MASTER CREDIT AGREEMENT
This MASTER CREDIT AGREEMENT is entered into as of March 27,
1996 among Matlack DE, Inc. (the "Company"), Matlack, Inc.
("MI"), Safeway Chemical Transportation, Inc. ("SCI"), Brite-Sol
Services, Inc. ("BSS"), (the Company, MI, SCI and BSS are
referred to individually and collectively as the "Borrower") Bank
of America Illinois ("BofA"), individually and as Collateral
Agent, and First Union National Bank ("FUNB") (collectively, "the
Banks", individually, "a Bank").
WHEREAS, BofA and FUNB have each entered into separate
commitments to extend credit to the Borrower whereby the
borrowing mechanics are set forth therein;
WHEREAS, the Banks and the Borrower desire to set forth the
terms and conditions for such credit facilities and to appoint
BofA as Collateral Agent;
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained herein, the parties agree as
follows:
ARTICLE I
DEFINITIONS
1.01 Certain Defined Terms. The following terms have the
following meanings:
"Acquisition" means any transaction or series of
related transactions for the purpose of or resulting,
directly or indirectly, in (a) the acquisition of all or
substantially all of the assets of a Person, or of any
business or division of a Person, (b) the acquisition of in
excess of 50% of the capital stock, partnership interests,
membership interests or equity of any Person, or otherwise
causing any Person to become a Subsidiary, or (c) a merger
or consolidation or any other combination with another
Person (other than a Person that is a Subsidiary) provided
that the Borrower or the Subsidiary is the surviving entity.
"Account Debtor" means any Person who is or who may
become obligated under or on account of an Account.
"Accounts" means all accounts receivable of a Person,
now owned and hereafter arising.
"Affiliate" means, as to any Person, any other Person
which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person.
A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and
policies of the other Person, whether through the ownership
of voting securities, membership interests, by contract, or
otherwise. Affiliate does not include Rollins Truck
Leasing, Corp. or Rollins Environmental Services, Inc.
"Agent-Related Persons" means BofA and any successor
agent arising hereunder, together with their respective
Affiliates, and the officers, directors, employees, agent
and attorneys-in-fact of such Persons and Affiliates.
"Agreement" means this Master Credit Agreement.
"Assigned Vehicle" means a Vehicle as to which the
Borrower shall have executed and delivered to Bank a
security agreement and mortgage on the Vehicle in form and
substance as required hereunder.
"Attorney Costs" means and includes all fees and
disbursements of any law firm or other external counsel, the
allocated cost of internal legal services and all
disbursements of internal counsel.
"Bank Agreements" means the loan agreement, note and
any other loan documents between each Bank and the Borrower
dated as of even date herewith.
"Bankruptcy Code" means the Federal Bankruptcy Reform
Act of 1978 (11 U.S.C. Section 101, et seq.).
"Borrowing Base" means, as of any date of determination
thereof, an amount equal to the sum of (x) 90% of the net
book value of unencumbered Equipment plus a 75% reserve for
replacement tires plus (y) 85% of all Eligible Accounts
outstanding at such date.
"Borrowing Base Certificate" means a certificate duly
executed by a Responsible Officer of the Company,
substantially in the form of Exhibit A.
"Business Day" means any day other than a Saturday,
Sunday or other day on which commercial banks in New York
City or Chicago, Illinois are authorized or required by law
to close and, if the applicable Business Day relates to any
offshore rate Loan, means such a day on which dealings are
carried on in the applicable offshore dollar interbank
market.
"CERCLA" has the meaning specified in the definition of
"Environmental Laws."
"Change of Control" means (i) the replacement of a
majority of the board of directors of Matlack Systems, Inc.,
the Borrower or any Subsidiary ("Matlack") from the
directors who constituted the board of directors on the
Effective Date for any reason other than death, retirement
or disability, and such replacement shall not have been
approved by the board of directors of Matlack as constituted
on the Effective Date (or as changed over time with the
approval of the board of directors of Matlack), or (ii) a
Person or entity or group of Persons or entities acting in
concert, other than the Rollins family, shall, as a result
of a tender or exchange offer, open market purchases,
privately negotiated purchases or otherwise, have become the
beneficial owner (within the meaning of Rule 13d.3 under the
Securities Exchange Act of 1934, as amended) of securities
of Matlack representing more than 50% of the voting stock of
Matlack.
"Closing Date" means the date on which all conditions
precedent set forth in the Bank Agreements are satisfied or
waived by the Banks.
"Code" means the Internal Revenue Code of 1986, and
regulations promulgated thereunder.
"Collateral" means Equipment and Accounts and proceeds
thereof now owned or hereafter acquired by the Borrower or
Subsidiaries in or upon which a Lien now or hereafter exists
in favor of the Collateral Agent whether under this
Agreement or under any other documents executed by any such
Person and delivered to the Collateral Agent.
"Collateral Agent" means Bank of America Illinois in
its capacity as collateral agent under this Agreement.
"Collateral Documents" means, collectively, (i) this
Agreement, the Bank Agreements, the Security Agreement, and
all other security agreements, mortgages, deeds of trust,
patent and trademark assignments, lease assignments,
guarantees and other similar agreements between the Borrower
or any Subsidiary and the Collateral Agent and/or the Banks,
now or hereafter delivered to the Banks pursuant to or in
connection with the transactions contemplated hereby, and
all financing statements (or comparable documents now or
hereafter filed in accordance with the Uniform Commercial
Code or comparable law) against the Borrower or any
Subsidiary as debtor in favor of the Collateral Agent as
secured party, and (ii) any amendments, supplements,
modifications, renewals, replacements, consolidations,
substitutions and extensions of any of the foregoing.
"Compliance Certificate" means a certificate
substantially in the form of Exhibit B.
"Consolidated Net Income" means for any period, the
consolidated net income of the Company and its Subsidiaries,
after deduction of all expenses, taxes, and other proper
charges, determined in accordance with GAAP.
"Consolidated Adjusted Net Worth" means with respect to
the Company and its Subsidiaries the sum of (i) the
Consolidated Net Worth of the Company and its Subsidiaries
at any time determined in accordance with GAAP plus (ii) the
amount remaining outstanding at such time of any
Subordinated Indebtedness, and (iii) 50% of deferred income
taxes.
"Consolidated Net Worth" means, at any time, the total
of shareholders' equity (including capital stock, additional
paid-in capital and retained earnings after deducting
treasury stock) of the Company and its consolidated
Subsidiaries prepared in accordance with GAAP.
"Contingent Obligation" means, as to any Person, any
direct or indirect liability of that Person, whether or not
contingent, with or without recourse, (a) with respect to
any Indebtedness, lease, dividend, letter of credit or other
obligation (the "primary obligations") of another Person
(the "primary obligor"), including any obligation of that
Person (i) to purchase, repurchase or otherwise acquire such
primary obligations or any security therefor, (ii) to
advance or provide funds for the payment or discharge of any
such primary obligation, or to maintain working capital or
equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet
item, level of income or financial condition of the primary
obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor to
make payment of such primary obligation, or (iv) otherwise
to assure or hold harmless the holder of any such primary
obligation against loss in respect thereof (each, a
"Guaranty Obligation"); (b) with respect to any Surety
Instrument issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of
drawings or payments; (c) to purchase any materials,
supplies or other property from, or to obtain the services
of, another Person if the relevant contract or other related
document or obligation requires that payment for such
materials, supplies or other property, or for such services,
shall be made regardless of whether delivery of such
materials, supplies or other property is ever made or
tendered, or such services are ever performed or tendered.
"Contractual Obligation" means, as to any Person, any
provision of any security issued by such Person or of any
agreement, undertaking, contract, indenture, mortgage, deed
of trust or other instrument, document or agreement to which
such Person is a party or by which it or any of its property
is bound.
"Current Maturities" means Indebtedness due within one
year.
"Default" means any event or circumstance which, with
the giving of notice, the lapse of time, or both, would (if
not cured or otherwise remedied during such time) constitute
an Event of Default.
"Disposition" means (i) the sale, lease, conveyance or
other disposition of property, other than sales or other
dispositions expressly permitted hereunder, and (ii) the
sale or transfer by the Company or any Subsidiary of the
Company of any equity securities issued by any Subsidiary of
the Company and held by such transferor Person.
"Dollars", "dollars" and "$" each mean lawful money of
the United States.
"EBITDA" means with respect to the Company and its
Subsidiaries for any fiscal period, an amount equal to
Consolidated Net Income for such period, plus to the extent
deducted in the calculation of Consolidated Net Income and
without duplication, (a) depreciation and amortization for
such period, (b) other noncash charges for such period, (c)
income tax expense for such period and (d) Consolidated
Total Interest Expense (including, without limitation, fees,
commissions and other charges associated with standby
letters of credit and other financing charges) paid or
accrued during such period.
"Eligible Account" means, at the time of any
determination thereof, any Account of the Borrower as to
which each of the following requirements has been met to the
satisfaction of the Bank:
(a) The Borrower has lawful and absolute title to such
Account and such Account is, in the Borrower's reasonable
judgment, collectible in the ordinary course of business;
(b) Such Account is not subject to a bona fide dispute,
setoff, counterclaim or other claim or defense on the part
of any Person (including the Account Debtor of the Account)
denying liability under such Account;
(c) Such Account is not subject to any Lien in favor
of any Person, except Liens permitted by Section 5.01;
(d) Such Account is a bona fide Account (which with
respect to an Account arising from a sale of goods, was
created as a result of a sale on an absolute basis and not
on consignment, approval, or sale-and-return basis) of the
Borrower arising in the ordinary course of the Borrower's
business and which:
(i) if an Account arising from the sale of
goods, covers goods which have been shipped or
delivered and on which have been taken all other
actions necessary to create a binding obligation
on the part of the Account Debtor on such Account;
(ii) if an Account relating to the
furnishing of services, covers services which have
been performed and completed and on which have
been taken all other actions necessary to create a
binding obligation on the part of the Account
Debtor on such Account;
(e) The Account Debtor on such Account is not:
(i) an Affiliate of the Borrower; or
(ii) the subject of any reorganization,
bankruptcy, receivership, custodianship,
insolvency, or other proceeding analogous to those
described in Section 7.01(e) or (f) and
(f) Such Account is not outstanding more than 90 days
past its original due date.
"Environmental Laws" means all federal, state or local
laws, statutes, common law duties, rules, regulations,
ordinances and codes, together with all administrative
orders, directed duties, requests, licenses, authorizations
and permits of, and agreements with, any Governmental
Authority, in each case relating to environmental, health,
safety and land use matters; including the Comprehensive
Environmental Response, Compensation and Liability Act of
1980 ("CERCLA"), the Clean Air Act, the Federal Water
Pollution Control Act of 1972, the Solid Waste Disposal Act,
the Federal Resource Conservation and Recovery Act, the
Toxic Substances Control Act, the Emergency Planning and
Community Right-to-Know Act.
"Equipment" means vehicles which are owned by the
Borrower free and clear of all liens and encumbrances except
those permitted by Section 5.01.
"ERISA" means the Employee Retirement Income Security
Act of 1974, and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether
or not incorporated) under common control with the Borrower
within the meaning of Section 414(b) or (c) of the Code (and
Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect
to a Pension Plan; (b) a withdrawal by the Company or any
ERISA Affiliate from a Pension Plan subject to Section 4063
of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations which is treated as such a
withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by the Company or any ERISA Affiliate
from a Multiemployer Plan or notification that a
Multiemployer Plan is in reorganization; (d) the filing of a
notice of intent to terminate, the treatment of a Plan
amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan; (e) an event
or condition which might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to
administer, any Pension Plan or Multiemployer Plan; or
(f) the imposition of any liability under Title IV of ERISA,
other than PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon the Borrower or any ERISA
Affiliate.
"Event of Default" means any of the events or
circumstances specified in Section 7.01.
"Event of Loss" means, with respect to any property,
any of the following: (a) any loss, destruction or damage of
such property; (b) any pending or threatened institution of
any proceedings for the condemnation or seizure of such
property or for the exercise of any right of eminent domain;
or (c) any actual condemnation, seizure or taking, by
exercise of the power of eminent domain or otherwise, of
such property, or confiscation of such property or the
requisition of the use of such property.
"Exchange Act" means the Securities Exchange Act of
1934, and regulations promulgated thereunder.
"FDIC" means the Federal Deposit Insurance Corporation,
and any Governmental Authority succeeding to any of its
principal functions.
"Fixed Charge Ratio Coverage" means the ratio of EBITDA
plus Rental and Lease Expense to the sum of Interest
Expense, Rental and Lease Expense, Current Maturities and
20% of Obligations, determined on a rolling four quarter
basis.
"FRB" means the Board of Governors of the Federal
Reserve System, and any Governmental Authority succeeding to
any of its principal functions.
"Future Lease Obligations" means the aggregate minimum
payments required under all operating leases.
"GAAP" means generally accepted accounting principles
set forth from time to time in the opinions and
pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of
the date of determination.
"Governmental Authority" means any nation or
government, any state or other political subdivision
thereof, any central bank (or similar monetary or regulatory
authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any
corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the
foregoing.
"Guaranty Obligation" has the meaning specified in the
definition of "Contingent Obligation."
"Hazardous Materials" means all those substances that
are regulated by, or which may form the basis of liability
under, any Environmental Law, including any substance
identified under any Environmental Law as a pollutant,
contaminant, hazardous waste, hazardous constituent, special
waste, hazardous substance, hazardous material, or toxic
substance, or petroleum or petroleum derived substance or
waste.
"Indebtedness" of any Person means, without
duplication, (a) all indebtedness for borrowed money;
(b) all obligations issued, undertaken or assumed as the
deferred purchase price of property or services (other than
trade payables entered into in the ordinary course of
business on ordinary terms); (c) all non-contingent
reimbursement or payment obligations with respect to Surety
Instruments; (d) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so
evidenced incurred in connection with the acquisition of
property, assets or businesses; (e) all indebtedness created
or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either
case with respect to property acquired by the Person (even
though the rights and remedies of the seller or bank under
such agreement in the event of default are limited to
repossession or sale of such property); (f) all obligations
with respect to capital leases; (g) all indebtedness
referred to in clauses (a) through (f) above secured by (or
for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien
upon or in property (including accounts and contracts
rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such
Indebtedness; and (h) all Guaranty Obligations in respect of
indebtedness or obligations of others of the kinds referred
to in clauses (a) through (g) above.
"Indemnified Liabilities" has the meaning specified in
Section 8.05.
"Indemnified Person" has the meaning specified in
Section 8.05.
"Independent Auditor" has the meaning specified in
Section 4.01(a).
"Insolvency Proceeding" means, with respect to any
Person, (a) any case, action or proceeding with respect to
such Person before any court or other Governmental Authority
relating to bankruptcy, reorganization, insolvency,
liquidation, receivership, dissolution, winding-up or relief
of debtors, or (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors,
or other, similar arrangement in respect of its creditors
generally or any substantial portion of its creditors;
undertaken under U.S. Federal, state or foreign law,
including the Bankruptcy Code.
"Interest Expense" means for any period the amount
which, in conformity with GAAP would be set forth opposite
the caption "interest expense" on a consolidated income
statement of the Company and its Subsidiaries for such
period.
"IRS" means the Internal Revenue Service, and any
Governmental Authority succeeding to any of its principal
functions under the Code.
"Investments" has the meaning specified in
Section 5.04.
"Joint Venture" means a single-purpose corporation,
partnership, limited liability company, joint venture or
other similar legal arrangement (whether created by contract
or conducted through a separate legal entity) now or
hereafter formed by the Borrower or any of its Subsidiaries
with another Person in order to conduct a common venture or
enterprise with such Person.
"L/C Obligations" means at any time the sum of (a) the
aggregate undrawn amount of all letters of credit then
outstanding, issued by any Bank in favor of the Borrower,
plus (b) the amount of all unreimbursed drawings under all
such letters of credit.
"Leverage Ratio" means the ratio of Indebtedness
(excluding Subordinated Indebtedness) plus the net present
value (in calculating the net present value the discount
rate shall be 10%) of Future Lease Obligations plus L/C
Obligations to Consolidated Adjusted Net Worth.
"Lien" means any security interest, mortgage, deed of
trust, pledge, hypothecation, assignment, charge or deposit
arrangement, encumbrance, lien (statutory or other) or
preferential arrangement of any kind or nature whatsoever in
respect of any property (including those created by, arising
under or evidenced by any conditional sale or other title
retention agreement, the interest of a lessor under a
capital lease, any financing lease having substantially the
same economic effect as any of the foregoing, or the filing
of any financing statement naming the owner of the asset to
which such lien relates as debtor, under the Uniform
Commercial Code or any comparable law) and any contingent or
other agreement to provide any of the foregoing, but not
including the interest of a lessor under an operating lease
"Loan" means an extension of credit by the Banks to the
Borrower pursuant to the Bank Agreements, including without
limitation, L/C Obligations.
"Loan Documents" means this Agreement, the Bank
Agreements, the Collateral Documents, and all other
documents delivered to the Banks and the Collateral Agent in
connection with the transactions contemplated by this
Agreement or the Bank Agreements.
"Margin Stock" means "margin stock" as such term is
defined in Regulation G, T, U or X of the FRB.
"Material Adverse Effect" means (a) a material adverse
change in, or a material adverse effect upon, the
operations, business, properties, condition (financial or
otherwise) of the Borrower or the Borrower and its
Subsidiaries taken as a whole ; (b) a material impairment of
the ability of the Borrower to perform under any Loan
Document and to avoid any Event of Default; or (c) a
material adverse effect upon (i) the legality, validity,
binding effect or enforceability against the Borrower or any
Subsidiary of any Loan Document, or (ii) the perfection or
priority of any Lien granted under any of the Collateral
Documents.
"Multiemployer Plan" means a "multiemployer plan",
within the meaning of Section 4001(a)(3) of ERISA, to which
the Borrower or any ERISA Affiliate makes, is making, or is
obligated to make contributions or, during the preceding
three calendar years, has made, or been obligated to make,
contributions.
"Net Book Value" of a Vehicle is its acquisition cost
(a) less accumulated depreciation thereon, (b) plus the cost
of improvements capitalized in accordance with GAAP, (c)
plus an allowance for tires and tubes installed on the
Vehicle in the amount of 75% of the cost of such tires and
tubes.
"Net Proceeds" means, as to any Disposition by a
Person, proceeds in cash, checks or other cash equivalent
financial instruments as and when received by such Person,
net of: (a) the direct costs relating to such Disposition
excluding amounts payable to such Person or any Affiliate of
such Person, (b) sale, use or other transaction taxes paid
or payable by such Person as a direct result thereof, and
(c) amounts required to be applied to repay principal,
interest and prepayment premiums and penalties on
Indebtedness secured by a Lien on the asset which is the
subject of such Disposition. "Net Proceeds" shall also
include proceeds paid on account of any Event of Loss, net
of (i) all money actually applied to repair or reconstruct
the damaged property or property affected by the
condemnation or taking, (ii) all of the costs and expenses
reasonably incurred in connection with the collection of
such proceeds, award or other payments, and (iii) any
amounts retained by or paid to parties having superior
rights to such proceeds, awards or other payments.
"Obligations" means all advances, debts, liabilities,
obligations, covenants and duties arising under any Loan
Document owing by the Borrower to the Banks or any
Indemnified Person, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due
or to become due, now existing or hereafter arising.
"Organization Documents" means, for any corporation,
the certificate or articles of incorporation, the bylaws,
any certificate of determination or instrument relating to
the rights of preferred shareholders of such corporation,
any shareholder rights agreement, and all applicable
resolutions of the board of directors (or any committee
thereof) of such corporation.
"Other Taxes" means any present or future stamp or
documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made
hereunder or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement or any
other Loan Documents.
"PBGC" means the Pension Benefit Guaranty Corporation,
or any Governmental Authority succeeding to any of its
principal functions under ERISA.
"Pension Plan" means a pension plan (as defined in
Section 3(2) of ERISA) subject to Title IV of ERISA which
the Borrower sponsors, maintains, or to which it makes, is
making, or is obligated to make contributions, or in the
case of a multiple employer plan (as described in Section
4064(a) of ERISA) has made contributions at any time during
the immediately preceding five (5) plan years.
"Permitted Liens" has the meaning specified in
Section 5.01.
"Person" means an individual, partnership, corporation,
limited liability company, business trust, joint stock
company, trust, unincorporated association, joint venture or
Governmental Authority.
"Plan" means an employee benefit plan (as defined in
Section 3(3) of ERISA) which the Borrower sponsors or
maintains or to which the Borrower makes, is making, or is
obligated to make contributions and includes any Pension
Plan.
"Rental and Lease Expense" means principal and interest
payments paid under operating leases.
"Reportable Event" means, any of the events set forth
in Section 4043(c) of ERISA or the regulations thereunder,
other than any such event for which the 30-day notice
requirement under ERISA has been waived in regulations
issued by the PBGC.
"Requirement of Law" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or
determination of an arbitrator or of a Governmental
Authority, in each case applicable to or binding upon the
Person or any of its property or to which the Person or any
of its property is subject.
"Responsible Officer" means the chief executive officer
or the president of the Company, or any other officer having
substantially the same authority and responsibility; or,
with respect to compliance with financial covenants, the
chief financial officer or the treasurer of the Company, or
any other officer having substantially the same authority
and responsibility.
"SEC" means the Securities and Exchange Commission, or
any Governmental Authority succeeding to any of its
principal functions.
"Security Agreement" means the Security Agreement
executed and delivered by the Borrower pursuant to
Section 2.01, substantially in the form of Exhibit C-1 or
C-2, as applicable, as amended, supplemented, or restated
from time to time.
"Solvent" means, as to any Person at any time, that
(a) the fair value of the property of such Person is greater
than the amount of such Person's liabilities (including
disputed, contingent and unliquidated liabilities) as such
value is established and liabilities evaluated for purposes
of Section 101(31) of the Bankruptcy Code; (b) the present
fair saleable value of the property of such Person is not
less than the amount that will be required to pay the
probable liability of such Person on its debts as they
become absolute and matured; (c) such Person is able to
realize upon its property and pay its debts and other
liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of
business; (d) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a
transaction, and is not about to engage in business or a
transaction, for which such Person's property would
constitute unreasonably small capital.
"Subordinated Indebtedness" means all indebtedness, if
any, described in the footnotes of the financial statements
described in Section 4.01 which is subordinated to the
indebtedness under the Loan Documents in form and substance
satisfactory to the Banks in their reasonable opinion.
"Subsidiary" of a Person means any corporation,
association, partnership, limited liability company, joint
venture or other business entity of which more than 50% of
the voting stock, membership interests or other equity
interests (in the case of Persons other than corporations),
is owned or controlled directly or indirectly by the Person,
or one or more of the Subsidiaries of the Person, or a
combination thereof. Unless the context otherwise clearly
requires, references herein to a "Subsidiary" refer to a
Subsidiary of the Borrower.
"Surety Instruments" means all letters of credit
(including standby and commercial), banker's acceptances,
bank guaranties, shipside bonds, surety bonds and similar
instruments.
"Taxes" means any and all present or future taxes,
levies, assessments, imposts, duties, deductions, fees,
withholdings or similar charges, and all liabilities with
respect thereto, excluding, in the case of the Bank, taxes
imposed on or measured by the Bank's net income by the
jurisdiction (or any political subdivision thereof) under
the laws of which the Bank is organized or maintains a
lending office.
"UCC" means the Uniform Commercial Code as in effect in
the State of Illinois.
"Unfunded Pension Liability" means the excess of a
Plan's benefit liabilities under Section 4001(a)(16) of
ERISA, over the current value of that Plan's assets,
determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code
for the applicable plan year.
"United States" and "U.S." each means the United States
of America.
"Vehicle" means a revenue-producing truck, truck-
tractor, trailer, container or other similar unit, and all
related equipment and accessories, now or hereafter owned by
the Borrower.
"Wholly-Owned Subsidiary" means any corporation in
which (other than directors' qualifying shares required by
law) 100% of the capital stock of each class having ordinary
voting power, and 100% of the capital stock of every other
class, in each case, at the time as of which any
determination is being made, is owned, beneficially and of
record, by the Borrower, or by one or more of the other
Wholly-Owned Subsidiaries, or both.
1.02 Other Interpretive Provisions.
(a) The meanings of defined terms are equally
applicable to the singular and plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and
similar words refer to this Agreement as a whole and not to any
particular provision of this Agreement; and subsection, Section,
Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(c) (1) The term "documents" includes any and all
instruments, documents, agreements, certificates,
indentures, notices and other writings, however evidenced.
(2) The term "including" is not limiting and
means "including without limitation."
(3) In the computation of periods of time from a
specified date to a later specified date, the word "from"
means "from and including"; the words "to" and "until" each
mean "to but excluding", and the word "through" means "to
and including."
(4) The term "property" includes any kind of
property or asset, real, personal or mixed, tangible or
intangible.
(d) Unless otherwise expressly provided herein,
(i) references to agreements (including this Agreement) and other
contractual instruments shall be deemed to include all subsequent
amendments and other modifications thereto, but only to the
extent such amendments and other modifications are not prohibited
by the terms of any Loan Document, and (ii) references to any
statute or regulation are to be construed as including all
statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or
regulation.
(e) The captions and headings of this Agreement are
for convenience of reference only and shall not affect the
interpretation of this Agreement.
(f) This Agreement and other Loan Documents may use
several different limitations, tests or measurements to regulate
the same or similar matters. All such limitations, tests and
measurements are cumulative and shall each be performed in
accordance with their terms. Unless otherwise expressly
provided, any reference to any action of the Bank by way of
consent, approval or waiver shall be deemed modified by the
phrase "in its sole discretion."
(g) This Agreement and the other Loan Documents are
the result of negotiations among and have been reviewed by
counsel to the Bank, the Borrower and the other parties, and are
the products of all parties. Accordingly, they shall not be
construed against the Bank merely because of the Bank's
involvement in their preparation.
1.03 Accounting Principles.
(a) Unless the context otherwise clearly requires, all
accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement
shall be made, in accordance with GAAP, consistently applied. If
there is a change in GAAP which adversely affects the calculation
of the financial covenants set forth in this Agreement, the
Borrower and the Banks shall negotiate in good faith to amend the
financial covenants herein.
(b) References herein to "fiscal year" and "fiscal
quarter" refer to such fiscal periods of the Borrower.
ARTICLE II
SECURITY
2.01 Security.
(a) The Borrower agrees that (i) at any time after the
date hereof either Bank may require that all the Borrower's
liabilities and obligations hereunder and under the Loan
Documents be secured by a security interest in and a lien upon
all existing and after acquired Vehicles and (ii) upon an Event
of Default, either Bank may require that all the Borrower's
liabilities and obligations hereunder and under the Loan
Documents be secured by a security interest in and a lien upon
all Accounts.
(b) Within 30 days after such notice pursuant to
subsection (a) (i) above, and upon an Event of Default, the
Borrower will execute and deliver to the Collateral Agent a
Security Agreement, together with such mortgages, certificates of
title (with encumbrances properly noted thereon required to
perfect the Bank's lien), financing statements or other documents
as the Collateral Agent may request and such mortgages, security
agreements, financing statements and other documents as may be
advised by counsel for the Collateral Agent as being necessary or
desirable to perfect the Collateral Agent's security interest in
the Collateral.
(c) At the request of either Bank furnish at monthly
intervals, such information concerning Assigned Vehicles as
security hereunder as may be requested and will show with respect
to the period for which such report is made, all net proceeds
received from the sale, destruction, commandeering, conversion,
loss of or damage to, or use of, attachment, or insurance on or
with respect to Assigned Vehicles.
(d) Cause the insurance arrangements required by
Section 4.06 to be for the benefit of the Borrower and the
Collateral Agent as their interests may appear (the Collateral
Agent's interest to be for the benefit of the Banks) and all
insurance policies shall provide for ten (10) days written
minimum cancellation notice to the Borrower and the Collateral
Agent; and in the event of such cancellation and failure on the
part of the Borrower to provide adequate insurance arrangements
satisfactory to the Bank, the Collateral Agent may at its option
provide such insurance and charge the cost thereof to the
Borrower as security administration charges hereunder.
(e) If in the opinion of the Collateral Agent or its
counsel, changes or modifications in the procedures governing the
titling, registration, mortgaging of, or the recording of
mortgages on, Vehicles are necessary or desirable to better
perfect or otherwise protect the Collateral Agent's security
interest, upon request of the Collateral Agent, exert its best
efforts to cause such changes or modifications to be made or
adopted.
(f) Unless an Event of Default or Default shall have
occurred and be continuing, the Collateral Agent shall release
from the lien of any mortgage or other security instrument held
by it any Vehicle which the Borrower wishes to sell upon payment
to the Collateral Agent of the Net Book Value of such Vehicle.
If and when this Agreement has been terminated and all
indebtedness and liabilities of the Borrower hereunder shall have
been paid in full, the Collateral Agent shall discharge all
mortgages and release to the Borrower all other security, if any,
then held by it.
2.02 Conditions Subsequent. Upon the request of either
Bank pursuant to Section 2.01 of this Agreement, the Borrower
will deliver to the Collateral Agent:
The Collateral Documents, executed by the Borrower, in
appropriate form for recording, where necessary, together with:
(1) Acknowledgment copies of all UCC-l financing
statements filed, registered or recorded to perfect the
security interests of the Collateral Agent and the Banks, or
other evidence satisfactory to the Collateral Agent that
there has been filed, registered or recorded all financing
statements and other filings, registrations and recordings
necessary and advisable to perfect the Liens of the
Collateral Agent and the Banks in accordance with applicable
law;
(2) Written advice relating to such Lien and
judgment searches as the Banks shall have requested, and
such termination statements or other documents as may be
necessary to confirm that the Collateral is subject to no
other Liens in favor of any Persons (other than Permitted
Liens);
(3) evidence that all other actions necessary or,
in the opinion of the Collateral Agent, desirable to perfect
and protect the first priority Lien created by the
Collateral Documents, and to enhance the Collateral Agent's
ability to preserve and protect its interests in and access
to the Collateral, have been taken.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Banks that:
3.01 Corporate Existence and Power. The Borrower and each
of its Subsidiaries:
(a) Is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation;
(b) Has the power and authority and all governmental
licenses, authorizations, consents and approvals to own its
assets, carry on its business and to execute, deliver, and
perform its obligations under the Loan Documents;
(c) Is duly qualified as a corporation and is licensed
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 or license; and
(d) Is in compliance with all Requirements of Law;
except, in each case referred to in clause (b) or clause (c), to
the extent that the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
3.02 Corporate Authorization; No Contravention. The
execution, delivery and performance by the Borrower and its
Subsidiaries of this Agreement and each other Loan Document to
which such Person is party, have been duly authorized by all
necessary corporate action, and do not and will not:
(a) Contravene the terms of any of that Person's
Organization Documents;
(b) Conflict with or result in any breach or
contravention of, or the creation of any Lien under, any document
evidencing any Contractual Obligation to which such Person is a
party or any order, injunction, writ or decree of any
Governmental Authority to which such Person or its property is
subject; or
(c) Violate any Requirement of Law.
3.03 Governmental Authorization. No approval, consent,
exemption, authorization, or other action by, or notice to, or
filing with, any Governmental Authority (except for recordings or
filings in connection with the Liens granted to the Bank under
the Collateral Documents) is necessary or required in connection
with the execution, delivery or performance by, or enforcement
against, the Borrower or any of its Subsidiaries of the Agreement
or any other Loan Document.
3.04 Binding Effect. This Agreement and each other Loan
Document to which the Borrower or any of its Subsidiaries is a
party constitute the legal, valid and binding obligations of the
Borrower and any of its Subsidiaries to the extent it is a party
thereto, enforceable against such Person in accordance with their
respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally or by equitable
principles relating to enforceability.
3.05 Litigation. Except as specifically disclosed in
Schedule 3.05, there are no actions, suits, proceedings, claims
or disputes pending, or to the best knowledge of the Borrower,
threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, against the Borrower, or its
Subsidiaries or any of their respective properties which:
(a) Purport to affect or pertain to this Agreement or
any other Loan Document, or any of the transactions contemplated
hereby or thereby; or
(b) If determined adversely to the Borrower or its
Subsidiaries, would reasonably be expected to have a Material
Adverse Effect. No injunction, writ, temporary restraining order
or any order of any nature has been issued by any court or other
Governmental Authority purporting to enjoin or restrain the
execution, delivery or performance of this Agreement or any other
Loan Document, or directing that the transactions provided for
herein or therein not be consummated as herein or therein
provided.
3.06 No Default. No Default or Event of Default exists or
would result from the incurring of any Obligations by the
Borrower or from the grant or perfection of the Liens of the Bank
on the Collateral. As of the Closing Date, neither the Borrower
nor any Subsidiary is in default under or with respect to any
Contractual Obligation in any respect which, individually or
together with all such defaults, could reasonably be expected to
have a Material Adverse Effect, or that would, if such default
had occurred after the Closing Date, create an Event of Default
under subsection 7.01(e).
3.07 ERISA Compliance. The Borrower and its Subsidiaries
are in material compliance with all statutes and governmental
rules and regulations applicable to them, including, without
limitation, ERISA insofar as such Act applies to them. Each
Plan complies in all material respects with all applicable
statutes and governmental rules and regulations, and the Borrower
is not aware that (i) any Reportable Event has occurred and is
continuing with respect to any Plan, (ii) the Borrower, any of
its Subsidiaries or any ERISA Affiliate has withdrawn from any
Multiemployer Plan or instituted steps to do so, and (iii) any
steps have been instituted to terminate any Plan or Multiemployer
Plan, which such occurrence, withdrawal or termination has
resulted or would result in the incurrence by the Company of
liability that could reasonably be expected to have a Material
Adverse Effect.
3.08 Use of Proceeds; Margin Regulations. The proceeds of
the Loans are to be used solely for the purposes set forth in and
permitted hereunder. Neither the Borrower nor any Subsidiary is
generally engaged in the business of purchasing or selling Margin
Stock or extending credit for the purpose of purchasing or
carrying Margin Stock.
3.09 Title to Properties. The Borrower and each Subsidiary
have good record and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary or used in
the ordinary conduct of their respective businesses, except for
such defects in title as could not, individually or in the
aggregate, have a Material Adverse Effect. As of the Closing
Date, the property of the Borrower and its Subsidiaries is
subject to no Liens, other than Permitted Liens.
3.10 Taxes. The Borrower and its Subsidiaries have filed
all Federal and other material tax returns and reports required
to be filed, and have paid all Federal and other material taxes,
assessments, fees and other governmental charges levied or
imposed upon them or their properties, income or assets otherwise
due and payable, except those which are being contested in good
faith by appropriate proceedings and for which adequate reserves
have been provided in accordance with GAAP. There is no proposed
tax assessment against the Borrower or any Subsidiary that would,
if made, have a Material Adverse Effect.
3.11 Financial Condition.
(a) The audited consolidated financial statements of
the Company and its Subsidiaries dated September 30, 1995, and
the related consolidated statements of income or operations,
shareholders' equity and cash flows for the fiscal year ended on
that date:
(1) Were prepared in accordance with GAAP
consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein, subject to
ordinary, good faith year end audit adjustments;
(2) Fairly present the financial condition of the
Company and its Subsidiaries as of the date thereof and
results of operations for the period covered thereby; and
(3) Except as specifically disclosed in Schedule
3.11, show all material indebtedness and other liabilities,
direct or contingent, of the Company and its consolidated
Subsidiaries as of the date thereof, including liabilities
for taxes, material commitments and Contingent Obligations.
(b) Since September 30, 1995, there has been no
Material Adverse Effect.
3.12 Environmental Matters.
The Borrower conducts in the ordinary course of business a
review of the effect of existing Environmental Laws and existing
environmental claims on its business, operations and properties,
and as a result thereof the Borrower has reasonably concluded
that, except as specifically disclosed in Schedule 3.12, such
Environmental Laws and environmental claims could not,
individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.
3.13 Regulated Entities. None of the Borrower, any Person
controlling the Borrower, or any Subsidiary, is an "Investment
Borrower" within the meaning of the Investment Borrower Act of
1940. The Borrower is not subject to regulation under the Public
Utility Holding Borrower Act of 1935, the Federal Power Act, any
state public utilities code, or any other Federal or state
statute or regulation limiting its ability to incur Indebtedness.
3.14 No Burdensome Restrictions. Neither the Borrower nor
any Subsidiary is a party to or bound by any Contractual
Obligation, or subject to any restriction in any Organization
Document, or any Requirement of Law, which could reasonably be
expected to have a Material Adverse Effect.
3.15 Subsidiaries. As of the Closing Date, the Borrower
has no Subsidiaries other than those specifically disclosed in
Schedule 3.15 hereto and has no equity investments in any other
corporation or entity other than those specifically disclosed in
Schedule 3.15.
3.16 Insurance. Except as specifically disclosed in
Schedule 3.16, the properties of the Borrower and its
Subsidiaries are insured with financially sound and reputable
insurance companies not Affiliates of the Borrower, in such
amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses
and owning similar properties in localities where the Borrower or
such Subsidiary operates.
3.17 Solvency. The Company and MI are each Solvent.
3.18 Borrowing Base Availability. The aggregate outstanding
principal amount of the Loans does not exceed the Borrowing Base.
ARTICLE IV
AFFIRMATIVE COVENANTS
So long as any Bank shall have any commitment to extend
credit under the Loan Documents, or any Loan or other Obligation
shall remain unpaid or unsatisfied or any letter of credit shall
remain outstanding, unless the Banks waive compliance in writing:
4.01 Financial Statements. The Company shall deliver to
the Banks, in form and detail satisfactory to the Banks:
(a) As soon as available, but not later than 90
days after the end of each fiscal year (commencing with the
fiscal year ended September 30, 1996, a copy of the audited
consolidated balance sheet of the Company and its Subsidiaries as
at the end of such year and the related consolidated statements
of income or operations, shareholders' equity and cash flows for
such year, setting forth in each case in comparative form the
figures for the previous fiscal year, and accompanied by the
opinion of KPMG Peat Marwick, L.L.P. or another
nationally-recognized independent public accounting firm
("Independent Auditor") which report shall state that such
consolidated financial statements present fairly the financial
position for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years. Such opinion
shall not be qualified or limited because of a restricted or
limited examination by the Independent Auditor of any material
portion of the Borrower's or any Subsidiary's records;
(b) As soon as available, but not later than 60 days
after the end of each of the first three fiscal quarters of each
fiscal year (commencing with the fiscal quarter ended
December 31, 1995, a copy of the unaudited consolidated balance
sheet of the Company and its Subsidiaries as of the end of such
quarter and the related consolidated statements of income,
shareholders' equity and cash flows for the period commencing on
the first day and ending on the last day of such quarter, and
certified by a Responsible Officer as fairly presenting, in
accordance with GAAP (subject to ordinary, good faith year-end
audit adjustments), the financial position and the results of
operations of the Borrower and the Subsidiaries;
(c) As soon as available, but not later than 90 days
after the end of each fiscal year (commencing with the fiscal
year ended September 30, 1996), a copy of an unaudited
consolidating balance sheet of the Company and its Subsidiaries
as at the end of such year and the related consolidating
statement of income, and cash flows for such year, certified by a
Responsible Officer as having been developed and used in
connection with the preparation of the financial statements
referred to in subsection (a);
4.02 Certificates; Other Information. The Company shall
furnish to the Banks:
(a) Concurrently with the delivery of the financial
statements referred to in subsections 4.01(a) and (b), a
Compliance Certificate executed by a Responsible Officer;
(b) Promptly, copies of all financial statements and
reports that the Borrower sends to its shareholders, and copies
of all financial statements and regular, periodical or special
reports (including Forms 10K, 10Q and 8K) that the Borrower or
any Subsidiary may make to, or file with, the SEC;
(c) as soon as available and in any event within 30
days after the end of each quarter, a Borrowing Base Certificate
and a receivables-aging report as of the end of such quarter; and
(d) Promptly, such additional information regarding
the business, financial or corporate affairs of the Borrower or
any Subsidiary as the Bank, may from time to time request.
4.03 Notices. The Borrower shall promptly notify the
Banks:
(a) Of the occurrence of any Default or Event of
Default, and of the occurrence or existence of any event or
circumstance that foreseeably will become a Default or Event of
Default;
(b) of (i) any breach or non-performance of, or any
default under, any Contractual Obligation of the Borrower or any
of its Subsidiaries which could result in a Material Adverse
Effect; and (ii) any dispute, litigation, investigation,
proceeding or suspension which may exist at any time between the
Borrower or any of its Subsidiaries and any Governmental
Authority which could result in a Material Adverse Effect;
(c) Of the commencement of, or any material
development in, any litigation or proceeding affecting the
Borrower or any Subsidiary which, if adversely determined, would
reasonably be expected to have a Material Adverse Effect, or
(iii) in which the relief sought is an injunction or other stay
of the performance of this Agreement or any Loan Document;
(d) Of any other litigation or proceeding affecting
the Borrower or any of its Subsidiaries which the Borrower would
be required to report to the SEC pursuant to the Exchange Act,
within four days after reporting the same to the SEC;
(e) Of the occurrence of any of the following events
affecting the Borrower or any ERISA Affiliate which could result
in a Material Adverse Effect, and deliver to the Bank a copy of
any notice with respect to such event is filed with a
Governmental Authority and any notice delivered by a Governmental
Authority to the Borrower or any ERISA Affiliate with respect to
such event:
(1) An ERISA Event;
(2) a material increase in the Unfunded Pension
Liability of any Pension Plan;
(3) The adoption of, or the commencement of
contributions to, any Plan subject to Section 412 of the
Code by the Borrower or any ERISA Affiliate;
(4) The adoption of any amendment to a Pension
Plan or other Plan subject to Section 412 of the Code, if
such amendment results in a material increase in
contributions or Unfunded Pension Liability;
(g) of any material change in accounting policies or
financial reporting practices by the Borrower or any of its
consolidated Subsidiaries;
Each notice under this Section shall be accompanied by
a written statement by a Responsible Officer setting forth
details of the occurrence referred to therein, and stating what
action the Borrower or any affected Subsidiary proposes to take
with respect thereto and at what time. Each notice under
subsection 4.03(a) shall describe with particularity any and all
clauses or provisions of this Agreement or other Loan Document
that have been (or foreseeably will be) breached or violated.
4.04 Preservation of Corporate Existence, Etc. The
Borrower shall, and shall cause each Subsidiary to:
(a) Preserve and maintain in full force and effect its
corporate existence and good standing under the laws of its state
or jurisdiction of incorporation;
(b) Preserve and maintain in full force and effect all
governmental rights, privileges, qualifications, permits,
licenses and franchises necessary or desirable in the normal
conduct of its business; and
(c) Use reasonable efforts, in the ordinary course of
business, to preserve its business organization and goodwill.
4.05 Maintenance of Property. The Borrower shall maintain,
and shall cause each Subsidiary to maintain, and preserve all its
property which is used or useful in its business in good working
order and condition, ordinary wear and tear excepted and make all
necessary repairs thereto and renewals and replacements thereof
except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
4.06 Insurance. In addition to insurance requirements set
forth in the Collateral Documents (when applicable), the Borrower
shall maintain, and shall cause each of its Subsidiaries to
maintain, with financially sound and reputable independent
insurers, insurance with respect to its properties and business
against loss or damage of the kinds customarily insured against
by Persons engaged in the same or similar business, of such types
and in such amounts as are customarily carried under similar
circumstances by such other Persons; including workers'
compensation insurance, public liability and property and
casualty insurance.
4.07 Payment of Obligations. The Borrower shall, and shall
cause each Subsidiary to, pay and discharge as the same shall
become due and payable, all their respective obligations and
liabilities, including:
(a) All tax liabilities, assessments and governmental
charges or levies upon it or its properties or assets, unless the
same are being contested in good faith by appropriate proceedings
and adequate reserves in accordance with GAAP are being
maintained by the Borrower or such Subsidiary;
(b) All lawful claims which, if unpaid, would by law
become a Lien upon its property; and
(c) All indebtedness, as and when due and payable, but
subject to any subordination provisions contained in any
instrument or agreement evidencing such Indebtedness.
4.08 Compliance with Laws. The Borrower shall comply, and
shall cause each Subsidiary to comply, in all material respects
with all Requirements of Law of any Governmental Authority having
jurisdiction over it or its business (including the Federal Fair
Labor Standards Act), except such as may be contested in good
faith or as to which a bona fide dispute may exist.
4.09 Compliance with ERISA. The Borrower shall, and shall
cause each of its ERISA Affiliates to: (a) maintain each Plan in
compliance in all material respects with the applicable
provisions of ERISA, the Code and other federal or state law;
(b) cause each Plan which is qualified under Section 401(a) of
the Code to maintain such qualification; and (c) make all
required contributions to any Plan subject to Section 412 of the
Code.
4.10 Inspection of Property and Books and Records. The
Borrower shall maintain and shall cause each Subsidiary to
maintain proper books of record and account, in which full, true
and correct entries in conformity with GAAP consistently applied
shall be made of all financial transactions and matters involving
the assets and business of the Borrower and such Subsidiary.
With respect to each unit of Eligible Equipment owned by it,
Borrower shall maintain records on a continuous basis, which
shall be in such form and show such information with respect to
each individual unit of Eligible Equipment as is necessary for
the determination of the Net Book Value of the Eligible Equipment
and the security value of the Vehicle. The Borrower shall permit,
and shall cause each Subsidiary to permit, representatives and
independent contractors of the Banks to visit and inspect any of
their respective properties, to examine their respective
corporate, financial and operating records, and make copies
thereof or abstracts therefrom, and to discuss their respective
affairs, finances and accounts with their respective officers,
all at such reasonable times during normal business hours and as
often as may be reasonably desired, upon reasonable advance
notice to the Borrower; provided, however, when an Event of
Default exists the Banks may do any of the foregoing at the
expense of the Borrower at any time during normal business hours
and without advance notice.
4.11 Environmental Laws. The Borrower shall, and shall
cause each Subsidiary to, conduct its operations and keep and
maintain its property in compliance with all Environmental Laws.
4.12 Use of Proceeds. The Borrower shall use the proceeds
of the Loans for working capital and other general corporate
purposes not in contravention of any Requirement of Law or of any
Loan Document.
4.13 Further Assurances.
(a) The Borrower shall ensure that all written
information, exhibits and reports furnished to the Bank do not
and will not contain any untrue statement of a material fact and
do not and will not omit to state any material fact or any fact
necessary to make the statements contained therein not misleading
in light of the circumstances in which made, and will promptly
disclose to the Banks and correct any defect or error that may be
discovered therein or in any Loan Document or in the execution,
acknowledgement or recordation thereof.
(b) Promptly upon request by the Collateral Agent or
the Banks, the Borrower shall (and shall cause any of its
Subsidiaries to) do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register, any and all
such further acts, deeds, conveyances, security agreements,
mortgages, assignments, estoppel certificates, financing
statements and continuations thereof, termination statements,
notices of assignment, transfers, certificates, assurances and
other instruments the Banks may reasonably require from time to
time in order (i) to carry out more effectively the purposes of
this Agreement or any other Loan Document, (ii) to subject to the
Liens created by any of the Collateral Documents any of the
properties, rights or interests covered by any of the Collateral
Documents, (iii) to perfect and maintain the validity,
effectiveness and priority of any of the Collateral Documents and
the Liens intended to be created thereby, (iv) cause the title to
all Eligible Equipment purchased on or after the date of this
Agreement to be and continue to be in the name of the Borrower;
(v) at any time a Security Agreement is executed hereunder,
continue to be the lawful owner of the Assigned Vehicle and
Accounts free and clear of all Liens, except as otherwise
permitted hereunder and (vi) to better assure, convey, grant,
assign, transfer, preserve, protect and confirm to the Bank the
rights granted or now or hereafter intended to be granted to the
Bank under any Loan Document or under any other document executed
in connection therewith.
4.14 Minimum Net Worth. The Borrower shall maintain Minimum
Net Worth equal to or greater than the sum of (i) $50,000,000 and
(ii) 50% of Net Income since September 30, 1995.
4.15 Acquisitions. The Borrower shall be permitted to make
Acquisitions not in excess of $25,000,000 in the aggregate.
4.16 Significant Subsidiaries. If at any time any
Subsidiary of the Company represents ten percent (10%) or more of
total Accounts and Equipment on a consolidated basis, the Company
shall cause such Subsidiary to become a borrower and party to
this Agreement and the Collateral Documents.
ARTICLE V
NEGATIVE COVENANTS
So long as any Bank shall have any commitment to extend
credit under the Loan Documents, or any Loan or other Obligation
shall remain unpaid or unsatisfied or any letter of credit shall
remain outstanding, unless the Banks waive compliance in writing:
5.01 Limitation on Liens. The Borrower shall not, and
shall not suffer or permit any Subsidiary to, directly or
indirectly, make, create, incur, assume or suffer to exist any
Lien upon or with respect to any part of its property, whether
now owned or hereafter acquired, other than the following
("Permitted Liens"):
(a) Any Lien (other than a Lien on the Collateral)
existing on property of the Borrower or any Subsidiary on the
Closing Date and set forth in Schedule 5.01 securing Indebtedness
outstanding on such date;
(b) Any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other
governmental charges which are not delinquent or remain payable
without penalty, or to the extent that non-payment thereof is
permitted hereunder, provided that no notice of lien has been
filed or recorded under the Code;
(d) Carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Liens arising in the
ordinary course of business which are not delinquent or remain
payable without penalty or which are being contested in good
faith and by appropriate proceedings, which proceedings have the
effect of preventing the forfeiture or sale of the property
subject thereto;
(e) Liens (other than any Lien imposed by ERISA and
other than on the Collateral) consisting of pledges or deposits
required in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other social
security legislation;
(f) Liens (other than Liens on the Collateral) on the
property of the Borrower or its Subsidiary securing (i) the non-
delinquent performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations which do not
exceed in the aggregate $15,000,000, (ii) contingent obligations
on surety and appeal bonds, and (iii) other non-delinquent
obligations of a like nature; in each case, incurred in the
ordinary course of business, provided all such Liens in the
aggregate would not (even if enforced) cause a Material Adverse
Effect;
(g) Liens (other than Liens on the Collateral)
consisting of judgment or judicial attachment liens, provided
that the enforcement of such Liens is effectively stayed and all
such liens in the aggregate at any time outstanding for the
Borrower and its Subsidiaries do not exceed 10% of Consolidated
Net Worth;
(h) 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 interfere with the ordinary conduct
of the businesses of the Borrower and its Subsidiaries;
(i) Purchase money security interests on any property
acquired or held by the Borrower or its Subsidiaries in the
ordinary course of business, securing Indebtedness incurred or
assumed for the purpose of financing all or any part of the cost
of acquiring such property; provided that (i) any such Lien
attaches to such property concurrently with or within 20 days
after the acquisition thereof, (ii) such Lien attaches solely to
the property so acquired in such transaction, and (iii) the
principal amount of the debt secured thereby does not exceed 100%
of the cost of such property.
5.02 Disposition of Assets. If the Borrower or any
Subsidiary sells, assigns, conveys, transfers or otherwise
disposes of (whether in one or a series of transactions) any
property, in excess of $2,500,000 during any fiscal quarter, the
Borrower shall deliver to the Banks an interim Borrowing Base
Certificate.
5.03 Consolidations and Mergers. Subject to the provisions
of Section 4.15, the Borrower shall not, and shall not suffer or
permit any Subsidiary to, merge, consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially
all of its assets (whether now owned or hereafter acquired) to or
in favor of any Person, except:
(a) Any Subsidiary may merge with the Borrower,
provided that the Borrower shall be the continuing or surviving
corporation, or with any one or more Subsidiaries, provided that
if any transaction shall be between a Subsidiary and a
Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary shall be the
continuing or surviving corporation; and
(b) Any Subsidiary may sell all or substantially all
of its assets (upon voluntary liquidation or otherwise), to the
Borrower or another Wholly-Owned Subsidiary.
5.04 Investments. Subject to the provisions of Section
4.15, the Borrower shall not purchase or acquire, or suffer or
permit any Subsidiary to purchase or acquire, or make any
commitment therefor, any capital stock, equity interest, or any
obligations or other securities of, or any interest in, any
Person, or make or commit to make any Acquisitions, or make or
commit to make any advance, loan, extension of credit or capital
contribution to or any other investment in, any Person including
any Affiliate of the Borrower (together, "Investments"), except
for:
(a) Investments held by the Borrower or Subsidiary in
the form of cash equivalents; and
(b) Extensions of credit in the nature of accounts
receivable or notes receivable arising from the sale or lease of
goods or services in the ordinary course of business.
5.05 Guaranties, Loans or Advances. Except as otherwise
provided in Sections 5.01 and 5.04, the Borrower shall not, and
shall not suffer or permit any Subsidiary to, become or be a
guarantor or surety of, or otherwise become or be responsible in
any manner (whether by agreement to purchase any obligations,
stock, assets, goods or services, or to supply or advance any
funds, assets, goods or services or otherwise) with respect to,
any undertaking of any other person or entity, or make or permit
to exist any loans or advances to any other Person or entity,
except for :
(a) the endorsement, in the ordinary course of
collection, of instruments payable to it or its order;
(b) advances not to exceed, in the aggregate for the
Borrower and all Subsidiaries at any one time outstanding,
$200,000 to officers and employees;
(c) guarantees of obligations of lease operators not
to exceed $2,500,000 at any time outstanding, and;
(d) guarantees of obligations of affiliated companies
in connection with surety bonds and guarantees of obligations of
municipal bond issuers financing Borrower facilities, which
obligations do not exceed $5,000,000.
5.06 Transactions with Affiliates. The Borrower shall not,
and shall not suffer or permit any Subsidiary to, enter into any
transaction with any Affiliate of the Borrower, except upon fair
and reasonable terms no less favorable to the Borrower or such
Subsidiary than would obtain in a comparable arm's-length
transaction with a Person not an Affiliate of the Borrower or
such Subsidiary.
5.07 Restricted Payments. The Borrower shall not, and
shall not suffer or permit any Subsidiary to, declare or make any
dividend payment or other distribution of assets, properties,
cash, rights, obligations or securities on account of any shares
of any class of its capital stock, or purchase, redeem or
otherwise acquire for value any shares of its capital stock or
any warrants, rights or options to acquire such shares, now or
hereafter outstanding; except that so long as no Default or Event
of Default has occurred, the Borrower may:
(a) Declare and make dividend payments or other
distributions payable solely in its common stock;
(b) Purchase, redeem or otherwise acquire shares of
its common stock or warrants or options to acquire any such
shares with the proceeds received from the substantially
concurrent issue of new shares of its common stock; and
(c) Make equity distributions to Matlack Systems, Inc.
not in excess of $4,000,000 plus 25% of Consolidated Net Income
subsequent to October 1, 1995.
5.08 ERISA. The Borrower shall not, and shall not suffer
or permit any of its ERISA Affiliates to: (a) engage in a
prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan which has resulted
or could reasonably expected to result in liability of the
Borrower in an aggregate amount in excess of 10% of Consolidated
Net Worth; or (b) engage in a transaction that could be subject
to Section 4069 or 4212(c) of ERISA.
5.09 Change in Business. The Borrower shall not, and shall
not suffer or permit any Subsidiary to, engage in any material
line of business substantially different from those lines of
business carried on by the Borrower and its Subsidiaries on the
date hereof.
5.10 Fixed Charge Coverage Ratio. The Company shall not
incur a Fixed Charge Coverage Ratio of less than 1.15:1.
5.11 Leverage Ratio. The Company shall not incur a
Leverage Ratio of greater than 2.5:1.
5.12 Borrowing Base Overage. On each date when the
aggregate outstanding principal amount of the Loans exceeds the
lesser of the Borrowing Base or the aggregate Commitments, the
Borrower shall make a mandatory prepayment of the Loans to the
Banks in an amount equal to such excess.
ARTICLE VI
COLLATERAL AGENT
6.01 Appointment and Authorization; "Collateral Agent".
Each Bank hereby irrevocably (subject to Section 6.09) appoints,
designates and authorizes Bank of America Illinois as Collateral
Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it
by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere
in this Agreement or in any other Loan Document, the Collateral
Agent shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall the Collateral Agent have
or be deemed to have any fiduciary relationship with any Bank,
and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or
any other Loan Document or otherwise exist against the Collateral
Agent. Without limiting the generality of the foregoing
sentence, the use of the term "agent" in this Agreement with
reference to the Collateral Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law. Instead, such term is
used merely as a matter of market custom, and is intended to
create or reflect only an administrative relationship between
independent contracting parties.
6.02 Delegation of Duties. The Collateral Agent may
execute any of its duties under this Agreement or any other Loan
Document by or through agents, employees or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters
pertaining to such duties. The Collateral Agent shall not be
responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.
6.03 Liability of Collateral Agent. None of the Collateral
Agent or Agent-Related Persons shall (i) be liable for any action
taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross
negligence or willful misconduct), or (ii) be responsible in any
manner to any of the Banks for any recital, statement,
representation or warranty made by the Borrower or any Subsidiary
or Affiliate of the Borrower, or any officer thereof, contained
in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or
provided for in, or received by the Collateral Agent under or in
connection with, this Agreement or any other Loan Document, or
for the value of or title to any Collateral, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of the
Borrower or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Collateral Agent or
Agent-Related Person shall be under any obligation to any Bank to
ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the
properties, books or records of the Borrower or any of the
Borrower's Subsidiaries or Affiliates.
6.04 Reliance by Collateral Agent. (a) The Collateral
Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or conversation
believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to the Borrower),
independent accountants and other experts selected by the
Collateral Agent. The Collateral 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 Banks as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by
the Banks 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 Collateral Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this
Agreement or any other Loan Document in accordance with a request
or consent of the Banks and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of the
Banks.
(b) For purposes of determining compliance with the
conditions specified in the conditions precedent section of each
Credit Agreement, each Bank that has executed this Agreement
shall be deemed to have consented to, approved or accepted or to
be satisfied with, each document or other matter either sent by
the Collateral Agent to such Bank for consent, approval,
acceptance or satisfaction, or required thereunder to be
consented to or approved by or acceptable or satisfactory to the
Bank.
6.05 Notice of Default. The Collateral Agent shall not be
deemed to have knowledge or notice of the occurrence of any
Default or Event of Default, unless the Collateral Agent shall
have received written notice from a Bank or the Borrower
referring to the Credit Agreements, describing such Default or
Event of Default and stating that such notice is a "notice of
default". The Collateral Agent will notify the Banks of its
receipt of any such notice. The Collateral Agent shall take such
action with respect to such Default or Event of Default as may be
requested by either Bank in accordance with the Credit Agreements
and/or applicable law; provided, however, that unless and until
the Collateral Agent has received any such request, the
Collateral 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 or in the
best interest of the Banks.
6.06 Credit Decision. Each Bank acknowledges that none of
the Collateral Agent or Agent-Related Persons has made any
representation or warranty to it, and that no act by the
Collateral Agent hereinafter taken, including any review of the
affairs of the Borrower and its Subsidiaries, shall be deemed to
constitute any representation or warranty by any Agent-Related
Person to any Bank. Each Bank represents to the Collateral Agent
that it has, independently and without reliance upon any Agent-
Related Person and based on such documents and information as it
has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property,
financial and other condition and creditworthiness of the
Borrower and its Subsidiaries, the value of and title to any
Collateral, and all applicable bank regulatory laws relating to
the transactions contemplated hereby, and made its own decision
to enter into this Agreement and to extend credit to the Borrower
hereunder. Each Bank also represents that it will, independently
and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at
the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement
and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition
and creditworthiness of the Borrower. Except for notices,
reports and other documents expressly herein required to be
furnished to the Banks by the Collateral Agent, the Collateral
Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the
business, prospects, operations, property, financial and other
condition or creditworthiness of the Borrower which may come into
the possession of any of the Agent-Related Persons.
6.07 Indemnification of Collateral Agent. Whether or not
the transactions contemplated hereby are consummated, the Banks
shall indemnify upon demand the Collateral Agent and
Agent-Related Persons (to the extent not reimbursed by or on
behalf of the Borrower and without limiting the obligation of the
Borrower to do so), pro rata, from and against any and all
Indemnified Liabilities; provided, however, that no Bank shall be
liable for the payment to the Collateral Agent or Agent-Related
Persons of any portion of such Indemnified Liabilities resulting
solely from such Person's gross negligence or willful misconduct.
Without limitation of the foregoing, each Bank shall reimburse
the Collateral Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including Attorney Costs)
incurred by the Collateral Agent in connection with the
preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein,
to the extent that the Collateral Agent is not reimbursed for
such expenses by or on behalf of the Borrower. The undertaking
in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of the Collateral
Agent.
6.08 Collateral Agent in Individual Capacity. BofA and its
Affiliates may make loans to, issue letters of credit for the
account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial
advisory, underwriting or other business with the Borrower and
its Subsidiaries and Affiliates as though BofA were not the
Collateral Agent hereunder and without notice to or consent of
the Banks. The Banks acknowledge that, pursuant to such
activities, BofA or its Affiliates may receive information
regarding the Borrower or its Affiliates (including information
that may be subject to confidentiality obligations in favor of
the Borrower or such Subsidiary) and acknowledge that the
Collateral Agent shall be under no obligation to provide such
information to them. With respect to its Loans, BofA shall have
the same rights and powers under its Credit Agreement as any
other Bank and may exercise the same as though it were not the
Collateral Agent, and the terms "Bank" and "Banks" include BofA
in its individual capacity.
6.09 Successor Collateral Agent. The Collateral Agent may,
and at the request of the Banks shall, resign as Collateral Agent
upon 30 days' notice to the Banks or upon 30 days from the
receipt of a written request from the Banks. If the Collateral
Agent resigns under this Agreement, the Banks shall appoint a
successor agent for the Banks which successor agent shall be
approved by the Borrower. If no successor agent is appointed
prior to the effective date of the resignation of the Collateral
Agent, the Collateral Agent may appoint, after consulting with
the Banks and the Borrower, a successor agent. Upon the
acceptance of its appointment as successor agent hereunder, such
successor agent shall succeed to all the rights, powers and
duties of the retiring Collateral Agent and the term "Collateral
Agent" shall mean such successor agent and the retiring
Collateral Agent's appointment, powers and duties as Collateral
Agent shall be terminated. After any retiring Collateral Agent's
resignation hereunder as Collateral Agent, the provisions of this
section shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Collateral Agent under
this Agreement. If no successor agent has accepted appointment
as Collateral Agent by the date which is 30 days following a
retiring Collateral Agent's notice of resignation, the retiring
Collateral Agent's resignation shall nevertheless thereupon
become effective and the Banks shall perform all of the duties of
the Collateral Agent hereunder until such time, if any, as the
Banks appoint a successor agent as provided for above.
6.10 Collateral Matters. (a) The Collateral Agent is
authorized on behalf of all the Banks, without the necessity of
any notice to or further consent from the Banks, from time to
time to take any action with respect to any Collateral or the
Collateral Documents which may be necessary to perfect and
maintain perfected the security interest in and Liens upon the
Collateral granted pursuant to the Collateral Documents.
(b) The Banks irrevocably authorize the Collateral
Agent, at its option and in its discretion, to release any Lien
granted to or held by the Collateral Agent upon any Collateral
(i) upon termination of the Commitments and payment in full of
all Loans and all other Obligations known to the Collateral Agent
and payable under this Agreement or any other Loan Document;
(ii) constituting property sold or to be sold or disposed of as
part of or in connection with any disposition permitted
hereunder; (iii) constituting property in which the Borrower or
any Subsidiary owned no interest at the time the Lien was granted
or at any time thereafter; (iv) constituting property leased to
the Borrower or any Subsidiary under a lease which has expired or
been terminated in a transaction permitted under this Agreement
or is about to expire and which has not been, and is not intended
by the Borrower or such Subsidiary to be, renewed or extended;
(v) consisting of an instrument evidencing Indebtedness or other
debt instrument, if the indebtedness evidenced thereby has been
paid in full; or (vi) if approved, authorized or ratified in
writing by the Banks. Upon request by the Collateral Agent at
any time, the Banks will confirm in writing the Collateral
Agent's authority to release particular types or items of
Collateral pursuant to this subsection (b), provided that the
absence of any such confirmation for whatever reason shall not
affect the Collateral Agent's rights under this Section.
ARTICLE VII
EVENTS OF DEFAULT
7.01 Event of Default. Any of the following shall
constitute an "Event of Default":
(a) Non-Payment. The Borrower fails to make, (i) when
and as required to be made under any of the Loan Documents or
herein, payments of any amount of principal of any Loan or of any
L/C obligation, or (ii) within five days after the same becomes
due, payment of any interest, fee or any other amount payable
hereunder or under any other Loan Document; or
(b) Representation or Warranty. Any representation or
warranty by the Borrower or any Subsidiary made or deemed made
herein, in any other Loan Document, or which is contained in any
certificate, document or financial or other statement by the
Borrower, any Subsidiary, or any Responsible Officer, furnished
at any time under this Agreement, or in or under any other Loan
Document, is incorrect in any material respect on or as of the
date made or deemed made; or
(c) Other Defaults. The Borrower or any Subsidiary
fails to perform or observe any other term or covenant contained
in this Agreement or any other Loan Document, and such default
shall continue unremedied for a period of 20 days after the
earlier of (i) the date upon which a Responsible Officer knew or
reasonably should have known of such failure or (ii) the date
upon which written notice thereof is given to the Borrower by
either Bank; or
(d) Cross-Default. (i) The Borrower or any Subsidiary
(A) fails to make any payment in respect of any Indebtedness or
Contingent Obligation, having an aggregate principal amount
(including undrawn committed or available amounts and including
amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than 10% of Consolidated Net Worth
when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) and such failure continues
after the applicable grace or notice period, if any, specified in
the relevant document on the date of such failure; or (B) fails
to perform or observe any other condition or covenant, or any
other event shall occur or condition exist, under any agreement
or instrument relating to any such Indebtedness or Contingent
Obligation, and such failure continues after the applicable grace
or notice period, if any, specified in the relevant document on
the date of such failure if the effect of such failure, event or
condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Indebtedness
(or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause such Indebtedness to be
declared to be due and payable prior to its stated maturity, or
such Contingent Obligation to become payable or cash collateral
in respect thereof to be demanded;
(e) Insolvency; Voluntary Proceedings. The Borrower
or any Subsidiary (i) ceases or fails to be solvent, or generally
fails to pay, or admits in writing its inability to pay, its
debts as they become due, subject to applicable grace periods, if
any, whether at stated maturity or otherwise; (ii) voluntarily
ceases to conduct its business in the ordinary course;
(iii) commences any Insolvency Proceeding with respect to itself;
or (iv) takes any action to effectuate or authorize any of the
foregoing; or
(f) Involuntary Proceedings. (i) Any involuntary
Insolvency Proceeding is commenced or filed against the Borrower
or any Subsidiary, or any writ, judgment, warrant of attachment,
execution or similar process, is issued or levied against a
substantial part of the Borrower's or any Subsidiary's
properties, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment,
execution or similar process shall not be released, vacated or
fully bonded within 60 days after commencement, filing or levy;
(ii) the Borrower or any Subsidiary admits the material
allegations of a petition against it in any Insolvency
Proceeding, or an order for relief (or similar order under non-
U.S. law) is ordered in any Insolvency Proceeding; or (iii) the
Borrower or any Subsidiary acquiesces in the appointment of a
receiver, trustee, custodian, conservator, liquidator, mortgagee
in possession (or agent therefor), or other similar Person for
itself or a substantial portion of its property or business; or
(g) ERISA. (i) An ERISA Event shall occur with
respect to a Pension Plan or Multiemployer Plan which has
resulted or could reasonably be expected to result in liability
of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess
of 10% of Consolidated Net Worth; or (ii) the aggregate amount of
Unfunded Pension Liability among all Pension Plans at any time
exceeds 10% of Consolidated Net Worth; or (iii) the Borrower or
any ERISA Affiliate shall fail to pay when due, after the
expiration of any applicable grace period, any installment
payment with respect to its withdrawal liability under Section
4201 of ERISA under a Multiemployer Plan in an aggregate amount
in excess of 10% of Consolidated Net Worth; or
(h) Monetary Judgments. One or more non-interlocutory
judgments, non-interlocutory orders, decrees or arbitration
awards is entered against the Borrower or any Subsidiary
involving in the aggregate a liability (to the extent not covered
by independent third-party insurance as to which the insurer does
not dispute coverage) as to any single or related series of
transactions, incidents or conditions, of 10% of Consolidated Net
Worth or more, and the same shall remain unsatisfied, unvacated
and unstayed pending appeal for a period of 10 days after the
entry thereof; or
(i) Non-Monetary Judgments. Any non-monetary
judgment, order or decree is entered against the Borrower or any
Subsidiary which does or would reasonably be expected to have a
Material Adverse Effect, and there shall be any period of 10
consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect; or
(j) Change of Control. There occurs any Change of
Control; or
(k) Adverse Change. There occurs a Material Adverse
Effect.
7.02 Remedies. If any Event of Default occurs:
(a) Each Bank may declare its commitment to make Loans
and any obligation to issue letters of credit to be terminated,
whereupon such commitment and obligation shall be terminated;
(b) Each Bank may declare an amount equal to the
maximum aggregate amount that is or at any time thereafter may
become available for drawing under any outstanding Letters of
Credit (whether or not any beneficiary shall have presented, or
shall be entitled at such time to present, the drafts or other
documents required to draw under such Letters of Credit) to be
immediately due and payable, and declare the unpaid principal
amount of all outstanding Loans, all interest accrued and unpaid
thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Borrower; and
(c) The Collateral Agent may exercise on behalf of the
Banks all rights and remedies available to it under the Loan
Documents or applicable law including, without limitation, the
filing of the Security Agreement and UCC-1 financing statements
with respect to accounts;
provided, however, that upon the occurrence of any event
specified in subsection (e) or (f) of Section 7.01 (in the case
of clause (i) of subsection (f) upon the expiration of the 60-day
period mentioned therein), the obligation of the Banks to make
Loans and any obligation to issue letters of credit shall
automatically terminate and the unpaid principal amount of all
outstanding Loans and all interest and other amounts as aforesaid
shall automatically become due and payable without further act of
the Banks.
7.03 Rights Not Exclusive. The rights provided for in this
Agreement and the other Loan Documents are cumulative and are not
exclusive of any other rights, powers, privileges or remedies
provided by law or in equity, or under any other instrument,
document or agreement now existing or hereafter arising.
7.04 Application of Proceeds. The cash proceeds actually
received from the sale or other disposition or collection of
Collateral, and any other amounts received in respect of the
Collateral the application of which is not otherwise provided for
herein, shall be applied (after payment of any amounts payable to
the Collateral Agent hereunder) in whole or in part by the
Collateral Agent, pro rata, for the benefit of the Banks against
all or any part of the Obligations in the following order: (i)
first, to any fees, costs, or other expenses due under the Loan
Documents; (ii) next, to any interest (including default rate
interest due under the Bank Agreements); (iii) next, to any
principal due under the Loan Documents (including without
limitation, L/C Obligations); and (iii) last, to any other
amounts due under the Loan Documents. Any surplus thereof which
exists after payment and performance in full of the Obligations
shall be promptly paid over to the Borrower or otherwise disposed
of in accordance with the UCC or other applicable law. The
Borrower shall remain liable to the Collateral Agent for any
deficiency which exists after any sale or other disposition or
collection of Collateral.
7.05 Remedies. Upon the occurrence of any Event of
Default, the Collateral Agent shall have, in addition to all
other rights and remedies granted to it in this Agreement, the
Credit Agreement or any other Loan Document, all rights and
remedies of a secured party under the UCC and other applicable
laws. Without limiting the generality of the foregoing, the
Borrower agrees that the Collateral Agent may:
(i) peaceably and without notice enter any premises of
the Borrower, take possession of any the Collateral, remove or
dispose of all or part of the Collateral on any premises or
elsewhere, or, in the case of Equipment, render it nonfunctional,
and otherwise collect, receive, appropriate and realize upon all
or any part of the Collateral, and demand, give receipt for,
settle, renew, extend, exchange, compromise, adjust, or sue for
all or any part of the Collateral, as the Collateral Agent may
determine;
(ii) require the Borrower to assemble all or any part
of the Collateral and make it available to the Collateral Agent
at any place and time designated by the Collateral Agent;
(iii) secure the appointment of a receiver of the
Collateral or any part thereof to the extent and in the manner
provided by applicable law;
(iv) withdraw (or cause to be withdrawn) any and all
funds from Deposit Accounts; and
(v) sell, resell, lease, use, assign, transfer or
otherwise dispose of any or all of the Collateral in its then
condition or following any commercially reasonable preparation or
processing (utilizing in connection therewith any of the
Borrower's assets, without charge or liability to the Collateral
Agent therefor) at public or private sale, by one or more
contracts, in one or more parcels, at the same or different
times, for cash or credit, or for future delivery without
assumption of any credit risk, all as the Collateral Agent deems
advisable; provided, however, that the Borrower shall be credited
with the net proceeds of sale only when such proceeds are finally
collected by the Collateral Agent. The Collateral Agent shall
have the right upon any such public sale, and, to the extent
permitted by law, upon any such private sale, to purchase the
whole or any part of the Collateral so sold, free of any right or
equity of redemption, which right or equity of redemption the
Borrower hereby releases, to the extent permitted by law. The
Borrower hereby agrees that the sending of notice by ordinary
mail, postage prepaid, to the address of the Borrower set forth
in the Credit Agreement, of the place and time of any public sale
or of the time after which any private sale or other intended
disposition is to be made, shall be deemed reasonable notice
thereof if such notice is sent ten days prior to the date of such
sale or other disposition or the date on or after which such sale
or other disposition may occur, provided that the Collateral
Agent may provide the Borrower shorter notice or no notice, to
the extent permitted by the UCC or other applicable law.
7.06 Proceeds Account. To the extent that any of the
Obligations may be contingent, unmatured or unliquidated
(including with respect to undrawn amounts under any letter of
credit) at such time as there may exist an Event of Default, the
Collateral Agent may, at its election, (i) retain the proceeds of
any sale, collection, disposition or other realization upon the
Collateral (or any portion thereof) in a special purpose non-
interest-bearing restricted deposit account (the "Proceeds
Account") created and maintained by the Collateral Agent for such
purpose (which shall constitute a Deposit Account included within
the Collateral hereunder) until such time as the Collateral Agent
may elect to apply such proceeds to the Obligations, and the
Borrower agrees that such retention of such proceeds by the
Collateral Agent shall not be deemed strict foreclosure with
respect thereto; (ii) in any manner elected by the Collateral
Agent, estimate the liquidated amount of any such contingent,
unmatured or unliquidated claims and apply the proceeds of the
Collateral against such amount; or (iii) otherwise proceed in any
manner permitted by applicable law. The Borrower agrees that the
Proceeds Account shall be a blocked account and that upon the
irrevocable deposit of funds into the Proceeds Account, the
Borrower shall not have any right of withdrawal with respect to
such funds. Accordingly, the Borrower irrevocably waives until
the termination of the security interests granted under this
Agreement and the right to make any withdrawal from the Proceeds
Account and the right to instruct the Collateral Agent to honor
drafts against the Proceeds Account.
7.07 Certain Waivers. The Borrower waives, to the fullest
extent permitted by law, (i) any right of redemption with respect
to the Collateral, whether before or after sale hereunder, and
all rights, if any, of marshalling of the Collateral or other
collateral or security for the Obligations; (ii) any right to
require the Collateral Agent (A) to proceed against any Person,
(B) to exhaust any other collateral or security for any of the
Obligations, (C) to pursue any remedy in the Collateral Agent's
power, or (D) to make or give any presentments, demands for
performance, notices of nonperformance, protests, notices of
protests or notices of dishonor in connection with any of the
Collateral; and (iii) all claims, damages, and demands against
the Collateral Agent arising out of the repossession, retention,
sale or application of the proceeds of any sale of the
Collateral.
ARTICLE VIII
MISCELLANEOUS
8.01 Amendments and Waivers. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no
consent with respect to any departure by the Borrower or any
applicable Subsidiary therefrom, shall be effective unless the
same shall be in writing and signed by the Banks and the
Borrower, and then any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for
which given.
8.02 Notices.
(a) All notices, requests, consents, approvals,
waivers and other communications shall be in writing (including,
unless the context expressly otherwise provides, by facsimile
transmission, provided that any matter transmitted by the
Borrower by facsimile (i) shall be immediately confirmed by a
telephone call to the recipient at the number specified on
Schedule 8.02, and (ii) shall be followed promptly by delivery of
a hard copy original thereof) and mailed, faxed or delivered, to
the address or facsimile number specified for notices on Schedule
8.02; or, as directed to the Borrower or the Banks, to such other
address as shall be designated by such party in a written notice
to the other party, and as directed to any other party, at such
other address as shall be designated by such party in a written
notice to the other party.
(b) All such notices, requests and communications
shall, when transmitted by overnight delivery, or faxed, be
effective when delivered for overnight (next-day) delivery, or
transmitted in legible form by facsimile machine, respectively,
or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if delivered, upon delivery;
(c) Any agreement of the Banks herein to receive
certain notices by telephone or facsimile is solely for the
convenience and at the request of the Borrower. The Banks shall
be entitled to rely on the authority of any Person purporting to
be a Person authorized by the Borrower to give such notice and
the Bank shall not have any liability to the Borrower or other
Person on account of any action taken or not taken by the Banks
in reliance upon such telephonic or facsimile notice. The
obligation of the Borrower to repay the Loans shall not be
affected in any way or to any extent by any failure by the Banks
to receive written confirmation of any telephonic or facsimile
notice or the receipt by the Banks of a confirmation which is at
variance with the terms understood by the Banks to be contained
in the telephonic or facsimile notice.
8.03 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Banks,
any right, remedy, power or privilege hereunder, 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.
8.04 Costs and Expenses. Upon an Event of Default, the
Borrower shall pay on demand:
(a) all title, appraisal (including the allocated
costs of internal appraisal services), survey, audit, consulting,
search, recording, filing and similar costs, fees and expenses
incurred or sustained by the Collateral Agent or any of its
Affiliates in connection with this Agreement or the Collateral;
and
(b) all costs and expenses of the Collateral Agent and
its Affiliates and the Banks, including Attorney Costs, in
connection with the enforcement or attempted enforcement of, and
preservation of any rights or interests under, this Agreement,
including in any out-of-court workout or other refinancing or
restructuring or in any bankruptcy case, and the protection, sale
or collection of, or other realization upon, any of the
Collateral, including all expenses of taking, collecting,
holding, sorting, handling, preparing for sale, selling, or the
like, and other such expenses of sales and collections of
Collateral, and any and all losses, costs and expenses sustained
by the Collateral Agent as a result of any failure by the
Borrower to perform or observe its obligations contained herein.
(c) all costs and expenses of the Collateral Agent for
all appraisal (including the allocated cost of internal appraisal
services), audit, environmental inspection and review (including
the allocated cost of such internal services), search and filing
costs, fees and expenses, incurred or sustained by the Collateral
Agent in connection with the matters referred to hereunder.
8.05 Borrower Indemnification.
(a) Whether or not the transactions contemplated
hereby are consummated, the Borrower shall indemnify, defend and
hold the Collateral Agent and each Bank, each of its Affiliates,
and each of its respective officers, directors, employees,
counsel, agents and attorneys-in-fact (each, an "Indemnified
Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, charges, expenses and disbursements (including
Attorney Costs) of any kind or nature whatsoever which may at any
time (including at any time following repayment of the Loans) be
imposed on, incurred by or asserted against any such Person by a
third party including with respect to any investigation,
litigation or proceeding (including any Insolvency Proceeding or
appellate proceeding) related to or arising out or the use of the
proceeds thereof, whether or not any Indemnified Person is a
party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"); provided, that the Borrower shall have no
obligation hereunder to any Indemnified Person with respect to
Indemnified Liabilities resulting solely from the gross
negligence or willful misconduct of such Indemnified Person. The
agreements in this Section shall survive payment of all other
Obligations.
(b) The obligations in this Section shall survive
payment of all other Obligations. At the election of any
Indemnified Person, the Borrower shall defend such Indemnified
Person using legal counsel satisfactory to such Indemnified
Person in such Person's sole discretion, at the sole cost and
expense of the Borrower. All amounts owing under this Section
shall be paid within 30 days after demand.
8.06 Payments Set Aside. To the extent that the Borrower
makes a payment to the Collateral Agent or the Banks, or the
Collateral Agent or the Banks exercise their right of set-off,
and such payment or the proceeds of such set-off or any part
thereof are subsequently invalidated, declared to be fraudulent
or preferential, set aside or required (including pursuant to any
settlement entered into by the Collateral Agent or such Bank in
its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any Insolvency Proceeding or otherwise,
then (a) to the extent of such recovery the obligation or part
thereof originally intended to be satisfied shall be revived and
continued in full force and effect as if such payment had not
been made or such set-off had not occurred, and (b) each Bank
severally agrees to pay to the Collateral Agent upon demand its
pro rata share of any amount so recovered from or repaid by the
Collateral Agent.
8.07 Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns,
except that the Borrower may not assign or transfer any of its
rights or obligations under this Agreement without the prior
written consent of the Bank.
8.08 Set-off. In addition to any rights and remedies of
the Banks provided by law, if an Event of Default exists or the
Loans have been accelerated, each Bank is authorized at any time
and from time to time, without prior notice to the Borrower, any
such notice being waived by the Borrower to the fullest extent
permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any
time held by, and other indebtedness at any time owing by, such
Bank to or for the credit or the account of the Borrower against
any and all Obligations owing to such Bank, now or hereafter
existing, irrespective of whether or not such Bank shall have
made demand under this Agreement or any Loan Document and
although such Obligations may be contingent or unmatured. If any
Bank, by exercising any right of set-off or any Bank receives
payment of principal or interest after an Event of Default has
occurred, such Bank shall immediately give written notice thereof
to the Collateral Agent and shall hold such payment for the
benefit of the Collateral Agent and shall remit any amount in
excess of such Bank's pro rata share, as determined from time to
time by the Collateral Agent, to the order of the Collateral
Agent.
8.09 Counterparts. This Agreement may be executed in any
number of separate counterparts, each of which, when so executed,
shall be deemed an original, and all of said counterparts taken
together shall be deemed to constitute but one and the same
instrument.
8.10 Severability. The illegality or unenforceability of
any provision of this Agreement or any instrument or agreement
required hereunder shall not in any way affect or impair the
legality or enforceability of the remaining provisions of this
Agreement or any instrument or agreement required hereunder.
8.11 No Third Parties Benefited. This Agreement is made
and entered into for the sole protection and legal benefit of the
Borrower, the Collateral Agent, the Banks, Affiliates thereof,
and their permitted successors and assigns, and no other Person
shall be a direct or indirect legal beneficiary of, or have any
direct or indirect cause of action or claim in connection with,
this Agreement or any of the other Loan Documents.
8.12 Governing Law and Jurisdiction.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS; PROVIDED
THAT THE BANK SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE
COURTS OF THE STATE OF ILLINOIS OR OF THE UNITED STATES FOR THE
NORTHERN DISTRICT OF ILLINOIS, AND BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH OF THE Borrower AND THE BANK CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. EACH OF THE Borrower AND THE BANK
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS,
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT
OR ANY DOCUMENT RELATED HERETO. THE Borrower AND THE BANK EACH
WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
ILLINOIS LAW.
8.13 Waiver of Jury Trial. THE Borrower AND THE BANK EACH
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR
OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES
AGAINST ANY OTHER PARTY OR ANY AFFILIATE OF THE BANK, PARTICIPANT
OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS, OR OTHERWISE. THE BORROWER AND THE BANK EACH AGREE THAT
ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL
WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES
FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS
WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN
PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR
THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
8.14 Entire Agreement. This Agreement, together with the
other Loan Documents, embodies the entire agreement and
understanding among the Borrower and the Bank and supersedes all
prior or contemporaneous agreements and understandings of such
Persons, verbal or written, relating to the subject matter hereof
and thereof. In the event of a conflict between the provisions
of any Bank Agreement and this Agreement, the provisions of this
Agreement shall govern.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered in Chicago by their
proper and duly authorized officers as of the day and year first
above written.
Matlack DE, INC.
By:
Name:
Title:
By:
Name:
Title:
Matlack, Inc.
By:
Name:
Title:
Safeway Chemical Transportation, Inc.
By:
Name:
Title:
Brite-Sol Services, Inc.
By:
Name:
Title:
BANK OF AMERICA ILLINOIS, as
Collateral Agent
By:
Name:
Title: Vice President
BANK OF AMERICA ILLINOIS, as Bank
By:
Name:
Title: Vice President
First Union National Bank, as Bank
By:
Name:
Title: Vice President
SCHEDULE 8.02
OFFSHORE AND DOMESTIC LENDING OFFICES,
ADDRESSES FOR NOTICES
BANK OF AMERICA ILLINOIS
Domestic and Offshore Lending Office:
231 S. LaSalle
Chicago, Illinois 60697
Attention:
Notices (other than Borrowing notices and Notices of
Conversion/Continuation):
[Address]
SCHEDULE 3.05
LITIGATION
[None]
SCHEDULE 8.02
OFFSHORE AND DOMESTIC LENDING OFFICES,
ADDRESSES FOR NOTICES
BANK OF AMERICA ILLINOIS
Domestic and Offshore Lending Office:
231 S. LaSalle
Chicago, Illinois 60697
Attention:
Notices (other than Borrowing notices and Notices of
Conversion/Continuation):
[Address]
SCHEDULE 3.11
CERTAIN LIABILITIES
[None]
SCHEDULE 3.12
ENVIRONMENTAL MATTERS
[None]
SCHEDULE 3.15
SUBSIDIARIES AND MINORITY INTERESTS
SCHEDULE 3.16
INSURANCE MATTERS
[None]
SCHEDULE 5.01
LIENS
[None]
MASTER CREDIT AGREEMENT
Dated as of March 27, 1996
among
Matlack DE, Inc.,
Matlack, Inc.,
Safeway Chemical Transportation, Inc.,
Brite-Sol Services, Inc.,
and
Bank of America Illinois, as Collateral Agent,
Bank of America Illinois, as Bank,
and
First Union National Bank, as Bank.
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS. . . . . . . . . . . . . 1
1.01 Certain Defined Terms. . . . . . . . . . . . . . . . . . 1
1.02 Other Interpretive Provisions. . . . . . . . . . . . . . 14
1.03 Accounting Principles. . . . . . . . . . . . . . . . . . 15
ARTICLE II
SECURITY. . . . . . . . . . . . . . 15
2.01 Security . . . . . . . . . . . . . . . . . . . . . . . . 15
2.02 Conditions Subsequent. . . . . . . . . . . . . . . . . . 16
ARTICLE III
REPRESENTATIONS AND WARRANTIES . . . . . . . . 17
3.01 Corporate Existence and Power. . . . . . . . . . . . . . 17
3.02 Corporate Authorization; No Contravention. . . . . . . . 17
3.03 Governmental Authorization . . . . . . . . . . . . . . . 18
3.04 Binding Effect . . . . . . . . . . . . . . . . . . . . . 18
3.05 Litigation . . . . . . . . . . . . . . . . . . . . . . . 18
3.06 No Default . . . . . . . . . . . . . . . . . . . . . . . 19
3.07 ERISA Compliance . . . . . . . . . . . . . . . . . . . . 19
3.08 Use of Proceeds; Margin Regulations. . . . . . . . . . . 19
3.09 Title to Properties. . . . . . . . . . . . . . . . . . . 19
3.10 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.11 Financial Condition. . . . . . . . . . . . . . . . . . . 19
3.12 Environmental Matters. . . . . . . . . . . . . . . . . . 20
3.13 Regulated Entities . . . . . . . . . . . . . . . . . . . 20
3.14 No Burdensome Restrictions . . . . . . . . . . . . . . . 20
3.15 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . 20
3.16 Insurance. . . . . . . . . . . . . . . . . . . . . . . . 21
3.17 Solvency . . . . . . . . . . . . . . . . . . . . . . . . 21
3.18 Borrowing Base Availability. . . . . . . . . . . . . . . 21
ARTICLE IV
AFFIRMATIVE COVENANTS . . . . . . . . . . 21
4.01 Financial Statements . . . . . . . . . . . . . . . . . . 21
4.02 Certificates; Other Information. . . . . . . . . . . . . 22
4.03 Notices. . . . . . . . . . . . . . . . . . . . . . . . . 22
4.04 Preservation of Corporate Existence, Etc . . . . . . . . 23
4.05 Maintenance of Property. . . . . . . . . . . . . . . . . 24
4.06 Insurance. . . . . . . . . . . . . . . . . . . . . . . . 24
4.07 Payment of Obligations . . . . . . . . . . . . . . . . . 24
4.08 Compliance with Laws . . . . . . . . . . . . . . . . . . 24
4.09 Compliance with ERISA. . . . . . . . . . . . . . . . . . 24
4.10 Inspection of Property and Books and Records . . . . . . 25
4.11 Environmental Laws . . . . . . . . . . . . . . . . . . . 25
4.12 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . 25
4.13 Further Assurances . . . . . . . . . . . . . . . . . . . 25
4.14 Minimum Net Worth. . . . . . . . . . . . . . . . . . . . 26
4.15 Acquisitions . . . . . . . . . . . . . . . . . . . . . . 26
4.16 Significant Subsidiaries . . . . . . . . . . . . . . . . 26
ARTICLE V
NEGATIVE COVENANTS . . . . . . . . . . . 26
5.01 Limitation on Liens. . . . . . . . . . . . . . . . . . . 26
5.02 Disposition of Assets. . . . . . . . . . . . . . . . . . 28
5.03 Consolidations and Mergers . . . . . . . . . . . . . . . 28
5.04 Investments. . . . . . . . . . . . . . . . . . . . . . . 28
5.05 Guaranties, Loans or Advances. . . . . . . . . . . . . . 28
5.06 Transactions with Affiliates . . . . . . . . . . . . . . 29
5.07 Restricted Payments. . . . . . . . . . . . . . . . . . . 29
5.08 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.09 Change in Business . . . . . . . . . . . . . . . . . . . 30
5.10 Fixed Charge Coverage Ratio. . . . . . . . . . . . . . . 30
5.11 Leverage Ratio . . . . . . . . . . . . . . . . . . . . . 30
5.12 Borrowing Base Overage . . . . . . . . . . . . . . . . . 30
ARTICLE VI
COLLATERAL AGENT. . . . . . . . . . . . 30
6.01 Appointment and Authorization; "Collateral Agent". . . . 30
6.02 Delegation of Duties . . . . . . . . . . . . . . . . . . 30
6.03 Liability of Collateral Agent. . . . . . . . . . . . . . 31
6.04 Reliance by Collateral Agent . . . . . . . . . . . . . . 31
6.05 Notice of Default. . . . . . . . . . . . . . . . . . . . 32
6.06 Credit Decision. . . . . . . . . . . . . . . . . . . . . 32
6.07 Indemnification of Collateral Agent. . . . . . . . . . . 33
6.08 Collateral Agent in Individual Capacity. . . . . . . . . 33
6.09 Successor Collateral Agent . . . . . . . . . . . . . . . 33
6.10 Collateral Matters . . . . . . . . . . . . . . . . . . . 34
ARTICLE VII
EVENTS OF DEFAULT . . . . . . . . . . . 34
7.01 Event of Default . . . . . . . . . . . . . . . . . . . . 35
(a) Non-Payment . . . . . . . . . . . . . . . . . . . . 35
(b) Representation or Warranty. . . . . . . . . . . . . 35
(c) Other Defaults. . . . . . . . . . . . . . . . . . . 35
(d) Cross-Default . . . . . . . . . . . . . . . . . . . 35
(e) Insolvency; Voluntary Proceedings . . . . . . . . . 35
(f) Involuntary Proceedings . . . . . . . . . . . . . . 36
(g) ERISA . . . . . . . . . . . . . . . . . . . . . . . 36
(h) Monetary Judgments. . . . . . . . . . . . . . . . . 36
(i) Non-Monetary Judgments. . . . . . . . . . . . . . . 36
(j) Change of Control . . . . . . . . . . . . . . . . . 37
(k) Adverse Change. . . . . . . . . . . . . . . . . . . 37
7.02 Remedies . . . . . . . . . . . . . . . . . . . . . . . . 37
7.03 Rights Not Exclusive . . . . . . . . . . . . . . . . . . 37
7.04 Application of Proceeds. . . . . . . . . . . . . . . . . 37
7.05 Remedies . . . . . . . . . . . . . . . . . . . . . . . . 38
7.06 Proceeds Account . . . . . . . . . . . . . . . . . . . . 39
7.07 Certain Waivers. . . . . . . . . . . . . . . . . . . . . 39
ARTICLE VIII
MISCELLANEOUS
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.01 Amendments and Waivers . . . . . . . . . . . . . . . . . 40
8.02 Notices. . . . . . . . . . . . . . . . . . . . . . . . . 40
8.03 No Waiver; Cumulative Remedies . . . . . . . . . . . . . 41
8.04 Costs and Expenses . . . . . . . . . . . . . . . . . . . 41
8.05 Borrower Indemnification . . . . . . . . . . . . . . . . 41
8.06 Payments Set Aside. . . . . . . . . . . . . . . . . . . 42
8.07 Successors and Assigns . . . . . . . . . . . . . . . . . 42
8.08 Set-off. . . . . . . . . . . . . . . . . . . . . . . . . 42
8.09 Counterparts . . . . . . . . . . . . . . . . . . . . . . 43
8.10 Severability . . . . . . . . . . . . . . . . . . . . . . 43
8.11 No Third Parties Benefited . . . . . . . . . . . . . . . 43
8.12 Governing Law and Jurisdiction . . . . . . . . . . . . . 43
8.13 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . 44
8.14 Entire Agreement . . . . . . . . . . . . . . . . . . . . 44
SCHEDULES
Schedule 3.05 Litigation
Schedule 3.11 Certain Liabilities
Schedule 3.12 Environmental Matters
Schedule 3.15 Subsidiaries and Minority Interests
Schedule 3.16 Insurance Matters
Schedule 5.01 Liens
Schedule 8.02 Lending Office; Addresses for Notices
EXHIBITS
Exhibit A Form of Borrowing Base Certificate
Exhibit B Form of Compliance Certificate
Exhibit C Form of Security Agreements