under the other Loan Documents With respect to its Loans made or renewed by it and with respect
to any Letter of Credit issued or participated in by it, the Administrative Agent shall have the
same rights and powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not the Administrative Agent, and the terms “Lender” and
“Lenders” shall include the Administrative Agent in its individual capacity.
Section 9.9. Successor Administrative Agent. The Administrative Agent may resign as
Administrative Agent upon 30 days’ notice to the Lenders and the Borrower. If the Administrative
Agent shall resign as Administrative Agent under this Agreement and the other Loan Documents, then
the Required Lenders shall appoint from among the Lenders, agreeing to become a successor agent, a
successor agent for the Lenders, which successor agent shall be approved by the Borrower (except
that no such approval shall be required if an Event of Default has occurred and is continuing at
such time), whereupon such successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term “Administrative Agent” shall mean such successor agent effective
upon such appointment and approval, and the former Administrative Agent’s rights, powers and duties
as Administrative Agent shall be terminated, without any other or further act or deed on the part
of such former Administrative Agent or any of the parties to this Agreement or any holders of the
Loans. After any retiring Administrative Agent’s resignation as Administrative Agent, the
provisions of this Article IX shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this Agreement and the other Loan Documents.
ARTICLE X. MISCELLANEOUS
Section 10.1. Amendments and Waivers. Subject to Section 2.19(d), neither this Agreement, any
other Loan Document, nor any terms hereof or thereof may be amended, supplemented or modified
except in accordance with the provisions of this subsection. The Required Lenders may, or, with
the written consent of the Required Lenders (receipt of which has been confirmed in writing by the
Administrative Agent to the Borrower), the Administrative Agent may, from time to time, (a) enter
into with the Loan Parties written amendments, supplements or modifications hereto and to the other
Loan Documents for the purpose of adding any provisions to this Agreement or the other Loan
Documents or changing in any manner the rights or obligations of the Lenders or of the Borrower
hereunder or thereunder or (b) waive, on such terms and conditions as the Required Lenders or the
Administrative Agent, as the case may be, may specify in such instrument, any of the requirements
of this Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment, supplement or
modification shall (i) reduce the amount or extend the scheduled date of maturity of any Loan or of
any installment thereof, or reduce the stated rate of any interest or fee payable hereunder or
extend the scheduled date of any payment thereof or increase the amount or extend the expiration
date of any Lender’s Commitment, in each case without the consent
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of each Lender affected thereby,
(ii) amend, modify or waive any provision of this Section or reduce the percentage specified in the
definition of Required Lenders, or consent to the assignment or transfer by the Borrower of any of
its rights and obligations under this Agreement and the other Loan Documents, in
each case without the written consent of all the Lenders, (iii) amend, modify or waive any
provision of Article IX without the written consent of the then Administrative Agent, (iv) release
any Guarantor other than in connection with the sale of a Guarantor in a transaction otherwise
permitted under this Agreement, without the written consent of each Lender or (v) amend, modify or
waive any provision of Article III without the written consent of the then Issuing Lender. Any
such waiver and any such amendment, supplement or modification shall apply equally to each of the
Lenders and shall be binding upon the Borrower, the Lenders, the Administrative Agent and all
future holders of the Loans. In the case of any waiver, the Borrower, the Lenders and the
Administrative Agent shall be restored to their former position and rights hereunder and any other
Loan Documents, and any Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default,
or impair any right consequent thereon.
Section 10.2. Notices.
(a) Except in the case of notices and other communications expressly permitted to be given by
telephone (and subject to paragraph (b) below), all notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by telecopy), and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered
by hand, or three days after being deposited in the mail, postage prepaid, or, in the case of
telecopy notice, when received, or, in the case of delivery by a nationally-recognized overnight
courier, when received, addressed as follows in the case of the Borrower, the Parent and the
Administrative Agent, and as set forth in Schedule 1.1(a) in the case of the other parties
hereto, or to such other address as may be hereafter notified by the respective parties hereto and
any future holders of the Loans:
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The Borrower or
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Landstar System Holdings, Inc. |
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any Subsidiary Guarantor:
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00000 Xxxxxx Xxxx Xxxxx Xxxxx |
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Xxxxxxxxxxxx, Xxxxxxx 00000 |
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Attention: Xxxxx X. Xxxxxxx |
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Telecopy: 000-000-0000 |
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The Parent:
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Landstar System, Inc. |
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00000 Xxxxxx Xxxx Xxxxx Xxxxx |
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Xxxxxxxxxxxx, Xxxxxxx 00000 |
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Attention: Xxxxx X. Xxxxxxx |
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Telecopy: 000-000-0000 |
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The Administrative Agent or |
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the Issuing Lender:
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JPMorgan Chase Bank, N.A. |
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Loan & Agency Services |
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00 Xxxxx Xxxxxxxx, Xxxxx 0 |
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Xxxxxxx, Xxxxxxxx 00000-0000 |
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Attention: Xxxxxxx Xxxxxxx |
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Telecopy: (000) 000-0000 |
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and with respect to any notices |
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relating to Eurocurrency Borrowings |
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or Letters of Credit denominated |
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in Foreign Currencies, with a copy to:
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X.X. Xxxxxx Europe Limited |
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9th Floor/9/1501L |
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000 Xxxxxx Xxxx |
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Xxxxxx XXXX 0XX |
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Xxxxxx Xxxxxxx |
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Attention: The Manager |
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Telecopy: 00 (0) 000 000 0000 |
provided that, any notice, request or demand to or upon the Administrative Agent or the
Lenders pursuant to Section 2.2, 2.4, 2.6, 2.12 or 3.2 shall not be effective until received.
(b) Notices and other communications to the Lenders hereunder may be delivered or furnished by
electronic communications pursuant to procedures approved by the Administrative Agent;
provided that, the foregoing shall not apply to notices pursuant to Article II and Article
III unless otherwise agreed by the Administrative Agent and the applicable Lender. The
Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to procedures approved by it;
provided that, approval of such procedures may be limited to particular notices or
communications.
(c) It is acknowledged that the Administrative Agent may provide notices and other
communications to the Lenders using “Intralinks” (xxx.xxxxxxxxxx.xxx) or a similar, reputable forum
on the internet, and such notices or communications will be deemed to have been given on the date
of notification by electronic mail of posting to such forum.
(d) Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and other
communications given to any party hereto in accordance with the provisions of this Agreement shall
be deemed to have been given on the date of receipt.
Section 10.3. No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Administrative Agent or any Lender, any right, remedy, power or
privilege hereunder or under the other Loan Documents shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
Section 10.4. Survival of Representations and Warranties. All representations and warranties
made hereunder, in the other Loan Documents and in any document, certificate or statement delivered
pursuant hereto or in connection herewith shall survive the execution and delivery of this
Agreement and the making of the Loans and other extensions of credit hereunder.
Section 10.5. Payment of Expenses and Taxes. The Borrower agrees (a) to pay or reimburse the
Administrative Agent for all its reasonable out-of-pocket costs and expenses incurred in connection
with the development, preparation and execution of, and any amendment, supplement or modification
to, this Agreement and the other Loan Documents and any other documents prepared in connection
herewith or therewith, and the consummation and administration of the transactions contemplated
hereby and thereby, including, without limitation, the reasonable fees and disbursements of
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counsel
to the Administrative Agent, (b) to pay or reimburse each Lender and the Administrative Agent for
all its reasonable costs and expenses incurred in connection with the enforcement or preservation
of any rights under this Agreement, the other Loan Documents and any such other documents,
including, without limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent and to the several Lenders (but excluding any transfer or similar taxes
arising solely from the event of an assignment by a Lender under Section 10.6(c)), (c) to pay,
indemnify, and hold each Lender and the Administrative Agent harmless from, any and all recording
and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise and other similar taxes, if
any, which may be payable or determined to be payable in connection with the execution and delivery
of, or consummation or administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the
other Loan Documents and any such other documents (but excluding any such taxes arising solely from
the event of an assignment by a Lender under Section 10.6(c)), and (d) to pay, indemnify, and hold
each Lender and the Administrative Agent harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the other Loan Documents and any
such other documents, including, without limitation, any of the foregoing relating to the violation
of, noncompliance with or liability under, any Environmental Law applicable to the operations of
the Borrower or any of its Subsidiaries (all the foregoing in this clause (d), collectively, the
“indemnified liabilities”); provided that, the Borrower shall have no obligation hereunder
to the Administrative Agent or any Lender with respect to indemnified liabilities arising from (i)
the gross negligence or willful misconduct of the Administrative Agent or any Lender or (ii) legal
proceedings commenced against the Administrative Agent or any Lender by any security holder or
creditor thereof arising out of and based upon rights afforded any such security holder or creditor
solely in its capacity as such. Notwithstanding the foregoing, except as provided in clause (c)
above, the Borrower shall have no obligation under this Section 10.5 to the Administrative Agent or
any Lender with respect to any tax, levy, impost, duty, charge, fee, deduction or withholding
imposed, levied, collected, withheld or assessed by any Governmental Authority. The agreements in
this subsection shall survive repayment of the Loans and all other amounts payable hereunder.
Section 10.6. Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of each of the Loan Parties,
the Lenders, the Administrative Agent, all future holders of the Loans and their respective
successors and assigns, except that no Loan Party may assign or transfer (other than in connection
with a merger, liquidation or consolidation permitted by Section 7.5) any of its rights or
obligations under this Agreement without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking business and in
accordance with applicable law, at any time sell to one or more banks or other entities
(“Participants”) participating interests in any Loan owing to such Lender any Commitment of
such Lender or any other interest of such Lender hereunder and under the other Loan Documents,
provided, that the amount of the Commitment sold to such Participant pursuant to such participation
(determined as of the date of the Assignment and Assumption with respect to such participation)
shall not be less than $2,500,000. In the event of any such sale by a Lender of a participating
interest to a Participant, such Lender’s obligations under this Agreement to the other parties to
this Agreement shall remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Loan (and any Note evidencing
such Loan) for all purposes under this Agreement and the other Loan Documents, the Borrower and the
Administrative Agent shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement and the other Loan Documents and such
Participant shall have no right to approve any amendment or waiver of any
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provision of any Loan
Document, or to consent to any departure by any Loan Party therefrom, except to the extent that
such amendment, waiver or consent would extend the maturity of or reduce the principal of, or
interest on, the Loans or any fees payable hereunder, in each case to the extent subject to such
participation. The Borrower agrees that if amounts outstanding under this Agreement and the Loans
are due or unpaid, or shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to the same extent as
if the amount of its
participating interest were owing directly to it as a Lender under this Agreement, provided
that, in purchasing such participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in Section 10.7(a) as fully as if it were a
Lender hereunder. The Borrower also agrees that each Participant shall be entitled to the benefits
of Sections 2.14 and 2.15 with respect to its participation in the Commitments and the Loans
outstanding from time to time as if it was a Lender; provided that, in the case of Section
2.15, such Participant shall have complied with the requirements of said Section; and
provided, further, that the Borrower shall not be required to pay, in respect of
the amount of the participation transferred by such transferor Lender to such Participant, any
greater amount pursuant to any such subsections than the Borrower would have been required to pay
in respect of the amount of the Loans subject to such participation had no such transfer occurred.
(c) Any Lender may assign to one or more assignees (an “Assignee”) all or a portion of
its rights and obligations under this Agreement and the Loan Documents (including all or a portion
of its Commitment and the Loans at the time owing to it) with the prior written consent (such
consent not to be unreasonably withheld) of (a) the Borrower, provided that no consent of the
Borrower shall be required for an assignment to a Lender or a Lender Affiliate or, if an Event of
Default has occurred and is continuing, any other Assignee, and (b) the Administrative Agent and
(c) the Issuing Lender, pursuant to an Assignment and Acceptance, substantially in the form of
Exhibit F, executed by such Assignee, such assigning Lender, the Administrative Agent and
the Issuing Lender (and, in the case of an Assignee that is not then a Lender or a Lender
Affiliate, by the Borrower, unless an Event of Default has occurred and is continuing) and
delivered to the Administrative Agent for its acceptance and recording in the Register, provided,
that the amount of the Revolving Credit Commitment of the assigning Lender assigned pursuant to
such assignment (determined as of the date of the Assignment and Assumption with respect to such
assignment) shall not be less than $2,500,000. Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to such Assignment and Acceptance,
(x) the Assignee thereunder shall be a party hereto and, to the extent provided in such Assignment
and Acceptance, have the rights and obligations of a Lender hereunder with a Commitment as set
forth therein, and (y) the assigning Lender thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case
of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s
rights and obligations under this Agreement, such assigning Lender shall cease to be a party hereto
and shall have no further rights except as set forth in the Assignment and Acceptance).
(d) The Administrative Agent shall maintain at its address referred to in Section 10.2 a copy
of each Assignment and Acceptance delivered to it and a register (the “Register”) for the
recordation of the names and addresses of the Lenders and the Revolving Credit Commitment of, and
principal amount of the Loans owing to, and Notes, if any, evidencing such Loans held by, each
Lender from time to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register as the owner of the Loan recorded therein for all purposes
of this Agreement. The Register shall be available for inspection by the Borrower or any Lender at
any reasonable time and from time to time upon reasonable prior notice.
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(e) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and an
Assignee (and, in the case of an Assignee that is not then a Lender or an affiliate thereof, by the
Administrative Agent) together with payment to the Administrative Agent of a registration and
processing fee of $3,500, the Administrative Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) on the effective date determined pursuant thereto record the information
contained therein in the Register and give notice of such acceptance and recordation to the Lenders
and the Borrower. On or prior to such effective date, the Borrower, at its own expense, shall,
upon receipt of a written request from the Assignee, execute and deliver to the Administrative
Agent a Note to the order of
such Assignee in an amount equal to the Commitment assumed by it pursuant to such Assignment
and Acceptance and, if the assigning Lender has retained a Commitment hereunder and so requests it,
a replacement Note to the order of the assigning Lender in an amount equal to the Commitment
retained by it hereunder. Such new Note or Notes shall be dated the Closing Date and otherwise
shall be in the form of Exhibit A or Exhibit B hereto. The Note or Notes
surrendered by the assigning Lender shall be returned by the Administrative Agent to the Borrower
marked “cancelled”.
(f) The Borrower authorizes each Lender to disclose to any Participant or Assignee (each, a
“Transferee”) and any prospective Transferee (subject to the provisions of Section 10.16
hereof) any and all financial information in such Lender’s possession concerning the Borrower and
its Affiliates which has been delivered to such Lender by or on behalf of the Borrower pursuant to
this Agreement or which has been delivered to such Lender by or on behalf of the Borrower in
connection with such Lender’s credit evaluation of the Borrower and its Affiliates prior to
becoming a party to this Agreement.
(g) Nothing herein shall prohibit any Lender from pledging or assigning any Note, together
with its rights hereunder, to any Federal Reserve Bank in accordance with applicable law.
Section 10.7. Adjustments; Set-off.
(a) If any Lender (a “Benefited Lender”) shall at any time receive any payment of all
or part of its Loans or the Reimbursement Obligations owing to it, or interest thereon, or receive
any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to
events or proceedings of the nature referred to in paragraph (f) of Article VIII, or otherwise), in
a greater proportion than any such payment to or collateral received by any other Lender, if any,
in respect of such other Lender’s Loans or the Reimbursement Obligations owing to it, or interest
thereon, such Benefited Lender shall purchase for cash from the other Lenders a participating
interest in such portion of each such other Lender’s Loan or the Reimbursement Obligations owing to
it, or shall provide such other Lenders with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such Benefited Lender to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits is thereafter
recovered from such Benefited Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided by law, each Lender shall
have the right, without prior notice to the Borrower, any such notice being expressly waived by the
Borrower to the extent permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder or under any other Loan Document and the expiration of any applicable period of
grace provided for herein or in any other Loan Document (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute
or contingent, matured or unmatured, at any time held or owing by such Lender or any branch or
agency thereof to or for the credit or the account of the Borrower. Each Lender agrees promptly to
notify the Borrower and the Administrative Agent after any such set-off and application made by
such Lender, provided that the failure to give such notice shall not affect the validity of such
set-off and application.
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Section 10.8. Counterparts; Effectiveness. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (and by telecopy), and all of
said counterparts taken together shall be deemed to constitute one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall be lodged with the Borrower and the
Administrative Agent. Except as provided in Section 5.1, this Agreement shall become effective
when it
shall have been executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof which, when taken together, bear the signatures of each of the
other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.
Section 10.9. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 10.10. Integration. This Agreement and the other Loan Documents and any separate
letter agreements with respect to fees payable to the Administrative Agent and the Lenders
represent the agreement of the Loan Parties, the Parent, the Administrative Agent and the Lenders
with respect to the subject matter hereof, and there are no promises, undertakings, representations
or warranties by the Loan Parties, Administrative Agent or any Lender relative to subject matter
hereof not expressly set forth or referred to herein or in the other Loan Documents.
Section 10.11. GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
Section 10.12. Submission To Jurisdiction. Each of the Administrative Agent, Lenders and Loan
Parties hereby irrevocably and unconditionally submits for itself and its property in any legal
action or proceeding relating to this Agreement and the other Loan Documents to which it is a
party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive
general jurisdiction of the Courts of the State of
New York, the courts of the United States of
America for the Southern District of
New York, and appellate courts from any thereof.
Section 10.13. Waivers. Each of the Loan Parties hereby irrevocably and unconditionally:
(a) consents that any such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(b) agrees that service of process in any such action or proceeding may be effected by mailing
a copy thereof by registered or certified mail (or any substantially similar form of mail), postage
prepaid, to any Loan Party, Administrative Agent or Lender, as applicable, at its address set forth
in Section 10.2 or at such other address of which the Administrative Agent, Lender or Loan Party
shall have been notified pursuant thereto;
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(c) agrees that nothing herein shall affect the right to effect service of process in any
other manner permitted by law or shall limit the right to xxx in any other jurisdiction; and
(d) waives, to the maximum extent not prohibited by law, any right it may have to claim or
recover in any legal action or proceeding referred to in this subsection any special, exemplary,
punitive or consequential damages.
Section 10.14. Acknowledgements. Each Loan Party hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any fiduciary relationship with or
duty to any Loan Party arising out of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between Administrative Agent and Lenders, on one hand, and the
Borrower and the Parent, on the other hand, in connection herewith or therewith is solely that of
debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by
virtue of the transactions contemplated hereby among the Lenders or among any Loan Party and the
Lenders.
Section 10.15. WAIVERS OF JURY TRIAL. THE LOAN PARTIES, THE ADMINISTRATIVE AGENT AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, THE NOTES, THE GUARANTEES, OR ANY OTHER LOAN DOCUMENTS AND
FOR ANY COUNTERCLAIM THEREIN.
Section 10.16. Confidentiality. Each Lender and the Administrative Agent agrees to take
normal and reasonable precautions to maintain the confidentiality of information designated in
writing as confidential and provided to it by the Parent, the Borrower or any Subsidiary in
connection with this Agreement or any other Loan Document; provided, however, that
any Lender may disclose such information (a) at the request of any regulatory authority or in
connection with an examination of such Lender by any such authority, (b) pursuant to subpoena or
other court process, (c) when required to do so in accordance with the provisions of any applicable
law, (d) at the discretion of any other Governmental Authority, (e) to such Lender’s Affiliates and
independent auditors and other professional advisors or (f) to any Transferee or potential
Transferee; provided that such Transferee agrees to comply with the provisions of this Section
10.16.
Section 10.17. USA PATRIOT Act. Each Lender hereby notifies the Borrower and each other Loan
Party that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) the (“Act”), it is required to obtain, verify and record information
that identifies the Borrower and each other Loan Party, which information includes the name and
address of the Borrower and each other Loan Party and other information that will allow such Lender
to identify the Borrower and each other Loan Party in accordance with the Act.
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Section 10.18. Foreign Assets Control Regulations, Etc. None of the requesting or borrowing
of the Loans, the requesting or issuance, extension or renewal of any Letters of Credit, or the use
of the proceeds of any thereof will violate the Trading With the Enemy Act (50 U.S.C. § 1 et seq.,
as amended) (the “Trading With the Enemy Act”) or any of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended)
(the “Foreign Assets Control Regulations”) or any enabling legislation or executive order
relating thereto (which for the avoidance of doubt shall include, but shall not be limited to (a)
Executive Order 13224 of September 21, 2001 Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit,
or Support Terrorism (66 Fed. Reg. 49079 (2001)) (the “Executive Order”) and (b) the
Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (Public Law 107-56)). Furthermore, neither the Borrower nor any of its
Subsidiaries or other Affiliates (a) is or will become a “blocked person” as described in the
Executive Order, the Trading With the Enemy Act or the Foreign Assets Control Regulations or (b)
engages or will engage in any dealings or transactions, or be otherwise associated, with any such
“blocked person”.
Section 10.19. Exchange Rates.
(a) Not later than 2:00 P.M. (London time) on each Computation Date or upon the occurrence of
any Event of Default, if any Loans or Letters of Credit are outstanding on such date in a Foreign
Currency, the Administrative Agent shall (i) determine the Exchange Rate as of such Computation
Date with respect to such Foreign Currency and (ii) give notice thereof to the Lenders and the
Borrower. The Exchange Rate so determined shall become effective on the first Business Day
immediately following the relevant Computation Date or Event of Default (a “Reset Date”),
shall remain effective until the next succeeding Reset Date, and shall for all purposes of this
Agreement (other than Section 10.20 or any other provision expressly requiring the use of a current
Exchange Rate) be the Exchange Rate employed in determining the Dollar Equivalent of any amounts of
such Foreign Currency.
(b) Not later than 2:00 P.M. (London time) on each Reset Date and each date on which Loans
and/or Letters of Credit denominated in a Foreign Currency are made or issued, if any such Loans
and/or Letters of Credit are outstanding on such date, the Administrative Agent shall (i) determine
the Dollar Equivalent of the aggregate principal amounts of the Loans and Letters of Credit
denominated in such Foreign Currency and (ii) notify the Lenders and the Borrower of the results of
such determination.
Section 10.20. Currency Conversion. All payments under this Agreement or any other Loan
Document shall be made in Dollars, except for Loans funded, or Reimbursement Obligations with
respect to Letters of Credit issued, in a Foreign Currency, which shall be repaid, including
interest thereon, in such Foreign Currency. If any payment by the Borrower or the proceeds of any
collateral, shall be made in a currency other than the currency required hereunder, such amount
shall be converted into the currency required hereunder at the rate determined by the
Administrative Agent or the Issuing Lender, as applicable, as the rate quoted by it in accordance
with methods customarily used by such Person for such or similar purposes as the spot rate for the
purchase by such Person of the required currency with the currency of actual payment through its
principal foreign exchange trading office (including, in the case of the Administrative Agent, any
Affiliate) at approximately 11:00 A.M. (Local Time at such office) two Business Days prior to the
effective date of such conversion; provided that, the Administrative Agent or the Issuing
Lender, as applicable, may obtain such spot rate from another financial institution actively
engaged in foreign currency exchange if the Administrative Agent or the Issuing Lender, as
applicable, does not then have a spot rate for the required currency. The parties hereto hereby
agree, to the fullest extent that they may effectively do so under applicable law, that (i) if for
the purposes of obtaining any judgment or award it becomes necessary to convert from any currency
other than the currency required hereunder into the currency required hereunder any amount in
connection with the Obligations, then the conversion shall be made as provided above on the
Business Day before the day on which the judgment or award is given, (ii) in the event that there
is a change in the applicable
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conversion rate prevailing between the Business Day before the day on
which the judgment or award is given and the date of payment, the Borrower will pay to the
Administrative Agent, for the benefit of the Lenders, such additional amounts (if any) as may be
necessary, and the Administrative Agent, on behalf of the Lenders, will pay to the Borrower such
excess amounts (if any) as result from such change in the rate of exchange, to assure that the
amount paid on such date is the amount in such other currency, which when converted at the
conversion rate described herein on the date of payment, is the amount then due in
the currency required hereunder, and (iii) any amount due from the Borrower under this Section
10.20 shall be due as a separate debt and shall not be affected by judgment or award being obtained
for any other sum due.
Section 10.21. No Margin Stock Collateral. Each of the Lenders represents to the
Administrative Agent, each of the other Lenders and the Borrower that it in good faith is not,
directly or indirectly (by negative pledge or otherwise), relying upon any margin stock (as defined
in Regulation U of the Board of Governors of the Federal Reserve System) as collateral in the
extension or maintenance of the credit provided for in this Agreement.
Section 10.22. Termination of Commitments under Existing Credit Agreement. Each of the Loan
Parties and the Lenders that is also a party to the Existing Credit Agreement hereby agrees that,
as of the Effective Date, all of the commitments to extend credit under the Existing Credit
Agreement will be terminated automatically, the Existing Credit Agreement shall be terminated and
of no further force or effect (except as otherwise expressly provided therein to survive the
termination thereof), and any and all conditions precedent or required notice periods in connection
with such termination are hereby waived and of no further force and effect.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered by their proper and duly authorized officers as of the day and year first above written.
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LANDSTAR SYSTEM HOLDINGS, INC. |
State of Georgia |
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Xxxxx X. Xxxxxxx |
Sworn before me this |
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Vice President, Chief Financial |
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Officer and Assistant Secretary |
26 day of June, 2008 |
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/s/ Xxxxx X. Xxxxxxxx |
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LANDSTAR SYSTEM, INC. |
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Notary Public |
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WITNESSETH |
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By: |
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/s/ Xxxxx X. Xxxxxxx |
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Name:
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Xxxxx X. Xxxxxxx |
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Title:
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Vice President, Chief Financial |
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Officer and Assistant Secretary |
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/s/ Xxxxxxx X. Xxxxxx |
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/s/ Xxxxx Xxxxxxxx |
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[SIGNATURE PAGE FOR LANDSTAR CREDIT AGREEMENT]
74
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State of Georgia |
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) |
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LANDSTAR ACQUISITION CORPORATION |
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) |
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s.s.: |
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LANDSTAR CANADA HOLDINGS, INC. |
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County of Camden |
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) |
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LANDSTAR CAPACITY SERVICES, INC. |
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Sworn before me this |
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LANDSTAR CARRIER SERVICES, INC. |
26 day of June, 2008 |
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LANDSTAR CORPORATE SERVICES, INC. |
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/s/ Xxxxx X. Xxxxxxxx |
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LANDSTAR EXPRESS AMERICA, INC. |
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Notary Public |
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LANDSTAR GEMINI, INC. |
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WITNESSETH |
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LANDSTAR GLOBAL LOGISTICS, INC. |
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/s/ Xxxxxxx X. Xxxxxx |
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LANDSTAR INWAY, INC. |
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/s/ Xxxxx Xxxxxxxx |
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LANDSTAR XXXXX, INC. |
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LANDSTAR RANGER, INC. |
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LANDSTAR T.L.C., INC. |
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RISK MANAGEMENT CLAIM SERVICES, INC. |
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SIGNATURE INSURANCE COMPANY |
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SIGNATURE TECHNOLOGY SERVICES, INC. |
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By:
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/s/ Xxxxx X. Xxxxxxx |
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Title: Vice President |
[SIGNATURE PAGE FOR LANDSTAR CREDIT AGREEMENT]
75
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JPMORGAN CHASE BANK, N.A.
as Administrative Agent and as a Lender
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By: |
/s/ Xxxxxx X. Xxxxxxxx
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Name: |
Xxxxxx X. Xxxxxxxx |
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Title: |
Vice President |
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[SIGNATURE PAGE FOR LANDSTAR CREDIT AGREEMENT]
76
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BANK OF AMERICA, N.A.
as Co-Syndication Agent and a Lender
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By: |
/s/ Xxxxxxx X. X’Xxxxxxxx
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Name: |
Xxxxxxx X. X’Xxxxxxxx |
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Title: |
Senior Vice President |
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[SIGNATURE PAGE FOR LANDSTAR CREDIT AGREEMENT]
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SUNTRUST BANK
as Co-Syndication Agent and a Lender
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By: |
/s/ Xxxxx Xxxxxxx
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Name: |
Xxxxx Xxxxxxx |
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Title: |
Portfolio Manager |
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[SIGNATURE PAGE FOR LANDSTAR CREDIT AGREEMENT]
78
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WACHOVIA BANK, NATIONAL ASSOCIATION
as Co-Syndication Agent and a Lender
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By: |
/s/ Xxxxxxx X. Xxxxxxxx
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Name: |
Xxxxxxx X. Xxxxxxxx |
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Title: |
Senior Vice President |
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[SIGNATURE PAGE FOR LANDSTAR CREDIT AGREEMENT]
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BRANCH BANKING & TRUST CO.
as Co-Syndication Agent and a Lender
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By: |
/s/ Xxxx X. Xxxxxx
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Name: |
Xxxx X. Xxxxxx |
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Title: |
Vice President |
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[SIGNATURE PAGE FOR LANDSTAR CREDIT AGREEMENT]
80
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COMERICA BANK
as a Lender
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By: |
/s/ Xxxxxx X. Xxxxxx, Xx.
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Name: |
Xxxxxx X. Xxxxxx, Xx. |
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Title: |
Vice President |
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[SIGNATURE PAGE FOR LANDSTAR CREDIT AGREEMENT]
81
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COMPASS BANK
as a Lender
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By: |
/s/ Xxxxxxx X. Del Xxxxx
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Name: |
Xxxxxxx X. Del Rocco |
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Title: |
Senior Vice President |
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[SIGNATURE PAGE FOR LANDSTAR CREDIT AGREEMENT]
82
SCHEDULE 1.1(A)
COMMITMENTS
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NAME OF LENDER |
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REVOLVING CREDIT COMMITMENT |
JPMorgan Chase Bank, N.A.
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$ |
37,000,000 |
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Bank of America, N.A.
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$ |
36,000,000 |
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SunTrust Bank
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$ |
36,000,000 |
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Wachovia Bank, National Association
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$ |
36,000,000 |
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Branch Banking & Trust Co.
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$ |
36,000,000 |
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Comerica Bank
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$ |
22,000,000 |
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Compass Bank
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$ |
22,000,000 |
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TOTAL:
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$ |
225,000,000 |
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83
SCHEDULE 1.1(B)
SUBSIDIARY GUARANTORS
Landstar Acquisition Corporation
Landstar Canada Holdings, Inc.
Landstar Capacity Services, Inc.
Landstar Carrier Services, Inc.
Landstar Corporate Services, Inc.
Landstar Express America, Inc.
Landstar Gemini, Inc.
Landstar Global Logistics, Inc.
Landstar Inway, Inc.
Landstar Xxxxx, Inc.
Landstar Ranger, Inc.
Landstar T.L.C., Inc.
Risk Management Claim Services, Inc.
Signature Insurance Company
Signature Technology Services, Inc.
84
SCHEDULE 1.1(C)
PRICING GRID
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EUROCURRENCY |
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COMMITMENT |
LEVEL |
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LEVERAGE RATIO* |
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ABR LOAN MARGIN |
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LOAN MARGIN |
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FEE RATE |
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Greater than 2.75 to 1.00
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0.50 |
% |
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1.500 |
% |
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0.350 |
% |
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II
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Less than or equal to
2.75 to 1 but greater
than 2.00 to 1.00
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0.25 |
% |
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1.250 |
% |
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0.300 |
% |
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III
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Less than or equal to
2.00 to 1 but greater
than 1.25 to 1.00
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0.00 |
% |
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1.000 |
% |
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0.250 |
% |
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IV
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Less than or equal to
1.25 to 1 but greater
than 0.50 to 1.00
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0.00 |
% |
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0.875 |
% |
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0.200 |
% |
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V
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Less than or equal to
0.50 to 1.00
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0.00 |
% |
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0.750 |
% |
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0.175 |
% |
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* |
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As defined in Section 7.1(a) of the Credit Agreement. |
The Applicable Margins and Commitment Fee Rates shall be determined in accordance with the
foregoing table based on the Parent’s most recent consolidated financial statements. Adjustments,
if any, to the Applicable Margins or Commitment Fee Rates shall be effective two Business Days
after the Administrative Agent has received the applicable financial statements. If the Borrower
fails to deliver such financial statements to the Administrative Agent at the time required
pursuant to the Credit Agreement, then the Applicable Margins and Commitment Fee Rates shall be the
highest Applicable Margins and Commitment Fee Rates set forth in the foregoing table until the next
Business Day after such financial statements are so delivered. The initial Applicable Margins and
Commitment Fee Rates shall not be lower than the respective percentages set forth in Level IV.
Upon delivery to the Administrative Agent of the Parent’s consolidated financial statements for the
fiscal quarter ending June 28, 2008, the Applicable Margin and Commitment Fee Rates shall be reset
in accordance with the above.
85
SCHEDULE 1.1(D)
MANDATORY COSTS
1. |
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The Mandatory Cost is an addition to the interest rate to compensate Lenders for the cost of
compliance with (a) the requirements of the Bank of England and/or the Financial Services
Authority (or, in either case, any other authority which replaces all or any of its functions)
or (b) the requirements of the European Central Bank. |
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2. |
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On the first day of each Interest Period (or as soon as possible thereafter) the
Administrative Agent shall calculate, as a percentage rate, a rate (the “Additional Cost
Rate”) for each Lender, in accordance with the paragraphs set out below. The Mandatory Cost
will be calculated by the Administrative Agent as a weighted average of the Lenders’
Additional Cost Rates (weighted in proportion to the percentage participation of each Lender
in the relevant Loan) and will be expressed as a percentage rate per annum. |
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3. |
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The Additional Cost Rate for any Lender lending from a Lending Office in a Participating
Member State will be the percentage notified by that Lender to the Administrative Agent. This
percentage will be certified by that Lender in its notice to the Administrative Agent to be
its reasonable determination of the cost (expressed as a percentage of that Lender’s
participation in all Loans made from that Lending Office) of complying with the minimum
reserve requirements of the European Central Bank in respect of Loans made from that Lending
Office. |
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4. |
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The Additional Cost Rate for any Lender lending from a Lending Office in the United Kingdom
will be calculated by the Administrative Agent as follows: |
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(a) in relation to a sterling Loan: |
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AB+C(B-D)+E x 0.01 |
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100-(A+C)
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per cent. per annum |
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(b) in relation to a Loan in any currency other than sterling: |
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E x 0.01 |
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300
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per cent. per annum. |
Where:
A is the percentage of Eligible Liabilities (assuming these to be in excess of any stated minimum)
which that Lender is from time to time required to maintain as an interest free cash ratio deposit
with the Bank of England to comply with cash ratio requirements.
B is the percentage rate of interest (excluding the Applicable Margin and the Mandatory Cost and,
if the Loan is an unpaid sum, the additional rate of interest specified in paragraph (c) of Section
2.9 (Default Rate) payable for the relevant Interest Period on the Loan.
C is the percentage (if any) of Eligible Liabilities which that Lender is required from time to
time to maintain as interest bearing Special Deposits with the Bank of England.
86
D is the percentage rate per annum payable by the Bank of England to the Administrative Agent on
interest bearing Special Deposits.
E is designed to compensate Lenders for amounts payable under the Fees Rules and is calculated by
the Administrative Agent as being the average of the most recent rates of charge supplied by the
Reference Banks to the Administrative Agent pursuant to paragraph 7 below and expressed in pounds
per £1,000,000.
5. |
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For the purposes of this Exhibit: |
(a) “Eligible Liabilities” and “Special Deposits” have the meanings given to them from time to time
under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank of
England;
(b) “Fees Rules” means the rules on periodic fees contained in the FSA Supervision Manual or such
other law or regulation as may be in force from time to time in respect of the payment of fees for
the acceptance of deposits;
(c) “Fee Tariffs” means the fee tariffs specified in the Fees Rules under the activity group A.1
Deposit acceptors (ignoring any minimum fee or zero rated fee required pursuant to the Fees Rules
but taking into account any applicable discount rate); and
(d) “Tariff Base” has the meaning given to it in, and will be calculated in accordance with, the
Fees Rules.
6. |
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In application of the above formulae, A, B, C and D will be included in the formulae as
percentages (i.e. 5 per cent. will be included in the formula as 5 and not as 0.05). A
negative result obtained by subtracting D from B shall be taken as zero. The resulting
figures shall be rounded to four decimal places. |
7. |
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If requested by the Administrative Agent, each Reference Bank shall, as soon as practicable
after publication by the Financial Services Authority, supply to the Administrative Agent, the
rate of charge payable by that Reference Bank to the Financial Services Authority pursuant to
the Fees Rules in respect of the relevant financial year of the Financial Services Authority
(calculated for this purpose by that Reference Bank as being the average of the Fee Tariffs
applicable to that Reference Bank for that financial year) and expressed in pounds per
£1,000,000 of the Tariff Base of that Reference Bank. |
8. |
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Each Lender shall supply any information required by the Administrative Agent for the purpose
of calculating its Additional Cost Rate. In particular, but without limitation, each Lender
shall supply the following information on or prior to the date on which it becomes a Lender: |
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(a) |
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the jurisdiction of its Lending Office; and |
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(b) |
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any other information that the Administrative Agent may reasonably require for such purpose. |
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Each Lender shall promptly notify the Administrative Agent of any change to the information
provided by it pursuant to this paragraph. |
87
9. |
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The percentages of each Lender for the purpose of A and C above and the rates of charge of
each Reference Bank for the purpose of E above shall be determined by the Administrative Agent
based upon the information supplied to it pursuant to paragraphs 7 and 8 above and on the
assumption that, unless a Lender notifies the Administrative Agent to the contrary, each
Lender’s obligations in relation to cash ratio deposits and Special Deposits are the same as
those of a typical bank from its jurisdiction of incorporation with a Lending Office in the
same jurisdiction as its Lending Office. |
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10. |
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The Administrative Agent shall have no liability to any person if such determination results
in an Additional Cost Rate which over or under compensates any Lender and shall be entitled to
assume that the information provided by any Lender or Reference Bank pursuant to paragraphs 3,
7 and 8 above is true and correct in all respects. |
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11. |
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The Administrative Agent shall distribute the additional amounts received as a result of the
Mandatory Cost to the Lenders on the basis of the Additional Cost Rate for each Lender based
on the information provided by each Lender and each Reference Bank pursuant to paragraphs 3, 7
and 8 above. |
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12. |
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Any determination by the Administrative Agent pursuant to this Exhibit in relation to a
formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to a Lender shall,
in the absence of manifest error, be conclusive and binding on all parties. |
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13. |
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The Administrative Agent may from time to time, after consultation with the Borrower and the
Lenders, determine and notify to all parties any amendments which are required to be made to
this Exhibit in order to comply with any change in law, regulation or any requirements from
time to time imposed by the Bank of England, the Financial Services Authority or the European
Central Bank (or, in any case, any other authority which replaces all or any of its functions)
and any such determination shall, in the absence of manifest error, be conclusive and binding
on all parties. |
88
SCHEDULE 3.9
EXISTING LETTERS OF CREDIT
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COVERAGE |
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BENEFICIARY |
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AMOUNT |
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EXPIRATION |
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Auto & General
Liability
|
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National Union Fire
Insurance Company
of Pittsburgh, PA.
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500,000.00 |
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01/05/2009 |
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Ranger/Qualified
Beneficiary
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5,000,000.00 |
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06/30/2009 |
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Inway/Qualified
Beneficiary
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5,000,000.00 |
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06/30/2009 |
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Xxxxx/Qualified
Beneficiary
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5,000,000.00 |
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06/30/2009 |
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Gemini/Qualified
Beneficiary
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5,000,000.00 |
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06/30/2009 |
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Express/Qualified
Beneficiary
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5,000,000.00 |
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06/30/2009 |
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Cargo Liability
|
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Ranger/Qualified
Beneficiary
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10,000.00 |
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01/05/2009 |
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Inway/Qualified
Beneficiary
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10,000.00 |
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01/05/2009 |
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Xxxxx/Qualified
Beneficiary
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10,000.00 |
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01/05/2009 |
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Gemini/Qualified
Beneficiary
|
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10,000.00 |
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01/05/2009 |
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Express/Qualified
Beneficiary
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10,000.00 |
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01/05/2009 |
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Xxxxx/ Qualified
Beneficiary
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10,000.00 |
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01/05/2009 |
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TLC / Qualified
Beneficiary
|
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10,000.00 |
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01/05/2009 |
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Expediting/Qualified
Beneficiary
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10,000.00 |
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01/05/2009 |
|
|
Workers’
Compensation
|
|
|
Liberty Mutual
Insurance Company
|
|
|
|
1,287,551.00 |
|
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|
01/05/2009 |
|
|
89
SCHEDULE 4.15
SUBSIDIARIES
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|
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Direct Subsidiaries of Parent
|
|
Jurisdiction of Incorporation |
|
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Landstar System Holdings, Inc.
|
|
Delaware |
|
|
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Direct Subsidiaries of Borrower
|
|
Jurisdiction of Incorporation |
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|
|
Landstar Acquisition Corporation
|
|
Alabama |
|
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|
Landstar Canada Holdings, Inc.
|
|
Delaware |
|
|
|
Landstar Capacity Services, Inc.
|
|
Delaware |
|
|
|
Landstar Carrier Services, Inc.
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|
Delaware |
|
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|
Landstar Contractor Financing, Inc.
|
|
Delaware |
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|
Landstar Inway, Inc.
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|
Delaware |
|
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|
Landstar Xxxxx, Inc.
|
|
Delaware |
|
|
|
Landstar Global Logistics, Inc.
|
|
Delaware |
|
|
|
Landstar Ranger, Inc.
|
|
Delaware |
|
|
|
Risk Management Claim Services, Inc.
|
|
Kentucky |
|
|
|
Signature Insurance Company
|
|
Cayman Islands |
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|
|
Signature Technology Services, Inc.
|
|
Delaware |
|
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Indirect Subsidiaries Of Borrower
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Jurisdiction of Incorporation |
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Landstar Canada, Inc.
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Ontario, Canada |
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Landstar Corporate Services, Inc.
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Delaware |
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Landstar Express America, Inc.
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North Carolina |
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Landstar Gemini, Inc.
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Delaware |
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Landstar T.L.C., Inc.
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Delaware |
90
SCHEDULE 4.17
ENVIRONMENTAL MATTERS
NONE
91
SCHEDULE 7.2
EXISTING INDEBTEDNESS
Future minimum lease payments of the Borrower under all noncancelable leases as of the Closing Date
are as follows:
Short term capital leases are no greater than $25,525,000
Long term capital leases are no greater than $52,414,000
Operating leases are no greater than $20,981,000
92
SCHEDULE 7.3
EXISTING LIENS
NONE
93
SCHEDULE 7.4
EXISTING GUARANTEE OBLIGATIONS
NONE
94
EXHIBIT A TO CREDIT AGREEMENT
FORM OF REVOLVING CREDIT NOTE
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REVOLVING CREDIT |
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COMMITMENT: |
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$_______________
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New York, New York |
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_________ ___, 2008 |
FOR VALUE RECEIVED, LANDSTAR SYSTEM HOLDINGS, INC., a Delaware corporation (the
“Borrower”), promises to pay to the order of __________________ (the “Lender”) on the
Termination Date, at the office of JPMorgan Chase Bank, N.A., at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (or, if any Revolving Credit Loans are denominated in a Foreign Currency, then at the
Applicable Payment Office for such Revolving Credit Loans), in lawful money of the United States of
America (or, if any Revolving Credit Loans are denominated in a Foreign Currency, then in lawful
money of such Foreign Currency) and in immediately available funds, the aggregate unpaid principal
amount of all Revolving Credit Loans made by the Lender to the Borrower. The Borrower further
agrees to pay interest at said office, in like money (except as otherwise provided in the Credit
Agreement for any Revolving Credit Loans denominated in a Foreign Currency), from the date hereof
on the unpaid principal amount hereof at the rates and on the dates specified in Section 2.9 of the
Credit Agreement, dated as of June 27, 2008, among the Borrower, Landstar System, Inc., the
Subsidiaries of the Borrower signatories thereto, the Lender, the several other banks and other
financial institutions from time to time parties thereto, and JPMorgan Chase Bank, N.A., as
administrative agent (as the same may from time to time be amended, modified or supplemented, the
“Credit Amendment”; terms defined therein being used herein as so defined).
This Note is one of the Revolving Credit Notes referred to in the Credit Agreement, is
entitled to the benefits thereof, and is subject to prepayment in whole or in part as provided
therein.
The holder of this Note is authorized to record the date, currency, amount and Type of each
Revolving Credit Loan made by the Lender to the Borrower pursuant to Section 2.2 of the Credit
Agreement, each continuation thereof, each conversion of all or a portion thereof to another Type,
the date and amount of each payment or prepayment of principal thereof, and the length of each
Interest Period with respect thereto, on the schedule annexed hereto and made a part hereof, and
any such recordation or any such information recorded on such Lender’s internal books and records
and then attached to this Note in the form of the schedule attached hereto shall constitute prima
facie evidence of the accuracy of the information so recorded; provided that, the failure
of the Lender to make such recordation (or any error in such recordation) shall not affect the
obligations of the Borrower hereunder or under the Credit Agreement.
Payment and performance of this Note is guaranteed as set forth in the Subsidiaries Guarantee
and the Parent Guarantee, and shall be secured by each Pledge Agreement delivered pursuant to the
terms of the Credit Agreement.
Upon the occurrence of any one or more of the Events of Default specified in the Credit
Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable all as provided therein.
95
The Borrower hereby waives presentment, demand, protest or notice of any kind in connection
with this Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.
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LANDSTAR SYSTEM HOLDINGS, INC.
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By: |
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Name: |
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Title: |
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96
SCHEDULE A To Note
LOANS, CONVERSIONS AND PAYMENTS
WITH RESPECT TO ABR LOANS
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Amount of ABR |
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Amount of ABR |
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Loans Made or |
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Loans Paid or |
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Converted from |
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Converted into |
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Unpaid Principal |
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Eurocurrency |
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Eurocurrency |
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Balance of ABR |
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Date |
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Loans |
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Loans |
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Loans |
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Notation Made By |
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97
SCHEDULE B To Note
LOANS, CONVERSIONS AND PAYMENTS
WITH RESPECT TO EUROCURRENCY LOANS
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Amount of |
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Amount of |
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Eurocurrency |
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Interest Period and |
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Eurocurrency |
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Loans Made or |
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Eurocurrency Rate |
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Loans Paid or |
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Converted from |
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in Respect |
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Converted into |
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Date |
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ABR Loans |
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Thereof |
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ABR Loans |
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Notation Made By |
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98
EXHIBIT B TO CREDIT AGREEMENT
FORM OF SWING LINE NOTE
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SWING LINE |
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COMMITMENT:
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New York, New York |
$25,000,000
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_________ ___, 2008 |
FOR VALUE RECEIVED, LANDSTAR SYSTEM HOLDINGS, INC., a Delaware corporation (the
“Borrower”), promises to pay to the order of JPMORGAN CHASE BANK, N.A. (the
“Lender”) on the Termination Date, at its offices at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, in lawful money of the United States of America and in immediately available funds, the
principal amount of the aggregate unpaid principal amount of all Swing Line Loans made by the
Lender to the Borrower. The Borrower further agrees to pay interest at said office, in like money,
from the date hereof on the unpaid principal amount hereof at the rates and on the dates specified
in Section 2.9 of the Credit Agreement, dated as of June 27, 2008, among the Borrower, Landstar
System, Inc., the Subsidiaries of the Borrower signatories thereto, the Lender, the several other
banks and other financial institutions from time to time parties thereto, and JPMorgan Chase Bank,
N.A., as administrative agent (as the same may from time to time be amended, modified or
supplemented, the “Credit Amendment”; terms defined therein being used herein as so
defined).
This Note is the Swing Line Note referred to in the Credit Agreement, is entitled to the
benefits thereof, and is subject to prepayment in whole or in part as provided therein.
The holder of this Note is authorized to record the date and amount of each Swing Line Loan
made by the Lender to the Borrower pursuant to Section 2.5 of the Credit Agreement and the date and
amount of each payment or prepayment of principal thereof, on the schedule annexed hereto and made
a part hereof, and any such recordation or any such information recorded on such Lender’s internal
books and records and then attached to this Note in the form of the schedule attached hereto shall
constitute prima facie evidence of the accuracy of the information so recorded, provided that the
failure of the Lender to make such recordation (or any error in such recordation) shall not affect
the obligations of the Borrower hereunder or under the Credit Agreement.
Payment and performance of this Note is guaranteed as set forth in the Subsidiaries Guarantee
and the Parent Guarantee, and shall be secured by each Pledge Agreement delivered pursuant to the
terms of the Credit Agreement.
Upon the occurrence of any one or more of the Events of Default specified in the Credit
Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable all as provided therein.
The Borrower hereby waives presentment, demand, protest or notice of any kind in connection
with this Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.
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LANDSTAR SYSTEM HOLDINGS, INC.
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By: |
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Name: |
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Title: |
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99
SCHEDULE A To Note
LOANS AND PAYMENTS
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Unpaid Principal |
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Amount of Swing |
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Amount of Swing |
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Balance of Swing |
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Date |
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Line Loans |
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Line Loans Paid |
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Line Loans |
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Notation Made By |
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100
EXHIBIT C-1 TO CREDIT AGREEMENT
FORM OF PARENT GUARANTEE
PARENT GUARANTEE, dated as of _________ ___, 2008, by LANDSTAR SYSTEM, INC., a Delaware corporation
(the “Guarantor”), in favor of JPMORGAN CHASE BANK, N.A., as administrative agent (in such
capacity, the “Administrative Agent”) for the Issuing Lender and the Lenders that are
parties to the Credit Agreement defined below (and including any Affiliates thereof that are
parties to any Interest Rate Protection Agreements included in the Obligations as defined below,
with such Lenders and Affiliates, together with the Issuing Lender, being collectively referred to
herein as the “Lenders”).
WITNESSETH:
WHEREAS, Landstar System Holdings, Inc., a Delaware corporation (the “Borrower”), is
party to the Credit Agreement, dated as of June 27, 2008, with Landstar System, Inc., the
Subsidiaries of the Borrower that are signatories thereto, the Administrative Agent, and the
lenders parties thereto (as amended, the “Credit Agreement”);
WHEREAS, the Guarantor owns directly all of the issued and outstanding stock of the Borrower
and expects to derive substantial benefits from the Credit Agreement;
WHEREAS, in connection with the Credit Agreement, the Guarantor and the Administrative Agent
wish to enter into this Parent Guarantee as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises, the Guarantor and the Administrative Agent,
with the consent of and for the ratable benefit of the Lenders, hereby agree that:
1. Defined Terms. As used in this Guarantee, terms defined in the Credit Agreement are used
herein as therein defined, and the following terms shall have the following meanings:
“Guarantee” shall mean this Parent Guarantee, as amended, supplemented or otherwise
modified from time to time.
“Obligations” shall mean the unpaid principal of and interest on (including, without
limitation, interest accruing after the maturity of the Loans and interest accruing after the
filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Loans and all other obligations and liabilities of the
Borrower or Reimbursement Obligations or other L/C Obligations to the Administrative Agent or the
Lenders, whether direct or indirect, absolute or contingent, due or to become due, now existing or
hereafter incurred, which may arise under, out of, or in connection with, the Credit Agreement, the
Letters of Credit, the Applications, any Interest Rate Protection Agreements entered into with any
Lenders, the other Loan Documents or any other document made, delivered or given in connection
therewith, whether on account of principal, interest, Reimbursement Obligations and other L/C
Obligations, fees, Letter of Credit commissions, indemnities, costs, expenses (including, without
limitation, all reasonable fees and disbursements of counsel to the Administrative Agent or any
Lender that are required to be paid by the Borrower pursuant to the terms of the Credit Agreement)
or otherwise.
101
2. Guarantee. (a) The Guarantor hereby unconditionally and irrevocably, guarantees to the
Administrative Agent and the Lenders and their respective successors, indorsees, transferees and
assigns, the prompt and complete payment by the Borrower when due (whether at the stated maturity,
by acceleration or otherwise) of the Obligations, in lawful money of the United States or any other
Agreed Currency in which such Obligations may be payable, and the Guarantor further agrees to pay
any and all expenses (including, without limitation, all reasonable fees and disbursements of
counsel) which may be paid or incurred by the Administrative Agent or any Lender in enforcing, or
obtaining advice of counsel in respect of, any rights with respect to, or collecting, any or all of
the Obligations and/or enforcing any rights with respect to, or collecting against, the Guarantor
under this Guarantee. This Guarantee shall remain in full force and effect until the Obligations
are paid in full and the Revolving Credit Commitments are terminated, notwithstanding that from
time to time prior thereto the Borrower may be free from any Obligations. This Guarantee is a
guarantee of payment when due and not of collection.
(b) No payment or payments made by the Borrower, the Guarantor or any other Person or received
or collected by the Administrative Agent or any Lender from the Borrower, the Guarantor or any
other Person by virtue of any action or proceeding or any set-off or appropriation or application
at any time or from time to time in reduction of or in payment of the Obligations shall be deemed
to modify, reduce, release or otherwise affect the liability of the Guarantor hereunder which
shall, notwithstanding any such payment or payments other than payments made by the Guarantor in
respect of the Obligations or payments received or collected from the Guarantor in respect of the
Obligations, remain liable for the Obligations until the Obligations are paid in full and the
Revolving Credit Commitments are terminated.
(c) The Guarantor agrees that whenever, at any time, or from time to time, it shall make any
payment to the Administrative Agent or any Lender on account of its liability hereunder, it will
notify the Administrative Agent in writing that such payment is made under this Guarantee for such
purpose.
3. Right of Set-off. Upon the occurrence of any Event of Default specified in the Credit
Agreement, the Guarantor hereby irrevocably authorizes each Lender at any time and from time to
time without notice to the Guarantor, any such notice being expressly waived by the Guarantor, to
set off and appropriate and apply any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at
any time held or owing by such Lender to or for the credit or the account of the Guarantor, or any
part thereof in such amounts as such Lender may elect, against and on account of the obligations
and liabilities of the Guarantor to such Lender hereunder and claims of every nature and
description of such Lender against the Guarantor, in any currency, whether arising hereunder, under
the Credit Agreement, the other Loan Documents or otherwise, as such Lender may elect, whether or
not the Administrative Agent or any Lender has made any demand for payment and although such
obligations, liabilities and claims may be contingent or unmatured. Each Lender agrees to notify
the Guarantor promptly of any such set-off and the application made by such Lender, provided that
the failure to give such notice shall not affect the validity of such set-off and application. The
rights of each Lender under this paragraph are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which such Lender may have.
4. No Subrogation, Contribution, Reimbursement or Indemnity. Notwithstanding anything to the
contrary in this Guarantee, the Guarantor hereby irrevocably waives all rights which may have
arisen in connection with this Guarantee to be subrogated to any of the rights (whether
contractual, under the Bankruptcy Code, including Section 509 thereof, under common law or
otherwise) of the Administrative Agent or any Lender against the Company or against the
Administrative Agent or any Lender for the payment of the Obligations. The Guarantor hereby
further irrevocably waives all
102
contractual, common law, statutory or other rights of reimbursement, contribution, exoneration
or indemnity (or any similar right) from or against the Borrower, any Subsidiary Guarantor, or any
other Person which may have arisen in connection with this Guarantee. So long as the Obligations
remain outstanding, if any amount shall be paid by or on behalf of the Borrower, or any Subsidiary
Guarantor, to the Guarantor on account of any of the rights waived in this paragraph, such amount
shall be held by the Guarantor in trust, segregated from other funds of the Guarantor, and shall,
forthwith upon receipt by such Guarantor, be turned over to the Administrative Agent in the exact
form received by the Guarantor (duly indorsed by the Guarantor to the Administrative Agent, if
required), to be applied against the obligations, whether matured or unmatured, in such order as
the Administrative Agent may determine. The provisions of this paragraph shall survive the term of
this Guarantee and the payment in full of the Obligations and the termination of the Revolving
Credit Commitments.
5. Amendments, etc. with respect to the Obligations; Waiver of Rights. The Guarantor shall
remain obligated hereunder notwithstanding that, without any reservation of rights against the
Guarantor and without notice to or further assent by the Guarantor, any demand for payment of any
of the Obligations made by the Administrative Agent or any Lender may be rescinded by such party
and any of the Obligations continued, and the obligations, or the liability of any other party upon
or for any part thereof, or any guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Administrative Agent or any Lender and the
Credit Agreement, the other Loan Documents or other guarantee or document in connection therewith
may be amended, modified, supplemented or terminated, in whole or in part, as the Administrative
Agent and/or any Lender may deem advisable from time to time, and any guarantee or right of offset
at any time held by the Administrative Agent or any Lender for the payment of the Obligations may
be sold, exchanged, waived, surrendered or released. Neither the Administrative Agent nor any
Lender shall have any obligation to protect, secure, perfect or insure any Lien at any time held as
security for the obligations or for this Guarantee or any property subject thereto. When making
any demand hereunder against the Guarantor, the Administrative Agent or any Lender may, but shall
be under no obligation to, make a similar demand on the Borrower or any guarantor, and any failure
by the Administrative Agent or any Lender to make any such demand or to collect any payments from
the Borrower or such other guarantor or any release of the Borrower or such other guarantor shall
not relieve the Guarantor, and shall not impair or affect the rights and remedies, express or
implied, or as a matter of law, of the Administrative Agent or any Lender against the Guarantor.
For the purposes hereof “demand” shall include the commencement and continuance of any legal
proceedings.
6. Guarantee Absolute and Unconditional. The Guarantor waives any and all notice of the
creation, renewal, extension or accrual of any of the Obligations and notice of or proof of
reliance by the Administrative Agent or any Lender upon this Guarantee or acceptance of this
Guarantee, the obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance upon this Guarantee;
and all dealings between the Borrower or the Guarantor and the Administrative Agent or any Lender
shall likewise be conclusively presumed to have been had or consummated in reliance upon this
Guarantee. The Guarantor waives diligence, presentment, protest, demand for payment and notice of
default or nonpayment to or upon the Borrower or the Guarantor with respect to the Obligations.
The Guarantor understands and agrees that this Guarantee shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the validity, regularity or
enforceability of the Credit Agreement, any other Loan Document, any of the Obligations or any
collateral security therefor or guarantee or right of offset with respect thereto at any time or
from time to time held by the Administrative Agent or any Lender (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any time be available to
or be asserted by the Borrower against the Administrative Agent or any Lender, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the Borrower or the Guarantor)
103
which constitutes, or might be construed to constitute, an equitable or legal discharge of the
Borrower for the obligations, or of the Guarantor under this Guarantee, in bankruptcy or in any
other instance. When pursuing its rights and remedies hereunder against the Guarantor, the
Administrative Agent and any Lender may, but shall be under no obligation to, pursue such rights
and remedies as it may have against the Borrower or any other Person or against any collateral
security or guarantee for the obligations or any right of offset with respect thereto, and any
failure by the Administrative Agent or any Lender to pursue such other rights or remedies or to
collect any payments from the Borrower or any such other Person or to realize upon any such
guarantee or to exercise any such right of offset, or any release of the Borrower or any such other
Person or any such collateral security, guarantee or right of offset, shall not relieve the
Guarantor of any liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the Administrative Agent or any Lender
against the Guarantor. This Guarantee shall remain in full force and effect and be binding in
accordance with and to the extent of its terms upon the Guarantor and the successors and assigns
thereof, and shall inure to the benefit of the Administrative Agent and the Lenders, and their
respective successors, indorsees, transferees and assigns, until all the obligations and the
obligations of the Guarantor under this Guarantee shall have been satisfied by payment in full and
the Revolving Credit Commitments shall be terminated, notwithstanding that from time to time during
the term of the Credit Agreement the Borrower may be free from any Obligations.
7. Reinstatement. This Guarantee shall continue to be effective, or be reinstated, as the
case may be, if at any time payment, or any part thereof, of any of the Obligations is rescinded or
must otherwise be restored or returned by the Administrative Agent or any Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or the
Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of,
or trustee or similar officer for, the Borrower or the Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.
8. Payments. The Guarantor hereby guarantees that payments hereunder will be paid to the
Administrative Agent without set-off or counterclaim in Dollars or other Agreed Currency in which
such Obligations are payable at the office of the Administrative Agent located at 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, X.X.X. or such Applicable Payment Office as may be specified for any of
the Obligations payable in any other Agreed Currency.
9. Representations and Warranties. The Guarantor hereby represents and warrants that the
representations and warranties set forth in Article IV of the Credit Agreement as they relate to
the Guarantor, each of which is hereby incorporated herein by reference, are true and correct, and
the Administrative Agent and each Lender shall be entitled to rely on each of them as if they were
fully set forth herein, provided that each reference in each such representation and warranty to
the Borrower’s knowledge shall, for the purposes of this paragraph, be deemed to be a reference to
the Guarantor’s knowledge.
The Guarantor agrees that the foregoing representations and warranties shall be deemed to have
been made by the Guarantor on the date of each borrowing by the Borrower, and on the date of
issuance of each Letter of Credit, under the Credit Agreement on and as of such date of borrowing
or issuance as though made hereunder on and as of such date (or, if stated to relate to an earlier
date, as of such earlier date).
10. Covenants. The Guarantor hereby agrees that, from and after the Closing Date and so long
as the Revolving Credit Commitments remain in effect, any Loan or Letter of Credit remains
outstanding and unpaid or any other amount is owing to any Lender or the Administrative Agent under
the Credit Agreement or any other Loan Document, the Guarantor shall take, or shall refrain from
taking,
104
as the case may be, all actions that are necessary to be taken or not taken so that no
violation of any provision, covenant or agreement contained in Articles VI or VII of the Credit
Agreement, and so that no Default or Event of Default, is caused by any act or failure to act of
the Guarantor or any of its Subsidiaries.
11. Severability. Any provision of this Guarantee which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
12. Paragraph Headings. The paragraph headings used in this Guarantee are for convenience of
reference only and are not to affect the construction hereof or be taken into consideration in the
interpretation hereof.
13. No Waiver; Cumulative Remedies. Neither the Administrative Agent nor any Lender shall by
any act (except by a written instrument pursuant to paragraph 14 hereof), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced
in any Default or Event of Default or in any breach of any of the terms and conditions hereof. No
failure to exercise, nor any delay in exercising, on the part of the Administrative Agent or any
Lender, any right, power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A waiver by the
Administrative Agent or any Lender of any right or remedy hereunder on any one occasion shall not
be construed as a bar to any right or remedy which the Administrative Agent or such Lender would
otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may
be exercised singly or concurrently and are not exclusive of any rights or remedies provided by
law.
14. Integration; Waivers and Amendments; Successors and Assigns; Governing Law. This
Guarantee and the other Loan Documents represent the agreement of the Guarantor with respect to the
subject matter hereof, and there are no promises or representations by the Administrative Agent or
any Lender relative to the subject matter hereof not reflected herein or in the other Loan
Documents. None of the terms or provisions of this Guarantee may be waived, amended or
supplemented or otherwise modified except by a written instrument executed by the Guarantor and the
Administrative Agent, provided that any provision of this Guarantee may be waived by the
Administrative Agent and the Lenders in a letter or agreement executed by the Administrative Agent
or by e-mail or facsimile transmission from the Administrative Agent. This Guarantee shall be
binding upon the successors and assigns of the Guarantor and shall inure to the benefit of the
Administrative Agent and the Lenders and their respective successors and assigns. This Guarantee
shall be governed by and be construed and interpreted in accordance with the law of the State of
New York.
105
15. Notices. All notices, requests and demands to or upon the Guarantor or the Administrative
Agent or any Lender to be effective shall be in writing (including by telecopy), and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered
by hand, or, in the case of mail, 3 days after deposit in the postal system, first class postage
prepaid, or, in the case of telecopy notice, when received, addressed to a party at the address set
forth in the Credit Agreement, in the case of the Administrative Agent or the Lenders or, in the
case of the Guarantor, to the following address:
Landstar System, Inc.
00000 Xxxxxx Xxxx Xxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Telecopy: 000-000-0000
16. Judgment Currency. If for the purposes of obtaining judgment in any court it is necessary
to convert a sum due from the Guarantor hereunder in the currency expressed to be payable herein
(the “specified currency”) into another currency, the parties hereto agree, to the fullest
extent that they may effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent could purchase the specified
currency with such other currency at the Administrative Agent’s main New York City office on the
Business Day preceding that on which final, non-appealable judgment is given. The obligations of
the Guarantor in respect of any sum due hereunder shall, notwithstanding any judgment in a currency
other than the specified currency, be discharged only to the extent that on the Business Day
following receipt by any holder of Obligations (including the Administrative Agent and the Issuing
Lender), as the case may be, of any sum adjudged to be so due in such other currency such holder of
Obligations (including the Administrative Agent and the Issuing Lender), as the case may be, may in
accordance with normal, reasonable banking procedures purchase the specified currency with such
other currency. If the amount of the specified currency so purchased is less than the sum
originally due to such holder of Obligations (including the Administrative Agent and the Issuing
Lender), as the case may be, in the specified currency, the Guarantor agrees to the fullest extent
that it may effectively do so, as a separate obligation and notwithstanding any such judgment, to
indemnify such holder of Obligations (including the Administrative Agent and the Issuing Lender),
as the case may be, against such loss, and if the amount of the specified currency so purchased
exceeds (a) the sum originally due to any holder of Obligations (including the Administrative Agent
and the Issuing Lender), as the case may be, in the specified currency and (b) amounts shared with
other holders of Obligations as a result of allocations of such excess as a disproportionate
payment to such other holder of Obligations under Section 2.12 of the Credit Agreement, such holder
of Obligations (including the Administrative Agent and the Issuing Lender), as the case may be,
agrees, by accepting the benefits hereof, to remit such excess to the Guarantor.
17. Counterparts. This Guarantee may be executed by one or more of the parties hereto on any
number of separate counterparts and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
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IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly executed and delivered
by its duly authorized officer as of the day and year first above written.
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LANDSTAR SYSTEM, INC.
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107
EXHIBIT C-2 TO CREDIT AGREEMENT
FORM OF SUBSIDIARIES GUARANTEE
SUBSIDIARIES GUARANTEE, dated as of ____________ ___, 2008, by each of the corporations that are
signatories hereto and each Subsidiary of the Borrower that hereafter executes and delivers a
Subsidiaries Guarantee Supplement hereto (collectively, the “Subsidiary Guarantors”) in
favor of JPMORGAN CHASE BANK, N.A., as administrative agent (in such capacity, the
“Administrative Agent”) for the Issuing Lender and the Lenders that are parties to the
Credit Agreement defined below (and including any Affiliates thereof that are parties to any
Interest Rate Protection Agreements included in the Obligations as defined below, with such Lenders
and Affiliates, together with the Issuing Lender, being collectively referred to herein as the
“Lenders”).
WITNESSETH:
WHEREAS, Landstar System Holdings, Inc., a Delaware corporation (the “Borrower”), is
party to the Credit Agreement, dated as of June 27, 2008, with Landstar System, Inc., the
Subsidiary Guarantors, the Administrative Agent, and the lenders parties thereto (as amended, the
“Credit Agreement”);
WHEREAS, the Borrower owns directly or indirectly all of the issued and outstanding stock of
each Subsidiary Guarantor;
WHEREAS, the Borrower and the Subsidiary Guarantors are engaged in related businesses, and
each Subsidiary Guarantor will derive substantial direct and indirect benefit from the making of
the Extensions of Credit; and
WHEREAS, in connection with the Credit Agreement, the Subsidiary Guarantors and the
Administrative Agent wish to enter into the Subsidiaries Guarantee as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises, each Subsidiary Guarantor and the
Administrative Agent, with the consent of and for the ratable benefit of the Lenders, hereby agree:
1. Defined Terms. As used in this Guarantee, terms defined in the Credit Agreement are used
herein as therein defined, and the following terms shall have the following meanings:
“Guarantee” shall mean this Subsidiaries Guarantee, as amended, supplemented or
otherwise modified from time to time.
“Obligations” shall mean the unpaid principal of and interest on (including, without
limitation, interest accruing after the maturity of the Loans and interest accruing after the
filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Loans and all other obligations and liabilities of the
Borrower or Reimbursement Obligations and other L/C Obligations of any Subsidiary Guarantor to the
Administrative Agent or the Lenders, whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter incurred, which may arise under, out of, or in connection
with, the Credit Agreement, the Letters of Credit, the Applications, any Interest Rate Protection
Agreements entered into with any Lenders, the other Loan Documents or any other document made,
delivered or given in connection therewith, whether on account of principal, interest,
Reimbursement Obligations and other L/C Obligations, fees, Letter of Credit
commissions, indemnities, costs, expenses (including, without limitation, all reasonable fees
and disbursements of counsel to the Administrative Agent or any Lender that are required to be paid
by the Borrower or any such Subsidiary Guarantor pursuant to the terms of the Credit Agreement) or
otherwise.
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2. Guarantee. (a) Subject to the provisions of paragraph (b), each of the Subsidiary
Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantees to the
Administrative Agent, for the ratable benefit of the Lenders and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and performance by the Borrower
and each other Subsidiary Guarantor when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations, in lawful money of the United States or any other Agreed Currency in
which such Obligations may be payable, and each Subsidiary Guarantor further agrees to pay any and
all expenses (including, without limitation, all reasonable fees and disbursements of counsel)
which may be paid or incurred by the Administrative Agent or any Lender in enforcing, or obtaining
advice of counsel with respect to, or collecting against, the Borrower or such other Subsidiary
Guarantor under this Guarantee. This Guarantee is a guarantee of payment when due and not of
collection.
(b) Anything herein or in any other Loan Document to the contrary notwithstanding, the maximum
liability of each Subsidiary Guarantor hereunder and under the other Loan Documents shall in no
event exceed the amount which can be guaranteed by such Subsidiary Guarantor under applicable
federal and state laws relating to the insolvency of debtors.
(c) Each Subsidiary Guarantor further agrees to pay any and all expenses (including, without
limitation, all fees and disbursements of counsel) which may be paid or incurred by the
Administrative Agent or any Lender in enforcing, or obtaining advice of counsel in respect of, any
rights with respect to, or collecting, any or all of the Obligations and/or enforcing any rights
with respect to, or collecting against, such Subsidiary Guarantor under this Guarantee. This
Guarantee shall remain in full force and effect until the Obligations are paid in full and the
Revolving Credit Commitments are terminated, notwithstanding that from time to time prior thereto
the Borrower may be free from any Obligations.
(d) Each Subsidiary Guarantor agrees that the obligations may at any time and from time to
time exceed the amount of the liability of such Subsidiary Guarantor hereunder without impairing
this Guarantee or affecting the rights and remedies of the Administrative Agent or any Lender
hereunder.
(e) No payment or payments made by the Borrower, any of the Subsidiary Guarantors, any other
guarantor or any other Person or received or collected by the Administrative Agent or any Lender
from the Borrower, any of the Subsidiary Guarantors, any other guarantor or any other Person by
virtue of any action or proceeding or any set-off or appropriation or application at any time or
from time to time in reduction of or in payment of the Obligations shall be deemed to modify,
reduce, release or otherwise affect the liability of any Subsidiary Guarantor hereunder which
shall, notwithstanding any such payment or payments other than payments made by such Subsidiary
Guarantor in respect of the Obligations or payments received or collected from such Subsidiary
Guarantor in respect of the Obligations, remain liable for the obligations up to the maximum
liability of such Subsidiary Guarantor hereunder until the Obligations are paid in full and the
Revolving Credit Commitments are terminated.
(f) Each Subsidiary Guarantor agrees that whenever, at any time, or from time to time, it
shall make any payment to the Administrative Agent or any Lender on account of its liability
hereunder, it will notify the Administrative Agent in writing that such payment is made under this
Guarantee for such purpose.
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3. Right of Contribution. Each Subsidiary Guarantor hereby agrees that to the extent that a
Subsidiary Guarantor shall have paid more than its proportionate share of any payment made
hereunder, such Subsidiary Guarantor shall be entitled to seek and receive contribution from and
against any other Subsidiary Guarantor hereunder who has not paid its proportionate share of such
payment. Each Subsidiary Guarantor’s right of contribution shall be subject to the terms and
conditions of Paragraph 5 hereof. The provisions of this Paragraph 3 shall in no respect limit the
obligations and liabilities of any Subsidiary Guarantor to the Administrative Agent and the
Lenders, and each Subsidiary Guarantor shall remain liable to the Administrative Agent and the
Lenders for the full amount guaranteed by such Subsidiary Guarantor hereunder.
4. Right of Set-off. Upon the occurrence of any Event of Default specified in the Credit
Agreement, each Subsidiary Guarantor hereby irrevocably authorizes each Lender at any time and from
time to time without notice to such Subsidiary Guarantor or any other Subsidiary Guarantor, any
such notice being expressly waived by each Subsidiary Guarantor, to set off and appropriate and
apply any and all deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such
Lender to or for the credit or the account of such Subsidiary Guarantor, or any part thereof in
such amounts as such Lender may elect, against and on account of the obligations and liabilities of
such Subsidiary Guarantor to such Lender hereunder and claims of every nature and description of
such Lender against such Subsidiary Guarantor, in any currency, whether arising hereunder, under
the Credit Agreement, the other Loan Documents or otherwise, as such Lender may elect, whether or
not the Administrative Agent or any Lender has made any demand for payment and although such
obligations, liabilities and claims may be contingent or unmatured. Each Lender agrees to notify
such Subsidiary Guarantor promptly of any such set-off and the application made by such Lender,
provided that the failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this paragraph are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which such Lender may have.
5. No Subrogation. Notwithstanding any payment or payments made by any of the Subsidiary
Guarantors hereunder or any set-off or application of funds of any of the Subsidiary Guarantors by
any Lender, no Subsidiary Guarantor shall be entitled to be subrogated to any of the rights of the
Administrative Agent or any Lender against the Borrower or any other Guarantor or any guarantee or
right of offset held by any Lender for the payment of the Obligations, nor shall any Subsidiary
Guarantor seek or be entitled to seek any contribution or reimbursement from the Borrower or any
other Guarantor in respect of payments made by such Subsidiary Guarantor hereunder, until all
amounts owing to the Administrative Agent and the Lenders on account of the Obligations are paid in
full and the Revolving Credit Commitments are terminated. If any amount shall be paid to any
Subsidiary Guarantor on account of such subrogation rights at any time when all of the Obligations
shall not have been paid in full, such amount shall be held by such Subsidiary Guarantor in trust
for the Administrative Agent and the Lenders, segregated from other funds of such Subsidiary
Guarantor, and shall, forthwith upon receipt by such Subsidiary Guarantor, be turned over to the
Administrative Agent in the exact form received by such Subsidiary Guarantor (duly indorsed by such
Subsidiary Guarantor to the Administrative Agent, if required), to be applied against the
obligations, whether matured or unmatured, in such order as the Administrative Agent may determine.
6. Amendments, etc. with Respect to the Obligations; Waiver of Rights. Each Subsidiary
Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights
against any Subsidiary Guarantor and without notice to or further assent by any Subsidiary
Guarantor, any demand for payment of any of the Obligations made by the Administrative Agent or any
Lender may be rescinded by such party and any of the obligations continued, and the Obligations, or
the liability of any other party upon or for any part thereof, or any collateral security or
guarantee therefor or
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right of offset with respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or released by the
Administrative Agent or any Lender and the Credit Agreement, the other Loan Documents, any other
collateral security document or other guarantee or document in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Administrative Agent and/or any
Lender may deem advisable from time to time, and any guarantee or right of offset at any time held
by the Administrative Agent or any Lender for the payment of the Obligations may be sold,
exchanged, waived, surrendered or released. Neither the Agent nor any Lender shall have any
obligation to protect, secure, perfect or insure any Lien at any time held as security for the
Obligations or for this Guarantee or any property subject thereto. When making any demand
hereunder against any of the Subsidiary Guarantors, the Administrative Agent or any Lender may, but
shall be under no obligation to, make a similar demand on the Borrower or any other Subsidiary
Guarantor or guarantor, and any failure by the Administrative Agent or any Lender to make any such
demand or to collect any payments from the Borrower or any such other Subsidiary Guarantor or
guarantor or any release of the Borrower or such other Subsidiary Guarantor or guarantor shall not
relieve any of the Subsidiary Guarantors in respect of which a demand or collection is not made or
any of the Subsidiary Guarantors not so released of their several obligations or liabilities
hereunder, and shall not impair or affect the rights and remedies, express or implied, or as a
matter of law, of the Administrative Agent or any Lender against any of the Subsidiary Guarantors.
For the purposes hereof “demand” shall include the commencement and continuance of any legal
proceedings.
7. Guarantee Absolute and Unconditional. Each Subsidiary Guarantor waives any and all notice
of the creation, renewal, extension or accrual of any of the Obligations and notice of or proof of
reliance by the Administrative Agent or any Lender upon this Guarantee or acceptance of this
Guarantee, the Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance upon this Guarantee;
and all dealings between the Borrower or any of the Subsidiary Guarantors and the Administrative
Agent or any Lender shall likewise be conclusively presumed to have been had or consummated in
reliance upon this Guarantee. Each Subsidiary Guarantor waives diligence, presentment, protest,
demand for payment and notice of default or nonpayment to or upon the Borrower or any of the
Subsidiary Guarantors with respect to the Obligations. Each Subsidiary Guarantor understands and
agrees that this Guarantee shall be construed as a continuing, absolute and unconditional guarantee
of payment without regard to (a) the validity, regularity or enforceability of the Credit
Agreement, any other Loan Document, any of the obligations or any guarantee or right of offset with
respect thereto at any time or from time to time held by the Administrative Agent or any Lender (b)
any defense, set-off or counterclaim (other than a defense of payment or performance) which may at
any time be available to or be asserted by the Borrower against the Administrative Agent or any
Lender, or (c) any other circumstance whatsoever (with or without notice to or knowledge of the
Borrower or such Subsidiary Guarantor) which constitutes, or might be construed to constitute, an
equitable or legal discharge of the Borrower for the Obligations, or of such Subsidiary Guarantor
under this Guarantee, in bankruptcy or in any other instance. When pursuing its rights and
remedies hereunder against any Subsidiary Guarantor, the Administrative Agent and any Lender may,
but shall be under no obligation to, pursue such rights and remedies as it may have against the
Borrower or any other Person or against any guarantee for the Obligations or any right of offset
with respect thereto, and any failure by the Administrative Agent or any Lender to pursue such
other rights or remedies or to collect any payments from the Borrower or any such other Person or
to realize upon such guarantee or to exercise any such right of offset, or any release of the
Borrower or any such other Person or such guarantee or right of offset, shall not relieve such
Subsidiary Guarantor of any liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the Administrative Agent or
any Lender against such Subsidiary Guarantor. This Guarantee shall remain in full force and effect
and be binding in accordance with and to the extent of its terms upon each Subsidiary Guarantor and
the successors and assigns thereof, and shall inure to the benefit of the
Administrative Agent and the Lenders, and their respective successors, indorsees, transferees
and assigns, until all the Obligations and the obligations of each Subsidiary Guarantor under this
Guarantee shall have been satisfied by payment in full and the Revolving Credit Commitments shall
be terminated, notwithstanding that from time to time during the term of the Credit Agreement the
Borrower may be free from any Obligations.
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8. Reinstatement. This Guarantee shall continue to be effective, or be reinstated, as the
case may be, if at any time payment, or any part thereof, of any of the Obligations is rescinded or
must otherwise be restored or returned by the Administrative Agent or any Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any
Subsidiary Guarantor, or upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, the Borrower or any Subsidiary Guarantor or any
substantial part of its property, or otherwise, all as though such payments had not been made.
9. Payments. Each Subsidiary Guarantor hereby guarantees that payments hereunder will be paid
to the Administrative Agent without set-off or counterclaim in Dollars or other Agreed Currency in
which such Obligations are payable at the office of the Administrative Agent located at 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, X.X.X. or such Applicable Payment Office as may be specified for
any of the Obligations payable in any other Agreed Currency.
10. Representations and Warranties. Each Subsidiary Guarantor hereby represents and warrants
that the representations and warranties set forth in Article IV of the Credit Agreement as they
relate to such Subsidiary Guarantor, each of which is hereby incorporated herein by reference, are
true and correct, and the Administrative Agent and each Lender shall be entitled to rely on each of
them as if they were fully set forth herein, provided that each reference in each such
representation and warranty to the Borrower’s knowledge shall, for the purposes of this paragraph,
be deemed to be a reference to such Subsidiary Guarantor’s knowledge.
Each Subsidiary Guarantor agrees that the foregoing representations and warranties shall be
deemed to have been made by such Subsidiary Guarantor on the date of each borrowing by the
Borrower, and on the date of issuance of each Letter of Credit, under the Credit Agreement on and
as of such date of borrowing or issuance as though made hereunder on and as of such date (or, if
stated to relate to an earlier date, as of such earlier date).
11. Covenants. Each Subsidiary Guarantor hereby agrees that, from and after the Closing Date
and so long as the Revolving Credit Commitments remain in effect, any Loan or Letter of Credit
remains outstanding and unpaid or any other amount is owing to any Lender or the Administrative
Agent under the Credit Agreement or any other Loan Document, such Subsidiary Guarantor shall take,
or shall refrain from taking, as the case may be, all actions that are necessary to be taken or not
taken so that no violation of any provision, covenant or agreement contained in Articles VI or VII
of the Credit Agreement, and so that no Default or Event of Default, is caused by any act or
failure to act of such Subsidiary Guarantor or any of its Subsidiaries.
12. Severability. Any provision of this Guarantee which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
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13. Paragraph Headings. The paragraph headings used in this Guarantee are for convenience of
reference only and are not to affect the construction hereof or be taken into consideration in the
interpretation hereof.
14. No Waiver; Cumulative Remedies. Neither the Administrative Agent nor any Lender shall by
any act (except by a written instrument pursuant to paragraph 15 hereof), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced
in any Default or Event of Default or in any breach of any of the terms and conditions hereof. No
failure to exercise, nor any delay in exercising, on the part of the Administrative Agent or any
Lender, any right, power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A waiver by the
Administrative Agent or any Lender of any right or remedy hereunder on any one occasion shall not
be construed as a bar to any right or remedy which the Administrative Agent or such Lender would
otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may
be exercised singly or concurrently and are not exclusive of any rights or remedies provided by
law.
15. Integration; Waivers and Amendments; Successors and Assigns; Governing Law. This
Guarantee and the other Loan Documents represent the agreement of each Subsidiary Guarantor with
respect to the subject matter hereof, and there are no promises or representations by the
Administrative Agent or any Lender relative to the subject matter hereof not reflected herein or in
the other Loan Documents. None of the terms or provisions of this Guarantee may be waived, amended
or supplemented or otherwise modified except by a written instrument executed by each Subsidiary
Guarantor and the Administrative Agent, provided that any provision of this Guarantee may be waived
by the Administrative Agent and the Lenders in a letter or agreement executed by the Administrative
Agent or by telex or facsimile transmission from the Administrative Agent. This Guarantee shall be
binding upon the successors and assigns of each Subsidiary Guarantor and shall inure to the benefit
of the Administrative Agent and the Lenders and their respective successors and assigns. This
Guarantee shall be governed by and be construed and interpreted in accordance with the law of the
State of New York.
16. Notices. All notices, requests and demands to or upon the Subsidiary Guarantors or the
Administrative Agent or any Lender to be effective shall be in writing (including by telecopy),
and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made
when delivered by hand, or, in the case of mail, 3 days after deposit in the postal system, first
class postage prepaid, or, in the case of telecopy notice, when received, addressed to a party at
the address set forth in the Credit Agreement for the Subsidiary Guarantors.
17. Judgment Currency. If for the purposes of obtaining judgment in any court it is necessary
to convert a sum due from any Subsidiary Guarantor hereunder in the currency expressed to be
payable herein (the “specified currency”) into another currency, the parties hereto agree,
to the fullest extent that they may effectively do so, that the rate of exchange used shall be that
at which in accordance with normal banking procedures the Administrative Agent could purchase the
specified currency with such other currency at the Administrative Agent’s main New York City office
on the Business Day preceding that on which final, non-appealable judgment is given. The
obligations of each Subsidiary Guarantor in respect of any sum due hereunder shall, notwithstanding
any judgment in a currency other than the specified currency, be discharged only to the extent that
on the Business Day following receipt by any holder of Obligations (including the Administrative
Agent and the Issuing Lender), as the case may be, of any sum adjudged to be so due in such other
currency such holder of Obligations (including the Administrative Agent and the Issuing Lender), as
the case may be, may in accordance with normal, reasonable banking procedures purchase the
specified currency with such other currency. If the amount of the specified currency so purchased
is less than the sum originally due to such holder of Obligations
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(including the Administrative Agent and the Issuing Lender), as the case may be, in the
specified currency, each Subsidiary Guarantor agrees to the fullest extent that it may effectively
do so, as a separate obligation and notwithstanding any such judgment, to indemnify such holder of
Obligations (including the Administrative Agent and the Issuing Lender), as the case may be,
against such loss, and if the amount of the specified currency so purchased exceeds (a) the sum
originally due to any holder of Obligations (including the Administrative Agent and the Issuing
Lender), as the case may be, in the specified currency and (b) amounts shared with other holders of
Obligations as a result of allocations of such excess as a disproportionate payment to such other
holder of Obligations under Section 2.12 of the Credit Agreement, such holder of Obligations
(including the Administrative Agent and the Issuing Lender), as the case may be, agrees, by
accepting the benefits hereof, to remit such excess to such Subsidiary Guarantor.
18. Counterparts. This Guarantee may be executed by one or more of the parties hereto on any
number of separate counterparts and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
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IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be duly executed and
delivered by its duly authorized officer as of the day and year first above written.
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LANDSTAR ACQUISITION CORPORATION
LANDSTAR CANADA HOLDINGS, INC.
LANDSTAR CAPACITY SERVICES, INC.
LANDSTAR CARRIER SERVICES, INC.
LANDSTAR CORPORATE SERVICES, INC.
LANDSTAR EXPRESS AMERICA, INC.
LANDSTAR GEMINI, INC.
LANDSTAR GLOBAL LOGISTICS, INC.
LANDSTAR INWAY, INC.
LANDSTAR XXXXX, INC.
LANDSTAR RANGER, INC.
LANDSTAR T.L.C., INC.
RISK MANAGEMENT CLAIM SERVICES, INC.
SIGNATURE INSURANCE COMPANY
SIGNATURE TECHNOLOGY SERVICES, INC.
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EXHIBIT A TO SUBSIDIARIES GUARANTEE
SUBSIDIARIES GUARANTEE SUPPLEMENT
Reference is made to the Subsidiaries Guarantee, dated as of ___, 2008 (as amended,
supplemented or otherwise modified from time to time, the “Subsidiaries Guarantee”; terms
defined therein being used herein as therein defined), made by the parties thereto in favor of
JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Administrative
Agent”) for the Lenders (together with certain of their Affiliates as provided in the
Subsidiaries Guarantee, the “Lenders”) parties to the Credit Agreement, dated as of June
27, 2008, among Landstar System Holdings, Inc., Landstar System, Inc., the Subsidiaries of the
Borrower signatories thereto, the Lenders, and the Administrative Agent.
The undersigned hereby acknowledges that it has received and reviewed a copy of the
Subsidiaries Guarantee, and hereby agrees, effective as of the date hereof:
(a) to join the Subsidiaries Guarantee as a Subsidiary Guarantor party thereto;
(b) to be bound by all covenants, agreements and acknowledgements attributable to a Subsidiary
Guarantor in the Subsidiaries Guarantee;
(c) to perform all obligations required of it as a Subsidiaries Guarantor by the Subsidiaries
Guarantee; and
(d) that the undersigned shall be deemed to be a Subsidiary Guarantor under the Credit
Agreement and that Schedule 1.1(b) of the Credit Agreement is hereby supplemented by adding
at the end thereof, under the heading “Subsidiary Guarantor”, the name “[NAME OF NEW SUBSIDIARY]”
and under the heading “Jurisdiction of Incorporation”, the word “[STATE OF INCORPORATION]”.
The undersigned hereby represents and warrants that the representations and warranties with
respect to it contained in, or made or deemed made by it in, Section 10 of the Subsidiaries
Guarantee are true and correct on the date hereof.
THIS SUBSIDIARIES GUARANTEE SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned has caused this Subsidiaries Guarantee Supplement to be
duly executed and delivered in New York, New York by its proper and duly authorized officer as of
this _________ day of __________________, 2___.
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[NAME OF NEW SUBSIDIARY]
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Date: __________________
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EXHIBIT C-3 TO CREDIT AGREEMENT
FORM OF L/C GUARANTEE
L/C GUARANTEE, dated as of ____________ ___, 2008 by LANDSTAR SYSTEM, INC., a Delaware corporation
(the “Guarantor”), in favor of JPMORGAN CHASE BANK, N.A., as administrative agent (in such
capacity, the “Administrative Agent”) for the Issuing Lender and the Lenders that are
parties to the Credit Agreement defined below (together with the Issuing Lender, collectively the
“Lenders”).
WITNESSETH:
WHEREAS, certain Subsidiaries of the Guarantor (collectively, the “Subsidiary
Guarantors”) are parties to the Credit Agreement, dated as of June 27, 2008, with Landstar
System Holdings, Inc., the Guarantor, the Administrative Agent, and the lenders parties thereto
(the “Credit Agreement”);
WHEREAS, the Guarantor owns directly or indirectly all of the issued and outstanding stock of
each Subsidiary Guarantor and expects to derive substantial benefits from the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and to induce the Administrative Agent and
the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective
loans and other extensions of credit to the Borrower and the Subsidiary Guarantors under the Credit
Agreement, the Guarantor hereby agrees with the Administrative Agent, for the ratable benefit of
the Lenders, as follows:
1. Defined Terms. As used in this Guarantee, terms defined in the Credit Agreement are used
herein as therein defined, and the following terms shall have the following meanings:
“Guarantee” shall mean this L/C Guarantee, as amended, supplemented or otherwise
modified from time to time.
“Obligations” shall mean the unpaid principal of and interest on (including, without
limitation, interest accruing after the maturity of the Loans and interest accruing after the
filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, owing by the respective Subsidiary Guarantor, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the Loans and all other obligations and
liabilities of the respective Subsidiary Guarantor to the Administrative Agent or the Lenders,
whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter
incurred, which may arise under, out of, or in connection with, the Credit Agreement, the Letters
of Credit, the Applications entered into with the Issuing Lender in respect of the Letters of
Credit, the other Loan Documents or any other document made, delivered or given in connection
therewith, whether on account of principal, interest, Reimbursement Obligations and other L/C
Obligations, fees, Letter of Credit commissions, indemnities, costs, expenses (including, without
limitation, all reasonable fees and disbursements of counsel to the Administrative Agent, the
Issuing Lender or any L/C Participant that are required to be paid by the respective Subsidiary
Guarantor pursuant to the terms of the Credit Agreement) or otherwise.
2. Guarantee. (a) The Guarantor hereby unconditionally and irrevocably, guarantees to the
Administrative Agent, the Issuing Lender and the L/C Participants and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment by each respective Subsidiary
Guarantor when due (whether at the stated maturity, by acceleration or otherwise) of the
Obligations, in lawful money of the United States or any other Agreed Currency in which such
Obligations may be payable, and the Guarantor further agrees to pay any and all expenses
(including, without limitation, all
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reasonable fees and disbursements of counsel) which may be paid or incurred by the
Administrative Agent, the Issuing Lender or any L/C Participant in enforcing, or obtaining advice
of counsel in respect of, any rights with respect to, or collecting, any or all of the Obligations
and/or enforcing any rights with respect to, or collecting against, the Guarantor under this
Guarantee. This Guarantee shall remain in full force and effect until the obligations are paid in
full and the Revolving Credit Commitments are terminated, notwithstanding that from time to time
prior thereto the Borrower or any Subsidiary Guarantors may be free from any Obligations. This
Guarantee is a guarantee of payment when due and not of collection.
(b) No payment or payments made by any Subsidiary Guarantor, the Guarantor or any other Person
or received or collected by the Administrative Agent, the Issuing Lender or any L/C Participant
from any Subsidiary Guarantor, the Guarantor or any other Person by virtue of any action or
proceeding or any set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of the Guarantor hereunder which shall, notwithstanding any such
payment or payments other than payments made by the Guarantor in respect of the Obligations or
payments received or collected from the Guarantor in respect of the Obligations, remain liable for
the Obligations until the Obligations are paid in full and the Revolving Credit Commitments are
terminated.
(c) The Guarantor agrees that whenever, at any time, or from time to time, it shall make any
payment to the Administrative Agent, the Issuing Lender or any L/C Participant on account of its
liability hereunder, it will notify the Administrative Agent in writing that such payment is made
under this Guarantee for such purpose.
3. Right of Set-off. Upon the occurrence of any Event of Default specified in the Credit
Agreement, the Guarantor hereby irrevocably authorizes the Issuing Lender or any L/C Participant at
any time and from time to time without notice to the Guarantor, any such notice being expressly
waived by the Guarantor, to set off and appropriate and apply any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by the Issuing Lender or such L/C
Participant to or for the credit or the account of the Guarantor, or any part thereof in such
amounts as the Issuing Lender or such L/C Participant may elect, against and on account of the
obligations and liabilities of the Guarantor to the Issuing Lender or such L/C Participant
hereunder and claims of every nature and description of the Issuing Lender or such L/C Participant
against the Guarantor, in any currency, whether arising hereunder, under the Credit Agreement, the
other Loan Documents or otherwise, as such Lender may elect, whether or not the Administrative
Agent, the Issuing Lender or any L/C Participant has made any demand for payment and although such
obligations, liabilities and claims may be contingent or unmatured. The Issuing Lender and each
L/C Participant agree to notify the Guarantor promptly of any such set-off and the application made
by the Issuing Lender or such L/C Participant, provided that the failure to give such notice shall
not affect the validity of such set-off and application. The rights of the Issuing Lender and each
L/C Participant under this paragraph are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which the Issuing Lender and such L/C Participant may
have.
4. No Subrogation, Contribution, Reimbursement or Indemnity. Notwithstanding anything to the
contrary in this Guarantee, the Guarantor hereby irrevocably waives all rights which may have
arisen in connection with this Guarantee to be subrogated to any of the rights (whether
contractual, under the Bankruptcy Code, including section 509 thereof, under common law or
otherwise) of the Administrative Agent, the Issuing Lender or any L/C Participant against the
Company or against the Administrative Agent, the Issuing Lender or any L/C Participant for the
payment of the obligations. The Guarantor hereby further irrevocably waives all contractual,
common law, statutory or other rights of
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reimbursement, contribution, exoneration or indemnity (or any similar right) from or against
any Subsidiary Guarantor or any other Person which may have arisen in connection with this
Guarantee. So long as the obligations remain outstanding, if any amount shall be paid by or on
behalf of any Subsidiary Guarantor to the Guarantor on account of any of the rights waived in this
paragraph, such amount shall be held by the Guarantor in trust, segregated from other funds of such
Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the
Administrative Agent in the exact form received by the Guarantor (duly indorsed by the Guarantor to
the Administrative Agent, if required), to be applied against the Obligations, whether matured or
unmatured, in such order as the Administrative Agent may determine. The provisions of this
paragraph shall survive the term of this Guarantee and the payment in xxxx of the obligations and
the termination of the Revolving Credit Commitments.
5. Amendments, etc. with Respect to the Obligations; Waiver of Rights. The Guarantor shall
remain obligated hereunder notwithstanding that, without any reservation of rights against the
Guarantor and without notice to or further assent by the Guarantor, any demand for payment of any
of the Obligations made by the Administrative Agent, Issuing Lender or any L/C Participant may be
rescinded by such party and any of the obligations continued, and the Obligations, or the liability
of any other party upon or for any part thereof, or any guarantee therefor or right of offset with
respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended,
modified, accelerated, compromised, waived, surrendered or released by the Administrative Agent,
the Issuing Lender or any L/C Participant and the Credit Agreement, the other Loan Documents or
other guarantee or document in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent, the Issuing Lender and/or any L/C
Participant may deem advisable from time to time, and any guarantee or right of offset at any time
held by the Administrative Agent, the Issuing Lender or any L/C Participant for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released. When making any demand
hereunder against the Guarantor, the Administrative Agent, the Issuing Lender or any L/C
Participant may, but shall be under no obligation to, make a similar demand on the respective
Subsidiary Guarantor or any guarantor, and any failure by the Administrative Agent or any Lender to
make any such demand or to collect any payments from such respective Subsidiary Guarantor or such
other guarantor or any release of such respective Subsidiary Guarantor or such other guarantor
shall not relieve the Guarantor, and shall not impair or affect the rights and remedies, express or
implied, or as a matter of law, of the Administrative Agent, the Issuing Lender or any L/C
Participant against the Guarantor. For the purposes hereof “demand” shall include the commencement
and continuance of any legal proceedings.
6. Guarantee Absolute and Unconditional. The Guarantor waives any and all notice of the
creation, renewal, extension or accrual of any of the Obligations and notice of or proof of
reliance by the Administrative Agent, the Issuing Lender or any L/C Participant upon this Guarantee
or acceptance of this Guarantee, the Obligations, and any of them, shall conclusively be deemed to
have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance
upon this Guarantee; and all dealings between the respective Subsidiary Guarantor or the Guarantor
and the Administrative Agent, the Issuing Lender or any L/C Participant shall likewise be
conclusively presumed to have been had or consummated in reliance upon this Guarantee. The
Guarantor waives diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon the respective Subsidiary Guarantor or the Guarantor with respect to the
Obligations. The Guarantor understands and agrees that this Guarantee shall be construed as a
continuing, absolute and unconditional guarantee of payment without regard to (a) the validity,
regularity or enforceability of the Credit Agreement, any other Loan Document, any of the
Obligations or guarantee or right of offset with respect thereto at any time or from time to time
held by the Administrative Agent, the Issuing Lender or any L/C Participant, (b) any defense,
set-off or counterclaim (other than a defense of payment or performance) which may at any time be
available to or be asserted by the respective Subsidiary Guarantor against the Administrative
Agent, the Issuing Lender or any L/C Participant, or (c) any other circumstance whatsoever (with or
without notice to or knowledge
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of the respective Subsidiary Guarantor or the Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the respective Subsidiary Guarantor for
the Obligations, or of the Guarantor under this Guarantee, in bankruptcy or in any other instance.
When pursuing its rights and remedies hereunder against the Guarantor, the Administrative Agent,
the Issuing Lender and any L/C Participant may, but shall be under no obligation to, pursue such
rights and remedies as it may have against the respective Subsidiary Guarantor or any other Person
or against any guarantee for the obligations or any right of offset with respect thereto, and any
failure by the Administrative Agent, the Issuing Lender or any L/C Participant to pursue such other
rights or remedies or to collect any payments from the respective Subsidiary Guarantor or any such
other Person or to realize upon any such guarantee or to exercise any such right of offset, or any
release of the respective Subsidiary Guarantor or any such other Person or any such guarantee or
right of offset, shall not relieve the Guarantor of any liability hereunder, and shall not impair
or affect the rights and remedies, whether express, implied or available as a matter of law, of the
Administrative Agent, the Issuing Lender or any L/C Participant against the Guarantor. This
Guarantee shall remain in full force and effect and be binding in accordance with and to the extent
of its terms upon the Guarantor and the successors and assigns thereof, and shall inure to the
benefit of the Administrative Agent, the Issuing Lender and the L/C Participants, and their
respective successors, indorsees, transferees and assigns, until all the Obligations and the
obligations of the Guarantor under this Guarantee shall have been satisfied by payment in full and
the Revolving Credit Commitments shall be terminated, notwithstanding that from time to time during
the term of the Credit Agreement the respective Subsidiary Guarantor may be free from any
Obligations.
7. Reinstatement. This Guarantee shall continue to be effective, or be reinstated, as the
case may be, if at any time payment, or any part thereof, of any of the Obligations is rescinded or
must otherwise be restored or returned by the Administrative Agent, the Issuing Lender or any L/C
Participant upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the
respective Subsidiary Guarantor or the Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the respective
Subsidiary Guarantor or the Guarantor or any substantial part of its property, or otherwise, all as
though such payments had not been made.
8. Payments. The Guarantor hereby guarantees that payments hereunder will be paid to the
Administrative Agent without set-off or counterclaim in Dollars or other Agreed Currency in which
such Obligations are payable at the office of the Administrative Agent located at 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, X.X.X. or such Applicable Payment Office as may be specified for any of
the Obligations payable in any other Agreed Currency.
9. Representations and Warranties. The Guarantor hereby represents and warrants that the
representations and warranties set forth in Article IV of the Credit Agreement as they relate to
the Guarantor, each of which is hereby incorporated herein by reference, are true and correct, and
the Administrative Agent, the Issuing Lender and each L/C Participant shall be entitled to rely on
each of them as if they were fully set forth herein, provided that each reference in each such
representation and warranty to the respective Subsidiary Guarantor’s knowledge shall, for the
purposes of this paragraph, be deemed to be a reference to the Guarantor’s knowledge.
The Guarantor agrees that the foregoing representations and warranties shall be deemed to have
been made by the Guarantor on the date of issuance of each Letter of Credit, under the Credit
Agreement on and as of such date of issuance as though made hereunder on and as of such date (or,
if stated to relate to an earlier date, as of such earlier date).
10. Covenants. The Guarantor hereby agrees that, from and after the Closing Date and so long
as any Letter of Credit remains outstanding and unpaid or any other amount is owing to the Issuing
Lender, any L/C Participant or the Administrative Agent under the Credit Agreement or any other
Loan Document, the Guarantor shall take, or shall refrain from taking, as the case may be, all
actions that are necessary to be taken or not taken so that no violation of any provision, covenant
or agreement contained in Articles VI or VII of the Credit Agreement, and so that no Default or
Event of Default, is caused by any act or failure to act of the Guarantor or any of its
Subsidiaries.
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11. Severability. Any provision of this Guarantee which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
12. Paragraph Headings. The paragraph headings used in this Guarantee are for convenience of
reference only and are not to affect the construction hereof or be taken into consideration in the
interpretation hereof.
13. No Waiver; Cumulative Remedies. Neither the Administrative Agent, the Issuing Lender nor
any L/C Participant shall by any act (except by a written instrument pursuant to paragraph 14
hereof), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in exercising, on the part of
the Administrative Agent, the Issuing Lender or any L/C Participant, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or
privilege hereunder shall preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. A waiver by the Administrative Agent, the Issuing Lender or any
L/C Participant of any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which the Administrative Agent, the Issuing Lender or such L/C
Participant would otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of any rights or
remedies provided by law.
14. Integration; Waivers and Amendments; Successors and Assigns; Governing Law. This
Guarantee and the other Loan Documents represent the agreement of the Guarantor with respect to the
subject matter hereof, and there are no promises or representations by the Administrative Agent,
the Issuing Lender or any L/C Participant relative to the subject matter hereof not reflected
herein or in the other Loan Documents. None of the terms or provisions of this Guarantee may be
waived, amended or supplemented or otherwise modified except by a written instrument executed by
the Guarantor and the Administrative Agent, provided that any provision of this Guarantee may be
waived by the Administrative Agent, the Issuing Lender and the L/C Participants in a letter or
agreement executed by the Administrative Agent or by e-mail or facsimile transmission from the
Administrative Agent. This Guarantee shall be binding upon the successors and assigns of the
Guarantor and shall inure to the benefit of the Administrative Agent, the Issuing Lender and the
L/C Participants and their respective successors and assigns. This Guarantee shall be governed by
and be construed and interpreted in accordance with the law of the State of New York.
15. Notices. All notices, requests and demands to or upon the Guarantor or the Administrative
Agent, the Issuing Lender or any L/C Participant to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to have been duly given
or made when delivered by hand, or, in the case of mail, 3 days after deposit in the postal system,
first class postage prepaid, or, in the case of telecopy notice, when received, addressed to a
party at the address set forth in the Credit Agreement, in the case of the Administrative Agent,
the Issuing Lender or the L/C Participants or, in the case of the Guarantor, to the following
address:
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Landstar System, Inc.
00000 Xxxxxx Xxxx Xxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Telecopy: 000-000-0000
16. Judgment Currency. If for the purposes of obtaining judgment in any court it is necessary
to convert a sum due from the Guarantor hereunder in the currency expressed to be payable herein
(the “specified currency”) into another currency, the parties hereto agree, to the fullest
extent that they may effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent could purchase the specified
currency with such other currency at the Administrative Agent’s main New York City office on the
Business Day preceding that on which final, non-appealable judgment is given. The obligations of
the Guarantor in respect of any sum due hereunder shall, notwithstanding any judgment in a currency
other than the specified currency, be discharged only to the extent that on the Business Day
following receipt by any holder of Obligations (including the Administrative Agent or the Issuing
Lender), as the case may be, of any sum adjudged to be so due in such other currency such holder of
Obligations (including the Administrative Agent or the Issuing Lender), as the case may be, may in
accordance with normal, reasonable banking procedures purchase the specified currency with such
other currency. If the amount of the specified currency so purchased is less than the sum
originally due to such holder of Obligations (including the Administrative Agent or the Issuing
Lender), as the case may be, in the specified currency, the Guarantor agrees to the fullest extent
that it may effectively do so, as a separate obligation and notwithstanding any such judgment, to
indemnify such holder of Obligations (including the Administrative Agent or the Issuing Lender), as
the case may be, against such loss, and if the amount of the specified currency so purchased
exceeds (a) the sum originally due to any holder of Obligations (including the Administrative Agent
or the Issuing Lender), as the case may be, in the specified currency and (b) amounts shared with
other holders of Obligations as a result of allocations of such excess as a disproportionate
payment to such other holder of Obligations under Section 2.12 of the Credit Agreement, such holder
of Obligations (including the Administrative Agent or the Issuing Lender), as the case may be,
agrees, by accepting the benefits hereof, to remit such excess to the Guarantor.
17. Counterparts. This Guarantee may be executed by one or more of the parties hereto on any
number of separate counterparts and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly executed and delivered
by its duly authorized officer as of the day and year first above written.
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LANDSTAR SYSTEM, INC.
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By: |
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Name: |
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Title: |
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EXHIBIT D TO CREDIT AGREEMENT
FORM OF CLOSING CERTIFICATE
This Closing Certificate is delivered to you by the undersigned pursuant to Section 5.1(b) of
the Credit Agreement, dated as of June 27, 2008 (as amended, supplemented or otherwise modified
from time to time, the “Credit Agreement”), among Landstar System Holdings, Inc. (the
“Borrower”), Landstar System, Inc., the Subsidiaries of the Borrower signatories thereto,
certain Lenders parties thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. Unless
otherwise defined herein, terms used herein have the meanings provided in the Credit Agreement.
The undersigned, being the duly elected and acting Vice President of the Borrower, hereby
certifies to the Administrative Agent and the Lenders that:
i. The representations and warranties of the Borrower and the Parent set forth in the
Credit Agreement or which are contained in any certificate, document or financial or other
statement furnished pursuant to or in connection with the Credit Agreement are correct in
all material respects on and as of the date hereof as if made on and as of such date (or, if
stated to relate to an earlier date, as of such earlier date).
ii. Immediately prior to and immediately after the making of the extensions of credit
under the Credit Agreement on the Closing Date, no Default or Event of Default has occurred
and is continuing under the Credit Agreement.
iii. On and as of the date hereof, no strikes or other labor disputes are pending or,
to the knowledge of the undersigned, threatened against the Parent, the Borrower or any of
its Subsidiaries, and neither the Parent, the Borrower nor any of its Subsidiaries are in
violation of the Fair Labor Standards Act or any other applicable Requirement of Law dealing
with labor or employment matters (including, without limitation, employee benefits) that
(individually or in the aggregate) could reasonably be expected to have a Material Adverse
Effect.
In witness whereof, we have hereto set our names on this ___ day of ____________, 2008.
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EXHIBIT E-I TO CREDIT AGREEMENT
FORM
OF OPINION OF DEBEVOISE & XXXXXXXX LLP
[TO BE IN FORM ACCEPTABLE TO THE ADMINISTRATIVE AGENT]
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EXHIBIT E-2 TO CREDIT AGREEMENT
FORM OF OPINION OF BORROWER’S GENERAL COUNSEL
[TO BE IN FORM ACCEPTABLE TO THE ADMINISTRATIVE AGENT]
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EXHIBIT E-3 TO CREDIT AGREEMENT
FORM OF OPINION OF XXXXXX AND CALDER
[TO BE IN FORM ACCEPTABLE TO THE ADMINISTRATIVE AGENT]
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EXHIBIT F TO CREDIT AGREEMENT
FORM OF
ASSIGNMENT AND ACCEPTANCE
This Assignment and Acceptance (the “Assignment and Acceptance”) is dated as of the
Effective Date set forth below and is entered into by and between [___________________________] (the
“Assignor”) and [___________________________] (the “Assignee”). Capitalized terms used but not
defined herein shall have the meanings given to them in the Credit Agreement identified below (as
amended, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed
to and incorporated herein by reference and made a part of this Assignment and Acceptance as if set
forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to
and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the
Effective Date inserted by the Administrative Agent as contemplated below (a) all of the Assignor’s
rights and obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and obligations of the
Assignor under the respective facilities identified below (including without limitation any letters
of credit, guarantees, and swingline loans included in such facilities) and (b) to the extent
permitted to be assigned under applicable law, all claims, suits, causes of action and any other
right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown,
arising under or in connection with the Credit Agreement, any other documents or instruments
delivered pursuant thereto or the loan transactions governed thereby or in any way based on or
related to any of the foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity related to the rights
and obligations sold and assigned pursuant to clause (a) above (the rights and obligations sold and
assigned pursuant to clauses (a) and (b) above being referred to herein collectively as, the
“Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as
expressly provided in this Assignment and Acceptance, without representation or warranty by the
Assignor.
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Assignor: |
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Assignee: |
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[and is an Affiliate of _______________] |
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3. |
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Borrower:
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Landstar System Holdings, Inc. |
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4. |
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Administrative Agent:
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JPMorgan Chase Bank, N.A., |
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as the administrative agent under the Credit Agreement |
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5. |
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Credit Agreement:
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Credit Agreement dated as of June 27, 2008 among Landstar
System Holdings, Inc., Landstar System, Inc., the Subsidiaries of the Borrower
signatories thereto, the Lenders parties thereto, and JPMorgan Chase Bank, N.A., as
Administrative Agent |
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Aggregate Amount of |
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Amount of |
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Facility Assigned1: |
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Revolving Credit |
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Revolving Credit |
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Percentage Assigned |
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Revolving Credit |
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Commitment/Loans |
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Commitment/Loans |
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of Revolving Credit |
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Facility |
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for all Lenders* |
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Assigned* |
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Commitment/Loans2 |
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$
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$
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% |
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$
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$
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% |
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$
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$
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Effective Date: ____________, 2___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE
THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]
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1 |
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Fill in the appropriate terminology for the type(s) of
facilities under the Credit Agreement that are being assigned under this
Assignment. |
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Amount to be adjusted by the counterparties to take into account any payments
or prepayments made between the Trade Date and the Effective Date. |
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Set forth, to at least 9 decimals, as a percentage of
the Revolving Credit Commitment/Loans of all Lenders thereunder. |
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To be completed if the Assignor and the Assignee intend
that the minimum assignment amount is to be determined as of the Trade Date. |
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The terms set forth in this Assignment and Acceptance are hereby agreed to:
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Consented to and Accepted:
JPMORGAN CHASE BANK, N.A., as
Administrative Agent
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By: |
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Title: |
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Consented to:
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JPMORGAN CHASE BANK, N.A., as
Issuing Lender
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By: |
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Title: |
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LANDSTAR SYSTEM HOLDINGS, INC., as
Borrower
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By: |
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Title: |
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129
ANNEX 1
The Credit Agreement dated as of June 27, 2008 among Landstar System Holdings, Inc., Landstar
System, Inc., the Subsidiaries of the Borrower which are signatories thereto, the Lenders parties
thereto and JPMorgan Chase Bank, N.A., as Administrative Agent.
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ACCEPTANCE
1. Representations and Warranties.
1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any
lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the Credit Agreement or any
other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its
Subsidiaries or Affiliates or any other Person of any of their respective obligations under any
Loan Document.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power
and authority, and has taken all action necessary, to execute and deliver this Assignment and
Acceptance and to consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it meets all requirements of an Eligible Assignee under the Credit Agreement
(subject to receipt of such consents as may be required under the Credit Agreement), (iii) from and
after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender
thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered pursuant to Sections 6. 1 and 6.2 thereof, as applicable, and
such other documents and information as it has deemed appropriate to make its own credit analysis
and decision to enter into this Assignment and Acceptance and to purchase the Assigned Interest on
the basis of which it has made such analysis and decision independently and without reliance on the
Administrative Agent or any other Lender, and (v) attached to the Assignment and Acceptance is any
documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance
with their terms all of the obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.
2. Payments. From and after the Effective Date, the Administrative Agent shall make
all payments in respect of the Assigned Interest (including payments of principal, interest, fees
and other amounts) to the Assignee whether such amounts have accrued prior to, on or after the
Effective
Date. The Assignor and the Assignee shall make all appropriate adjustments in payments by the
Administrative Agent for periods prior to the Effective Date or with respect to the making of this
assignment directly between themselves.
3. General Provisions. This Assignment and Acceptance shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and assigns. This
Assignment and Acceptance may be executed in any number of counterparts, which together shall
constitute one instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Acceptance by telecopy shall be effective as delivery of a manually executed
counterpart of this Assignment and Acceptance. This Assignment and Acceptance shall be governed
by, and construed in accordance with, the laws of the State of New York.
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